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Home My WebLink About2014-01-13 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers January 13, 2014 6:00 PM REVISED Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 January 13, 2014 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. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. 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 up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Closed Session 6:00-7:30 PM 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his designees pursuant to Merit System Rules and (James Keene, Pamela Antil, Lalo Perez, David Ramberg, Joe Saccio, Kathryn Shen, Sandra Blanch, Dania Torres Wong, Melissa Tronquet, Brenna Rowe, Molly Stump, Khashayar Alaee) Employee Organization: Service Employees International Union, (SEIU) Local 521 Authority: Government Code Section 54957.6(a) 1a. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL Potential Litigation (as plaintiff/defendant) – One Matter Subject: Construction of the Mitchell Park Library and Community Center Authority: Government Code Section 54956.9 2 January 13, 2014 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. Special Orders of the Day 7:30-7:40 PM 2. Appointments for Three Positions on the Storm Drain Oversight Committee for Three Year Terms Ending on October 31, 2018 (Terms of Clark, Mickelson, and Whaley) 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. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. City Manager Comments 7:40-7:50 PM Council Member Questions, Comments and Announcements 7:50-8:05 PM Members of the public may not speak to the item(s) Oral Communications 8:05-8:20 PM Members of the public may speak to any item not on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 8:20-8:25 PM November 12, 2013 November 18, 2013 December 2, 2013 December 9, 2013 Consent Calendar 8:25-8:30 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 3. Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy Guidelines for 2014 4. Review and Acceptance of Annual Status Report on Developers' Fees for Fiscal Year 2013 and Adoption of Resolution Making Findings Regarding Continuing Need for Unexpended Stanford Research Park/El Camino Development Fees in the Amount of $823,618; San Antonio/West Bayshore Development Fees in the Amount of $664,374; University Avenue Parking In-Lieu Development Fees in the Amount of 3 January 13, 2014 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. $90,696; and the Citywide Transportation Impact Development Fees in the Amount of $4,453 5. Approval of the Long-Term Trash Management Plan required by the Municipal Regional Stormwater NPDES Permit 6. Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan 7. Finance Committee Recommendation to Accept Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2013 and Management Letter 8. Approval to Designate a Residence Located at 411 Lytton Avenue to the City of Palo Alto’s Historic Inventory in Category 2, and Adoption of a Resolution and Record of Land Use Action at the Request of the Owner 9. Second Reading: Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions (First Reading : December 9, 2013 PASSED: 9-0) 10. Second Reading: Adoption of the Ordinance for Penalties on Expired Permit Enforcement for Residential Project (First Reading : December 9, 2013 PASSED: 9-0) 11. Approval of Amendment Number 1 to Contract #C10131413 in the Amount of $84,660 with URS Corporation to Provide Additional Services Associated With the Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing Reservoirs and Rehabilitation of Three Receiving Stations Project WS-07000, WS- 08001 and WS-09000, for a Total Not to Exceed Amount of $567,052 12. Approval of Amendment No. 21 to Contract No. S0114750 With The Peninsula Corridor Joint Powers Board for Rail Shuttle Bus Administration to Extend the Term for Six Months and Add $26,684 for a Total Not To Exceed Amount of $2,930,612 13. Policy and Services Committee Recommendation for $30,000 Expenditure for Teen Program 4 January 13, 2014 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: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 8:30-8:45 PM 14. Public Hearing: On Objections to Weed Abatement and Adoption of Resolution Ordering Weed Nuisance Abated 8:45-9:05 PM 15. Public Hearing: Ordinance to Amend Sections 18.04.030 (Definitions), 18.16.060 (CN Zone), 18.18.060 (CD Zone), 18.20.030 (ROLM(E) Zone) and Add Section 18.46 (Reasonable Accommodation) of Title 18 (Zoning) of Palo Alto Municipal Code to Implement 2007-2014 Housing Element Programs 9:05-10:00 PM 16. Public Hearing: Council Review and Adoption of an Ordinance for a New Chapter 18.15 (Residential Density Bonus) to include in Title 18 of the Palo Alto Municipal Code to Implement Government Code Section 65915 Adjournment AMERICANS WITH DISABILITY ACT (ADA) 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. 5 January 13, 2014 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. Additional Information Council and Standing Committee Meetings Special City Council Closed Session 1/16/14 7:00 PM Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Use of City Manager's Emergency Contracting Authority to Award a Contract to Acco Engineered Systems for Mechanical Systems at Ventura Community Center Independent Police Auditors Interim Report for 2013 Public Letters to Council Set 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK January 13, 2014 The Honorable City Council Palo Alto, California Appointments for Three Positions on the Storm Drain Oversight Committee for Three Year Terms Ending on October 31, 2018 (Terms of Clark, Mickelson, and Whaley ) The Storm Drain Oversight Committee terms of Nancy Clerk, Hal Mickelson, and Richard Whaley expired on December 31, 2013. The following Candidates interviewed for these terms on December 2, 1013: 1. Nancy Clark 2. Mark Harris 3. Hal Mickelson 4. Richard Whaley Staff is requesting Council vote to appoint three positions on the Storm Drain Oversight Committee ending on October 31, 2018. Voting will be by paper ballot. Five votes are required to be appointed. The first two candidates that receive at least five votes will be appointed. ATTACHMENTS:  Clark, Nancy (PDF)  Harris, Mark (PDF)  Mickelson, Hal (PDF)  Whaley, Richard (PDF) Department Head: Donna Grider, City Clerk Please Return to: CITY OF PALO ALTO STORM DRAIN OVERSIGHT COMMITTEE SUPPLEMENTAL OUESTIONNAIRE Mark Harris Name: Office of the City Clerk 250 Hamilton Avenue Palo Alto, CA 94301 650-329-2571 ------------------------------------- Date: November 1,2013 Please print or type your answers to the following questions and submit with your completed application You may submit additional sheets, if necessary, to complete your answers. 1. Have you attended the following meeting? • Storm Drain Oversight Committee Yes D (Date: __________ --J. No [2] 2. How did you Learn about the vacancy on the Storm Drain Oversight Committee? Community Group:D Palo Alto Weekly: D The Daily Post: D Website: D If yes, please identify Website: ____________________ __ Email from City Clerk: D Library Bulletin Board: D FlyerlBookmark: D Oth PI S ify Council member informed me of the opening. er, ease pec : _________________________________ _ 3. Describe your involvement in community activities, volunteer and civic organizations: I have Deen extensively involved with Kara, a premier gnef support organization .located in Palo Alto, since 1980. On the board of directors from 1993-2008 and was . secretary, treasurer and president; currently advisory committee chair. Member of -the Palo Alto Mediation Program since 2001 and served as its co-chair; now emeritus. Member of the Crescent Park Neighborhood Association. Contribute to -many local organizations such as the Palo Alto Community Fund, Peninsula Open .Space Trust, Boys & Girls Club of the Peninsula and the Junior League. I have been a T-ball coach, member of a local service club, Cub Scout leader, on the -Duveneck Site Council, Cub Scout den leader, projects for the Stanford Graduate School of Business Alumni Consulting Team. 4. What is it about the Storm Drain Oversight Committee that interests you? What qualities, experience and e~ertise would you bring to the Storm Drain Oversight Committee? Control of rain run-off after storms of all magnitudes is a critical public service. At its .lowest level, run-off must be quickly and efficiently transported to storm drains, sewers creeks and utlimately to the Bay. During critical, high level storms, the 'system must have the ability to function in rare events and either prevent or minimize' damge to the Community so that critical and normal City functions are not disrupted 'or brought back into service quickly. This makes the Oversite Committee a very .worthwhile and interesting civic activity for me. I would bring a wealth of utilites, engineering and financial knowledge and expertise to the Committee. The City only -has so much money to spend on storm drains and each dollar must be used productively on a priority basis. Bds/Commissions -702-23 9/13/2011 5. How would you see your role as board member when recommending policy and working with the Council? If it were necessary to change current roles, how would you approach making such changes? Our charge as a Committee would be to recommend a plan that uses the available .finances in the most effective way possible. The Committee is an additional set of eyes that can complement and enhance the work by staff in developing the project ·plan. We should be a tool for the Council to lever its time and expertise as the Council must decide on a whole spectrum of issues important to the City. I am not 'certain what the second question is asking. If this means that the Council wants the .Committee to take on some new or modified efforts related to storm drains, my approach would be to make certain the Committee had a clear sense of what the 'Council was looking for to avoid waste of time and frustration on the part of the Council and Committee. 6. What are the current issues facing the Storm Drain Oversight Committee? There is always the issue of too many projects for the money available, in which .case the Committee needs to make recommendations on how to put existing resources to the best use. One major issue is how to create facilities that will 'minimize or eliminate damage that can be expected from rare but highly likely storm events. In the long run we must keep in mind potential impacts from climate change. 7. Describe your specific education, training or experience in the fields of accounting, engineering, municipal infrastructure planning or water resources, if any. As mentioned previously, my educational training is in engineering and business with .an emphasis in finance. I spent approximately 20 years in local government in municipal utilities and finance, specifically in Palo Alto and Mountain View. I am very ·much aware of capital and operational funding and all the issues associated with them. Most recently I was a commissioner for the City's Blue Ribbon Infrastructure 'Commission so I am very well versed in the Palo Alto infrastructure and the issues .related to it. 8. Describe other personal traits that make you well-qualified to selVe on this committee. I am patient and a good listener. I am analytical and solution oriented and often .come up with creative compromises that bridge a variety of different viewpoints and concerns. I have a history of working well within a committee structure and usually 'contribute more than my fair share. I will commit the time necessary to get the Committee's work accomplished. Bds/Commissions -702-23 9/13/2011 C11' 111.: ,.,. " ,,_, lil I-ALU M 1il C'\ ' Cll Y CLEi<K'S oFFI'cE 13 NOV -S M'l 10: 04 CITY OF PALO ALTO BOARD AND COMMISSION INCUMBENT APPLICATION SUBMIT TO: Office of the City Clerk 250 Hamilton Avenue, Palo Alto, CA 94301 __ ~ _____ =(6.;:....:50) 329-2571 ___ ~ . ______ ......:... __ . ___ .-. __ .. ____ ". ___ -~_ Incumbents may use this form to declare their intent to apply for another term in office. BOARDCURRENTLYSERVINOON:' 5TORN\ DRfrlN dvef2,St~Hr CDMtr1tfr EE NAME: W hClle.r Last . RJ3SIDENCE ADDRESS: X Please resubmit the most recent application I.have on file. I will update myapplicatiOn·$ld SUbmit. it prior to th~ deadline. *Blank applications may be found 'at Www.cityofpaloalto.org , signature of Applicant ~ ...... ~ HOME Plf{ThlR· WORK. PH()NF.~ CELL PH()NF.~ Board or Commission applying for: Storm Drain oversight Committee SUBMIT TO: CITY OF PALO ALTO BOARD AND COMMISSION APPLICATION Office ofthe City Clerk 250 Hamilton Avenue, Palo Alto, CA 94301 (650) 329-2571 Please print or type answers to all questions and indicate ''Nt An in those areas that do not apply. Be sure that you complete the attached supplement and return it with your siMned application. RESIDENCE ADDRESS EDUCATION (1 RA-IJUAIE (J f $rA-N FtJ~D WORKPHONE~N~/A~ __ List relevant training and experience, certificates of training, licenses, or professional registrations: Sec: ftTrA'C.ffGj) Rb5 UM IS Page 1 of 2 (Rev. 12/2005 TN) ~ .. RESUME RICHARD I. WHALEY, P.E. Civil Engineer Mr. Whaley is a California licensed Civil Engineer, RCE 16149; and a graduate of Stanford University in Civil Engineering, 1958. Experience as follows: City of Palo Alto, UtOities Department. Water, Gas, Wastewater, Palo Alto, Co. Supen/sor of Construction Inspectors. 1990 -2005. Supervised three inspectors. Duties included plan review, field inspection, progress reports, and as-built records. Projects included water, gas, wastewater, road, and tank construction. Barrett,Consultlilg Group, Menlo Park, Co., Prolect Engineer. 1985 -1990 Duties involved design, construction, and reports for a wide range of projects. Clients included the Cities of Palo Alto, Mill Valley, Redwood City, and Mountain View; the U.S.Navy; and FEMA. Richard L Whaley. CivO Engineer, Palo Alto, Co. Owner and operator. 1975 -1985. Specialized in Municipal Engineering, and was the Town Engineer for Woodside for 20 years. Other work involved land development projects and expert witnessing. R. M. Gallowav and Associates. Inc.. Burlingame. Co.. Chief Engineer. 1973 -1975. Supervised an office staff: and performed work for the Town of Woodside, and land development clients. Brian-Kangas-Foulk and Associates. Redwood City, Co. Project Engineer. 1965 -1973. Duties included municipal engineering and land development engineering for the Town of Woodside, Stanford University, and the City of Redwood City. George S. Nolte. Consulting Civil Engineers, Inc., Palo Alto, Co. Prolect Engineer. 1963- 1965. As a member of the Sanitary Department, designed sewer outfalls, pump stations, and assessment districts. A drainage plan was also prepared. Charles S. Mc Candless and Company, Consulting CivO Engineers. Palo Alto, Ca. Engineer. 1962 -1963. Duties included reports, plans, and construction management for water, sanitary sewer, and municipal projects. Deputy Town Engineer for the Town of Los Altos Hills, and Construction Engineer for the Purissima Hills County Water District. American Culvert Company, Oakland. Co. Sales Engineer. 1958 -1962. Work included sales, promotion, credit clearance, and bill collecting in eleven counties connected with the manufacture of corrugated metal pipe. Professional Afflliations: American Society of Civil Engineers, National Society of Professional Engineers, American Public Works Association, American Water Works Association, and Water Environment Federation. Address: Please answer 'Yes' or 'No' to the following questions: Yes No Are you a Palo Aho resident? o Are you an employee of a Palo Alto business? o Are you an owner of real K 0 Do you have any relatives or members of your household who are employed by the City of U )( Palo Alto, who are currently serving on the City Council. or who are board members or Commissioners? Are you available and committed to complete .the term for which you are applying? o po you have an investment in. or do you serve as an officer or director of, a company doing 0 .~ business in Palo Alto which you believe is likely) ) to engage in business with the City> 2) to provide products or services for City projects, or 3) be affected by decisions ofthe board or commission for which you are applying? Excluding your pdncipal residence, do you own real property in Palo Alto or within two 0 'IX miles of Palo Alto? . EMPLOYMENT List only your present or last employer: Name of Company: CITY 6f PALO At-TV Address: '2,.. r;D l-( AMI LT oN AvE PALo A~w\CA QQ?v3 Occupation: Signature of APPJicant: __ ~'-;:N=ame:::-U_---""-'--"-~-"-'~'---__ ""f _____ "~d/:-l....;1'-t1_1J_6_ Page 2 of 2 (Rev. 12/2005 TH) .. ~ ; Board or Commission applying for: Storm Drain Oversight Committee SUBMIT TO: CITY OF PALO ALTO SUPPLEMENTAL QUESTIONNAIRE Office of the City Clerk 250 Hamilton Avenue. Palo Alto, CA 94301 (650) 329-2571 Please print or type answers to aU questions and indicate "Nt A" in those areas that do not apply. Submit this questionnaire with your signed, completed Board and Commission Application. You may submit additional sheets, if necessary, to complete your answers. NAME_-",t.AJ~It.-'-'It,-",lr..-:;€,-,-Y ___ --,-",-((.:..,( c""""H,.....A-_R_V ___ DATE _....,1 f_'_~-I-/(J_b __ LiSt Pilat r · 1. How did you learn· about the vacancy on this committee? Community Group 0 Newspaper Advertisement 0 Utility Bill Stuffer 0 City Clerk's Office 0 Libnuy :.' . 0 Other (specify) W G~JU-Y N €.t;.) 5 A-R. TIC,l... r3 2. Briefly describc:your involvement in community activities, volunteer and civic organizations . M ~M6 er<: 6 F :; r t'1ftl2 ~~" CHURCff) IV E I G If Eot< S 3. What about this committee interests you? A LI f:'£ Page 1 of 2 (Rev. 12/2005 TH) 4. Explain how you would see your role as a committee member when reviewing budget documents and reporting to the Finance Coinmittee of the City Council? V £TfH L-EJ) A-NA Ly~ IS 5. Describe your specific education, training or experience in the fields of accounting, engineering, municipal infrastructure planning or water resources, if any. 5 e e It-rm-Cl-f E p RES(} Nl c= 6. Describe other personal traits tbat make you well-qualified to serve on this committee. rL-£~$A--NT J oor GOING) PEI<$(JN AB/-B . S. fA I' () , 0 11 ! / ... () f) ~ 19natureo pp lcant:_-..:..~_=~==--=~:!>....:.--=-~::....!.-=::.;:;:..O......::".j~--------- Page 2 of 2 (Rev. 13/300S TH) November 4, 2013 City Council Re: Storm Drain Oversight Committee Dear Council Members: [d?I:Y tgl2M,;~ j~lf~C~{\ 13 NOV -5 A~1I0: 05 I am applying for another term on this committee. I believe that I bring a professional voice to this group. Thank you for your consideration. Sincerely yours, ~~.I~ Richard I. PE . , .... : I" -; , . City of Palo Alto (ID # 4342) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Utilities 2014 Legislative Policies Title: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy Guidelines for 2014 From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt the attached resolution (Attachment A) approving the attached Utilities Legislative Policy Guidelines for 2014. Executive Summary The Utilities Legislative Policy Guidelines for 2014 (Attachment B) have been updated from the 2013 guidelines to respond to recent legislative and regulatory trends to: 1) provide direction to staff in evaluating and responding to legislative action involving Utilities issues, and 2) clarify approved policy and advocacy direction when active involvement of Palo Alto elected officials is required. These revisions were reviewed and unanimously approved by the UAC at its December 4, 2013 meeting. The guidelines are grouped in five sections: the first addressing legislative policy guidelines that are common to all utilities (electric, fiber optics, gas, wastewater collection, and water), and the following four sections addressing those guidelines that are specific to electric, gas, wastewater collection, and water. There is no section specifically for fiber optics as legislative initiatives focus mainly on Palo Alto’s traditional utilities. Each section includes a set of goals for the utility and guidelines for Palo Alto staff and elected officials when taking action to achieve the goals. City of Palo Alto Page 2 Background The utility industry is a high-profile and heavily regulated industry that is subject to continuous legislative action at both the state and federal levels. Such legislation can influence, among other things, the reliability and security of the supply and distribution infrastructure, commodity procurement practices, customer service and billing, program design, rate design, and activities and costs associated with climate protection. Representatives of the City (appointed and elected officials and staff) participate in Federal and State legislative forums to advocate positions on energy- and water-related issues that facilitate the City’s current strategic objectives, as adopted in the 2011 Utilities Strategic Plan: ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. The City also participates in joint action efforts to advocate for goals and objectives shared by other publicly-owned utilities. At the state level, hundreds of bills focused on the utility industry can be introduced each year. The number of bills introduced, the pace at which bills change and new language is negotiated, and the often surprising speed at which bills can be placed for a vote during the legislative year requires staff and elected officials to respond quickly if the City is to have any influence on the resulting legislation. Often, a response to an amended bill is required in a matter of a day or two. These timing constraints preclude a return to the UAC and Council for approval each time a response is required. Therefore, a set of policy guidelines is developed each year that identifies the goals and priorities for the City to be applied by staff when evaluating and responding to legislation. While the guidelines are used by staff for evaluating legislation, any advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager per the City’s legislative advocacy process. Although it is impractical to return for approval each time a letter is sent in response to a bill amendment, the issues under debate are known to the UAC and Council through their participation in legislative committee meetings, and updates from the City Manager, the Utilities Director and City staff. Formal letters responding to legislative bills or amendments will be distributed to the UAC and Council. Discussion The proposed 2014 Utilities Legislative Policy Guidelines have been updated to respond to recent legislative and regulatory trends. Attachment C highlights the changes from the 2013 guidelines and Attachment D provides a summary of legislative action from 2013. Although there were minimal new state regulations introduced in 2013 for publically owned utilities, such as Palo Alto’s Utilities Department, there could be renewed attempts to increase net energy metering caps and renewable portfolio standards in 2014. At the Federal level there is continuing activity to increase cyber security requirements, threats to tax-exempt bond financing, and ongoing activities relating to the City’s federal hydropower allocation from the Western Area Power Administration (Western). City of Palo Alto Page 3 The major revisions to the legislative guidelines were the addition of the following new guidelines: All Utilities A new global guideline was added to maintain existing low cost financing options and to also advocate for new federal and state programs to meet critical infrastructure needs. The purpose of this new Guideline was to address potential threats to traditional municipal (i.e. tax exempt) bond financing, and to position staff to advocate for new funding mechanisms for infrastructure needs within the City or as part of the City’s membership with various joint action agencies. Electric Utility Changes Under Guideline # 3, Staff added a new objective that provides flexibility to balance policy objectives with rate payer equity needs. Under Guideline #6, staff added a new objective to support the continuation of federal and state incentives for renewable development. Finally, under Guideline #7, staff added a new objective to monitor Delta conveyance impacts on the City’s federal power allocation. Gas Utility Changes Under Guideline #8, staff added a new objective that ensures the Utilities Department has flexibility to ensure greenhouse gas allowance costs and revenues can be aligned with rates to maximize desired results. Water Utility Changes For the water utility there are two substantive changes. Under Guideline # 6, staff added a new objective to ensure San Francisco Public Utilities Commission supply costs are largely based on water usage and any changes are consistent with the City’s Water Supply Agreement. Also under Guideline #6, staff added an objective to formalize staff’s position that the current dry year water allocation between the SFPUC and the Bay Area Water Supply and Conservation Agency (BAWSCA) needs to be modified. Commission Review and Recommendation The Utilities Legislative Policy Guidelines for 2014 were presented to the UAC at its December 4, 2013 meeting. The UAC had a few clarifying questions on the new guidelines. Staff made one minor change to clarify that a reference to critical cyber assets only related to those assets defined by the North American Electric Reliability Corporation (NERC). The UAC unanimously approved (5-0, with two Commissioners absent) a motion to recommend that the City Council City of Palo Alto Page 4 approve the Utilities Legislative Policy Guidelines for 2014. Draft minutes from the UAC meeting are included as Attachment E. Resource Impact There is no direct resource impact associated with adoption of the proposed legislative policy guidelines. However, actions taken that support the efficient use of the City’s assets and resources will help control costs, implement the Council’s policies and goals, and protect utility customers. Policy Implications The recommendation is consistent with Council policy and supports the 2011 Utilities Strategic Plan’s objectives of: ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. Environmental Review Approval of a resolution adopting the Utilities Legislative Policy Guidelines for 2014 does not meet the definition of a project pursuant to Section 21065 of the California Environmental Quality Act (CEQA), thus, no environmental review is required. Attachments:  Attachment A - Resolution (PDF)  Attachment B - 2014 Utilities Legislative Policy Guidelines (PDF)  Attachment C - Utilities Legislative Policy Guidelines - redline changes from 2013 (PDF)  Attachment D - 2013 Legislative Activity Summary (PDF)  Attachment E - Excerpted Draft UAC Minutes of December 4, 2013 (PDF) *NOT YET APPROVED* 131216 dm 650 RESO App Util Guidelines 2014 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving the City of Palo Alto Utilities Legislative Policy Guidelines for 2014 R E C I T A L S A. The City of Palo Alto Utilities Strategic Plan (“Strategic Plan”), approved by the Palo Alto City Council on July 18, 2011, [CMR 1880] provides a set of Strategic Objectives for the City of Palo Alto Utilities Department (CPAU) to follow in ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. B. CPAU annually identifies Utilities’ Legislative Policy Guidelines that facilitate the Strategic Plan’s Strategic Objectives, and advocates for utility-related issues at Federal and State legislative forums in furtherance of those objectives. C. In December 2013 CPAU staff updated the Legislative Policy Guidelines to respond to recent legislative and regulatory trends. D. Action on some of these issues may require active involvement of Palo Alto elected and appointed officials. E. The Utilities’ Legislative Policy Guidelines for 2014 were presented to the UAC at its December 4, 2013 meeting, and the UAC voted unanimously to recommend that the City Council approve the Utilities’ Legislative Policy Guidelines for 2014. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby adopts this resolution approving the Utilities Legislative Policy Guidelines for 2014. // // // // // // // *NOT YET APPROVED* 131216 dm 650 RESO App Util Guidelines 2014 2 SECTION 2. The Council finds that the adoption of this resolution does not constitute a project under Section 21065 of the California Environmental Quality Act (CEQA) and the CEQA Guidelines, and therefore, no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENTIONS: ABSENT: ATTEST: APPROVED: _____________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: _____________________________ City Manager _____________________________ Senior Asst. City Attorney _____________________________ Director of Utilities _____________________________ Director of Administrative Services ATTACHMENT B Utilities’ Legislative Policy Guidelines for 2014 Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager as per the City’s legislative advocacy process. ALL UTILITIES Goals 1. Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2. Support efforts to maintain or improve the reliability of the supply, transmission, storage and distribution/collection infrastructures. 3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, and recognizes early voluntary action. 4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 1. Advocate goals through active participation in joint action efforts. Federal, State, and Regional     2. Communicate the City’s record on environmental and energy efficiency programs with Legislature, California Energy Commission (CEC), California Air Resources Board (CARB), and Natural Resources Defense Council (NRDC) via California Municipal Utilities Association (CMUA), Northern California Power Agency (NCPA), and the Bay Area Water Supply and Conservation Agency (BAWSCA). State    3. Support legislation that will result in the most cost-effective reduction of GHG emissions, recognition of early action, and inclusion of more efficient solutions, fuel switching, and demand control programs, in integrated resource plans. Federal, State, and Regional    Utilities Legislative Policy Guidelines for 2014 Page 2 of 13 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 4. Promote utility legislation and regulations that support reasonable reliability standards and compliance requirements, and effective and consistent reporting requirements, customer communications, and goal- setting. Federal, State, and Regional Reliability Councils    5. Oppose cost shifts from Federal or State budgets and California Public Utilities Commission (CPUC) jurisdictional utilities through active participation in CMUA and NCPA legislative activities. Federal, State, and CPUC   6. Advocate for State and Federal grants for local and regional applications of energy efficiency, conservation, renewable resources, fiber, wastewater collection systems and recycled water projects. Federal and State    7. Maintain right of way access for utility infrastructure. Federal and State   8. Protect the value of existing assets and contracts and local regulatory approvals of same. Federal and State    9. Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and state programs that recognize critical infrastructure needs. Federal and State    Utilities Legislative Policy Guidelines for 2014 Page 3 of 13 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability and security of infrastructure. 3. Support legislation that makes bold progress in cost effectively reducing GHG emissions and encourages early voluntary action. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (CMUA), American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff to speak with a coordinated voice. Federal and State     2. Support NCPA in its continued efforts to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State   3. Advocate for legislation/regulations that provide local control and support for:  cost-effective clean distributed generation and cogeneration projects, and standards for connecting such resources to the local distribution system;  balancing state and local policy implementation and ratepayer equity;  cost-effective electric efficiency programs;  implementation of renewable portfolio standards;  cost-effective storage integration;  direct access requirements;  smart meters and smart grid design and implementation, and  public benefit funds (as allowed in AB1890 (1996)). Federal and State     Utilities Legislative Policy Guidelines for 2014 Page 4 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 4. Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to move to lower GHG emission portfolios;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State    5. Support legislation for renewable portfolio standards that:  promote the 33% goal for the state;  maintain local compliance authority;  allow utilities to pursue low cost alternatives by utilizing existing transmission system to access out-of-state resources, including use of Renewable Energy Certificates (RECs);  prevent double jeopardy in the assessment of penalties for non-compliance; and  restrict extension of CEC jurisdiction over Publicly Owned Utilities. Local and State    6. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that:  enhance/ensure reliability;  ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state-owned electric contract costs on municipal utility customers);  improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards);  support the continuation of federal and state financial incentives that promote increased renewable development;  improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and Local, State, and Federal     Utilities Legislative Policy Guidelines for 2014 Page 5 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control  reduce the environmental impact on the Bay Area and the Peninsula. 7. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration (Western) such as:  support of Congressional Field Hearings to explore modernizing flood control strategies, river regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries;  protection of the status of Western Power Marketing Administration and cost-based rates;  provisions for preference customers’ first take at land available with economic potential for wind farms;  balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts;  achieving the grid modernization goals of Secretary Chu’s March 16, 2012 memo without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts; and  monitor and evaluate impacts of Delta conveyance proposals on Western Base Resource allocation. Federal, State and Regional    8. Advocate for Congressional, legislative, or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) or the Western Electricity Coordinating Council (WECC). Federal, State and Regional    9. Support fair and reasonable application of grid reliability requirements established by NERC, WECC, or FERC and seek Congressional remedies (if needed) for punitive application of fees and fines. Federal and Regional    10. Work with CAISO or through FERC:  to give buyers of renewable intermittent resources relief from imbalance penalties; and  to promote financial and operational changes that result in timely and accurate settlement Federal and State    Utilities Legislative Policy Guidelines for 2014 Page 6 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control and billing. 11. Monitor cyber security issues to ensure that CPAU, which currently does not have NERC defined Critical Cyber Assets, retains local control over its cyber security needs while remaining exempt from NERC cyber security standards. Support NCPA to protect it and its member agencies from unnecessary cyber security regulations. Federal and Regional   Utilities Legislative Policy Guidelines for 2014 Page 7 of 13 GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and conservation programs, alternative gas supplies, and rate structure. 2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3. Support efforts to reduce greenhouse gas emissions and protect the environment. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliability of Infrastructure 3. Environ -ment 4. Cost Control 1. Advocate most of these goals mainly through the American Public Gas Association (APGA) with minor support from Palo Alto staff. Primarily Federal with minor advocacy at State level     2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State     3. Support increased production/incentives for renewable gas supplies from in or out of state. Federal and State     4. Advocate for financing or funding for cost- effective natural gas efficiency and solar water heating end uses. Federal and State     5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7. Support efforts to improve pipeline safety. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. Oppose legislative proposals resulting in unreasonable costs for Palo Alto’s customers. Federal and State    Utilities Legislative Policy Guidelines for 2014 Page 8 of 13 1. Local Authority 2. Reliability of Infrastructure 3. Environ -ment 4. Cost Control 8. Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for natural gas utilities to move to lower GHG emission portfolios;  advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and- trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State    9. Support legislation that aims to protect public health and encourages transparency regarding the practice of hydraulic fracturing or “fracking” for natural gas development, but not blanket moratoriums that aren’t supported by science. Federal and State   Utilities Legislative Policy Guidelines for 2014 Page 9 of 13 WASTEWATER COLLECTIO N Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2. Increase the reliability of the local wastewater collection systems. 3. Maintain the provision of an environmentally sustainable, reliable high quality wastewater collection service at a fair price. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly and time-intensive reporting requirements and improve value and accuracy of information reported to the public. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliable infrastructure 3. Maintain service 4.Valuable Reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG). Local, Regional & State     2. Advocate for future regulations of wastewater collection systems that include the following requirements::  timely rebuilding of the local wastewater systems;  maintains the quality of delivered wastewater collection service;  minimizes any increase in the cost of wastewater collection service;  creates no additional exposure to more frequent or severe wastewater overflows;  supports the existing wastewater collections systems and their operation. Local, Regional & State    3. Support provision of sufficient resources for regional agencies to enable them to advocate for:  environmentally sustainable, reliable wastewater collection service at a fair price;  regional comparisons of wastewater collection projects for future state grant funding. Local and Regional    Utilities Legislative Policy Guidelines for 2014 Page 10 of 13 1. Local Authority 2. Reliable infrastructure 3. Maintain service 4.Valuable Reporting 4. Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional, and State  5. Advocate for funding and local regulations for wastewater collections system projects and requirements that reduce overflows and improve collection system efficiency. Regional, State and Federal   Utilities Legislative Policy Guidelines for 2014 Page 11 of 13 WATER Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the ability to optimize volumetric and fixed charges to balance the goals of revenue certainty and water use efficiency. 2. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3. Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a fair price. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA) and California Municipal Utilities Association (CMUA), with support from Palo Alto staff for BAWSCA and the San Francisco Bay Area Regional Water System Financing Authority (RFA). Local, Regional & State     2. Participate in California Urban Water Conservation Council (CUWCC) Best Management Practice (BMP) revisions and development to ensure that aggressive and cost- effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State     3. Advocate to ensure that legislative actions regarding the Hetch Hetchy Reservoir and conveyance system include the following requirements:  timely rebuilding of the regional water system;  maintains the quality of delivered water;  minimizes any increase in the cost of water;  creates no additional exposure to more frequent or severe water shortages;  supports the existing water system and its operation. Local, Regional & State   Utilities Legislative Policy Guidelines for 2014 Page 12 of 13 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 4. Advocate for interpretations or implementation of Water Code provisions (such as those enacted by AB 1823 (2002), AB 2058 (2002) and SB 1870 (2002)) that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State    5. Support provision of sufficient resources for BAWSCA to enable it to advocate for:  an environmentally sustainable, reliable supply of high quality water at a fair price;  a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage.  a contract amendment to modify the drought time water allocation between the SFPUC and the BAWSCA agencies  preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system;  regional planning for conservation, recycled water, and other water supply projects. Local and Regional     6. Advocate for:  actions that preserve Palo Alto’s existing contractual rights  supporting actions that preserve local control over water use and limit encroachment from outside jurisdictions Local and Regional   7. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  8. Support notification requirements that aid residents/customers but do not inflict undue or unobtainable requirements on the utility. State   9. Support local control of public benefit funds funding levels and program design. State   10. Support beneficiary pays methodologies to prevent taxes or fees, in particular those imposed on SFPUC customers, to fund infrastructure improvements and costs of other water sources such as the Delta. State    Utilities Legislative Policy Guidelines for 2014 Page 13 of 13 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 11. Advocate for financing or funding for water conservation programs and recycled water projects that meet end-use needs and conserve potable water and oppose legislation that would reduce such funding. State, Regional and Federal     12. Support infrastructure security and reliability that includes equitable allocation of funds for increasing the security of infrastructure and that protects the City from unnecessary regulations. Local, State and Federal    ATTACHMENT C Utilities’ Legislative Policy Guidelines for 2014 Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager as per the City’s legislative advocacy process. ALL UTILITIES Goals 1. Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2. Support efforts to maintain or improve the reliability of the supply, transmission, storage and distribution/collection infrastructures. 3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, and recognizes early voluntary action. 4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 1. Advocate goals through active participation in joint action efforts. Federal, State, and Regional     2. Communicate the City’s record on environmental and energy efficiency programs with Legislature, California Energy Commission (CEC), California Air Resources Board (CARB), and Natural Resources Defense Council (NRDC) via California Municipal Utilities Association (CMUA), Northern California Power Agency (NCPA), and the Bay Area Water Supply and Conservation Agency (BAWSCA). State    Deleted: A Utilities Legislative Policy Guidelines for 2014 Page 2 of 13 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 3. Support legislation that will result in the most cost-effective reduction of GHG emissions, recognition of early action, and inclusion of more efficient solutions, fuel switching, and demand control programs, in integrated resource plans. Federal, State, and Regional    4. Promote utility legislation and regulations that support reasonable reliability standards and compliance requirements, and effective and consistent reporting requirements, customer communications, and goal- setting. Federal, State, and Regional Reliability Councils    5. Oppose cost shifts from Federal or State budgets and California Public Utilities Commission (CPUC) jurisdictional utilities through active participation in CMUA and NCPA legislative activities. Federal, State, and CPUC   6. Advocate for State and Federal grants for local and regional applications of energy efficiency, conservation, renewable resources, fiber, wastewater collection systems and recycled water projects. Federal and State    7. Maintain right of way access for utility infrastructure. Federal and State   8. Protect the value of existing assets and contracts and local regulatory approvals of same. Federal and State    9. Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and state programs that recognize critical infrastructure needs. Federal and State    Deleted:  Deleted:  Utilities Legislative Policy Guidelines for 2014 Page 3 of 13 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability and security of infrastructure. 3. Support legislation that makes bold progress in cost effectively reducing GHG emissions and encourages early voluntary action. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Legislative Policy Guidelines Venue Goals 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (CMUA), American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff to speak with a coordinated voice. Federal and State     2. Support NCPA in its continued efforts to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State   3. Advocate for legislation/regulations that provide local control and support for:  cost-effective clean distributed generation and cogeneration projects, and standards for connecting such resources to the local distribution system;  balancing state and local policy implementation and ratepayer equity;  cost-effective electric efficiency programs;  implementation of renewable portfolio standards;  cost-effective storage integration;  direct access requirements;  smart meters and smart grid design and implementation, and  public benefit funds (as allowed in AB1890 (1996)). Federal and State     Deleted: greenhouse gas Deleted: . Utilities Legislative Policy Guidelines for 2014 Page 4 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 4. Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to move to lower GHG emission portfolios;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State    5. Support legislation for renewable portfolio standards that:  promote the 33% goal for the state;  maintain local compliance authority;  allow utilities to pursue low cost alternatives by utilizing existing transmission system to access out-of-state resources, including use of Renewable Energy Certificates (RECs);  prevent double jeopardy in the assessment of penalties for non-compliance; and  restrict extension of CEC jurisdiction over Publicly Owned Utilities. Local and State    6. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that:  enhance/ensure reliability;  ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state-owned electric contract costs on municipal utility customers);  improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards);  support the continuation of federal and state financial incentives that promote increased renewable development;  improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and Local, State, and Federal     Deleted: . Utilities Legislative Policy Guidelines for 2014 Page 5 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control  reduce the environmental impact on the Bay Area and the Peninsula. 7. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration (Western) such as:  support of Congressional Field Hearings to explore modernizing flood control strategies, river regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries;  protection of the status of Western Power Marketing Administration and cost-based rates;  provisions for preference customers’ first take at land available with economic potential for wind farms;  balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts;  achieving the grid modernization goals of Secretary Chu’s March 16, 2012 memo without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts; and  monitor and evaluate impacts of Delta conveyance proposals on Western Base Resource allocation. Federal, State and Regional    8. Advocate for Congressional, legislative, or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) or the Western Electricity Coordinating Council (WECC). Federal, State and Regional    9. Support fair and reasonable application of grid reliability requirements established by NERC, WECC, or FERC and seek Congressional remedies (if needed) for punitive application of fees and fines. Federal and Regional    10. Work with CAISO or through FERC:  to give buyers of renewable intermittent resources relief from imbalance penalties; and  to promote financial and operational changes that result in timely and accurate settlement Federal and State    Deleted: lower Deleted: and Deleted: . Deleted: assessment Deleted: California Independent System Operator ( Deleted: ) Utilities Legislative Policy Guidelines for 2014 Page 6 of 13 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control and billing. 11. Monitor cyber security issues to ensure that CPAU, which currently does not have NERC defined Critical Cyber Assets, retains local control over its cyber security needs while remaining exempt from NERC cyber security standards. Support NCPA to protect it and its member agencies from unnecessary cyber security regulations. Federal and Regional   Deleted: is not subject to NERC cyber security standards Deleted: and s Utilities Legislative Policy Guidelines for 2014 Page 7 of 13 GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and conservation programs, alternative gas supplies, and rate structure. 2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3. Support efforts to reduce greenhouse gas emissions and protect the environment. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliability of Infrastructure 3. Environ -ment 4. Cost Control 1. Advocate most of these goals mainly through the American Public Gas Association (APGA) with minor support from Palo Alto staff. Primarily Federal with minor advocacy at State level     2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State     3. Support increased production/incentives for renewable gas supplies from in or out of state. Federal and State     4. Advocate for financing or funding for cost- effective natural gas efficiency and solar water heating end uses. Federal and State     5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7. Support efforts to improve pipeline safety. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. Oppose legislative proposals resulting in unreasonable costs for Palo Alto’s customers. Federal and State    Utilities Legislative Policy Guidelines for 2014 Page 8 of 13 1. Local Authority 2. Reliability of Infrastructure 3. Environ -ment 4. Cost Control 8. Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for natural gas utilities to move to lower GHG emission portfolios;  advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and- trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State    9. Support legislation that aims to protect public health and encourages transparency regarding the practice of hydraulic fracturing or “fracking” for natural gas development, but not blanket moratoriums that aren’t supported by science. Federal and State   Deleted: . Deleted: Advocate for the fair application of Clean Water Act rules and other existing environmental rules on the Deleted: . Utilities Legislative Policy Guidelines for 2014 Page 9 of 13 WASTEWATER COLLECTIO N Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2. Increase the reliability of the local wastewater collection systems. 3. Maintain the provision of an environmentally sustainable, reliable high quality wastewater collection service at a fair price. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly and time-intensive reporting requirements and improve value and accuracy of information reported to the public. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliable infrastructure 3. Maintain service 4.Valuable Reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG). Local, Regional & State     2. Advocate for future regulations of wastewater collection systems that include the following requirements::  timely rebuilding of the local wastewater systems;  maintains the quality of delivered wastewater collection service;  minimizes any increase in the cost of wastewater collection service;  creates no additional exposure to more frequent or severe wastewater overflows;  supports the existing wastewater collections systems and their operation. Local, Regional & State    3. Support provision of sufficient resources for regional agencies to enable them to advocate for:  environmentally sustainable, reliable wastewater collection service at a fair price;  regional comparisons of wastewater collection projects for future state grant funding. Local and Regional    Deleted: Advocate to ensure that legislative actions regarding the comparison of wastewater collections systems for future regulations include the following requirements Deleted: ABAG Deleted: it Utilities Legislative Policy Guidelines for 2014 Page 10 of 13 1. Local Authority 2. Reliable infrastructure 3. Maintain service 4.Valuable Reporting 4. Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional, and State  5. Advocate for funding and local regulations for wastewater collections system projects and requirements that reduce overflows and improve collection system efficiency. Regional, State and Federal   Utilities Legislative Policy Guidelines for 2014 Page 11 of 13 WATER Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the ability to optimize volumetric and fixed charges to balance the goals of revenue certainty and water use efficiency. 2. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3. Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a fair price. Legislative Policy Guidelines Venue Goals 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA) and California Municipal Utilities Association (CMUA), with support from Palo Alto staff for BAWSCA and the San Francisco Bay Area Regional Water System Financing Authority (RFA). Local, Regional & State     2. Participate in California Urban Water Conservation Council (CUWCC) Best Management Practice (BMP) revisions and development to ensure that aggressive and cost- effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State     3. Advocate to ensure that legislative actions regarding the Hetch Hetchy Reservoir and conveyance system include the following requirements:  timely rebuilding of the regional water system;  maintains the quality of delivered water;  minimizes any increase in the cost of water;  creates no additional exposure to more frequent or severe water shortages;  supports the existing water system and its operation. Local, Regional & State   Utilities Legislative Policy Guidelines for 2014 Page 12 of 13 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 4. Advocate for interpretations or implementation of Water Code provisions (such as those enacted by AB 1823 (2002), AB 2058 (2002) and SB 1870 (2002)) that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State    5. Support provision of sufficient resources for BAWSCA to enable it to advocate for:  an environmentally sustainable, reliable supply of high quality water at a fair price;  a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage.  a contract amendment to modify the drought time water allocation between the SFPUC and the BAWSCA agencies  preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system;  regional planning for conservation, recycled water, and other water supply projects. Local and Regional     6. Advocate for:  actions that preserve Palo Alto’s existing contractual rights  supporting actions that preserve local control over water use and limit encroachment from outside jurisdictions Local and Regional   7. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  8. Support notification requirements that aid residents/customers but do not inflict undue or unobtainable requirements on the utility. State   9. Support local control of public benefit funds funding levels and program design. State   10. Support beneficiary pays methodologies to prevent taxes or fees, in particular those imposed on SFPUC customers, to fund infrastructure improvements and costs of other water sources such as the Delta. State    Deleted: n Utilities Legislative Policy Guidelines for 2014 Page 13 of 13 1. Local Authority 2. Reliable infrastructure 3. Minimize imports 4. Supplies at fair cost 11. Advocate for financing or funding for water conservation programs and recycled water projects that meet end-use needs and conserve potable water and oppose legislation that would reduce such funding. State, Regional and Federal     12. Support infrastructure security and reliability that includes equitable allocation of funds for increasing the security of infrastructure and that protects the City from unnecessary regulations. Local, State and Federal    ATTACHMENT D 1 Review of Legislative Activities in 2013 City of Palo Alto Utilities (CPAU) staff participates on the legislative committees of the California Municipal Utilities Association (CMUA) and the Northern California Power Agency (NCPA). This is year one of California’s two-year 2013-2014 legislative session. Friday, September 13, 2013 was the final day for the Assembly and Senate floors to pass legislation for this year. Any bills remaining in the Senate or Assembly could become two-year bills and be taken up again in 2014. This was a relatively quiet year for energy and water legislation, and those bills that have made it to the Governor’s desk this year have little immediate or direct impact to CPAU as a publicly owned utility (POU) and so CPAU did not take any formal positions on utility related bills this year. However, one bill passed (AB 792 - Mullin) that could have a minor impact on the City’s collection of the utility user’s tax. Following is a summary of the bills CPAU staff has been following this year, along with the positions taken by NCPA and CMUA. State Legislative Issues Energy Related Bills Community Solar programs: SB 43 (Wolk) – Approved by Governor (Chapter 413, Statutes of 2013). SB 43 was the surviving community solar bill this year. It requires large Investor Owned Utilities (IOUs) with more than 100,000 customers to offer a “green tariff” for their customers to purchase power from large renewable energy generation facilities (up to 20 MW in size) located in their service territory. The program sets a statewide limit of 600 MW and is scheduled to sunset on January 1, 2019. The statute excludes POUs and therefore would not apply to CPAU. However, community solar could return next year in the form of a bill to expand the mandate to POUs. Proposition 39 Implementation: California Proposition 39 (Income Tax Increase for Multistate Businesses) passed in November 2012 and created the Clean Energy Job Creation Fund. The fund will receive $550 million annually for five years (FY 2014 – FY 2018). A number of bills were introduced this year to direct the use of these funds. These bills became irrelevant, however, once the Governor and the Legislature agreed upon a compromise proposal and included provisions for directing funds in Budget trailer bills (AB 78/SB 73). Those and the rest of the trailer bills, which together represented the State Budget, were passed together by the Legislature on June 15, 2013. The Legislature and Governor agreed that Proposition 39 funds should focus on energy efficiency investments in public schools. NCPA will remain a proactive participant in the discussions concerning implementation of Proposition 39 as it moves through the regulatory process at the California Energy Commission (CEC) and California Department of Education. ATTACHMENT D 2 AB 327 (Perea) – Approved by Governor (Chapter 611, Statutes of 2013). This statute relates to IOU’s utility rates, fixed fees, and Net Energy Metering (NEM). Originally, AB 327 focused on the frozen Tier I and II rates of the IOUs and treatment of their low income customers. Towards the end of the session, the legislation became the focus of major NEM amendments from the Governor’s office. The Governor’s language will extend the NEM program by, among other things, increasing the cap on the percentage of a utility’s total load that could be met by NEM. However, POUs remain unaffected because the NEM amendments only apply to large IOUs. Natural Gas: AB 1257 (Bocanegra) – Approved by Governor (Chapter 749, Statutes of 2013). This statute requires the CEC, on or before January 1, 2015, and every four years thereafter, to prepare and submit to the Governor a report identifying strategies to maximize the benefits obtained from natural gas as an energy source. Other Energy Related Bills: AB 8 (Perea) – Approved by Governor (Chapter 401, Statutes of 2013). This is an alternative- fuel vehicles funding program that extends the sunset dates on various fees collected for statewide programs that support alternative fuels and vehicles. SB 11 (Pavley) contained similar language but did not pass this year, remaining in the assembly as a potential 2-year bill. CMUA supported both bills. AB 792 (Mullin) – Approved by Governor (Chapter 534, Statutes of 2013). This statute creates Utility User Tax (UUT) exemptions. The original purpose of this legislation was to exempt energy use from customer on-site solar facilities from UUT. The legislation was then amended to include, until January 1, 2020, UUT exemptions for a “clean energy resource”, commonly understood to include fuel cells that run on natural gas. The California League of Cities tried to block the inclusion of non-renewable fuel cells, but failed and the League therefore remained opposed to the bill. CMUA also took an oppose position. CPAU already has a de facto exemption for its NEM customers, because the UUT is applied to the net billed amount, and is not specifically applied to the amount of energy used on-site and generated by a particular source. Depending on assumptions for the growth of customer on- site solar, the forgone UUT could be $200,000/yr by 2020, but, as noted, the City does not currently collect UUT on generation from these behind-the-meter solar installations. The new language could further impact City revenues if a commercial customer installs a fuel cell that uses natural gas since the electricity supplied by the fuel cell would supplant electricity purchases from CPAU, which would result in a lower UUT collection. However, staff has not experienced demand for fuel cell applications. Water Related Bills Drinking Water: AB 145 (Perea) – This bill would have transferred the Division of Drinking Water and Environmental Management of the California Department of Public Health (CDPH) to the State Resources Control Board (SWRCB), but failed passage this year. Due to that failure, Assembly ATTACHMENT D 3 Member Perea amended another bill, AB 1393 (Perea), which would have moved the Safe Drinking Water State Revolving Fund (SRF) to the SWRCB (an alternative previously supported by CMUA to more specifically address the identified problems). AB 1393 also failed passage, never moving out of the Senate Rules Committee. However, the Governor’s office is apparently still set on moving CDPH as a whole to the SWRCB. Next year, it is possible that the administration will introduce a generic reorganization bill. Hydraulic Fracturing: SB 4 (Pavley) – Approved by Governor (Chapter 313, Statutes of 2013). This was the remaining legislation related to hydraulic fracturing (“fracking”) this year. Late amendments turned it into a more controversial issue, with major environmental groups pulling their support, and oil interests ceasing their active lobbying against it. This statute establishes a comprehensive regulatory program for oil and gas well stimulation treatments (e.g., fracking, acid well stimulation), which includes, among other things, a study, the development of regulations, a permitting process, and public notification and disclosure. Water Recycling: AB 803 (Gomez) – Approved by Governor (Chapter 635, Statutes of 2013). Prior to enactment of AB 803, state law required any person who causes or permits any sewage or other waste, or the effluent of treated sewage or other waste to be discharged in or on any waters of the state, or where it probably will be discharged in or on any waters of the state, to immediately notify the local health officer or the director of environmental health of the discharge. Now that AB 803, the Water Recycling Act of 2013, has been enacted, the notification requirement does not apply to an unauthorized discharge of effluent of treated sewage defined as recycled water. The purpose of the bill, according to the author, was to align existing provisions in law and reduce unnecessary paperwork resulting from the reporting of incidental run-off from recycled water projects. AB 803 was supported by CMUA. Potential Two-Year Bills: AB 1331 (Water Parks and Wildlife Committee) and SB 42 (Wolk) – Both these bills would repeal the existing $11.1 billion water bond (currently scheduled for submission to voters in the November 2014 statewide general election) and replace it with a new bond issuance. The new bond amounts would be about $6.5 billion under both bills. AB 122 (Rendon) – This legislation is related to nonresidential building energy retrofit financing. It was held in the Assembly Appropriations committee. This bill would enact the Nonresidential Building Energy Retrofit Financing Act of 2012 and would require the CEC to establish the Nonresidential Building Energy Retrofit Financing Program to provide (through a third-party administrator) financial assistance through revenue bonds for owners of eligible buildings to implement energy efficiency improvements. While this does not create a utility program, possible financing options will be of interest to CPAU customers. AB 1258 (Skinner) – This bill would require the CEC to perform a technical analysis of the ability of existing hydroelectric and pumped storage facilities to provide additional operational ATTACHMENT D 4 flexibility to integrate intermittent renewables, such as solar and wind. The bill targets the electrical output of specific facilities, namely units of the State Water Project, for which electrical generation is a secondary purpose. The bill was strongly opposed by electric and water utilities. SB 605 (Lara) – This bill is related to revision of the AB 32 Scoping Plan on In-State Offset Protocols. This bill could resurface in May 2014, but is off the radar for now. CMUA is opposed to any language restricting the location of offset protocols. CMUA continues to monitor in case the offset component turns up in amendments to another bill this year. SB 760 (Wright) – This is a renewables portfolio standards (RPS) related bill. This bill would “encourage” geothermal as an RPS baseline resource for IOUs. It would require the CPUC to include in its RPS resource selection criteria, the resources necessary to maintain the reliability of the electrical grid to meet electrical demand on a 24-hour basis and consider the attributes of utilizing geothermal. The bill does not include POUs at this time but CMUA will continue to watch it. Federal Legislative Issues Prior to its August recess, Congress teed up a number of big issues for their return in September; namely raising the government debt ceiling and the associated bargains over tax reform and the deficit reduction. NCPA’s legislative priorities, which are consistent with CPAU’s in this regard have remained on ensuring that any Congressional changes and actions do not adversely impact tax-exempt financing. Other CPAU shared, NCPA legislative priorities include cybersecurity, federal hydropower regulatory reform, and fixes to the Commodity Futures Trading Commission’s (CFTC) swap dealer definition. NCPA continues to try to focus the Bureau of Reclamation’s and the Western Area Power Administration’s attention on resolving the issue of Central Valley Project power customers paying a disproportionately higher assessment of the environmental Restoration Fund than intended in the Central Valley Project Improvement Act. Cybersecurity In July, Senate Commerce Committee Chairman Jay Rockefeller (D-WV) and Ranking Republican John Thune (R-SD) introduced legislation that builds on the President’s February Executive Order on cybersecurity. Under the Executive Order, the National Institute of Standards and Technology (NIST) is to identify best practices and develop voluntary standards for the 18 critical infrastructure sectors. The Senators’ bill, S. 1353, also known as the Cybersecurity Act of 2013, would:  Formalize cybersecurity as one of NIST’s priority areas of focus and create a NIST- facilitated, industry-driven process for developing a set of voluntary cybersecurity standards for critical infrastructure. These standards will not duplicate or conflict with existing cyber requirements or regulatory processes, and they will be non-regulatory, non-prescriptive and technology neutral; ATTACHMENT D 5  Strengthen cyber research and development and build on existing research and development programs and ensures better coordination across the federal government;  Improve the cyber workforce and cyber education. S.1353 will help make sure we train and prepare the next generation of cyber experts; and,  Increase the public’s awareness of cyber risks and cybersecurity. Federal Hydropower Regulatory Reform and Efficiency Measures At the beginning of August the U.S. Senate, by unanimous consent, passed two hydropower bills aimed at encouraging and expediting the development of small-scale hydropower. The Hydropower Regulator Efficiency Act (H.R. 267), would raise the current FERC licensing exemption threshold for small hydropower projects from 5 megawatts (MW) to 40 MW. The Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act (H.R. 678), would allow hydropower development in existing Bureau of Reclamation water canals, pipes, and ditches. H.R. 267 and H.R. 678 were both signed into law, becoming Public Law No: 113-23 and Public Law No: 113-24, respectively. This is a culmination of the effort by National Hydropower Association and its members, including NCPA, to promote hydropower streamlining legislation. CFTC swap dealer definition There have been recent developments from the CFTC regarding swaps regulations and the requirements of the Commodity Exchange Act’s as amended by the Dodd-Frank Act. Staff will provide a summary of these recent developments in the next quarterly report. Power Marketing Administration Recommendations To provide input for its “roadmap” to 2024, the Western Area Power Administration (Western) sent out more than 1,000 surveys to its power and transmission customers and another 1,500 surveys to its employees and contractors. In total, 23% of the power and transmission customers that were contacted responded to the survey. In addition to the survey, Western conducted in-depth interviews with about 20 customer representatives throughout its five regions. In August, Western hosted a webinar to unveil the results of a customer survey, and provide details on the agency’s efforts to craft a “roadmap” for 2024. Western’s summary of the initial feedback from the survey was that there was a strong interest from both customers and employees to maintain a clear focus on the agency’s core mission. They also stated that the survey and interviews highlighted the need for transmission construction, the inevitability of markets, and the growing importance of renewables. The first draft of Western’s Roadmap is expected before the end of the year. EXCERPTED DRAFT MINUTES OF THE DECEMBER 4, 2013 UTILITIES ADVISORY COMMISSION MEETING ITEM 2: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy Guidelines for 2014 Compliance Manager Debbie Lloyd presented an overview of the written report. She reviewed the changes made from the Council-adopted 2013 guidelines, summarized legislative action in 2013 and provided a look ahead to legislative activity expected in 2014. Lloyd highlighted the more substantive changes to guidelines, which included: supporting tax-exempt financing options; adhering to a beneficiary pays philosophy for large infrastructure investments; monitoring impacts to the City’s Western hydro resource allocation; local flexibility for using cap-and-trade revenues; science based regulations for hydraulic fracturing that ensure transparency and public safety; and fair dry year water allocations and rate structures for the City’s water supply. Lloyd stated that while there had been minimal new state regulations introduced in 2013 for publically owned utilities, such as Palo Alto’s Utilities Department, we may see renewed attempts to increase net energy metering caps and renewable portfolio standards in 2014. Regarding Federal issues, Lloyd highlighted continuing activity to increase cyber security requirements, threats to tax-exempt bond financing, and ongoing activities relating to the City’s Western allocation. Commission Eglash commended staff on the development of the legislative guidelines noting that they are a terrific tool to help staff be responsive and use time efficiently. With respect to Gas Guideline #9 regarding fracking, he supports the recommended changes and stated that the fracking is used universally and banning it is not practical, but it is appropriate to do it responsibly. Vice Chair Foster asked that if all gas is fracked, then what is the debate about fracking? Commissioner Eglash responded that in the past, there were some well casings that were constructed badly which led to environmental problems; and there is the ongoing question about fugitive emissions and the environmental impact of natural gas in general. There is also a small but vocal minority of concerned people that worry about very small seismic events triggering earthquakes, so that even if there are sound well casings, there could still be some leakage and contamination of ground water, although he was not aware of any data or studies that supported that concern. Director Fong added that the methods used can vary and we want to make sure that the most responsible techniques are in use. Commissioner Hall asked about the proposed new Guideline #9 under all utilities regarding maintaining existing local municipal financing options. Lloyd replied that there are threats to tax-exempt municipal bonds and other federal funding as a result of the Federal budget issues and sequestration. Commissioner Hall asked for clarification that the electric guideline #11 relating to critical cyber assets was in the context of NERC guidelines. Director Fong verified that there was a very specific definition of NERC critical cyber assets and that staff would clarify this in the guidelines so that it will be clear that the City is not discounting critical assets such as our SCADA and communications systems. Commissioner Hall commented about proposed Delta Flow criteria changes and water impacts during dry years. He asked where this should be addressed in the guidelines. Lloyd referred to electric guideline #7 that supports “ balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts”. Director Fong also referred to water guidelines #1 and #3 as being relevant to the Delta flow issues. ACTION: Commissioner Eglash made a motion to recommendation Commissioner Hall seconded the motion. The motion carried unanimously (5-0) with Chair Cook and Commissioner Waldfogel absent. City of Palo Alto (ID # 4349) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Annual Status Report Developers' Impact Fees FY 2013 Title: Review and Acceptance of Annual Status Report on Developers' Fees for Fiscal Year 2013 and Adoption of Resolution Making Findings Regarding Continuing Need for Unexpended Stanford Research Park/El Camino Development Fees in the Amount of $823,618; San Antonio/West Bayshore Development Fees in the Amount of $664,374; University Avenue Parking In- Lieu Development Fees in the Amount of $90,696; and the Citywide Transportation Impact Development Fees in the Amount of $4,453 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the City Council review and accept the Annual Report on Developers' Fees for the period ending June 30, 2013 (Attachment A). In addition, staff recommends that the City Council adopt the attached resolution (Attachment B) regarding the continuing need for unexpended funds in the Stanford Research Park/El Camino Development Fund, San Antonio/West Bayshore Development Fund, University Avenue Parking In-Lieu Development Fund, and Citywide Transportation Impact Development Fund. Background State law (Government Code Section 66006) requires each local agency that imposes development impact fees prepare an annual report providing specific information about those fees. This requirement is part of the law commonly referred to as AB 1600. It codifies the legal requirement that fees on new development must have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposes certain accounting and reporting requirements with respect to the fees collected. The fees, for accounting purposes, must be segregated from the general funds of the City and from other funds or accounts containing fees collected for other improvements. Interest on each development fee fund or account must be credited to that fund or account and used only for the purposes for which the fees were collected. City of Palo Alto Page 2 Government Code Section 66006 contains comprehensive annual reporting requirements for development impact fees. This statute requires that, within 180 days after the close of the fiscal year, the agency that collected the fees must make available to the public the following information regarding each fund or account: o A brief description of the type of fee in the fund. o The amount of the fee. o The beginning and ending balance for the fiscal year in the fund. o The amount of fees collected and interest earned. o An identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. o An identification of an approximate date by which the construction of a public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement. o A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. o The amount of any refunds made due to inability to expend fees within the required time frame. This report must also be reviewed by the City Council at a regularly scheduled public meeting not less than 15 days after the information is made available to the public. In addition, notice of the time and place of the meeting shall be mailed at least 15 days prior to the meeting to any interested party who files a written request with the local agency for such a mailed notice. An City of Palo Alto Page 3 early packet consisting of Exhibit A only was made available to the public and included in the packet for the December 9, 2013 meeting of the City Council. The law also provides that, for the fifth fiscal year following the first deposit into the fund and every five years thereafter, the local agency shall make findings with respect to any portion of the fee remaining unexpended, whether committed or uncommitted. The finding must: identify the purpose to which the fee is to be put; demonstrate a nexus between the fee and the purpose for which it was originally charged; and identify all sources and amounts of funding anticipated to complete financing of incomplete improvements along with the approximate dates on which the anticipated funding is expected to be deposited into the fund. If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or to perform certain administrative tasks prescribed by AB 1600, the agency may be required to refund, on a prorated basis to owners of the properties upon which the fees for the improvement were imposed, the monies collected for that project and any interest earned on those funds. Discussion The City of Palo Alto development fees covered by AB 1600, and documented in Attachment A, include the following: o Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. o San Antonio/West Bayshore Area traffic impact fees (PAMC Ch. 16.46): Fee for new nonresidential development in the San Antonio/West Bayshore area to fund capacity improvements at four intersections. o Housing impact fees imposed on commercial developments (PAMC Ch. 16.47): Fee on commercial and industrial development to contribute to programs that increase the City's low income and moderate-income housing stock. o Parking in-lieu fees for University Avenue Parking District (PAMC Ch. 16.57): Fee on new non-residential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces. City of Palo Alto Page 4 o Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new residential and non-residential development to provide community facility funds for parks, community centers and libraries. o Residential housing in-lieu fees (PAMC Ch. 16.47): Fee on residential developments in- lieu of providing required below-market rate units to low and moderate income households. o Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.59): Fee on new development and re-development within the Charleston-Arastradero Corridor to provide for pedestrian and bicyclist improvements. o Parkland dedication fees (Quimby Act) (California Government Code Section 66477): Fees or parkland dedication imposed on new residential and non-residential development. o Water and sewer capacity fees (California Government Code Section 66000): Fee on developments adding load to water and sewer systems. o Citywide Transportation impact fee (PAMC Ch 16.59): Fee on development in all parts of the City to fund transportation projects and programs to reduce congestion. AB 1600 requires the City to make specified findings in the event any funds are not expended within five fiscal years of collection and every five years thereafter. While there are several funds containing collected fees that have not been expended in five years, the required statutory carryover findings have already been made for those funds and no further findings are required. There are four categories of fees that require statutory findings. (These proposed findings are contained in Attachment B.) The Stanford Research Park/El Camino Development Fund has an unexpended fund balance of $823,618 that was collected in fiscal year 2008 or prior. The San Antonio/West Bayshore Development Fund has an unexpended fund balance of $664,374 that was collected in fiscal year 2008 and prior. The University Avenue Parking In-Lieu Development Fund has an unexpended fund balance of $90,696 that was collected in fiscal year 2008 or prior. The Citywide Transportation Impact Development Fund has an unexpended fund balance of $4,453 that was collected in fiscal year 2008 or prior. City of Palo Alto Page 5 The Community Centers Development Fund, Libraries Development Fund, and Parkland Dedication Fund contain development impact fees that remain unexpended. In fiscal year 2012 (CMR #3405) the City Council made the required findings that there was a continued need for the Community Centers and Libraries Development Funds to be used for the Mitchell Park Library and Community Center project. In fiscal year 2012, Council also found a continued need for the Parkland Dedication Fund for the purpose of acquiring land to build a recreation park in underserved communities. In the case of housing impact fees for residential and commercial development and the Charleston/Arastradero developer impact fees, the funds on hand as of June 30, 2013 have all been received within the past four years. Therefore, no findings are required for those fees. Resource Impact If the Council does not make the findings contained in Attachment B, the development fees described therein might be required to be refunded. This would have a total fiscal impact of $1,583,141 in the Stanford Research Park/El Camino Development Fund ($823,618), the San Antonio/West Bayshore Development Fund (664,374), the University Avenue Parking In-Lieu Development Fund ($90,696), and the Citywide Transportation Impact Development Fund ($4,453) for projects or purposes as outlined in Attachment B. Policy Implications This report does not represent any change to existing City policies. Environmental Review Presentation of this annual report is not a project under the California Environmental Quality Act; accordingly, no environmental assessment is required. Attachments:  Attachment A: Developer Fees (XLS)  Attachment B: Resolution Adopting Findings with Respect to Unspent Fees (PDF) Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Stanford Research Park/San Antonio/West FUND El Camino Fund Bayshore Fund Purpose and Authority Traffic impact fees imposed on new Traffic impact fees imposed on new for Collection nonresidential development in the nonresidential development in the Stanford Research Park/El Camino San Antonio/West Bayshore Areas Real CS zone to fund improvements to fund capacity improvements at at eight identified intersections.four identified intersections. PAMC Ch. 16.45 PAMC Ch. 16.46 Amount of the Fee $11.08 per square foot $2.28 per square foot Fund Balance July 1, 2012 $3,388,571 $801,992 Activity in 2012-13 Revenues Fees Collected 480,591 35,151 Interest Earnings (22,646)(7,926) Unrealized Gain/Loss Investments 0 0 Transfer In from Gas Tax Fund Transfer In from CIP Fund ------------------------------------------------------------------------------------------------------------------- Total Revenues $457,945 $27,225 Expenditures Other 0 0 Charleston/Arastradero Corridor Improvements 0 0 (PL-05002) ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2013 $3,846,516 $829,217 Net Funds Available $3,846,516 $829,217 Unexpended balance after five years $823,618 $664,374 USE OF FEES:USE OF FEES: No expenditures have been made from this fund in Fiscal Year 2013. Fees are planned to be used for the Page Mill/Hanover intersection. No expenditures have been made from this fund in Fiscal Year 2013. Fees are planned to be used for specific traffic improvements in the Charleston/San Antonio Road area, but have been delayed by a related project to be constructed by the State Department of Transportation. Page 1 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 University Avenue Commercial Housing Parking Assessment District FUND In-Lieu Fund In-Lieu Fund Purpose and Authority Fees imposed on large commercial Fees collected from non-residential for Collection and industrial development to development within the University Ave. contribute to programs that increase Parking Assessment District in lieu of the City's low income and moderate-providing the required number of income housing stock.parking spaces. PAMC Ch.16.47 PAMC Ch 16.57 Amount of the Fee $18.44 per square foot $60,750 per space Fund Balance July 1, 2012 $3,561,337 $657,993 Activity in 2012-13 Revenues Other Revenue from Other Agencies 3,754,664 0 Interest Earnings 1,106 2,859 Unrealized Gain/Loss Investments 0 0 Operating Transfer from SUMC Dev Agreement Fund 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues 3,755,770 2,859 Expenditures Reclassify prior year to loan 2,700,000 0 Consultant Fees 0 ------------------------------------------------------------------------------------------------------------------- Total Expenditures 2,700,000 0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2013 $10,017,107 $660,852 Other Commitments/Appropriations Encumbrances 0 Reserve for Notes Receivable include:$1,290,000 for 2811 Alma, $1,500,000 for Maybell Apts., and $3,645,010 for 801 Alma.(6,435,010) Reserve for unrealized gain on investments (12,599)(2,891) Net Funds Available $3,569,498 $657,961 Unexpended balance after five years 0 $90,696 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this fund in Fiscal Year 2013. $2.7 million previously reported as expenditure for 801 Alma St. was reclassified to loan. No expenditure of funds have been made from this fund in Fiscal Year 2013. Page 2 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Residential & Non-Residential Housing Residential & Non-Residential Housing Community Facilities Community Facilities FUND Parks Community Centers Purpose and Authority Fees imposed on new residential and Fees imposed on new residential and for Collection non-residential development approved non-residential development approved after Jan 28, 2002 for Parks. after Jan 28, 2002 for Community Centers. PAMC Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $10,639/residence (or $15,887/residence larger than 3,000 sq ft); Multifamily $6,964/unit (or $3,521/unit smaller than or equal to 900 sq ft) Residential: Single family $2,758/residence (or $4,129/residence larger than 3,000 sq ft); Multifamily $1,815/unit (or $916/unit smaller than or equal to 900 sq ft) Nonresidential: Commercial/industrial $4,518 per 1,000 sq ft; Hotel/Motel $2,043 per 1,000 sq ft Nonresidential: Commercial/industrial $255 per 1,000 sq ft; Hotel/Motel $115 per 1,000 sq ft Fund Balance July 1, 2012 $3,184,008 $1,620,518 Activity in 2012-13 Revenues Fees Collected 1,223,560 3,774,869 Interest Earnings (57,506)760 Unrealized Gain/Loss 0 0 Transfer In from CIP Fund 0 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues $1,166,054 $3,775,629 Operating Transfer to Capital Projects Fund (2,723,496)0 ------------------------------------------------------------------------------------------------------------------- Total Expenditures (2,723,496)0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2013 $1,626,566 $5,396,147 Other Commitments/AppropriationsReserve for unrealized gain on investments (10,120)(15,283)------------------------------------------------------------------------------------------------------------------- Net Funds Available $1,616,446 $5,380,864 Unexpended balance after five years 0 $1,072,581 USE OF FEES:USE OF FEES: Expenditure of funds have been made in Fiscal Year 2013 for $1,793K to PG- 13002 (El Camino Park Fields), $260K to PE-13007 (El Camino Dog Park), $450K to PE-13016 (El Camino Park Parking and Restrooms), and $220K to PE-06007 (Park Restrooms). No expenditure of funds have been made from this Fund in Fiscal Year 2013. Page 3 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Residential & Non-Residential Housing Residential Housing Community Facilities In-Lieu Fund FUND Libraries Purpose and Authority Fees imposed on new residential and Fees collected from residential for Collection non-residential development approved developments of three or more units in after Jan 28, 2002 for Libraries. lieu of providing the required below- market rate unit(s) to low and moderate PAMC Ch. 16.58 income households. PA Comprehensive Plan and PAMC Chapter 18 Amount of the Fee Residential: Single family $963/residence (or $1,434/residence larger than 3,000 sq ft); Multifamily $575/unit (or $316/unit smaller than or equal to 900 sq ft)Varies Nonresidential: Commercial/industrial $243 per 1,000 sq ft; Hotel/Motel $102 per 1,000 sq ft Fund Balance July 1, 2012 $586,252 $12,374,215 Activity in 2012-13 Revenues Fees Collected 98,931 893,213 Webster Wood In-Lieu Payment 0 5,500 Palo Alto Bimmer In-Lieu Payment 0 0 Interest Earnings (4,738)51,447 Unrealized Gain/Loss Investments - 0 Operating Transfer from SUMC Dev Agreement Fund 1,720,220 ------------------------------------------------------------------------------------------------------------------- Total Revenues $94,193 $2,670,380 Expenditures Legal 0 Housing Program Expense 0 (285,525) Principal Retired (123,599) Reclassify prior year to loan 300,000 ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 (109,124) ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2013 $680,445 $14,935,471 Reserve for Encumbrances 0 (1,863) Reserve for unrealized gain on investments (2,685)(21,066) Reserve for Notes Receivable include $375,000 for 3053 Emerson, $3,804,300 for Tree House Apts, $461,527 for Oak Manor, $756,819 for Sheridan Apts., $3,164,986 for 801 Alma, and $1,720,220 for Maybell Apts.(10,282,852) ------------------------------------------------------------------------------------------------------------------- Page 4 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Net Funds Available $677,760 $4,629,690 Unexpended balance after five years $374,520 0 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2013. Expenditures in Fiscal Year 2013 include $160K to Palo Alto Housing Corp for BMR fees, $124K for Oak Manor Apts. loan forgiveness, and $300K reclassification of prior year expenditure for 801 Alma St. to loan. Page 5 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Parkland Dedication Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety FUND Purpose and Authority Fees on parkland dedication imposed Fees collected from new development and for Collection on new residential and non-residential re-development within the Charleston- development Arastradero Corridor to provide for pedest- rian and bicyclist safety improvements. Govt Code Sec.66477 (Quimby Act) PAMC Ch. 16.60 Amount of the Fee Varies Residential: $1,115 per unit; Commercial: $0.33 per sq ft Fund Balance July 1, 2012 $772,588 $726,688 Activity in 2012-13 Revenues Fees Collected 1,269,933 99,691 Interest Earnings 14,254 (4,090) - 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues $1,284,187 $95,601 Expenditures Operating Transfer to Capital Projects Fund 0 (250,000) ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 (250,000) ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2013 $2,056,775 $572,289 Other Commitments/Reappropriations Reserve for unrealized gain on investments (6,196)(2,891) ------------------------------------------------------------------------------------------------------------------- Net Funds Available $2,050,579 $569,398 Unexpended balance after five years $181,801 $0 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2013. Budgeted transfers in the amount of $250K were made to the Capital Improvement Fund in Fiscal Year 2013 for the Corridor Plan (PE-13011). Page 6 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 Citywide Transportation FUND Purpose and Authority for Collection Transportation impact fees imposed on new development in all parts of the City to fund congestion reduction projects. PAMC Ch. 16.59 Amount of the Fee $3,053 per net new PM peak hour trip Fund Balance July 1, 2012 $489,245 Activity in 2012-13 Revenues Fees Collected 2,582,599 Interest Earnings 77,404 Unrealized Gain/Loss Investments - -------------------------------------------------------- Total Revenues $2,660,003 ExpendituresOperating Transfer to Capital Projects Fund 0 Operating Transfer to BMR Fund Principal Retired -------------------------------------------------------- Total Expenditures 0 -------------------------------------------------------- Ending Balance June 30, 2013 $3,149,248 Other Commitments/Reappropriations Reserve for unrealized gain on investments (7,848)-------------------------------------------------------- Net Funds Available $3,141,400 Unexpended balance after five years $4,453 USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2013. Page 7 of 8 12/17/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2013 (INFORMATION ONLY) FUND Water and Wastewater Collection Purpose and Authority Capacity fees charged to developers that for Collection are adding load to the water and sewer systems effective July 1, 2005. California Government Code Sect 66000 Amount of the Fee Water Domestic: 5/8 in., 3/4 in. $5,000, 1 in. $9,400, 1 1/2 in. $18,850, 2 in. by est. $125/FU, 3 in. by est. $125/FU , 4 in. by est. $125/FU , 6 in. by est. $125/FU Water Fire Service: 2 in. $750, 4 in. $9,000, 6 in. $22,530, 8 in. $43,080, 10in. $69,510 Sewer: 4 in. $10,500 first 50 FU, $210/FU additional, 6 in. by est. $210/FU, 8 in. by est. $210/FU FU is fixture unit Activity in 2012-13 Capacity Fees Collected Water $1,162,123 Wastewater Collection 1,062,465 Total $2,224,588 USE OF FEES: The fees are used exclusively for water and sewer system improvements Page 8 of 8 12/17/2013 NOT YET APPROVED 1 131105 jb 0131153 Resolution No. Resolution of the Council of the City of Palo Alto Making Findings Regarding Continuing Need for Unexpended Stanford Research Park/El Camino Development Fees in the Amount of $823,618; San Antonio/West Bayshore Development Fees in the Amount of $664,374; University Avenue Parking In-Lieu Development Fees in the Amount of $90,696; and the Citywide Transportation Impact Fund Development Fees in the Amount of $4,453 RECITALS A. Government Code Section 66001(d) requires the City to make certain findings with respect to development fees collected which remain unexpended or uncommitted five of more fiscal years after deposit of such fees. B. As authorized under Chapter 16.45 of the Palo Alto Municipal Code, the City has collected a development fee known as the “Stanford Research Park Traffic Impact Fee” for the purpose of funding capacity improvements at eight intersections. C. The sum of $823,618, representing fees collected pursuant to Chapter 16.45 between 2001 and 2008, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“unexpended Transportation Impact Fee for New Nonresidential Development in the Stanford Research Park/El Camino Real CS Zone”). D. As authorized under Chapter 16.46 of the Palo Alto Municipal Code, the City has collected a development fee known as the “San Antonio/West Bayshore Traffic Impact Fee” for the purpose of funding capacity improvements at certain intersections. E. The sum of $664,374, representing fees collected pursuant to Chapter 16.46 between 1989 and 2008, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“unexpended San Antonio/West Bayshore Traffic Impact Fees”). F. As authorized under Chapter 16.57 of the Palo Alto Municipal Code, the City has collected a development fee known as the “University Avenue In-Lieu Parking Fee” for the purpose of funding parking structures in the University Avenue area. G. The sum of $90,696, representing fees collected pursuant to Chapter 16.57 between 2001 and 2008, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“unexpended University Avenue In-Lieu Parking Development Fees”). NOT YET APPROVED 2 131105 jb 0131153 H. As authorized under Chapter 16.59 of the Palo Alto Municipal Code, the City has collected a development fee known as the “Citywide Transportation Impact Fee” for the purpose of funding the installation, acquisition, construction, maintenance and operation of eligible citywide transportation capacity enhancements. I. The sum of $4,453, representing fees collected pursuant to Chapter 16.59 in 2008, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“unexpended Citywide Transportation Impact Fees”). The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council makes the following findings: Stanford Research Park Fees 1. The Stanford Research Park fees were collected pursuant to Chapter 16.45 of the Palo Alto Municipal Code, to be used solely for the purpose of funding transportation capacity improvements at designated intersections which are adversely impacted from new non-residential development in the Stanford Research Park/El Camino Real CS Zone Area (“Area”). 2. The need for the improvements for which the Stanford Research Park fees were collected was identified in an Environmental Impact Report (“EIR”) certified by the City Council on March 6, 1989 and updated in the EIR for the 1998-2010 Comprehensive Plan. 3. Section 16.45.060 of Chapter 16.45 identifies the specific improvements to be constructed with the Stanford Research Park fees. Of the four intersection improvements identified in this section, one (Foothill/Arastradero/Miranda) was implemented by Santa Clara County. A second (Page Mill expressway/El Camino Real) is in the process of being partially implemented. The next project will be the Page Mill/Hanover intersection. Other major intersection improvements will follow as funds become available, and as traffic conditions dictate. An implementation program for these improvements has been adopted by the City Council as part of approval of the Comprehensive Plan. This program establishes a procedure to insure that improvements are constructed as traffic conditions warrant. The first step in implementing the remaining improvements is the completion of design plans to the 10-20 percent level, sufficient to establish “plan lines” that will give the City the ability to obtain right-of-way where required. The current cost estimate for the remaining major intersection improvements significantly exceeds the impact fees anticipated to be collected. The remaining funds will be obtained from other sources including: ISTEA (federal), state, county, and City (street improvement NOT YET APPROVED 3 131105 jb 0131153 funds). All major intersection improvements are expected to be completed by 2015. The remaining improvements have not yet been implemented due to lack of funding, lack of right-of-way, secondary impacts of intersection widening, and a temporary respite from deteriorating traffic conditions due to an economic recession. 4. A reasonable relationship exists between the Stanford Research Park fees and the purpose for which they were collected, in that the fees were imposed upon new non- residential developments in the Area. Those projects, according to the EIR, cumulatively generate traffic which adversely impact the intersections designated in the EIR. 5. The Stanford Research Park fees will be used solely for purpose of constructing the traffic improvements identified in Chapter 16.45, as required under the Code. 6. The Stanford Research Park fees continue to be required in order to fund the improvements specified in Chapter 16.45, in that the improvements have not yet been constructed for the reasons described above, and the cost of the necessary improvements is to be spread proportionately among the new non-residential users, which contribute the traffic generating the need for the improvements. 7. Based on the foregoing, a continuing need for the Stanford Research Park fees has been demonstrated. San Antonio Fees 8. The San Antonio fees were collected pursuant to Chapter 16.46 of the Palo Alto Municipal Code, to be used solely for the purpose of funding transportation capacity improvements at designated intersections, which are adversely impacted from new non- residential development in the San Antonio/West Bayshore Area (“Area”). 9. The need for the improvements for which the San Antonio fees were collected was identified in an Environmental Impact Report (“EIR”) certified by the City Council on January 13, 1986. 10. Chapter 16.46 identifies the specific improvements to be constructed with the fees collected thereunder, which include a right-turn lane on westbound Charleston at San Antonio, interconnections of traffic signals in the Area, or alternative improvements in the Area as determined by the Chief Transportation Official, subject to the approval of the City Council. One improvement identified in Chapter 16.46 (a signalized intersection at the former Sun Microsystems driveway) is no longer needed. 11. The State Department of Transportation (Caltrans) has plans for a new on-ramp and ramp metering improvements at the San Antonio Road junction with Highway 101. This NOT YET APPROVED 4 131105 jb 0131153 project has been planned for over twenty years, but has not yet been constructed. The State and VTA are currently engaging in further review and study of the project. The San Antonio/West Bayshore improvements described in Chapter 16.46 (with the exception of the Middlefield/San Antonio feasibility study, which is not being actively pursued at this time) are to be constructed together with or after the Caltrans on-ramp improvements, because of the need to coordinate construction projects and assess the impacts of the new on-ramp prior to commencement of the City improvements. Accordingly, the City has been unable to undertake the improvements as of this time, and the San Antonio fees remain unspent. 12. The cost estimate for the projects other than the feasibility study, as of 2003 was $712,000 and it is anticipated that all of the collected impact fees will thus be needed to fund these improvements. 13. A reasonable relationship exists between the San Antonio fees and the purpose for which they were collected, in that the fees were imposed upon new non-residential developments in the Area. Those projects, according to the EIR, cumulatively generate traffic, which adversely impact the intersections designated in the EIR. 14. The San Antonio fees will be used solely for purpose of constructing the traffic improvements identified in Chapter 16.46, as required under the Code. 15. The San Antonio fees continue to be required in order to fund the improvements specified in Chapter 16.46, in that the improvements have not yet been constructed for the reasons described above, and the cost of the necessary improvements is to be spread proportionately among the new non-residential users which contribute the traffic generating the need for the improvements. 16. Based on the foregoing, a continuing need for the San Antonio fees has been demonstrated. In-Lieu Parking Fees 17. The University Avenue Parking In Lieu Fees were collected pursuant to Chapter 16.57 of the Palo Alto Municipal Code to be used solely for the purpose of construction of public parking spaces within the assessment district to serve the parking needs of the district created by the developments that paid the fees, as determined by the chief transportation official, subject to the approval of the City Council. NOT YET APPROVED 5 131105 jb 0131153 18. A reasonable relationship exists between the University Parking In Lieu Fees and the purpose for which they were collected, in that the fees were imposed upon non- residential developments to serve parking needs of the district. 19. The University Parking In Lieu Fees continue to be required in order to fund the improvements specified in Chapter 16.57. 20. Based on the foregoing, a continuing need for the University Parking In Lieu Fees has been demonstrated. Citywide Transportation Impact Fees 21. The Citywide Transportation Impact Fees were collected pursuant to Chapter 16.59 of the Palo Alto Municipal Code, to be used for the purpose of funding the installation, acquisition, construction, maintenance and operation of eligible citywide transportation capacity enhancements. 22. The unexpended Citywide Transportation fees in the amount of $4,453 are intended to be used to fund generalized city transportation improvements such as transportation demand management, computerized traffic management, expanded shuttle service, and bike transportation improvements. 23. The funds have not been expended to date because the City is in the process of exploring a comprehensive TDM program and identifying particular projects that will best leverage use of the TIF funds. 24. The Citywide Transportation Impact fees continue to be required in order to fund the improvements specified in Chapter 16.59 and in this resolution. 25. Based on the foregoing, a continuing need for the Citywide Transportation fees has been demonstrated. // // // // NOT YET APPROVED 6 131105 jb 0131153 SECTION 2. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: ______________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: ______________________________ City Manager ________________________________ ______________________________ Senior Asst. City Attorney Director of Administrative Services ______________________________ Director of Planning and Community Environment City of Palo Alto (ID # 4313) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Long-Term Trash Management Plan Title: Approval of the Long-Term Trash Management Plan required by the Municipal Regional Stormwater NPDES Permit From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve the attached Draft Long-Term Trash Management Plan required by the City’s stormwater discharge permit (Attachment A). The Long-Term Trash Management Plan will be finalized and submitted to the Regional Water Quality Control Board by February 1, 2014. Background In October 2009, the San Francisco Bay Regional Water Quality Control Board (Water Board) issued a new regional National Pollutant Discharge Elimination System (NPDES) storm water permit to the City of Palo Alto (the City) and 76 other Bay Area entities for discharge of municipal storm water to local creeks and San Francisco Bay. The Municipal Regional Permit (MRP) specifies programs and measures to be conducted by local agencies to minimize storm water pollution through the year 2014. One of the areas of focus in the MRP is control of trash in local waterways. The MRP requires each Permittee to reduce trash loading to its storm drain system by 40 percent by 2014, 70 percent by 2017, and to no adverse impact by 2022. Each Permittee was required to submit a Short-Term Trash Load Reduction Plan by February 1, 2012 in order to document how the 2014 trash reduction goal would be met. Additionally, a Long-Term Trash Load Reduction Plan, documenting how the City intends to meet the more challenging 2017 and City of Palo Alto Page 2 2022 trash reduction goals, must be submitted to the Water Board by February 1, 2014. Several local creeks have been formally designated as "impaired by trash" under the Federal Clean Water Act, including San Francisquito and Matadero Creeks. To comply with the trash load reduction requirements, Permittees are required to determine how much trash is conveyed through the storm drain system to creeks and waterways; implement actions to reduce that trash; and document trash reductions achieved. This is challenging, because trash can be wind-blown or dumped directly into creeks in addition to traveling through the storm drain system. Baseline trash levels were determined through a regional effort coordinated by the Bay Area Stormwater Management Agencies Association (BASMAA). In 2011, a BASMAA consultant sorted and measured trash and debris from more than 160 storm drain inlets that had been outfitted with full trash capture devices from a cross-sampling of land uses across the Bay Area. This data was used to determine each Permittee's Baseline Trash Load (using a Base Year of 2009) and to quantify trash load reductions that would result from specific trash reduction measures such as street sweeping, structural trash controls, and product bans. Staff used the BASMAA-recommended methodology to compile the City’s Short-Term Trash Reduction Plan, which indicated that the City’s trash management actions produced a cumulative trash load reduction of 51%. Palo Alto was able to exceed the short-term 40% trash load reduction goal without having to implement many new measures and programs because the trash load reduction credit strategy devised by BASMAA gave credit for early adoption of effective measures like enhanced frequency street sweeping in commercial areas, where trash is more prevalent, and plastic bag and expanded polystyrene product bans. The most significant new control measure in Palo Alto’s Short-Term Plan was the installation of trash capture devices in the municipal storm drain system. An informational report was provided to the Council regarding installation of the trash capture devices and the Short-Term Trash Load Reduction Plan on July 23, 2012 (#2919). City of Palo Alto Page 3 The methodology used for the Short-Term Trash Load Reduction Plans was rejected by the Water Board in June 2012. In addition, Water Board staff has indicated that trash control actions implemented before the October 2009 Stormwater Permit effective date may not be considered in measuring compliance with the requirements of the permit, resulting in regulatory uncertainty for the City, where as a result of the City’s leadership in implementing trash reduction efforts, many successful programs were implemented prior to the adoption of the MRP. As a result, continued assessment of the success of Palo Alto’s ongoing programs, combined with targeted new actions for areas that were found to have litter issues, form the basis of the City’s Long-Term Trash Load Reduction Plan. Discussion The Long-Term Trash Reduction Plan framework was developed regionally by Permittees, the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP), and other Bay Area-wide stormwater program staff, in collaboration with Water Board staff. Palo Alto’s Long-Term Trash Management Plan contains the following elements:  Identification of 13 Trash Management Areas based on in-field litter assessments  Identification of appropriate trash control measures for each Trash Management Area  Implementation plan for new trash control measures in targeted areas  Assessment of trash control measures • Ongoing adaptive management of trash control measures The first step in the Long-Term Trash Load Reduction Plan framework requires Permittees to identify very high, high, moderate, and low trash-generating areas within their jurisdictions. Trash generation rates, developed through the BASMAA regional study, were used as a starting point; then Permittees used local knowledge and field and/or desktop assessments to confirm and refine the level of trash generation for specific areas. For the City, 13 Trash Management Areas City of Palo Alto Page 4 were identified as both high and moderate trash-generation areas. The resulting maps are included in the attached Long-Term Trash Load Reduction Plan. Water Board staff and regional stormwater managers have agreed that trash reduction efforts should be targeted at areas with high and moderate levels of trash generation. Trash control measures implemented to date include the following highlights:  Street Sweeping: High-priority areas are swept three times per week, other areas once a week with some areas having parking prohibitions on sweep days. This frequency is higher than most other cities, particularly in residential areas. Staff is recommending reducing the frequency of sweeping in residential areas during the non-leaf season, which is consistent with the Long-Term Trash Management Plan. Any potential future changes to the street sweeping program will be coordinated to ensure continued compliance with the trash management requirements of the stormwater permit.  On-Land Clean Up (litter removal): The City performs extensive on-land clean ups. The Downtown Streets Team was founded in Palo Alto in 2005 to address homelessness and litter problems and has been instrumental in reducing litter downtown. In addition to the Downtown Streets Team, City staff clean tree wells, medians, parks, school fields and other areas at a high frequency.  Partial Trash Capture: The City piloted the use of a trash boom in Matadero Creek in 2009 and executed a new agreement with the Santa Clara Valley Water District for trash booms in both Matadero and Adobe Creeks in December 2012. The booms prevent floating trash from entering the Baylands area.  Full Trash Capture: The City installed two Continuous Deflective Separator (CDS) units to filter out trash from a portion of the storm drain system. These units capture trash from a combined tributary area of 167 acres, exceeding the requirements in the MRP and capturing a portion of El Camino and adjoining high trash generation area. The units were funded through a combination of a San Francisco Estuary Project (SFEP) grant and City matching funds. City of Palo Alto Page 5  Single-Use Plastic Bag Ordinance: The City banned single-use plastic bags at grocery stores in September 2009 and expanded the ordinance to cover all retail and food service establishments in 2013.  Expanded Polystyrene (EPS) Ordinance: The City’s ordinance prohibiting use of EPS in food service establishments went into effect in April 2010.  Public Outreach and Education: In addition to participating in regional outreach campaigns related to litter, the City continues its School Outreach Program, which includes education on stormwater issues, including litter The Long-Term Trash Load Reduction Plan proposes continuing the City’s successful trash management programs. In addition, the following additional actions are proposed as part of the Long-Term Trash Load Reduction Plan. Any actions that are recommended for implementation and that have budget implications will be brought back to the Council for approval:  Consideration of expanding the trash control measures used downtown (e.g. Downtown Streets Team, designated staff) to the California Avenue business district  Additional school outreach and a new school inspection program related to litter  Performing a study of the feasibility of installing additional full trash capture devices at the City’s stormwater pump stations, if needed, based on trash assessments of the areas draining to the pump stations  Consideration of ordinances banning smoking downtown and in the California Avenue business district  Consideration of expanding the Expanded Polystyrene Ordinance to include sale of items made of expanded polystyrene  Consideration of changing public litter can design for parks and other areas in order to prevent spillage and overflows  Review of the parking enforcement program to enhance the effectiveness of street sweeping in areas posted for no parking on sweep day  Additional outreach/inspection for businesses related to litter issues  Consideration of additional ordinance language related to litter  Seeking coordination with Caltrans related to trash along El Camino Real and other highway areas City of Palo Alto Page 6 The City staff will work closely with SCVURPPP co-permittees and Water Board staff to develop a new alternate tracking method to account for trash load reductions and track progress toward trash load reduction targets. A regional pilot strategy will be used to test the effectiveness of proposed trash assessment and monitoring methods. In addition to implementing assessment strategies once developed regionally, the City is also partnering with Acterra, a local environmental nonprofit organization, on including observations of trash in creeks with their ongoing volunteer monitoring efforts. Use of adaptive management techniques will allow the City to modify and improve the trash management strategy initially proposed in the Long-Term Trash Load Reduction Plan based on monitoring of the effectiveness of various measures. In addition, the trash management requirements are one of the key issues being discussed by Water Board staff and regional stormwater managers as the next stormwater NPDES permit will be negotiated in 2014, because the current permit will expire at the end of 2014. Any changes to the trash requirements included in the next NPDES permit would likely result in amendments and changes to the City’s Long-Term Trash Load Reduction Plan as part of the adaptive management process. Timeline The Long-Term Trash Load Reduction Plan must be submitted to the Water Board on February 1, 2014 as part of the requirements of the stormwater discharge permit. Implementation of the plan is intended to meet the requirements for trash load reduction of 70% by 2017 and no adverse impact by 2022. Resource Impact The Long-Term Trash Load Reduction Plan states that the Council maintains discretion over the level of expenditures for trash control measures and service level implementation in accordance with the City's annual budget process and the Municipal Code. Inclusion of a proposed action in the Long-Term Trash Load Reduction Plan does not obligate the City to implement it. Changes to the plan City of Palo Alto Page 7 will be submitted to the Water Board annually as part of the Stormwater Permit annual reporting process. The costs related to implementation of this plan will be developed following additional analysis, with separate approvals by the Council, as required. It is anticipated that many of the proposed actions can be accommodated within existing budgets. The full trash capture feasibility study, if needed, will require additional funding as will additional trash assessment efforts. The primary source of any additional funding that may be needed will be the Storm Drainage Fund. Street sweeping is funded by the Refuse Fund; however, no changes resulting in budget impacts are anticipated due to the Long-Term Trash Load Reduction Plan. There will be minimal or no impact to the General Fund. Should full trash capture capital projects be needed to comply with trash management requirements, staff will pursue grant funding as was done for the existing trash capture devices. Policy Implications The Long-Term Trash Load Reduction Plan is consistent with all City and stormwater management policies. Environmental Review The Long-Term Trash Load Reduction Plan is not a project under the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Draft Final Long Term Trash Plan Palo Alto (PDF) Long-Term Trash Load Reduction Plan and Assessment Strategy ______________________________________________________________________________________________________ Submitted by: City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 February 1, 2014 In compliance with Provisions C.10.c of Order R2-2009-0074 Attachment A CITY OF PALO ALTO II CITY OF PALO ALTO ii Page Intentionally Left Blank Long‐Term Trash Load Reduction Plan iii CITY OF PALO ALTO LONG-TERM TRASH LOAD REDUCTION PLAN AND ASSESSMENT STRATEGY CERTIFICATION STATEMENT "I certify, under penalty of law, that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to ensure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted, is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.” Signature by Duly Authorized Representative: Joe Teresi February 1, 2014 Senior Engineer City of Palo Alto iv TABLE OF CONTENTS CERTIFICATION STATEMENT .................................................................................................................... III TABLE OF CONTENTS ................................................................................................................................. IV LIST OF TABLES ............................................................................................................................................. V LIST FIGURES ................................................................................................................................................ V LIST APPENDICES ....................................................................................................................................... V APPENDIX A. STAFF REPORT TO PALO ALTO CITY COUNCIL ADOPTING LONG-TERM PLAN ........................ V ABBREVIATIONS ........................................................................................................................................... VI PREFACE ......................................................................................................................................................... 7 1.0 INTRODUCTION ..................................................................................................................................... 7 1.1 PURPOSE OF LONG‐TERM TRASH REDUCTION PLAN .................................................................................................... 7 1.2 BACKGROUND ..................................................................................................................................................... 8 1.2.1 Long‐Term Trash Load Reduction Plan Framework ............................................................................... 8 1.2.2 BASMAA Generation Rates Project ........................................................................................................ 9 1.2.3 Short‐Term Trash Load Reduction Plan ................................................................................................ 10 1.3 ORGANIZATION OF LONG‐TERM PLAN .................................................................................................................... 11 2.0 SCOPE OF THE TRASH PROBLEM .......................................................................................................... 12 2.1 PERMITTEE CHARACTERISTICS ............................................................................................................................... 12 2.2 TRASH SOURCES AND PATHWAYS .......................................................................................................................... 12 2.3 TRASH GENERATING AREAS .................................................................................................................................. 14 2.3.1 Generation Categories and Designation of Areas ................................................................................ 14 2.3.2 Summary of Trash Generating Areas and Sources ............................................................................... 16 3.0 TRASH MANAGEMENT AREAS AND CONTROL MEASURES .................................................................... 19 3.1 MANAGEMENT AREA DELINEATION AND PRIORITIZATION ........................................................................................... 19 3.2 CURRENT AND PLANNED TRASH CONTROL MEASURES ............................................................................................... 24 3.2.1 Trash Management Area #1 ................................................................................................................ 24 3.2.2 Trash Management Area #2 ................................................................................................................ 29 3.2.3 Trash Management Area #3 ................................................................................................................ 31 3.2.4 Trash Management Area #4 ................................................................................................................ 33 3.2.5 Trash Management Area #5 ..................................................................................................................... 35 3.2.6 Trash Management Area #6 ................................................................................................................ 37 3.2.7 Trash Management Area #7 ................................................................................................................ 39 3.2.8 Trash Management Area #8 ................................................................................................................ 40 3.2.9 Trash Management Area #9 ............................................................................................................... 43 3.2.10 Trash Management Area #10 ........................................................................................................ 46 3.2.11 Trash Management Area #11 ................................................................................................................. 48 3.2.12 Trash Management Area #12 ................................................................................................................ 49 3.2.13 Jurisdiction‐wide Control Measures and Trash Management Area #13 ......................................... 50 3.2.14 Creek and Shoreline Hot Spot Cleanups .......................................................................................... 56 3.2.15 Summary of Trash Control Measures .............................................................................................. 56 3.3 CONTROL MEASURE IMPLEMENTATION SCHEDULE .................................................................................................... 59 4 PROGRESS ASSESSMENT STRATEGY .......................................................................................................... 64 4.2 SCVURPPP PILOT ASSESSMENT STRATEGY ............................................................................................................ 64 4.2.13 Management Questions .................................................................................................................. 64 Long‐Term Trash Load Reduction Plan v 4.2.14 Indicators of Progress and Success.................................................................................................. 64 4.2.15 Pilot Assessment Methods .............................................................................................................. 65 4.3 BASMAA “TRACKING CALIFORNIA’S TRASH” PROJECT ............................................................................................. 68 4.3.13 Testing of Trash Monitoring Methods ............................................................................................. 69 4.3.14 Full Capture Equivalent Studies ....................................................................................................... 69 4.4 ADDITIONAL PROGRESS ASSESSMENTS ................................................................................................................... 69 4.5 LONG‐TERM ASSESSMENT STRATEGY ..................................................................................................................... 69 4.6 IMPLEMENTATION SCHEDULE ................................................................................................................................ 70 5.0 REFERENCES .................................................................................................................................. 72 LIST OF TABLES TABLE 1. SAN FRANCISCO BAY AREA TRASH GENERATION RATES BY LAND USE (GALLONS/ACRE/YEAR). TABLE 2. PERCENTAGES OF THE CITY OF PALO ALTO'S JURISDICTIONAL AREA WITHIN LAND USE CLASSES IDENTIFIED BY ABAG (2005) TABLE 3. TRASH GENERATION CATEGORIES AND ASSOCIATED GENERATION RATES (GALLONS/ACRE/YEAR). TABLE 4. DEFINITIONS OF ON-LAND TRASH ASSESSMENT CONDITION CATEGORIES. TABLE 5. PERCENTAGE OF JURISDICTIONAL AREA WITHIN THE CITY OF PALO ALTO ASSIGNED TO EACH TRASH GENERATION CATEGORY. TABLE 6. JURISDICTIONAL AREA AND PERCENTAGE OF EACH TRASH MANAGEMENT AREA (TMA) COMPRISED OF TRASH GENERATION CATEGORIES TABLE 7. CITY OF PALO ALTO TRASH CONTROL MEASURE IMPLEMENTATION SCHEDULE. TABLE 8. TRASH CONDITION CATEGORIES USED IN THE DRAFT ON-LAND VISUAL ASSESSMENT PROTOCOL. TABLE 9. CITY OF TRASH PROGRESS ASSESSMENT IMPLEMENTATION SCHEDULE. LIST FIGURES FIGURE 1. EIGHT-STEP FRAMEWORK FOR DEVELOPING, IMPLEMENTING AND REFINING LONG-TERM TRASH REDUCTION PLANS. FIGURE 2. CONCEPTUAL MODEL OF TRASH GENERATION, INTERCEPTION AND LOAD. FIGURE 3. TRASH SOURCES CATEGORIES AND TRANSPORT PATHWAYS TO URBAN CREEKS. FIGURE 4. TRASH SOURCES CATEGORIES AND TRANSPORT PATHWAYS TO URBAN CREEKS. FIGURE 5. FINAL TRASH GENERATION MAP FOR THE CITY OF PALO ALTO. FIGURE 6. TRASH MANAGEMENT AREA MAP FOR THE CITY OF PALO ALTO. FIGURE 7. TRASH FULL CAPTURE DEVICE MAP FOR THE CITY OF PALO ALTO. LIST APPENDICES APPENDIX A. STAFF REPORT TO PALO ALTO CITY COUNCIL ADOPTING LONG-TERM PLAN City of Palo Alto vi ABBREVIATIONS BASMAA Bay Area Stormwater Management Agencies Association BID Business Improvement District Caltrans California Department of Transportation CDS Continuous Deflection Separator CY Cubic Yards EIR Environmental Impact Report EPS Expanded Polystyrene FOG Fats, Oil, and Grease FSE Food Service Establishment MRP Municipal Regional Stormwater NPDES Permit MS4 Municipal Separate Storm Sewer System NPDES National Pollutant Discharge Elimination System Q Flow RWQCB San Francisco Regional Water Quality Control Board RWQCP Palo Alto Regional Water Quality Control Plant SCVURPPP Santa Clara Valley Urban Runoff Pollution Prevention Program SWRCB State Water Resource Control Board TMA Trash Management Area TMDL Total Maximum Daily Load USEPA United States Environmental Protection Agency VTA Santa Clara Valley Transportation Authority Long‐Term Trash Load Reduction Plan 7 PREFACE This Long-Term Trash Load Reduction Plan and Assessment Strategy (the “Long-Term Plan”) is submitted in compliance with provision C.10.c of the Municipal Regional Stormwater NPDES Permit (the “MRP”) for Phase I communities in the San Francisco Bay (Order R2-2009-0074). The Long-Term Plan was developed using a regionally consistent outline and guidance developed by the Bay Area Stormwater Management Agencies Association (the “BASMAA”) and reviewed by San Francisco Bay Regional Water Quality Control Board (the “RWQCB”) staff. The Long-Term Plan is consistent with the Long-Term Trash Load Reduction Framework developed in collaboration with RWQCB staff. Its content is based on the City of Palo Alto’s (the “City”) current understanding of trash problems within its jurisdiction and the effectiveness of control measures designed to reduce trash impacts associated with Municipal Separate Storm Sewer System (the “MS4”) discharges. This Long-Term Plan is intended to be iterative and may be modified in the future based on information gained through the implementation of trash control measures. The City therefore, reserves the right to revise or amend this Long-Term Plan at its discretion. If significant revisions or amendments are made by the City, a revised Long- Term Plan will be submitted to the RWQCB through the City’s annual reporting process. 1.0 INTRODUCTION 1.1 Purpose of Long‐Term Trash Reduction Plan The Municipal Regional Stormwater National Pollutant Discharge Elimination System (“NPDES”) Permit for Phase I communities in the San Francisco Bay (Order R2-2009-0074), also known as the MRP, became effective on December 1, 2009. The MRP applies to 76 large, medium and small municipalities (cities, towns and counties) and flood control agencies in the San Francisco Bay Region, collectively referred to as Permittees. Provision C.10.c of the MRP requires Permittees to submit a Long-Term Trash Load Reduction Plan (Long-Term Plan) by February 1, 2014. Long-Term Plans must describe control measures that are currently being implemented, including the level of implementation, and additional control measures that will be implemented and/or increased level of implementation designed to attain a 70% trash load reduction by July 1, 2017, and 100% (i.e., “No Visual Impact”) by July 1, 2022. This Long-Term Plan is submitted by the City in compliance with the MRP provision C.10.c. Consistent with provision C.10 requirements, the goal of the Long-Term Plan is to solve trash problems in receiving waters by reducing the impacts associated with trash in discharges from the City’s MS4 that are regulated by NPDES Permit requirements. The Long-Term Plan includes: 1. Descriptions the current level of implementation of trash control measures, and the type and extent to which new or enhanced control measures will be implemented to achieve a target of 100% (i.e. full) trash reduction from MS4s by July 1, 2022, with an interim milestone of 70% reduction by July 1, 2017; 2. A description of the Trash Assessment Strategy that will be used assess progress towards trash reduction targets achieved as a result of control measure implementation; and, 3. Time schedules for implementing control measures and the assessment strategy. City of Palo Alto 8 The Long-Term Plan was developed using a regionally consistent outline and guidance developed by the BASMAA and reviewed by the RWQCB staff. The Long-Term Plan is consistent with the Long-Term Trash Load Reduction Framework (see section 1.2.1) developed in collaboration with RWQCB staff. Its content is based on the City of Palo Alto’s current understanding of trash problems within its jurisdiction and the effectiveness of control measures designed to reduce trash impacts associated with Municipal Separate Storm Sewer (MS4) discharges. The Long-Term Plan builds upon trash control measures implemented by the City prior to the adoption of the MRP and during the implementation of the Short-Term Trash Load Reduction Plan submitted to the RWQCB on February 1, 2012. The Long-Term Plan was reviewed and approved for submittal by the Palo Alto City Council (the “Council”) on January 13, 2014. The City’s Staff Report is attached as Appendix A. 1.2 Background 1.2.1 Long‐Term Trash Load Reduction Plan Framework A workgroup of MRP Permittee, Bay Area countywide stormwater program staff and RWQCB staff met between October 2012 and March 2013 to better define the process for developing and implementing Long-Term Plans, methods for assessing progress toward reduction goals, and tracking and reporting requirements associated with provision C.10. Through these discussions, an eight-step framework for developing and implementing Long-Term Plans was created by the workgroup (Figure 1). Figure 1. Eight-step framework for developing, implementing and refining Long-Term Trash Reduction Plans. The workgroup agreed that as the first step in the framework, Permittees would identify very high, high, moderate, and low trash generating areas in their jurisdictional areas. Trash generation rates developed through the BASMAA Baseline Trash Generation Rates Project (as 5. Define method(s) to assess progress 4. Identify/select control measures 3. Delineate and prioritize management areas 2. Identify trash sources (as needed) 8. Modify area designations & reprioritize areas / problems 7. Assess progress via defined methods 6. Implement control measures 1. Identify and map trash generating areas Long‐Term Trash Load Reduction Plan 9 discussed below) were used as a starting point for differentiating and delineating land areas with varying levels of trash generation. Permittees would then use local knowledge and field and/or desktop assessments to confirm or refine the level of trash generation for specific areas within their jurisdiction. Each Permittee would then develop a map depicting trash generation categories within their jurisdiction. As a next step, Permittees would then delineate and prioritize Trash Management Areas (“TMAs”) where specific control measures exist or are planned for implementation. TMAs delineated by Permittees are intended to serve as reporting units in the future. Reporting at the management area level provides the level of detail necessary to demonstrate implementation and progress towards trash reduction targets. Once control measures are selected and implemented, Permittees will evaluate progress toward trash reduction targets using outcome-based assessment methods. As the results of the progress assessments are available, Permittees may choose to reprioritize trash management areas and associated control measures designed to improve trash reduction within their jurisdictions. 1.2.2 BASMAA Generation Rates Project Through approval of a BASMAA regional project in 2010, Permittees agreed to work collaboratively to develop a regionally consistent method to establish trash generation rates within their jurisdictions. The project, also known as the BASMAA Trash Generation Rates Project (the “Generation Rates Project”) assisted Permittees in establishing the rates of trash generation and identifying very high, high, moderate and low trash generating areas. The term “trash generation” refers to the rate at which trash is produced or generated onto the surface of the watershed and is potentially available for transport via MS4s to receiving waters. Generation rates do not explicitly take into account existing control measures that intercept trash prior to transport. Generation rates are expressed as trash volume/acre/year and were established via the Generation Rates Project. In contrast to trash generation, the term “trash loading” refers to the rate at which trash from MS4s enters receiving waters. Trash loading rates are also expressed as trash volume/acre/year and are equal to or less than trash generation rates because they account for the effects of control measures that intercept trash generated in an area before it is discharged to a receiving water. Trash loading rates are specific to particular areas because they are dependent upon the effectiveness of control measures implemented within an area. Figure 2 illustrates the difference between trash generation and loading. Figure 2. Conceptual model of trash generation, interception and load. Trash generation rates were estimated based on factors that significantly affect trash generation (i.e., land use and income). The method used to the establish trash generation rates for each City of Palo Alto 10 Permittee builds off “lessons learned” from previous trash loading studies conducted in urban areas (Allison and Chiew 1995; Allison et al. 1998; Armitage et al. 1998; Armitage and Rooseboom 2000; Lippner et al. 2001; Armitage 2003; Kim et al. 2004; County of Los Angeles 2002, 2004a, 2004b; Armitage 2007). The method is based on a conceptual model developed as an outgrowth of these studies (BASMAA 2011b). Trash generation rates were developed through the quantification and characterization of trash captured in RWQCB-recognized full-capture treatment devices installed in the San Francisco Bay area. Trash generation rates estimated from this study are listed for each land use type in Table 1. Methods used to develop trash generation rates are more fully described in BASMAA (2011b, 2011c, and 2012). Table 1. San Francisco Bay Area trash generation rates by land use (gallons/acre/year). Land Use Lowb Bestb Highb Commercial & Services 0.7 6.2 17.3 Industrial 2.8 8.4 17.8 Residentiala 0.3 - 30.2 0.5 - 87.1 1.0 - 257.0 Retaila 0.7 - 109.7 1.8 - 150.0 4.6 - 389.1 K-12 Schools 3 6.2 11.5 Urban Parks 0.5 5.0 11.4 a For residential and retail land uses, trash generation rates are provided as a range that takes into account the correlation between rates and household median income. b For residential and retail land uses: Low = 5% confidence interval; Best = best fit regression line between generation rates and household median income; and, High = 95% confidence interval. For all other land use categories: High = 90th percentile; Best = mean generation rate; and, Low = 10th percentile. 1.2.3 Short‐Term Trash Load Reduction Plan In February 2012, the City developed a Short-Term Trash Management Plan (the “Short-Term Plan”) that described the current level of control measures implementation and identified the type and extent to which new or enhanced control measures would be implemented to attain a 40% trash load reduction from its MS4 by July 1, 2014. Since that time, the City has begun to implement its short-term plan. Control measures implemented to date via the short-term trash reduction plan are:  Street Sweeping: High priority areas are swept three times per week, other areas once a week with some areas having parking enforcement. The City is conducting a pilot to better direct sweeping resources to high priority areas and is considering lowering frequency in single-family residential areas during the non-leaf season.  On-Land Clean Up: The City performs extensive on-land clean ups. The Downtown Streets Team was founded in Palo Alto in 2005 to address homelessness and litter downtown. This program has created new opportunities for the local homeless population to develop skills and has been instrumental in reducing litter downtown. In addition to the Streets Team, the City’s staff cleans tree wells, medians, parks, school fields and other areas at a high frequency. Finally, restaurants seeking encroachment Long‐Term Trash Load Reduction Plan 11 permits to place tables and chairs on sidewalks are required to keep their encroachment area free of debris, which has resulted in less trash in the public right-of-way.  Partial Trash Capture: In 2009, the City piloted the use of a trash boom in Matadero Creek. This project proved to be extremely successful in removing floatable trash materials from the creek. In December 2012, the City executed a new agreement with the Santa Clara Valley Water District (the “Water District”) for trash booms in both Matadero and Adobe Creeks, extending the program to 2022.  Full Trash Capture: The City installed two Continuous Deflective Separator (“CDS”) units that have a combined tributary area of 167 acres, exceeding the requirements in the MRP and capturing a portion of El Camino Real and adjoining high trash generation area as a cost share with the San Francisco Estuary Project grant and City matching funds.  Single Use Plastic Bag Ordinance: The City banned single use plastic bags at grocery stores in September 2009 and expanded the ordinance to cover all retail and food service establishments in 2013.  Expanded Polystyrene (EPS) Ordinance: The City’s ordinance prohibiting the use of EPS and other plastics that are not recyclable or compostable in the City’s recycling program at food service establishments commenced in April 2010. In 2014, the City’s staff will ask the Council to amend this ordinance to prohibit the sale of EPS foodware and ice chests at retail establishments.  Outreach: In addition to participating in regional outreach campaigns related to litter, the City continues its School Program for 2nd, 3rd, 4th and 7th graders. All classroom visits include messages on wastewater and stormwater. One of the second grade programs is about plastic bags and promoting reusable bags. One of the 3rd grade programs is “who dirtied the Bay”, where litter is collected from the school grounds and discussed during the lesson. In addition, the “wheel of trash” game is used at outreach events. Control measures described in this Long-Term Plan build upon actions taken to-date via the City’s Short-Term Plan. A full description of control measures implemented via short and long- term plans is included in section 3.2. Outcomes associated with short-term plan implementation will be reported in the City’s Fiscal Year 2013-14 Annual Report, scheduled for submittal to the RWQCB by September 15, 2014. 1.3 Organization of Long‐Term Plan This Long-Term Plan is organized into the following sections: 1.0 Introduction; 2.0 Scope of the Trash Problem; 3.0 Trash Management Areas and Control Measures; 4.0 Progress Assessment Strategies; and 5.0 References Section 2.0 is intended to provide a description of the extent and magnitude of the trash problem in the City. Control measures that will be implemented by the City as a result of this Long-Term Plan are described in section 3.0. Section 4.0 describes the methods that will be used to assess progress toward trash reduction targets. City of Palo Alto 12 2.0 SCOPE OF THE TRASH PROBLEM 2.1 Permittee Characteristics Incorporated in 1894, the City of Palo Alto is located in the County of Santa Clara (the “County”), and has a jurisdictional area of 15,569 acres. According to the 2010 Census, it has a population of 64,403, with a population density of 2,497.5 people per square mile and average household size of 2.41. Of the 64,403 who call Palo Alto home, 23.4% are under the age of 18, 4.9% are between 18 and 24, 26.6% are between 25 and 44, 28.0% are between 45 and 64, and 17.1% are 65 or older. The median household income was $119,046 in 2010. Palo Alto is home to many high tech companies. Large employers include Hewlett-Packard, VM Ware, and Space Systems Loral. About one-third of Palo Alto’s land area is open space. Palo Alto is served by two major freeways, Highway 101, and Interstate 280, and is traversed by the Peninsula's main north-south boulevard, El Camino Real (SR 82) as well as by Caltrain. A census conducted in 2013 by the County estimates the number of homeless individuals in Palo Alto at 157. Land uses within Palo Alto depicted in Association of Bay Area Governments (“ABAG”) (2005) are provided in These include residential, commercial and services, and open space (included under “other” in the table below). Table 2. The City is primary comprised of three land uses. These include residential, commercial and services, and open space (included under “other” in the table below). Table 2. Percentages of the City of Palo Alto's jurisdictional area1 within land use classes identified by ABAG (2005) Land Use Category Jurisdictional Area (acres) % of Jurisdictional Area Commercial and Services 1,221.1 7.8% Industrial 400.2 2.5% Residential 4,415.4 28.0% Retail 279.1 1.8% K‐12 Schools 272.1 1.7% Urban Parks 216.8 1.4% Other (e.g. Open Space) 8,937.1 56.8% 2.2 Trash Sources and Pathways Trash in San Francisco Bay Area creeks and shorelines originates from a variety of sources and is transported to receiving waters by a number of pathways (Figure 3). Of the four source 1 A Permittee’s jurisdictional area is defined as the urban land area within a Permittee’s boundary that is not subject to stormwater NPDES Permit requirements for traditional and non‐traditional small MS4s (i.e. Phase II MS4s) or the California Department of Transportation, or owned and maintained by the State of California, the U.S. federal government or other municipal agency or special district (e.g., flood control district). Long‐Term Trash Load Reduction Plan 13 categories, pedestrian litter includes trash sources from high traffic areas near businesses and schools, transitional areas where food/drinks are not permitted (e.g., bus stops), and from public or private special events with high volumes of people. Trash from vehicles occurs due to littering from automobiles and uncovered loads. Inadequate waste container management includes sources such as overflowing or uncovered containers and dumpsters as well as the dispersion of household and business-related trash and recycling materials before, during, and after collection. The on-land illegal dumping of trash is the final source category. Trash is transported to receiving waters through three main pathways: 1) Stormwater Conveyances; 2) Wind; and 3) Direct Dumping. Stormwater or urban runoff conveyance systems (e.g., MS4s) consist of curbs/gutters, and pipes and channels that discharge to urban creeks and the San Francisco Bay shorelines. Wind can also blow trash directly into creeks and the Bay. Lastly, trash in receiving waters can also originate from direct dumping into urban creeks and shorelines. This Long-term Plan and associated trash control measures described in Section 3.0 are focused on reducing trash from one of the transport pathways illustrated in Figure 3– stormwater conveyances. Specifically, the Long-term Plan is focused on reducing the impacts of discharges from MS4s to the San Francisco Area receiving waters and the protection of associated beneficial uses. Figure 3. Trash sources categories and transport pathways to urban creeks. The City has taken the following actions to address the Wind and Direct Dumping transport pathways, which are planned to be continued:  Trash Booms: Trash Booms in both Matadero and Adobe Creeks collect floatable material that is dumped directly, wind-blown or transported through the MS4 (see Section 3.2.13 for additional detail)  Weekly clean-up of Baylands areas that experience litter and illegal dumping by City staff and public litter cans in the Baylands.  Participation in National River Clean Up and Costal Clean Up day events at designated hot-spot (and surrounding area), exceeding requirements in the MRP. Pedestrian Litter Litter from Vehicles On‐land Dumping Source Categories Wind Direct Dumping Urban Creeks and the San Francisco Bay Estuary Transport Pathways Receiving Waters Stormwater Conveyances Inadequate Waste Container Management City of Palo Alto 14  No Fishing Signage: Due to high levels of dumping of trash associated with fishing activities, Matadero Creek was posted for “No Fishing” due to dumping in 2013. A phone number is provided for complaints and questions.  Coordination with the California Department of Transportation (“Caltrans”): In 2013, the City’s staff ensured Caltrans’ staff was aware of public complaints related to trash and debris at the off and on ramps at Highway 101. Clean-up has occurred and further coordination is planned as needed.  Graffiti: Graffiti-cleaning crews pick up spray cans in creeks whenever possible. Additional planned actions include outreach to tennis clubs and areas with tennis courts that are located adjacent to creeks to address the large number of tennis balls captured by the boom and found in creek clean ups. 2.3 Trash Generating Areas 2.3.1 Generation Categories and Designation of Areas The process and methods used to identify the level of trash generation within the City are described in this section and illustrated in Figure 4. Figure 4. Trash sources categories and transport pathways to urban creeks. As a first step, trash generation rates developed through the BASMAA Trash Generation Rates Project were applied to parcels within the City based on current land uses and 2010 household median incomes. A Draft Trash Generation Map was created as a result of this application. The draft map served as a starting point for the City to identify trash generating levels. Levels of trash generation are depicted on the map using four trash generation rate (gallons/acre/year) categories that are symbolized by four different colors illustrated in Table 3. Table 3. Trash generation categories and associated generation rates (gallons/acre/year). Category Very High High Moderate Low Generation Rate (gallons/acre/year) > 50 10-50 5-10 < 5 The City then reviewed and refined the draft trash generation map to ensure that trash generation categories were correctly assigned to parcels or groups of parcels. City staff refined maps using the following process: Long‐Term Trash Load Reduction Plan 15 1. Based upon its knowledge of trash generation and problem areas within Palo Alto, the City’s staff identified areas noted on the draft map that potentially had incorrect trash generation category designations. 2. Trash generation category designations initially assigned to areas identified in step #1 were then assessed and confirmed/refined by the City using the methods listed below. a. On-Land Visual Assessments To assist Permittees with developing their trash generation maps, BASMAA developed a Draft On-land Visual Trash Assessment Protocol (the “Draft Protocol”). The Draft Protocol entails walking a street segment and visually observing the level of trash present on the roadway, curb and gutter, sidewalk, and other areas adjacent to the street that could potentially contribute trash to the MS4. Based on the level of trash observed, each segment (i.e., assessment area) was placed into one of four on-land assessment condition categories that are summarized in Table 4. In using the Draft Protocol, the City assessed a total of 58 areas to assist in conducting/refining trash generating area designations in May and October 2013. Eight locations were assessed twice to account for the street sweeping pilot (see Section 3.2.13). Table 4. Definitions of on-land trash assessment condition categories. On-land Assessment Condition Category Summary Definition A Effectively no trash is observed in the assessment area. (Low) B Predominantly free of trash except for a few pieces that are easily observed. (Moderate) C Trash is widely/evenly distributed and/or small accumulations are visible on the street, sidewalks, or inlets. (High) D Trash is continuously seen throughout the assessment area, with large piles and a strong impression of lack of concern for litter in the area. (Very High) b. Querying Municipal Staff or Members of the Public Prior to performing the on-land visual assessments, the City’s staff from various groups within the Public Works Department as well as the Open Space, Parks and Golf Division (the “Parks Division”) met to discuss the draft map to choose areas for assessment and develop an assessment plan that was coordinated with street sweeping days and focused on the areas where staff knowledge believed the map may need changes or confirmation. During the visual on-land assessment, the City’s staff interviewed members of the public as well as staff from shopping centers, as opportunities arose, to confirm trash generation. The visual assessment results were shared with municipal staff for additional confirmation. c. Reviewing Municipal Operations Data City of Palo Alto 16 Municipal Operations Data, such as catch basin clean out and Palo Alto311 database, were used to confirm areas for assessment. d. Viewing Areas via Goggle Maps – Street View 14 locations, which were small in size, were reviewed using Google maps rather than using on-land visual assessment, due to staff time constraints. 3. Based on assessments conducted to confirm/refine trash generation category designations, the City created a final trash generation map that depicts the most current understanding of trash generation within the City. The City documented this process by tracking the information collected through the assessments and subsequent refinements to the Draft Trash Generation Map. The City of Palo Alto’s Final Trash Generation Map is included as Figure 5. 2.3.2 Summary of Trash Generating Areas and Sources Summary statistics for land use and trash generation categories generated through the mapping and assessment process are presented in Table 5. Table 5. Percentage of jurisdictional area within the City of Palo Alto assigned to each trash generation category. Trash Generation Category Jurisdictional Area (Acres) Commercial and Services Industrial Residential Retail K‐12 Schools Urban Parks Other Very High 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% High 3.5 0.0% 0.0% 1.0%99.0%0.0% 0.0% 0.0% Medium 463.2 51.1% 14.6%4.4% 6.7%15.1% 7.7% 0.3% Low / Medium 12.4 0.0% 0.0%98.2%1.5% 0.0% 0.0% 0.2% Low 4,725.6 10.4%6.3%46.7%1.8% 0.7% 0.6%33.6% Long‐Term Trash Load Reduction Plan 17 Figure 5. Final Trash Generation Map for the City of Palo Alto , Legend Trash Gon ... llo" C'''g<>ry ~ lQwlMedium ~ -_Hig/1 _ HigIWe<y Hi;!> _ VMyHigh , .Cr~HOISj>OI --. f:::: ;;:::::: • ..",ca!e9C<'\') ----~" D Par<*1!oo<>:;Iary 0.25 0.5 1 ~iles I ( 001. SourcH: R.,....:Sor<.caor.c....-.y CIty __ :_aaroCGunty _groIo'f'd:ESRI_Topog<"""",M .. MopeR_By: ,~~ D ... : Dec.m~r~lh. 2013 I City of Palo Alto Trash Generation Map -- • er ... IoJSn<i<eIinoHOlSj>Ol --. [:::: ='bOnC.~1 -'-""'""'" 0.25 0.' 1 Miles 0.0. k><>tcH: R_:_o..Coo.oroy CIlyIkl<>rMlo<lH,SanlaOaraCGunt, _g«><>r><I:ESRI_T __ "' .. M ... C ....... 8jI: ,~~ Date: Oec.m"'r~Th. 2013 City of Palo Alto 18 Page Intentionally Left Blank Long‐Term Trash Load Reduction Plan 19 3.0 TRASH MANAGEMENT AREAS AND CONTROL MEASURES This section describes the control measures that the City has or plans to implement to solve trash problems and achieve a target of 100% (i.e. full) trash reduction from its MS4 by July 1, 2022. The selection of control measures described in this section is based on the City’s current understanding of trash problems within its jurisdiction and the effectiveness of control measures designed to reduce trash impacts associated with MS4 discharges. Information on the effectiveness of some trash control measures is currently lacking and therefore in the absence of this information, the City based its selection of control measures on existing effectiveness information, their experience in implementing trash controls and knowledge of trash problems, and costs of implementation. As knowledge is gained through the implementation of these control measures, the City may choose to refine their trash control strategy described in this section. If significant revisions or amendments are made, a revised Long-Term Plan will be submitted to the RWQCB through the City’s annual reporting process. 3.1 Management Area Delineation and Prioritization Consistent with the Long-Term Plan framework, the City delineated and prioritized TMAs based on the geographical distribution of trash generating areas, types of trash sources, and current or planned control measure locations. TMAs are intended to form the management units by which trash control measure implementation can be tracked and assessed for progress towards trash reduction targets. Once they were delineated, TMAs were also prioritized for control measure implementation. The City’s primary management areas were selected based on the spatial distribution of trash generating areas and the location of specific existing or planned management actions within City’s jurisdiction. The City’s staff used the following procedure to designate TMAs:  Areas that were designated high trash generation areas received highest priority, followed by medium high trash generation areas.  Any retail areas that included high trash generation areas and that attract a high level of pedestrian traffic were designated at the top of the priority list, including downtown, California Avenue, and Town and Country.  The areas captured by the existing CDS units include high trash generation areas and along with the entire stretch of El Camino Real were the next highest priority due to the numbers of customers these businesses attract.  Some TMAs are groupings of similar types of facilities, such as neighborhood shopping centers, schools, parks/community centers, and commercial/industrial areas that would all receive similar trash management measures. A map depicting the City’s TMAs is included as Figure 6. All jurisdictional areas within the City are included within a TMA. The amount of jurisdictional land area and associated trash condition categories for each TMA are included in Table 6. City of Palo Alto 20 Table 6. Jurisdictional area and percentage of each Trash Management Area (TMA) comprised of trash generation categories TMA Jurisdictional Area (Acres) Trash Generation Rate Very High High Medium Low / Medium Low 1 86.2 0.0% 0.0% 68.7% 0.0% 31.3% 1A 92.0 0.0% 12.1% 83.2% 0.0% 4.7% 1B 11.8 0.0% 0.0% 79.5% 0.0% 20.5% 2 153.3 0.0% 0.4% 77.0% 0.0% 22.5% 3 21.1 0.0% 92.3% 7.7% 0.0% 0.0% 4A 40.7 0.0% 0.0% 22.8% 0.0% 77.2% 4B 123.2 0.0% 6.7% 13.7% 0.0% 79.5% 5 155.0 0.0% 2.5% 81.3% 9.2% 7.0% 6 68.4 0.0% 0.0% 36.8% 63.1% 0.1% 6D 4.1 0.0% 0.0% 65.4% 34.6% 0.0% 7A 7.9 0.0% 21.3% 78.7% 0.0% 0.0% 7B 12.4 0.0% 0.0% 99.9% 0.0% 0.1% 7C 5.6 0.0% 0.0% 100.0% 0.0% 0.0% 7D 6.0 0.0% 0.0% 100.0% 0.0% 0.0% 7E 2.3 0.0% 0.0% 100.0% 0.0% 0.0% 8A 6.9 0.0% 0.0% 100.0% 0.0% 0.0% 8B 25.3 0.0% 0.0% 100.0% 0.0% 0.0% 8C 48.3 0.0% 0.0% 100.0% 0.0% 0.0% 8D 7.5 0.0% 0.0% 100.0% 0.0% 0.0% 8E 6.0 0.0% 0.0% 100.0% 0.0% 0.0% 8F 6.9 0.0% 0.0% 100.0% 0.0% 0.0% 8G 6.5 0.0% 0.0% 100.0% 0.0% 0.0% 8H 6.0 0.0% 0.0% 100.0% 0.0% 0.0% 8I 37.1 0.0% 0.0% 100.0% 0.0% 0.0% 8J 7.4 0.0% 0.0% 100.0% 0.0% 0.0% 8K 5.1 0.0% 0.0% 100.0% 0.0% 0.0% 8L 16.7 0.0% 0.0% 100.0% 0.0% 0.0% 8M 64.1 0.0% 0.0% 98.7% 0.0% 1.3% 8N 1.6 0.0% 0.0% 100.0% 0.0% 0.0% 8O 1.9 0.0% 0.0% 100.0% 0.0% 0.0% 8P 2.7 0.0% 0.0% 100.0% 0.0% 0.0% 8Q 5.1 0.0% 0.0% 100.0% 0.0% 0.0% 8R 3.1 0.0% 0.0% 100.0% 0.0% 0.0% 8S 7.8 0.0% 0.0% 100.0% 0.0% 0.0% 8T 2.8 0.0% 0.0% 100.0% 0.0% 0.0% 8U 7.7 0.0% 0.0% 100.0% 0.0% 0.0% 8V 10.5 0.0% 0.0% 100.0% 0.0% 0.0% Long‐Term Trash Load Reduction Plan 21 8W 4.7 0.0% 0.0% 0.0% 100.0% 0.0% 8X 3.8 0.0% 0.0% 31.0% 0.0% 69.0% 9A 36.9 0.0% 0.0% 100.0% 0.0% 0.0% 9B 25.1 0.0% 0.0% 100.0% 0.0% 0.0% 9C 23.2 0.0% 0.0% 100.0% 0.0% 0.0% 9D 40.9 0.0% 0.0% 100.0% 0.0% 0.0% 9E 7.4 0.0% 0.0% 100.0% 0.0% 0.0% 9F 4.6 0.0% 0.0% 100.0% 0.0% 0.0% 9G 5.5 0.0% 0.0% 100.0% 0.0% 0.0% 9H 3.8 0.0% 0.0% 100.0% 0.0% 0.0% 9I 2.3 0.0% 0.0% 100.0% 0.0% 0.0% 9J 10.7 0.0% 0.0% 100.0% 0.0% 0.0% 9K 12.3 0.0% 0.0% 100.0% 0.0% 0.0% 9L 22.0 0.0% 0.0% 100.0% 0.0% 0.0% 9M 5.6 0.0% 0.0% 100.0% 0.0% 0.0% 9N 11.5 0.0% 0.0% 100.0% 0.0% 0.0% 9O 4.5 0.0% 0.0% 100.0% 0.0% 0.0% 9P 4.8 0.0% 0.0% 100.0% 0.0% 0.0% 9Q 3.4 0.0% 0.0% 100.0% 0.0% 0.0% 10A 122.8 0.0% 2.0% 98.0% 0.0% 0.0% 10B 55.0 0.0% 0.0% 98.9% 0.0% 1.1% 10C 114.7 0.0% 0.0% 99.8% 0.0% 0.2% 10D 117.1 0.0% 0.0% 74.9% 20.3% 4.8% 10E 41.8 0.0% 1.7% 88.6% 0.0% 9.7% 10F 15.7 0.0% 0.0% 72.0% 0.0% 28.0% 10G 13.9 0.0% 25.0% 33.2% 41.8% 0.0% 11 20.3 0.0% 0.0% 100.0% 0.0% 0.0% 12 5.3 0.0% 100.0% 0.0% 0.0% 0.0% 13 1,3924.9 0.0% 0.0% 0.0% 0.1% 99.9% City of Palo Alto 22 Figure 6. Trash Management Area Map for the City of Palo Alto Long‐Term Trash Load Reduction Plan 23 Page Intentionally Left Blank City of Palo Alto 24 3.2 Current and Planned Trash Control Measures The City of Palo Alto has been a leader in implementing successful programs to control litter prior to the MRP’s adoption because litter management has been a priority for many years and resources have been dedicated, particularly in high priority areas. The City’s focus has been on streetsweeping, on-land clean up, product bans, and education. The City has also implemented full trash capture, exceeding the requirement in the MRP. Unique approaches include the agreement with the Water District for litter booms in two creeks, as well as the formation of the Downtown Streets Team to address homelessness and litter in the downtown area. The City’s focus is on programs that provide multiple benefits, such as the Downtown Streets Team, which provides benefits for the economic vitality and aesthetics of downtown, addressing homelessness, and litter. Likewise, street sweeping provides multiple benefits by addressing both litter and leaves; and product bans contribute to the City’s zero waste and sustainability policies while addressing litter. 3.2.1 Trash Management Area #1 Trash Management Area #1 comprises the City’s downtown area spanning from Alma to Middlefield and Everett to Homer Street. There are two subareas: Subarea 1.a. is the Downtown Business Improvement District (the “BID”) spanning from Alma to Webster and Lytton to Hamilton; Subarea 1.b. is the residential area north of the downtown area between Lytton and Everett. The downtown area has a high concentration of retail and restaurants, including many with outdoor seating; parks and plazas, office buildings, and multifamily dwellings. The downtown area attracts many visitors, making it a high priority trash management area. Trash sources are primarily pedestrian litter. The City has implemented litter management programs in this area for many years. Based on trash assessments conducted, these litter control and prevention activities are successful. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The downtown area streets from Alma to Middlefield and Lytton to Homer are swept three times per week. In Subarea 1.b., sweeping is performed once a week with parking enforcement. In Subarea 1.a, dedicated City staff use blowers to push trash and debris from the BID sidewalks and from behind parking stops and tree wells into the street on street sweeping days in order to allow the sweepers to pick up sidewalk-based debris as well as street-based debris. In addition, the City’s parking lots are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors. The City plans to continue sweeping at the same frequency in this area. In addition, the City may explore additional parking enforcement to enhance street sweeping outside of Subarea 1.a. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: The Downtown Streets Team has been cleaning the downtown area since 2005. The Downtown Streets Team is a model developed in Palo Alto by the BID to reduce panhandling and trash accumulation. In exchange for housing and meal vouchers, homeless people hand-sweep the sidewalks, empty overflowing public trash receptacles in the downtown area on Sundays (when not emptied by the City’s waste hauler), and clean two downtown area parks and the garages in the downtown area. The Streets Team is funded by City contracts, grants, family foundation, and the Downtown Business Association. In a typical week, about 400 person hours are spent (every day including weekends), cleaning up debris in the BID. The City’s staff and contractors pick up litter and debris in landscaping areas twice per week and two additional downtown area parks every weekday. Subarea 1.a. sidewalks are mechanically swept and vacuumed by the City’s staff on a daily basis using a small-scale sweeper known as the Green Machine and steam cleaned monthly by a BASMAA certified steam cleaner. Restaurants applying for outdoor seating areas in the public right-of-way are required as part of their encroachment permit to ensure the cleanliness of the outdoor seating areas, including sweeping and steam cleaning. In addition, special events hosted downtown are required to ensure cleanliness of the area after the event. Actions initiated after the MRP effective date: An additional Downtown Streets Team refuse bin was provided to enhance debris and trash collection. Actions planned for future implementation: The City plans to revise the encroachment permit language for restaurants with tables and chairs to clarify the cleanliness requirements and will pursue additional enforcement as needed. Long‐Term Trash Load Reduction Plan 25 Full-Capture Treatment Devices Actions Initiated Prior to and continued after the MRP effective date: The Santa Clara Valley Transportation Authority (the “VTA”) maintains full trash capture devices at the Caltrain station. The maintenance agreement for these devices was executed in March 2006 as part of the C.3 requirements. City staff inspects the full trash capture units annually as part of the C.3 maintenance inspections. In addition, several new developments have installed full trash capture devices to meet C.3 requirements. Please refer to Figure 7 – Trash Full Capture Treatment Device Map. Actions planned for future implementation: Most of the downtown area flows to the San Francisquito Creek pump station near Highway 101. The City will study the feasibility of full trash capture at the pump station (e.g. placing netting devices on low- flow pumps) if trash assessments determine that the downtown area remains a significant source of trash during FY 2017-18. Partial-Capture Treatment Devices Actions initiated prior to and continued after the MRP effective date: The County’s C.12 diversion structure covers a portion of TMA #1. In 1993 the City constructed a structure in its stormwater system that directs up to 0.5 million gallons of dry or wet weather flows to per day to the Palo Alto Regional Water Quality Control Plant (the “RWQCP”). The structure traps sediment and trash in a vault where it can be removed. The area draining to the diversion structure is roughly 50 acres and is bound by Hamilton Avenue, Bryant Street, Channing Avenue and Alma Street. The structure is currently under evaluation for full capture designation. In addition, a wet well at the University underpass at Alma provides partial capture where trash can be removed. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Public Litter Cans are placed in the downtown area to reduce public littering. Most containers are serviced Monday through Saturday by GreenWaste. The containers in the main arteries downtown are also serviced by the Downtown Streets Team on Sundays. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires food service establishments (“FSEs”) to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste cooking fats, oils and grease (FOG) or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures and downtown alleys. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Smoking Ordinance Actions planned for future implementation: City of Palo Alto 26 In November 2013, the Council directed staff to develop an ordinance banning smoking in the downtown area, in part, to address litter issues caused by cigarette butts. This ordinance will be an opportunity for outreach related to the harmful effects of cigarette butt litter. Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Outreach – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Long‐Term Trash Load Reduction Plan 27 Figure 7. Trash Full Capture Device Map for the City of Palo Alto. City of Palo Alto 28 Page Intentionally Left Blank . Long‐Term Trash Load Reduction Plan 29 3.2.2 Trash Management Area #2 Trash Management Area #2 comprises the California Avenue Business Area spanning from El Camino Real to Park Avenue and College to Lambert Street. The California Avenue area has a high concentration of retail and restaurants, including many with outdoor seating; parks and plazas, office buildings, other commercial businesses, and multifamily dwellings. The California Avenue area attracts many visitors, making it a high priority trash management area. Trash sources are primarily pedestrian litter. The City has implemented litter management programs in this area for many years. Based on trash assessments conducted, these litter control and prevention activities are successful. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The California Avenue Area streets are swept three times per week, except for Sherman to Sheridan Avenue and El Camino Real to Ash, which are residential areas that are swept weekly and have parking enforcement if needed. City parking lots are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes, so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors. The City plans to continue sweeping at the same frequency in this area. In addition, the City may explore additional parking enforcement to enhance street sweeping. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: The City’s staff and contractors pick up litter and debris in landscaping areas twice per week, medians at California Avenue daily, tree wells weekly, and the Caltrain Station round-about weekly. Johnson Park, located within this area, has daily litter pick up. Restaurants applying for outdoor seating areas in the public right-of-way are required as part of their encroachment permit to ensure the cleanliness of the outdoor seating areas, including sweeping and steam cleaning. In addition, special events hosted downtown must ensure cleanliness of the area. Actions planned for future implementation: The City plans to revise the encroachment permit language for restaurants with tables and chairs to clarify the cleanliness requirements and will pursue additional enforcement as needed. The California Avenue Streetscape Project is in the planning phase and includes improvements between El Camino Real and the Caltrain Station at Park Avenue. The purpose of this project is to help revitalize the street by providing modern street design and amenities that will support the creation of a vibrant pedestrian- and bike -oriented commercial and residential district that builds upon existing public art amenities. The project will identify additional opportunities for trash management, both structurally and maintenance-related following the project, such as on-land clean-up activities, including considering using the downtown model at California Avenue, which would include consideration of contracting with the Downtown Streets Team, additional City resources, and sidewalk sweeping. Full-Capture Treatment Devices Actions planned for future implementation: The City will study the feasibility of full trash capture of the California Avenue Area if trash assessments determine that the California Avenue Business district remains a significant source of trash during FY 2017-18. City of Palo Alto 30 Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Public Litter Cans are placed in the California Avenue and El Camino areas to reduce littering. Most containers are serviced Monday through Saturday by GreenWaste. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180 requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures and alleys. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Litter issues are addressed immediately, for example, a public litter can consistently overflowing on Sundays, when no pick up by GreenWaste occurs, was addressed by adding a second public litter can. Smoking Ordinance Actions planned for future implementation: In November 2013, the Council directed staff to develop an ordinance banning smoking in the California Avenue area, in part to address litter issues. This ordinance will be an opportunity for outreach related to the harmful effects of cigarette butt litter. Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Long‐Term Trash Load Reduction Plan 31 Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Outreach – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.3 Trash Management Area #3 Trash Management Area #3 comprises the Town & Country Shopping Center (“Town & Country”) spanning from El Camino Real to Alma and Embarcadero to Encina. The Town & Country Shopping Center has a high concentration of retail and restaurants, including many with outdoor seating; and is adjacent to Palo Alto High School, which has an open campus, resulting in heavy foot traffic between the school and the shopping center. Trash sources are primarily pedestrian litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The Town & Country area streets are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors. The City plans to continue sweeping at the same frequency in this area. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: The City’s staff and contractors pick up litter and debris in landscaping areas along Embarcadero Road once per week. Actions initiated after the MRP effective date: Town & Country staff picks up litter within the shopping center and along the perimeter at Encina, El Camino Real and Embarcadero daily. The City’s staff interviewed facility staff at the shopping center and received their input related to litter sources. The City’s staff also met with the principal of the high school to discuss ways to reduce litter and conducted two clean-ups in front of the school. Actions planned for future implementation: Further monitoring of this site is planned to determine if additional on-land clean-up is needed, including engaging student clubs to “adopt” the area in front of the school. Full-Capture Treatment Devices Actions planned for future implementation: This area flows to the San Francisquito Creek pump station near Highway 101. The City will study the feasibility of full trash capture at the pump station (e.g. netting devices at low-flow pumps) if trash assessments determine that the area remains a significant source of trash during FY 2017-18. City of Palo Alto 32 Partial-Capture Treatment Devices Actions initiated prior to and continued after the MRP effective date: A wet well at the Embarcadero underpass under Alma provides partial capture and is cleaned of trash as needed. The Town and Country installed C.3 devices as part of a remodel in 2007 which provide partial capture and are inspected annually as part of the City’s maintenance inspection program. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Public Litter Cans are placed in the shopping center to reduce littering and are serviced by Town & Country staff. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180 requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide) and Trash Management Area 8 (Schools). Long‐Term Trash Load Reduction Plan 33 Actions Planned for Future Implementation: In addition to ongoing outreach, the City’s staff will work with Town and Country and the Palo Alto High School to address litter issues along Embarcadero, for example, creation of a banner and involving school clubs in addressing litter issues. Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.4 Trash Management Area #4 Trash Management Area #4 comprises a portion of El Camino Real and El Camino Way and adjoining multi-family and single family residential area. This area has a concentration of retail and restaurants, including a Goodwill Store, as well as a park. Trash sources are primarily pedestrian litter. The two subareas are: 4.a El Camino to Park Blvd between Wilton and El Camino Way 4.b. El Camino to Park Blvd between El Camino Way and Dinah Court. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The streets are swept weekly. The City has an agreement with Caltrans for maintenance of El Camino Real, which specifies that Caltrans reimburses the City for streetsweeping services. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: With the City’s potential change in its sweeping program, discussions with Caltrans will occur to ensure continued weekly sweeping of El Camino. The residential area may be swept less frequently during the non-leaf season as described in section 3.2.13. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: City staff and contractors pick up litter and debris in landscaping areas weekly along El Camino as well as at Robles Park, which is within this Trash Management Area. Full-Capture Treatment Devices Actions Initiated after the MRP effective date: The City’s staff selected the Continuous Deflective Separator (CDS) unit manufactured by Contech Construction Products, Inc. In order to determine the optimum locations for trash capture devices in Palo Alto, staff reviewed the layout of the City’s storm drain system in search of locations with the following characteristics: City of Palo Alto 34  Not connected to a storm water pump station (pump stations have trash racks that currently capture a significant portion of incoming trash and debris).  Tributary to commercially-zoned land use areas (where there is a higher likelihood of trash, as compared to residential areas).  Easily accessible for maintenance using simple traffic control measures.  Junction points where multiple storm drain pipelines converge. Using these criteria, staff decided to install trash capture devices at the two locations listed below (see Figure 7): Park Boulevard at Ventura Avenue • Tributary area of 40 acres • Includes runoff from El Camino Real between Wilton Avenue and Los Robles Avenue, • Flows to Barron Creek 4040 Park Boulevard (east of Maclane Avenue) • Tributary area of 127 acres, which includes medium trash generating areas along El Camino and multi-family residential • Includes runoff from El Camino Real between Los Robles Avenue and Dinah’s Court, which includes high and medium trash generating land uses as well as Robles Park and residential areas • Flows to Barron Creek The devices were installed in July 2012 using grant funding from ABAG and matching funds from the City. The two devices cover an area that is 200% of the 84 acres of trash capture specified in the MRP for the City. They are maintained at least annually. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. GreenWaste services some of the Public Litter Cans on El Camino. Public Litter Cans at bus stops and bus shelters are maintained by VTA. Long‐Term Trash Load Reduction Plan 35 Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.5 Trash Management Area #5 Trash Management Area #5 comprises the City’s portion of El Camino Real, an area that experiences significant vehicular traffic and has many retail businesses and restaurants along its stretch. The City of Palo Alto has an agreement with Caltrans for maintenance of El Camino Real trash sources are primarily vehicular and pedestrian litter and illegal dumping for one area. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: El Camino Real is swept weekly. The City has an agreement with Caltrans for maintenance of El Camino Real, which specifies that Caltrans reimburses the City for streetsweeping services. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: With the City’s potential change in its sweeping program, discussions with Caltrans will occur to ensure continued weekly sweeping of El Camino Real. City of Palo Alto 36 On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: City staff and contractors pick up litter and debris in landscaping areas weekly along El Camino. Actions Initiated after the MRP effective date: An area along El Camino Real that is vacant and once had a railway line was found to be heavily littered from illegal dumping. The area was cleaned by the City’s staff as part of the Great American Litter Pickup in 2013. Staff will monitor the area, pick up litter as needed, and engage nearby fast-food businesses to see whether they could assist in keeping the area clean. Full Trash Capture Treatment Devices Actions planned for future implementation: The City will seek to collaborate with Caltrans on full trash capture treatment devices that capture additional portions of El Camino (in addition to TMA #4) if needed during FY 2017-18. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Bus stop litter cans along El Camino Real are maintained by VTA. The City initiated a Clean Bay Business Program focusing on vehicle service facilities in 1992 and provided positive incentives and recognition to reduce pollutants such as heavy metals from entering our creeks and Bay from these facilities. The auto facilities along El Camino Real are inspected at least annually to determine whether they meet Clean Bay Business Program requirements, which includes checking for litter. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste cooking FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste Long‐Term Trash Load Reduction Plan 37 bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.6 Trash Management Area #6 Trash Management Area #6 comprises the Stanford Shopping Center. This Mall has a high concentration of retail and restaurants, including many with outdoor seating. During trash assessments in May 2013, no trash was found along Sand Hill, Quarry and Vineyard Lane, which bound the shopping center in addition to El Camino. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The Stanford Shopping Center area streets are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: While the City is considering changes in the sweeping program, including potential use of contractors, the City plans to continue sweeping at the same frequency in this area. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: Stanford Shopping Center staff/contractors pick up litter in the shopping center. Parks contractors maintain the substation area off Quarry, including litter pick up, across from the Shopping Center. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection City of Palo Alto 38 services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Litter Cans are placed in the shopping center to reduce littering and are serviced by Stanford Shopping Center staff. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or containers used for the collection of trash, recycling, food scraps and waste cooking fats, oils and grease (FOG) or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Long‐Term Trash Load Reduction Plan 39 3.2.7 Trash Management Area #7 Trash Management Area #7 is comprised of Palo Alto’s five neighborhood shopping centers:  Subarea 7.a: Edgewood Plaza at Embarcadero and St. Francis  Subarea 7.b: Midtown Shopping Area at Middlefield and Colorado  Subarea 7.c: Charleston Plaza at Middlefield and Charleston  Subarea 7.d: Alma Plaza at Alma and East Meadow  Subarea 7.e: neighborhood shops at Loma Verde and Middlefield These areas were grouped in one trash management area because trash sources and trash management actions are similar for these areas. Trash sources are primarily pedestrian litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The streets around the shopping centers are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: The shopping center property managers are responsible for maintaining the shopping centers. For Subarea 7.b: Parks contractors maintain landscaping and collect litter in an alley weekly. For Subarea 7.d: Parks contractors maintain landscaping and collect litter across from the shopping center about 100ft along train tracks from East Meadow north and East Meadow South on Alma on the East side of the tracks. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers City of Palo Alto 40 are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Litter Cans are placed in the shopping centers to reduce littering and are serviced by each shopping center’s staff or contractors. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.8 Trash Management Area #8 Trash Management Area #8 is comprised of the private and public schools in Palo Alto:  Subarea 8.a: Duveneck Elementary (public)  Subarea 8.b: Jordan Middle (public) and Stratford School (private)  Subarea 8.c: Palo Alto High School (public)  Subarea 8.d: Walter Hays Elementary (public)  Subarea 8.e: Addison Elementary (public)  Subarea 8.f: Barron Park Elementary (public)  Subarea 8.g: Juana Briones Elementary (public)  Subarea 8.h: El Carmelo Elementary (public)  Subarea 8.i: JLS Middle, Fairmeadow and Hoover Elementary (public)  Subarea 8.j: Ohlone Elementary (public) Long‐Term Trash Load Reduction Plan 41  Subarea 8.k: Palo Verde Elementary (public)  Subarea 8.l: Terman Middle (public)  Subarea 8.m: Gunn High School (public)  Subarea 8.n: Girls Middle School (private)  Subarea 8.o: International School (private)  Subarea 8.p: Kehillah Jewish High School (private)  Subarea 8.q: Gideon Hausner (private)  Subarea 8.r: Montessori School of Los Altos (private)  Subarea 8.s: International School Peninsula (private)  Subarea 8.t: Keys School (private)  Subarea 8.u: Castilleja (private)  Subarea 8.v: Challenger School (private)  Subarea 8.w: Elizabeth Seton (private)  Subarea 8.x: University Church Afterschool Care (private) These areas were grouped in one trash management area because trash sources and trash management actions are similar for these areas. Trash sources are primarily pedestrian litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The streets around the schools are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: Janitorial staff picks up litter at schools, in addition to various methods including using lunch detention students to clean up after lunch, giving points during spirit week to clean up litter, etc. For all public middle and elementary schools: the Parks Division’s staff maintains landscaping and collect litter on the athletic fields twice per week. Partial-Capture Treatment Devices Actions initiated after the MRP effective date: Keys School has installed a vortex separator as part of C.3 compliance. Gideon Hausner is in the process of remodeling and will be installing stormwater treatment as part of C.3 requirements. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in City of Palo Alto 42 a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Litter Cans are placed at the schools to reduce littering and are serviced by school staff. Actions initiated after the MRP effective date: Watershed Protection staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The Sustainable Schools Committee, among other things, works on improving recycling at the schools. GreenWaste has worked with schools on improving waste collection and recycling. Actions Planned for future implementation: Watershed Protection’s staff is piloting an inspection program for wastewater and stormwater issues for all middle and high schools. The inspection program will include inspecting trash areas, as well as automotive, pool, science, and art areas. Outreach Actions Initiated prior to and continued after the MRP Effective date: The City has allowed citizen volunteers to stencil storm drains since 1992, when the San Francisco Estuary Project began its Paint the Drain Campaign, and has maintained white backgrounds near storm drains around schools. Outreach to School-age Children or Youth ZunZun (Countywide) Through participation and funding of the SCVURPPP countywide ZunZun Program, the City of Palo Alto is continuing to implement litter reduction outreach to elementary school-age children. Up to 50 ZunZun assemblies at elementary schools are conducted in the Santa Clara Valley each year. These bilingual musical assemblies educate elementary school students and their teachers on watersheds and urban runoff pollution prevention, including litter. ZunZun performances use physical comedy, audience participation and musical instruments to educate teachers and children. Handouts, including teacher and student activity sheets, are distributed following the assembly. In addition to participating in regional outreach campaigns, the City has run an effective school outreach program since prior to the MRP effective date. Actions initiated after the MRP effective date: The school program was expanded in 2010 and includes programs for 2nd, 3rd, 4th and 7th graders. All classroom visits include messages on wastewater and stormwater. The programs relevant to trash/litter education are: What's Up with the Bags? (second grade) In this program students practice their reading and comprehension skills by reading a story out loud as they learn about the impact of plastic bags when they enter the watershed through human use and misuse. Plastic bag alternatives are discussed. Students are Long‐Term Trash Load Reduction Plan 43 given a re-usable bag, encouraged to decorate it with a message about water pollution or something else they learned from the lesson, and then take the bag home to be reused. Students also learn: the difference between waste water and storm water (where it comes from, where it goes); the water cycle; the definition and function of a watershed; and” reduce/reuse/recycle /rot/respect." Watershed Warriors! In this program students utilize a hands-on, simulated model called The Enviroscape. This model represents various environments such as a farm and a neighborhood. Students learn the sources of pollution & solutions to reduce or eliminate pollution. Students also learn: the difference between waste water and storm water (where it comes from, where it goes); the water cycle; the definition and function of a watershed; and "reduce/reuse/recycle/rot/respect." Who Dirtied the Bay? (third grade) Moving through time from past to present the focus of this program is on storm water and how pollutants impact the Baylands and H2O environment. Pollution prevention solutions are discussed with an emphasis on what the students can do right now, at their age, to impact water pollution Students also learn: the difference between waste water and storm water (where it comes from, where it goes); the water cycle; the definition and function of a watershed; and "reduce/reuse/recycle/rot/respect." Litter is collected from the school grounds and discussed during the lesson. Following the May 2013 trash assessments, the City’s staff met with the principal of Palo Alto High School to discuss litter outreach strategies. In addition, the City’s staff has attended a special session for all 100 7th graders at JLS middle school to discuss how litter impacts water quality in creeks and participated in a “litter walk” around the campus. Actions Planned for future implementation: Additional litter outreach to schools is planned as opportunities arise. Staff is currently working with Jordan Middle School on an anti-litter program which may be implemented in the future. In addition, participation at science fairs to discuss water quality issues including litter is being considered, as is working with student clubs in designing one or more banners to be placed near schools related to litter. Also see discussion for Trash Management Area 3 related to litter outreach to Palo Alto High school. Please also refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.9 Trash Management Area #9 Trash Management Area #9 is comprised of the City’s parks:  Subarea 9.a: Rinconada/Lucie Stern/Main Library/Art Center complex  Subarea 9.b: Mitchell Park and Community Center City of Palo Alto 44  Subarea 9.c: Greer Park  Subarea 9.d: Cubberley Community Center and playing fields  Subarea 9.e: Hoover Park Ball fields  Subarea 9.f: Ramos Park  Subarea 9.g: Peers Park  Subarea 9.h: Jerry Bowden  Subarea 9.i: Lawn Bowling Green  Subarea 9.j: Eleanor Pardee  Subarea 9.k: Bol Park  Subarea 9.l: Esther Clark  Subarea 9.m: Briones Park  Subarea 9.n: El Camino Park and El Palo Alto Park  Subarea 9.o: Seale Park  Subarea 9.p: four neighborhood parks in College Terrace  Subarea 9.q: Mayfield Soccer Fields These areas were grouped in one trash management area because trash sources and trash management actions are similar for these areas. Trash sources are primarily pedestrian litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The streets around the parks are swept weekly. Parking lots at the following parks are swept weekly: Mayfield Soccer fields, El Camino Park, Mitchell Park/community center, Lucie Stern, Greer, Terman, Main library/art center. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: Parks are maintained daily (weekday) or three times per week, depending on usage of the parks by Parks staff/contractors. For example, Cubberley maintenance occurs twice per week for the athletic fields and twice per week for the remainder of the community center. Mitchell Park/library/community center has daily litter pick up. Mayfield Soccer Fields are cleaned by the Downtown Streets Team as well as City staff. Partial-Capture Treatment Devices Actions initiated after the MRP effective date: The Main and Mitchell Park libraries as well as El Camino Park are in the process of being remodeled and will install stormwater treatment devices as part of the C.3 requirements. Mayfield Soccer fields have installed stormwater treatment devices as part of C.3 requirements. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection Long‐Term Trash Load Reduction Plan 45 services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Litter Cans are placed in the parks to reduce littering and are serviced by Parks staff or contractors and are emptied either daily or three times per week depending on the park’s usage. Rinconada and Mitchell Park also have weekend litter can pick up. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular Palo Alto Municipal Code section 16.09.180, requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Actions planned for future implementation: The City’s Zero Waste Group and the Open Space, Parks and Golf Division are considering improving trash receptacles in parks to increase material diversion, and to prevent wind and animals from causing litter to escape the receptacles. Smoking Ordinance Actions initiated after the MRP effective date: On August 12, 2013, the Council approved a ban on smoking in all public parks and open space nature preserves, including the City’s golf course, effective October 9, 2013. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) City of Palo Alto 46 Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.10 Trash Management Area #10 Trash Management Area #10 is comprised of the commercial/industrial areas within the City outside of the two main business areas (TMA #1 and #2):  Subarea 10.a: Charleston at San Antonio (high tech industry, plating shops, automobile, various commercial)  Subarea 10.b: Page Mill Corridor/El Camino (primarily high tech industry)  Subarea 10.c: East Bayshore and Embarcadero (office buildings, some auto facilities, airport/golf course, GreenWaste Facility)  Subarea 10.d: Vineyard to Pasteur and Quarry to Sand Hill (primarily Stanford Hospitals and Clinics and Children’s hospital as well as medical office buildings)  Subarea 10.e: San Antonio to Adobe Creek (Various Commercial/office buildings)  Subarea 10.f: Alma between Addison and Homer: automobile, hardware store, and miscellaneous commercial  Subarea 10.g: Alma between Lytton and Palo Alto Ave: primarily retail and offices, one park These areas were grouped in one trash management area because trash sources and trash management actions are similar for these areas. Trash sources include pedestrian litter, homeless encampment and vehicular litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: The streets are swept weekly. For area 10.c, the golf course parking lot is swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. In addition, the City may explore additional parking enforcement to enhance street sweeping in some areas. On-Land Trash Cleanup Actions Initiated prior to and continued after the MRP Effective date: For areas 10 a. and b., Parks staff/contractors maintain landscaping and pick up litter weekly in the median. For area 10.g, Parks staff/contractors pick up litter weekly at Watertower Park (Alma Tower). Public Works' staff cleans the embankment of Caltrain as needed. Actions planned for future implementation: For area 10.d, Parks staff/contractors will begin maintaining Welch Road medians and sides for litter and landscaping weekly. Long‐Term Trash Load Reduction Plan 47 Full-Capture Treatment Devices Actions planned for future implementation: The City will study the feasibility of full trash capture at the Adobe Pump Station, if it is determined that the tributary area is a significant source of trash, during FY 2017-18. Partial-Capture Treatment Devices Actions initiated prior to and continued after the MRP effective date: The County’s C.12 diversion structure covers a portion of TMA #10 Subarea 10.f. In 1993 the City constructed a structure in its stormwater system that diverts up to 0.5 million gallons of dry or wet weather flows to per day to the RWQCP. The structure traps sediment and trash in a vault where it can be removed. The area draining to the diversion structure is roughly 50 acres and is bound by Hamilton Avenue, Bryant Street, Channing Avenue and Alma Street. The structure is currently under evaluation for full capture designation. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. The City initiated a Clean Bay Business Program focusing on vehicle service facilities in 1992 and provided positive incentives and recognition to reduce pollutants such as heavy metals from entering creeks and the Bay from these facilities. The auto facilities are inspected at least annually to determine whether they meet Clean Bay Business Program requirements, which includes checking for litter. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180 requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. In addition, Palo Alto Municipal Code section 16.09.075 requires FSEs to include a covered area for all dumpsters, bins, carts or container used for the collection of trash, recycling, food scraps and waste FOG or tallow, with the area designed prevent water run-on to the area and runoff from the area. Drains that are installed within the enclosure for recycle and waste bins, dumpsters and tallow bins serving FSEs are optional. Any such drain installed shall be connected to a grease control device. If tallow is to be stored outside then an adequately sized, segregated space for a tallow bin shall be included in the covered area. City of Palo Alto 48 Watershed Protection’s staff is working closely with solid waste staff on addressing overflowing bins and littered trash enclosures. The City’s active inspection program for commercial and industrial facilities includes inspecting trash areas and enforcement documented in the enforcement database when applicable. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.11 Trash Management Area #11 Trash Management Area #11 comprises East Bayshore Road between Adobe and San Francisquito Creeks. The Municipal Service Center (MSC) is located in this TMA. Trash sources are primarily vehicular from the adjacent Highway 101. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: East Bayshore is swept weekly. Parking lots at MSC are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: While the City is considering changes in the sweeping program, including potential use of contractors, the City plans to continue sweeping at the same frequency in this area. On-Land Trash Cleanup Actions Initiated after the MRP effective date: Areas near the on/off ramps to highway 101 at Embarcadero and San Antonio Roads are cleaned as needed. In addition, the two MRP required hot spots are in this TMA, which are cleaned twice per year. Actions planned for future implementation: The City will seek additional coordination/collaboration with Caltrans for this TMA to ensure clean ups of the nearby Caltrans right-of-way occur to prevent trash from being transported from the highway areas to this TMA. Partial-Capture Treatment Devices Actions initiated prior to and continued after the MRP effective date: Trash booms are located in this area at Adobe and Matadero Creeks. (See TMA #13 for additional description) Long‐Term Trash Load Reduction Plan 49 Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The MSC has a Stormwater Pollution Prevention Plan and is inspected at least annually. Staff training and outreach is conducted to ensure that dumpsters are closed and litter prevented. The City initiated a Clean Bay Business Program focusing on vehicle service facilities in 1992 and provided positive incentives and recognition to reduce pollutants such as heavy metals from entering our creeks and Bay from these facilities. The Vehicle service facility at the MSC is inspected twice annually to determine whether they meet Clean Bay Business Program requirements, which includes checking for litter. Outreach Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.12 Trash Management Area #12 Trash Management Area #12 comprises West Bayshore Road between San Francisquito Creek and Channing Avenue adjacent to Highway 101 sound wall. This area is primarily residential. However, it has recently become an area where significant illegal dumping occurs. Additional trash sources are pedestrian and parked car litter. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: West Bayshore is swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. On-Land Trash Cleanup Actions Initiated after the MRP effective date: Parks staff/contractors maintain an area near the sound wall monthly for litter and landscaping. Public Works’ staff cleans the area as needed. In addition, the area is part of East Palo Alto’s creek clean up area when possible. Outreach City of Palo Alto 50 Please refer to description in Trash Management Area 13 (Jurisdiction-wide). Enhanced Storm Drain Inlet Maintenance – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Activities to Reduce Trash from Uncovered Loads – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Anti-littering and Illegal Dumping Enforcement Activities – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) Actions planned for future implementation: The City’s staff will coordinate with the City of East Palo Alto on illegal dumping initiatives for this area. In addition, a sidewalk has been requested by some residents to better access the new Edgewood Shopping Center. If this sidewalk project occurs, bringing additional light and beautification to this area may deter dumping. Product Bans – Please refer to description in Trash Management Area 13 (Jurisdiction-wide) 3.2.13 Jurisdiction‐wide Control Measures and Trash Management Area #13 This TMA consists primarily of open space and residential as well as high tech company campus areas, which are land uses with a low trash generation rate. Palo Alto has been a leader in a number of trash management activities, including implementing product bans as well as partial capture using trash booms, with some actions occurring prior to the effective date of the MRP. This TMA is the lowest priority area due to the level of trash generation. The control measures described here pertain to TMA #13, but also to all other TMAs because they are jurisdictional-wide. Street Sweeping Actions Initiated prior to and continued after the MRP Effective date: Residential streets are swept weekly. Actions Initiated after the MRP effective date: A new Broom Sweeper was added to the Fleet to help make sure the heavier debris is picked up. The new Broom sweeper is rotated throughout all the routes so each route receives sweeping by this new Broom sweeper at least every five weeks. Actions planned for future implementation: The City conducted a pilot project in primarily residential areas to test every-other-week street sweeping service during the non-leaf season months of March through September. The pilot evaluated whether the City can save costs by reducing sweeping frequency without significantly impacting residents or the environment. Recommendations are being discussed with the Finance Committee on December 2, 2013.Weekly street sweeping service will continue during the leaf season months (October through February). This process will be an opportunity to further evaluate the efficiency and effectiveness of the streetsweeping program and make changes to routes and procedures if needed. On-Land Trash Cleanup Actions Initiated after the MRP effective date: Small areas with medians and public right-of-way planting areas are maintained for landscaping and litter by the Parks Division’s staff/contractors. In addition, the City has a maintenance agreement with the County to maintain landscaping and remove litter from the median and side area landscaping at Oregon Expressway/Page Mill Road. Partial-Capture Treatment Devices Long‐Term Trash Load Reduction Plan 51 Actions initiated prior to and continued after the MRP effective date: The City entered into an agreement with the Water District in April 2009 to install a trash boom across Matadero Creek during the dry season. The trash boom prevents any floating trash from entering the Palo Alto Flood Basin and natural areas of the creek. Four of the eight pump stations have trash racks. Matadero Pump Station was retrofitted with additional trash racks. Pump Stations are cleaned of debris annually each September. Debris is collected, dried and then weighed. Weights are recorded on an excel spread sheet. Emergency cleanings may be required due to increased storm influx and maintenance requirements. Actions Initiated after the MRP effective date: Based on the successful pilot at Matadero Creek, the City and the Water District developed a new agreement to deploy trash booms at both Matadero and Adobe Creeks. The new agreement was approved by the City Council on December 10, 2012. The Water District completed permitting in July 2013. The City purchased a second boom in April 2013. Booms were deployed in July and August in Adobe and Matadero creeks. In accordance with the permit, the boom must be removed each year prior to the start of the rainy season so as not to cause potential flow blockages during storm events. The boom floats on the surface of the water and has a suspended curtain that captures near-surface debris. The amount of debris trapped by the boom will be monitored periodically by City staff, and the debris is photographed, removed and measured on an as-needed basis, at least twice per year. The City’s staff has been providing technical assistance to the Water District for other trash boom locations in the county. Improved Trash Bins/Container Management and Commercial Inspection Program Actions initiated prior to and continued after the MRP effective date: The City has a number of municipal ordinances regulating the maintenance of trash/recyclables containers by residents and businesses. Palo Alto Municipal Code Sections 5.20.040, 5.20.080, 5.20.130, 5.20.140, and 5.20.180 require residents and businesses to 1) utilize the trash/recyclables collection services of the City’s contracted hauler GreenWaste of Palo Alto (“GreenWaste”); 2) procure a sufficient number of containers to hold all solid waste created, produced or accumulated on the premises during a one-week period, unless a more frequent collection schedule has been arranged; 3) maintain the trash/recyclables bins, boxes, and containers on their premises, and the area in which they are located, in a good, usable, clean and sanitary condition, and ensure that the lid or cover on the bin, box, or container is kept fully closed in a manner that prevents leakage, spillage and the escape of odors, and that no solid waste or recyclable materials are placed outside of the bin, box, or container; and 4) keep their premises in a clean and sanitary condition and not cause, suffer or permit any solid waste to accumulate in, on or about such premises for a period in excess of one calendar week, respectively. In order to ensure that trash/recyclables containers for residents and businesses are properly sized, GreenWaste works with customers during the establishment of new refuse collection services to recommend a suitably-sized container based on the occupant load and use of the premises. Language in the City’s municipal contract requires GreenWaste’s staff to take corrective actions in response to overflowing trash and recyclables bins. Problem locations identified by collection vehicle drivers in the field are tagged by the drivers and conveyed to GreenWaste’s office and outreach staff for investigation and resolution. GreenWaste’s staff works with customers to ensure that missing containers are replaced and/or that undersized containers are replaced with larger units in order to accommodate the customer needs and prevent future overflow conditions. Actions initiated after the MRP effective date: The Sewer Use Ordinance updated in 2010, in particular, Palo Alto Municipal Code section 16.09.180 requires new buildings and residential developments providing centralized solid waste collection, except for single-family and duplex residences, to provide a covered area for a dumpster. The area shall be adequately sized for all waste streams and designed with grading or a berm system to prevent water runon and runoff from the area. Actions planned for future implementation: The City may consider including additional ordinance language relating to littering prohibitions. City of Palo Alto 52 Enhanced Storm Drain Inlet Maintenance Actions initiated prior to and continued after the MRP effective date: Storm inlets are cleaned annually in October and during pipeline cleaning year round. All work is recorded daily and marked on a map. Data is collected monthly and recorded on an Excel spreadsheet. Debris collected is weighed, dried and recorded. Activities to Reduce Trash from Uncovered Loads Actions initiated prior to and continued after the MRP effective date: Since 1997, the City has implemented the following control measures to reduce trash from vehicles with uncovered loads: 1) The City’s contract with GreenWaste contains language requiring covered loads when GreenWaste is transporting trash and debris to the transfer station. 2) Palo Alto Municipal Code Section section 5.20.160 requires that all solid waste and recyclable materials hauled by any person over public streets in the City shall be securely tied and covered during hauling thereof so as to prevent leakage, spillage, or blowing and prohibits any person from allowing any solid waste or recyclable materials of any kind whatsoever to leak, spill, blow or drop from any vehicle on any public street. This Code section is enforced by the Palo Alto Police Department. Violators are subject to an administrative penalty of $250. 3) The City is a partner agency in the Sunnyvale Materials Recovery and Transfer (“SMaRT”) Station. The SMaRT Station has a tarp distribution program which requires vehicles that arrive with uncovered loads to purchase a tarp at a cost of $15.00. Each subsequent visit to the transfer station with an uncovered load will result in an additional fee for a tarp, prompting haulers to change their behavior by covering their loads in order to avoid additional tarp fees. Actions initiated after the MRP effective date: With the closure of the City’s landfill, the tarp distribution program is implemented by the SMaRT station in Sunnyvale. Anti-littering and Illegal Dumping Enforcement Activities Actions initiated after the MRP effective date: The City has implemented PaloAlto311, a multi-platform solution to report issues, including illegal dumping. With this new Smartphone app, service requests are easily submitted by completing a short description of the request. A picture of the issue can be included in order to provide additional details. The app will automatically know the issue location* and the chosen request type will ensure that the issue is sent to the appropriate department at the City. The submitter and subsequent “followers” will be able to track the request all the way through its resolution right from the phone. In addition to the 311 tracking, illegal dumping service requests are also tracked in a database and hardcopy format. In addition, an illegal dumping phone number 650-329-2413 and web service request entry form are provided. Product Bans Single-Use Carryout Bag Policies Actions initiated prior to and continued after the MRP effective date: The City banned single-use plastic bags at grocery stores prior to the MRP, with the ordinance going into effect September 2009. 100% of grocery stores were compliant with the ordinance. Actions initiated after the MRP effective date: The City expanded its bag ordinance to include all retail services, including FSEs, and to implement a mandatory 10 cent charge for purchasing paper and reusable bags as well as paper and reusable bag requirements. The expanded ordinance was approved in May 2013 and went into effect for all retail on July 1 and FSEs on November 1, 2013. An EIR was prepared that shows that the ordinance will prevent 20 million single-use bags from being used in Palo Alto each year. Extensive outreach was conducted to both stores and residents, and compliance verification was performed in fall 2013 for retail and is ongoing Long‐Term Trash Load Reduction Plan 53 for food service establishments. For more information, including the ordinance text, see http://www.cityofpaloalto.org/bags Polystyrene Foam Food Service Ware Policies Actions initiated prior to and continued after the MRP effective date: The Council approved an Expanded Polystyrene (“EPS”) Restriction Ordinance in May 2009. The City’s ordinance number 5039 (Palo Alto Municipal Code Chapter 5.30) bans food vendors from providing prepared food in disposable food service containers made from expanded polystyrene or non-recyclable plastic. The ordinance also prohibits all City facilities, City-managed concessions, City-sponsored events, and City-permitted events from using disposable food service containers made from EPS or non- recyclable plastic. The ordinance became effective on April 22, 2010. Complaints and routine restaurant inspections include checking for compliance and any enforcement is documented in the stormwater database. Additional information and the ordinance text can be found at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=1277&TargetID=286 Plastic Packaging Materials Policy Actions initiated after the MRP effective date: In an effort to reduce pollution associated with plastic packaging materials, the Cities of Palo Alto, Sunnyvale, and San Jose are collaborating on an effort to disallow goods to be shipped to them in expanded foam packaging. The main goals of the Supply Chain Plastics Reduction Project are to ensure that public agencies minimize the amount of expanded foam packaging they receive with their shipments of goods and to send a market signal to vendors that packaging of all types is be minimized (while ensuring products are safely shipped) and that plastics packaging is unwanted because of associated water pollution and Zero Waste impacts. Public Education and Outreach Programs Please also refer to description in Trash Management Area 8 for School Outreach. Actions initiated prior to and continued after the MRP effective date: The City implemented the following public education and outreach control measures prior to the effective date of the MRP and has continued to implement these measures since MRP adoption. Watershed Watch Campaign (Countywide) In addition to the BASMAA Campaign, the City continues to implement the countywide Watershed Watch Campaign through active participation and funding of SCVURPPP. This Campaign conducts media advertising that includes anti-litter messages. Anti-litter advertisements for television, print, transit and radio have been developed and are used each year and will continue in the future. A telephone survey is conducted every five years to measure the effectiveness of outreach and increase in awareness about liter and stormwater related messaging. The FY 12-13 Watershed Watch media advertising included 312 anti-littering advertisements on TV, radio and online media. The Campaign also conducted outreach at a community event to promote the BASMAA “Be the Street” anti-littering campaign. Media Relations BASMAA Regional Media Relations Project (Regional) Through participation and funding of the BASMAA Regional Media Relations Project, the City is continuing to implement a media relations project partially designed to reduce littering from target audiences in the Bay Area. The goal of the BASMAA Regional Media Relations Project is to generate media coverage that encourages individuals to adopt behavior changes to prevent water pollution, including littering. At least two press releases or PSAs focus on litter issues each year (e.g., creek clean- up activities, preventing litter by using reusable containers, etc.). In FY 12-13, the Media Relations Project developed a press release new and recent bag bans in cities around the region. The pitch included information on the litter caused by plastic bags. Information ran on KBAY, KCBS and on eight Bay Area Patch.com sites. Stenciling Program City of Palo Alto 54 The City has allowed citizen volunteers to stencil storm drains since 1992, when the San Francisco Estuary Project began its Paint the Drain Campaign. The storm drain stencil was redesigned in 2010. In 2009, the City awarded a contract to the California Conservation Corps to install storm drain stainless steel markers at all City storm drains, except those around schools, where a white background was painted on 862 storm drains. The white background is painted about every 4 years at a subset of storm drains to allow citizen volunteers, such as school groups, to stencil the drains. Actions initiated after the MRP effective date; BASMAA Youth Outreach Campaign (Regional) Through participation and funding of the regional BASMAA Youth Outreach Campaign, the City is implementing an outreach campaign designed to reduce littering from the target audience in the Bay Area. The Youth Outreach Campaign was launched in September 2011 and aims to increase the awareness of Bay Area Youth (ages 16-24) on litter and stormwater pollution issues, and eventually change their littering behaviors. Combining the ideas of Community Based Social Marketing with traditional advertising, the Youth Campaign aims to engage youth to enable the peer-to-peer distribution of Campaign messages. The Campaign will at least run through FY 13-14. A brief description of the Campaign activities is provided below: o Raising Awareness: The Campaign is raising awareness of the target audience on litter and stormwater pollution issues. Partnerships with youth commissions, high schools, and other youth focused organizations have been developed to reach the target audience. Messages targeted to youth have been created and distributed via paid advertising, email marketing, Campaign website and social networking sites (e.g., Facebook and Twitter). o Engage the Youth - The advertisements encourage the audience to participate in the Youth Campaign by joining a Facebook page, entering a contest, taking an online quiz, etc., and providing their contact information. At the beginning of FY 12-13, a video contest was launched to get Bay Area youth further involved in the Campaign. An online voting system was used to select the winning entry. Media advertising was conducted to promote the winning entry. o Change Behaviors: To move the audience along the behavior change continuum, the Campaign is using electronic platforms such as email marketing and social networking sites to encourage participants to engage in increasingly more difficult behavior changes, such as participating in a clean-up, organizing a clean-up, etc. o Maintain Engagement: The Campaign continues to interact with the target audience through email marketing and social media websites. The Youth Campaign includes a pre- and post-campaign survey to evaluate the effectiveness of outreach. The pre-campaign survey was conducted in FY 11-12 and the post campaign survey will begin in FY 13-14. Other evaluation mechanisms, such as website hits, number of youth engaged in the Campaign’s social networking website, etc. are also being used to evaluate its effectiveness in increasing awareness and changing behavior. Activities in FY 12-13 included maintaining the website www.BetheStreet.org, Facebook page, and Instagram account. A video contest asking participants to submit their best anti-litter video was also conducted. The Be the Street campaign received 52 entries in response to the contest. The winning video was promoted on television, Pandora (online music site), YouTube, Google, and Facebook. The Watershed Watch Campaign promoted the winning video on KNTV. The City purchased a “Be the Street” banner to host events. Awareness through Art The City joined with Bay Area artist Judith Selby Lang to raise awareness about plastics pollution through two outdoor art installations: Lawn Bowls (created out of 10,000 plastic bags) and Water Lilies (created out of empty single use plastic bottles). Wheel of Trash This game is used at outreach events; staff educated residents about trash by playing a game where they must answer questions about litter. Some of the categories in the game are “creek geek” and “how did it get there” Long‐Term Trash Load Reduction Plan 55 Zero Litter Initiative The City’s staff provides leadership to the Zero Litter Initiative (“ZLI”) as part of the Santa Clara Basin Watershed Management Initiative (the “SCBWMI”). ZLI brings together multiple cities and agencies with a common interest in preventing litter and its impacts on our local streets and transportation corridors, creeks, and neighborhoods. Key players include staff from the cities of Palo Alto, San Jose, and Campbell; the Water District, Caltrans, VTA, and SCVURPP. ZLI is implementing its strategic plan for eliminating trash throughout Santa Clara County. The initiatives identified in the strategic plan include engagement with the business community, legislative advocacy, managing the impacts of trash from homeless encampments, and actions to reduce highway litter. In 2012, a workshop was held to focus on litter reduction from activities related to solid waste activities related to customer bins, collection, transfer, and disposal. A follow up workshop in early 2013 began development of workplans to reduce litter from these activities, with several active workgroups pursuing technology solutions, model waste contract language, outreach to shared-bin situations, etc. Right-sizing Outreach GreenWaste has included “right-sizing” and litter messages in their field visits and outreach pieces to multi-family dwellings, residents, and businesses. Citations have not been issued for incidents of overflowing containers or litter incidents. Resolutions to incidents are resolved through education and communication with customers and changes to their collection services. Information collected by the City is kept on a database and GreenWaste tracks the number of tags they leave with customers for bins that are overflowing. Actions Planned for future implementation: Expanded EPS Ordinance In 2014, staff will ask City Council to expand this ordinance to prohibit the sale of EPS foodware and ice chests at retail establishments. Zero Litter Initiative The Zero Litter Initiative is focusing on developing outreach materials for shared-bin situations such as multi-family dwellings and commercial areas. The City’s staff actively participates in the outreach committee and plan to use materials created in future outreach. Cigarette Butt Outreach Since cigarette butts are one of the items most commonly found in on-land and creek clean ups, additional outreach on cigarette but litter are planned. Volunteer Monitoring Support The City supports Acterra volunteer monitoring, which will include documentation of trash at monitoring locations, which will also assist in trash assessments. City of Palo Alto 56 3.2.14 Creek and Shoreline Hot Spot Cleanups The City of Palo Alto has two designated hot spots (see Figure 5 for locations):  PA – 02 is located along Matadero Creek where Highway 101 crosses over the creek, approximately 50 feet upstream and 600 feet downstream of W. Bayshore Rd. Trash sources include: windblown litter from nearby Highway and road, illegal dumping (fishermen, construction debris, homeless), litter/trash from upstream sources. Trash items found primarily are cigarette butts, convenience/fast food items, sports balls, aluminum cans, plastic products, bottles (plastic or glass), and construction debris.  PA – 01 is located along Adobe Creek at East Bayshore pedestrian bridge to 470 feet downstream. Trash sources include: windblown litter from nearby Highway and road, litter/trash from upstream sources. Trash items found primarily are convenience/fast food items, sports balls, paper and cardboard, bottles (plastic or glass), spray cans, and aluminum cans Both host spots are cleaned using volunteers twice per year on National River Cleanup day in May and Coastal Cleanup day in September. The City’s staff has observed that trash collected at these trash hot spots is highly variable and that no trends can be observed. For PA – 02 (Matadero), trash removed has ranged from 1.196 to 2.988 cubic yards of trash removed over the past three years. For PA – 01 (Adobe), trash removed has ranged from 0.679 to 2.040 cubic yards of trash removed over the past three years. Prior to the MRP effective date, the City’s staff led clean-up efforts at San Francisquito Creek and Adobe Creek, at least once per year, however, the designation of hot spots resulted in Matadero beginning to be a clean-up site. Since the MRP effective date, Matadero and Adobe creek hot spots have been cleaned up twice annually. In addition, trash booms (see Section 3.2.13) have been deployed upstream of the hot spot areas. Please also see Section 2.2 for measures taken to address trash from illegal dumping by fishermen. 3.2.15 Summary of Trash Control Measures Trash Management Area 1: Downtown  Three times per week street sweeping with blowing out of materials from tree wells and hard to reach areas ahead of sweeper. Parking enforcement in a portion of the TMA. Weekly Parking Lot sweeping. Explore additional parking enforcement (planned)  Extensive on-land clean-up: Daily on-land clean-up by Downtown Streets Team, weekly sidewalk cleaning using GreenMachine sweeper, monthly BASMAA steam cleaning, litter and landscaping twice per week, and encroachment permit language for restaurants with tables and chairs on sidewalk to maintain cleanliness  Full Trash Capture existing in limited areas downtown. The City will determine feasibility of full trash capture at pump stations if downtown is determined to be a significant source of trash  Partial Capture: Portions of TMA drain to POTW diversion structure. Wet well serves as partial capture  Container management, litter cans, and commercial enforcement activities  Planned smoking ordinance Trash Management Area 2: California Avenue Business District  Three times per week street sweeping. Parking enforcement in a portion of the TMA. Weekly Parking Lot sweeping. Explore additional parking enforcement (planned)  On-land clean up in landscaping areas twice per week, medians at California Avenue daily, tree wells weekly, Johnson Park daily, and Caltrain round-about weekly. Additional on-land clean-up efforts are being considered following completion of the streetscape project. Long‐Term Trash Load Reduction Plan 57  Full Trash Capture: The City will study the feasibility of full trash capture of the California Avenue Area if trash assessments determine that the California Avenue Business district remains a significant source of trash.  Container management, litter cans, and commercial enforcement activities  Planned smoking ordinance Trash Management Area 3: Town and Country Shopping Center  Weekly Street Sweeping  On-land Clean Up: daily  Full Trash Capture: The City will determine feasibility of full trash capture at pump stations if area determined to be a significant source of trash  Partial Capture: Wet well and stormwater treatment areas  Container management, litter cans, and commercial enforcement activities  Additional outreach planned Trash Management Area 4: El Camino Way/portions of El Camino Real  Weekly Street Sweeping  On-land Clean Up: daily at El Camino medians and park  Full Trash Capture: Implemented for all of TMA  Container management, litter cans, and commercial enforcement activities Trash Management Area 5: El Camino Real  Weekly Street Sweeping  On-land Clean Up: daily  Full Trash Capture: The City will seek to collaborate with Caltrans on full trash capture treatment devices  Container management, litter cans, and commercial enforcement activities Trash Management Area 6: Stanford Mall  Weekly Street Sweeping  On-land Clean Up: daily  Container management, litter cans, and commercial enforcement activities Trash Management Area 7: Neighborhood Shopping Centers  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes.  On-land Clean Up (private and City contractors)  Container management, litter cans, and commercial enforcement activities Trash Management Area 8: schools  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes.  On-land Clean Up  Container management, litter cans, sustainable schools committee  Partial Capture at some schools  Extensive school outreach with additional outreach planned  School inspection program (planned) Trash Management Area 9: Parks City of Palo Alto 58  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. Weekly parking lot sweeping  On-land Clean Up either daily or three times per week depending on park usage  Partial capture at some parks (and planned for remodels)  Container management and litter cans. Additional planned activities on trash receptacles.  Smoking ban Trash Management Area 10: Commercial/Industrial Areas  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. Explore additional parking enforcement (planned)  On-land Clean Up (private and City contractors)  Full Trash Capture: The City will study the feasibility of full trash capture at the Adobe Pump Station (e.g. netting devices on low flow pumps), if it is determined that the tributary area is a significant source of trash.  Partial capture: Portions of TMA drain to POTW diversion structure. Wet well serves as partial capture  Container management, litter cans, and commercial enforcement activities Trash Management Area 11: East Bayshore  Weekly Street Sweeping and weekly sweeping at municipal corporation yard  Creek Clean Up events  Container management, litter cans, and commercial enforcement activities  Coordination with Caltrans (planned) Trash Management Area 12: West Bayshore  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes.  On-land Clean up  Coordination with East Palo Alto (planned)  Possible beautification to address illegal dumping Trash Management Area 13: Residential and Jurisdiction-wide  Weekly Street Sweeping, the City is considering changes in the sweeping program, including potential use of contractors, and will review sweeping frequency needs for these areas as part of these changes. Weekly parking lot sweeping  On-land Clean  Partial capture: litter booms  Container management  Litter ordinance language (planned for consideration)  Enhanced storm drain inlet maintenance  Activities to Reduce Trash from Uncovered Loads  Anti-littering and Illegal Dumping Enforcement Activities  Product bans: o Single-Use Carryout Bag Policies o Polystyrene Foam Food Service Ware Policies o Plastic Packaging Materials Policy  Public Education and Outreach  Zero Litter Initiative Long‐Term Trash Load Reduction Plan 59  Volunteer Monitoring support The control measures described above are believed to achieve the full trash reduction level required in each management area. If assessment shows that additional measures are needed, an adaptive management process will be used to add or adapt trash control measures. 3.3 Control Measure Implementation Schedule The City has implemented control measures for trash prior to the effective date of the MRP to address trash in local creeks. This has included many unique programs, such as the Downtown Streets Team on- land clean up, and litter booms deployed in creeks, which have been continued or enhanced during the time of the MRP. New programs will focus on remaining areas where trash was found during trash assessments. City of Palo Alto 60 Table 7. City of Palo Alto trash control measure implementation schedule. Trash Management Area and Control Measures Pr e - M R P Short-Term Long-Term FY 2 0 0 9 - 2 0 1 0 FY 2 0 1 0 - 2 0 1 1 FY 2 0 1 1 - 2 0 1 2 FY 2 0 1 2 - 2 0 1 3 FY 2 0 1 3 - 2 0 1 4 a FY 2 0 1 4 - 2 0 1 5 FY 2 0 1 5 - 2 0 1 6 FY 2 0 1 6 - 2 0 1 7 b FY 2 0 1 7 - 2 0 1 8 FY 2 0 1 8 - 2 0 1 9 FY 2 0 1 9 - 2 0 2 0 FY 2 0 2 0 - 2 0 2 1 FY 2 0 2 1 - 2 0 2 2 c TMA #1 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Full Trash Capture (as part of C.3) x x x x x x x x x x x x x x Full Trash Capture Feasibility Study x Partial Capture x x x x x x x x x x x x x X Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x X Smoking Ordinance x x x x x x x X TMA #2 Street Sweeping x x x x x x x x x x x x x X On-land Clean up x x x x x x x x x x x x x x Full Trash Capture Feasibility Study x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x Smoking Ordinance x x x x x x x x TMA #3 Street Sweeping x x x x x x x x x x x x x X On-land Clean up x x x x x x x x x x x x x X Full Trash Capture Feasibility Study x Partial Capture x x x x x x x x x x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x Long‐Term Trash Load Reduction Plan 61 Trash Management Area and Control Measures Pr e - M R P Short-Term Long-Term FY 2 0 0 9 - 2 0 1 0 FY 2 0 1 0 - 2 0 1 1 FY 2 0 1 1 - 2 0 1 2 FY 2 0 1 2 - 2 0 1 3 FY 2 0 1 3 - 2 0 1 4 a FY 2 0 1 4 - 2 0 1 5 FY 2 0 1 5 - 2 0 1 6 FY 2 0 1 6 - 2 0 1 7 b FY 2 0 1 7 - 2 0 1 8 FY 2 0 1 8 - 2 0 1 9 FY 2 0 1 9 - 2 0 2 0 FY 2 0 2 0 - 2 0 2 1 FY 2 0 2 1 - 2 0 2 2 c Additional Outreach x x x x x x x x TMA #4 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Full Trash Capture x x x x x x x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x TMA #5 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Full Trash Capture (seek to collaborate with Caltrans) x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x TMA #6 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x TMA #7 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x TMA #8 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x City of Palo Alto 62 Trash Management Area and Control Measures Pr e - M R P Short-Term Long-Term FY 2 0 0 9 - 2 0 1 0 FY 2 0 1 0 - 2 0 1 1 FY 2 0 1 1 - 2 0 1 2 FY 2 0 1 2 - 2 0 1 3 FY 2 0 1 3 - 2 0 1 4 a FY 2 0 1 4 - 2 0 1 5 FY 2 0 1 5 - 2 0 1 6 FY 2 0 1 6 - 2 0 1 7 b FY 2 0 1 7 - 2 0 1 8 FY 2 0 1 8 - 2 0 1 9 FY 2 0 1 9 - 2 0 2 0 FY 2 0 2 0 - 2 0 2 1 FY 2 0 2 1 - 2 0 2 2 c Improved Trash Bin/Container Mgt x x x x x x x x x x x x x x School Inspection Program x x x Outreach x x x x x x x x x x x x x x TMA #9 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Partial capture (as part of C.3) x x x x x x x x x x Improved Trash Bin/Container Mgt, Public Litter Cans, and Commercial Inspections x x x x x x x x x x x x x x Smoking Ordinance x x x x x x x x x TMA #10 Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Full Trash Capture Feasibility Study x Partial Capture x x x x x x x x x x x x x x Improved Trash Bin/Container Mgt, and Commercial Inspections x x x x x x x x x x x x x x TMA #11 Street Sweeping x x x x x x x x x x x x x x Creek Clean up x x x x x x x x x x x x x x Partial Capture (litter booms) x x x x x x x x x x x x x X Improved Trash Bin/Container Mgt, and Municipal Service Center Inspections x x x x x x x x x x x x x X TMA #12 Street Sweeping x x x x x x x x x x x x x x Long‐Term Trash Load Reduction Plan 63 Trash Management Area and Control Measures Pr e - M R P Short-Term Long-Term FY 2 0 0 9 - 2 0 1 0 FY 2 0 1 0 - 2 0 1 1 FY 2 0 1 1 - 2 0 1 2 FY 2 0 1 2 - 2 0 1 3 FY 2 0 1 3 - 2 0 1 4 a FY 2 0 1 4 - 2 0 1 5 FY 2 0 1 5 - 2 0 1 6 FY 2 0 1 6 - 2 0 1 7 b FY 2 0 1 7 - 2 0 1 8 FY 2 0 1 8 - 2 0 1 9 FY 2 0 1 9 - 2 0 2 0 FY 2 0 2 0 - 2 0 2 1 FY 2 0 2 1 - 2 0 2 2 c On-land Clean up x x x x x x x x x x x x x x Illegal Dumping Prevention x x x x x x x x x Jurisdiction-wide Control Measures Street Sweeping x x x x x x x x x x x x x x On-land Clean up x x x x x x x x x x x x x x Improved Trash Bin/Container Mgt, x x x x x x x x x x x x x x Partial Capture (litter booms) x x x x x x x x x x x x x X Enhanced Storm Drain Inlet Cleaning x x x x x x x x x x x x x X Activities to Reduce Trash from Uncovered Loads x x x x x x x x x x x x x x Anti-littering and Illegal Dumping Enforcement Activities x x x x x x x x x x x x x Single-Use Carryout Bag Policies x x x x x x x x x x x x x x Polystyrene Foam Food Service Ware Policies x x x x x x x x x x x x x x Plastic Packaging Materials Policy x x x x x x x x x x x X Public Education and Outreach Programs x x x x x x x x x x x x x x Creek and Shoreline Hot Spot Cleanups National River Clean Up x x x x x x x x x x x x x X Coastal Clean Up x x x x x x x x x x x x x x aJuly 1, 2014 40% trash reduction target bJuly 1, 2014 70% trash reduction target cJuly 1, 2022 100% trash reduction target Baseline Trash Load and Short‐Term Trash Load Reduction Plan 64 4 PROGRESS ASSESSMENT STRATEGY Provision C.10.a.ii of the MRP requires Permittees to develop and implement a trash load reduction tracking method that will be used to account for trash load reduction actions and to demonstrate progress and attainment of trash load reduction targets. Early into the MRP, Permittees decided to work collaboratively to develop a trash load reduction tracking method through BASMAA. Permittees, RWQCB staff and other stakeholders assisted in developing Version 1.0 of the tracking method. On behalf of all MRP Permittees, the BASMAA submitted Version 1.0 to the RWQCB on February 1, 2012. The Trash Assessment Strategy (the “Strategy”) described in this section is intended to serve as Version 2.0 of the trash tracking method and replace version 1.0 previously submitted to the RWQCB. The Strategy is specific to Permittees participating in SCVURPPP, including the City of Palo Alto. The City intends to implement the Strategy in phases and at multiple geographical scales (i.e., jurisdiction-wide and trash management area) in collaboration with SCVURPPP. Pilot implementation is scheduled for the near-term and as assessment methods are tested and refined, the Strategy will be adapted into a longer-term approach. The Strategy selected by the City is described in the following sections. 4.2 SCVURPPP Pilot Assessment Strategy The following SCVURPPP Pilot Trash Assessment Strategy (the “SCVURPPP Pilot Strategy”) was developed by SCVURPPP on behalf of the City and other Santa Clara Valley Permittees. The SCVURPPP Pilot Strategy will be implemented at a pilot scale on a countywide basis and includes measurements and observations in the City of Palo Alto. 4.2.13 Management Questions The SCVURPPP Pilot Strategy is intended to answer the following core management questions over time as trash control measures outlined in section 3.0 are implemented and refined:  Are the MS4 trash load reduction targets being achieved?  Have trash problems in receiving waters been resolved?  If trash problems in receiving waters exist, what are the important sources and transport pathways? The SCVURPPP Pilot Strategy, including indicators and methods, is summarized in this section and fully described in the SCVURPPP Pilot Trash Assessment Strategy, a compendium document submitted to the RWQCB on February 1, 2014 on behalf of all SCVURPPP Permittees (SCVURPPP 2014). 4.2.14 Indicators of Progress and Success The management questions listed in the previous section will be addressed by tracking information and collecting data needed to report on a set of key environmental indicators. Environmental indicators are simple measures that communicate what is happening in the environment. Since trash in the environment is very complex, indicators provide a more practical and economical way to track the state of the environment than if we attempted to record every possible variable. 65 With regard to municipal stormwater trash management, indicators are intended to detect progress towards trash load reduction targets and solving trash problems. Ideally, indicators should be robust and able to detect progress that is attributable to multiple types of trash control measure implementation scenarios. Assessment results should also provide Permittees with an adequate level of confidence that trash load reductions from MS4s have occurred, while also assessing whether trash problems in receiving waters have been resolved. Indicators must also be cost effective, relatively easy to generate, and understandable to stakeholders. Primary and secondary indicators that SCVURPPP Permittees will use to answer core management questions include: Primary Indicators: 1-A Reduction in the level of trash present on-land and available to MS4s 1-B Effective full capture device operation and maintenance Secondary Indicators: 2-A Successful levels of trash control measures implementation 2-B Reductions in the amount of trash in receiving waters In selecting the indicators above, the City of Palo Alto in collaboration with SCVURPPP and other SCVURPPP Permittees recognize that no one environmental indicator will provide the information necessary to effectively determine progress made in reducing trash discharged from MS4s and improvements in the level of trash in receiving waters. Multiple indicators were therefore selected. The ultimate goal of municipal stormwater trash reduction strategies is to reduce the impacts of trash associated with MS4s on receiving waters. Indicators selected to assess progress towards this goal should ideally measure outcomes (e.g., reductions in trash discharged). The primary indicators selected by SCVURPPP are outcome-based and include those that are directly related to MS4 discharges. Secondary indicators are outcome or output-based and are intended to provide additional perspective on and evidence of, successful trash control measure implementation and improvements in receiving water condition with regard to trash. As described in Section 2.2, trash is transported to receiving waters from pathways other than MS4s, which may confound our ability to observe MS4-associated reductions in creeks and shorelines. Due to this challenge of linking MS4 control measure implementation to receiving water conditions, the receiving water based indicator is currently considered a secondary indicator. Evaluations of data on the amount of trash in receiving waters that are conducted over time through the Pilot Assessment Strategy will assist the City in further determinations of the important sources and pathways causing problems in local creeks, rivers and shorelines. 4.2.15 Pilot Assessment Methods This section briefly summarizes the preliminary assessment methods that the City of Palo Alto will implement through the SCVURPPP Pilot Strategy to generate indicator information described in the previous section. Additional information on each method can be found in the SCVURPPP Pilot Trash Assessment Strategy submitted to the RWQCB by SCVURPPP on behalf of the City. 1-A. On-land Visual Assessments City of Palo Alto 66 As part of the Trash Generation Map assessment and refinement process (see Section 2.3.1), a draft on-land visual assessment method was developed to assist Permittees in confirming and refining trash generating area designations (i.e., very high, high, moderate and low trash generating categories). The draft on-land visual assessment method is intended to be a cost-effective tool and provide Permittees with a viable alternative to quantifying the level of trash discharged from MS4s. As part of BASMAA’s Tracking California’s Trash grant received from the State Water Resources Control Board (see Section 4.2), quantitative relationships between trash loading from MS4s and on-land visual assessment condition categories will be established. Condition categories defined in the draft on-land assessment protocol are listed in Table 8 Table 8. Trash condition categories used in the draft on-land visual assessment protocol. Trash Condition Category Summary Definition A (Low) Effectively no trash is observed in the assessment area. B (Moderate) Predominantly free of trash except for a few pieces that are easily observed. C (High) Trash is widely/evenly distributed and/or small accumulations are visible on the street, sidewalks, or inlets. D (Very High) Trash is continuously seen throughout the assessment area, with large piles and a strong impression of lack of concern for litter in the area. On-land visual assessments will be conducted in trash management areas within the City of Palo Alto as part of the SCVURPPP Pilot Trash Assessment Strategy. On-land assessments are intended to establish initial conditions and detect improvements in the level of trash available to MS4s over time. More specifically, on-land visual assessment methods will be conducted in areas not treated by trash full capture devices in an attempt to evaluate reductions associated with other types of control measures. Assessment methods for areas treated by full capture devices are described in this next section. Given that the on-land assessment method and associated protocol have not been fully tested and refined, initial assessments will occur at a pilot scale in the City and in parallel to the Tracking California’s Trash project. The frequency of assessments and number of sites where assessments will occur during the pilot stage are more fully described in the SCVURPPP Pilot Trash Assessment Strategy (SCVURPPP 2014). 1-B. Full Capture Operation and Maintenance Verification Consistent with the MRP, adequate inspection and maintenance of trash full capture devices is required to maintain full capture designation by the RWQCB. The City of Palo Alto is currently developing an operation and maintenance verification program (Trash O&M 67 Verification Program), via SCVURPPP, to ensure that devices are inspected and maintained at a level that maintains this designation. The SCVURPPP Trash O&M Verification Program will be modeled on the current O&M verification program for stormwater treatment controls implemented consistent with the Permit new and redevelopment requirements. Additional details regarding the Trash O&M Verification Program can be found in the SCVURPPP Pilot Trash Assessment Strategy (SCVURPPP 2014). 2-A. Control Measure Effectiveness Evaluations In addition to on-land trash assessments and full capture operation and maintenance verification, the City will also conduct assessments of trash control measures implemented within their jurisdictional area. Assessment methods will be selected based on trash sources and the type of control measure being implemented. Control measure effectiveness evaluations are more fully described in the SCVURPPP Pilot Trash Assessment Strategy. The following are example assessment methods that may be used to demonstrate successful control measure implementation and progress towards trash reduction targets:  Product-related Ordinances – Annually tracking and reporting the % of businesses in compliance with the ordinance and the percentage requiring a response.  Street Sweeping – Reporting the frequency of sweeping and ability to sweep to the curb in specific areas where enhanced sweeping is implemented; and/or documenting the level of trash on streets directly after street sweeping during wet and dry weather seasons.  Public/Private Trash Container Management – Reporting the magnitude and extent of enhanced actions; and/or visually assessing and documenting conditions around public trash containers before and after implementing enhanced control measures.  Targeted Outreach and Enforcement – Reporting the magnitude and extent of enhanced actions; tracking and reporting the % increase in enforcement actions; and/or visually assessing and documenting the conditions in targeted areas before and after implementing control measures.  Public Outreach Campaigns – Reporting the magnitude and extent of enhanced actions, and/or conducting pre and post campaign surveys.  On-land Cleanups and Enforcement – Reporting the magnitude and extent of enhanced actions; visually assessing and documenting the conditions in targeted areas before and after control measure implementation; and/or tracking the volumes of trash removed.  Illegal Dumping Prevention – Reporting the magnitude and extent of enhanced actions; and/or tracking and reporting improvements in the number of incidents.  Business Improvement Districts – Reporting the magnitude and extent of enhanced actions; and/or visually assessing and documenting the conditions in BID areas before and after implementing control measures.  Prevention of Uncovered Loads - Reporting the magnitude and extent of enhanced actions; tracking and reporting the decreases in the number of incidents; and/or visually assessing and documenting the conditions in targeted areas before and after implementing control measures. City of Palo Alto 68  Partial Capture Devices – Reporting the magnitude and extent of enhanced actions; and/or visually assessing and the amount of trash in storm drains or downstream of partial capture devices. 2-C. Receiving Water Condition Assessments The ultimate goal of stormwater trash management in the Bay Area is to significantly reduce the amount of trash found in receiving waters. In the last decade, Santa Clara Valley Permittees and volunteers have collected data on the amounts of trash removed during cleanup events. More recently, Permittees have conducted trash assessments in creek and shoreline hotspots using standardized assessment methods. In an effort to answer the core management question Have trash problems in receiving waters been resolved?, the City of Palo Alto plans to continue conducting receiving water condition assessments at trash hot spots a minimum of one time per year. Assessment will be conducted consistent with Permit hot spot cleanup and assessment requirements. Additional information on receiving water assessment methods can be found in the SCVURPPP Pilot Trash Assessment Strategy (SCVURPPP 2014). 4.3 BASMAA “Tracking California’s Trash” Project The SCVURPPP Pilot Assessment Strategy described in the previous section recognizes that outcome-based trash assessment methods needed to assess progress toward trash reduction targets are not well established by the scientific community. In an effort to address these information gaps associated with trash assessment methods, the BASMAA, in collaboration with SCVURPPP, the 5 Gyres Institute, San Francisco Estuary Partnership, the City of Los Angeles, and other stormwater programs in the Bay Area, developed the Tracking California’s Trash Project. The Project is funded through a Proposition 84 grant awarded to BASMAA by the State Water Resources Control Board (SWRCB) who recognized the need for standardized trash assessment methods that are robust and cost-effective. The Project is intended to assist BASMAA member agencies in testing trash assessment and monitoring methods needed to evaluate trash levels in receiving waters, establish control measures that have an equivalent performance to trash full capture devices, and assess progress in trash reduction over time. The following sections provide brief descriptions of tasks that BASMAA will conduct via the three-year Project. Full descriptions of project scopes, deliverables, and outcomes will be developed as part of the task-specific Sampling and Analysis Plans required by the SWRCB during the beginning of the Project. The Project is currently underway and will continue through 2016. 69 4.3.13 Testing of Trash Monitoring Methods BASMAA and the 5 Gyres Institute will evaluate the following two types of assessment methods as part of the Project:  Trash Flux Monitoring – Trash flux monitoring is intended quantify the amount of trash flowing in receiving waters under varying hydrological conditions. Flux monitoring will be tested in up to four receiving water bodies in San Francisco Bay and/or the Los Angeles areas. Methods selected for evaluation and monitoring will be based on a literature review conducted during this task and through input from technical advisors and stakeholders. Monitoring is scheduled to begin in 2014 and will be completed in 2016.  On-land Visual Assessments – As part of the Project, BASMAA will also conduct an evaluation of on-land visual assessment methods that are included in the SCVURPPP Pilot Assessment Strategy. The methods are designed to determine the level of trash on streets and public right-of-ways that may be transported to receiving waters via MS4s. BASMAA plans to conduct field work associated with the evaluation of on-land visual assessment at a number of sites throughout the region. To the extent practical, sites where the on-land methods evaluations take place will be coordinated with trash flux monitoring in receiving waters. On-land assessments will occur in areas that drain to trash full capture devices, and all sites will be assessed during wet and dry weather seasons in order to evaluate on-land methods during varying hydrologic conditions. Monitoring is scheduled to begin in 2014 and will be completed in 2016. 4.3.14 Full Capture Equivalent Studies Through the implementation of BASMAA’s Tracking California’s Trash grant-funded project, a small set of “Full Capture Equivalent” projects will also be conducted in an attempt to demonstrate that specific combinations of control measures will reduce trash to a level equivalent to full capture devices. Initial Best Management Practices (“BMPs”) combinations include high-frequency street sweeping, and enhanced street sweeping with auto-retractable curb inlet screens. Other combinations will also be considered. Studies are scheduled to begin in 2014 and will be completed in 2016. 4.4 Additional Progress Assessments The City contracts with Acterra, an environmental nonprofit, to conduct volunteer monitoring, which includes documenting trash found at creek monitoring locations. The City will conduct on-land visual assessments of high trash generation areas at least once per year. In addition, the City’s staff monitors litter booms weekly when in place and will sort any litter removed from litter booms to determine what materials are being found and where they may have originated. 4.5 Long‐Term Assessment Strategy The City is committed to implementing standardized assessment methods post-2016 based on the lessons learned from pilot assessments and studies that will occur between 2014 and 2016. Assessment activities described in the previous sections will evaluate the utility of different assessment methods to demonstrate progress towards trash reduction targets and provide City of Palo Alto 70 recommended approaches for long-term implementation. Lessons learned will be submitted to the RWQCB with the FY 2015-2016 Annual Report and a revised Strategy will be developed and submitted, if necessary. The revised Strategy will include agreed upon assessment methods that will be used to demonstrate progress during the remaining term of trash reduction requirements. Reporting using the new/revised methods will begin with the FY 2016-17 Annual Report. 4.6 Implementation Schedule The implementation schedule for the SCVURPPP Pilot Implementation Strategy, BASMAA’s Tracking California’s Trash project, and the Long-Term Assessment Strategy are included in Table 9. Load reduction reporting milestones are also denoted in the table. The schedule is consistent with the need for near-term pilot assessment results to demonstrate progress toward short-term targets, while acknowledging the need for testing and evaluation of assessment methods and protocols prior to long-term implementation. For more detailed information on implementation timelines, refer to the SCVURPPP Pilot Trash Assessment Strategy (SCVURPPP 2014) and monitoring plans developed as part of BASMAA’s Tracking California’s Trash project. Table 9. City of Palo Alto trash progress assessment implementation schedule. Trash Assessment Programs and Methods Pr i o r t o F Y 20 1 3 - 1 4 Fiscal Year 20 1 3 - 1 4 a 20 1 4 - 1 5 20 1 5 - 1 6 20 1 6 - 1 7 b 20 1 7 - 1 8 20 1 8 - 1 9 20 1 9 - 2 0 20 2 0 - 2 1 20 2 1 - 2 2 c Pilot Trash Assessment Strategy (SCVURPPP) On-land Visual Assessments Initial (Baseline) Assessments X Pilot Progress Assessments X X X X Full Capture Operation and Maintenance Verification X X X Control Measure Effectiveness Evaluations X X X X X Receiving Water Condition Assessments X X X X X Tracking California’s Trash Project (BASMAA) Testing of Trash Monitoring Methods Trash Flux Monitoring Protocol Testing X X X On-land Visual Assessment Evaluations X X X Full Capture Equivalent Studies X X X Additional Assessments (City of Palo Alto) Volunteer Monitoring x x x Trash Boom Monitoring and Material Sorting x x x x x x x x x x Annual On-land visual assessment of high-trash generating areas x x x x x x x x x 71 Long-Term Trash Assessment Strategy (SCVURPPP) X X X X X aJuly 1, 2014 40% trash reduction target bJuly 1, 2014 70% trash reduction target cJuly 1, 2022 100% trash reduction target Baseline Trash Load and Short‐Term Trash Load Reduction Plan 72 5.0 REFERENCES Allison R.A. and F.H.S. Chiew 1995. Monitoring stormwater pollution from various land uses in an urban catchment. Proceedings from the 2nd International Symposium on Urban Stormwater Management, Melbourne, 551-516. Allison, R.A., T.A. Walker, F.H.S. Chiew, I.C. O’Neill and T.A McMahon 1998. From Roads to rivers: Gross pollutant removal from urban waterways. Report 98/6. Cooperative Research Centre for Catchment Hydrology. Victoria, Australia. May 1998. Armitage, N. 2003. The removal of urban solid waste from stormwater drains. Prepared for the International Workshop on Global Developments in Urban Drainage Management, Indian Institute of Technology, Bombay, Mumbai India. 5-7 February 2003. Armitage, N. 2007. The reduction of urban litter in the stormwater drains of South Africa. Urban Water Journal Vol. 4, No. 3: 151-172. September 2007. Armitage N., A. Rooseboom, C. Nel, and P. Townshend 1998. “The removal of Urban Litter from Stormwater Conduits and Streams. Water Research Commission (South Africa) Report No. TT 95/98, Prestoria. Armitage, N. and A. Rooseboom 2000. The removal of urban litter from stormwater conduits and streams: Paper 1 – The quantities involved and catchment litter management options. Water S.A. Vol. 26. No. 2: 181-187. ABAG (Association of Bay Area Governments). 2005. Bay Area Land Use Geographical Information Systems Datalayer. BASMAA (Bay Area Stormwater Management Agencies Association). 2011a. Progress Report on Methods to Estimate Baseline Trash Loads from Bay Area Municipal Stormwater Systems and Track Loads Reduced. February 2011. BASMAA (Bay Area Stormwater Management Agencies Association). 2011b. Method to Estimate Baseline Trash Loads from Bay Area Municipal Stormwater Systems: Technical Memorandum #1. Prepared by EOA, Inc. April 2011. BASMAA (Bay Area Stormwater Management Agencies Association). 2011c. Sampling and Analysis Plan. Prepared by EOA, Inc. April 2011. BASMAA (Bay Area Stormwater Management Agencies Association). 2012. Trash Baseline Generation Rates: Technical Report. Prepared by EOA, Inc. February 1, 2012. County of Los Angeles. 2002. Los Angeles County Litter Monitoring Plan for the Los Angeles River and Ballona Creek Trash Total Maximum Daily Load. May 30, 2002. County of Los Angeles. 2004a. Trash Baseline Monitoring Results Los Angeles River and Ballona Creek Watershed. Los Angeles County Department of Public Works. February 17, 2004. County of Los Angeles 2004b. Trash Baseline Monitoring for Los Angeles River and Ballona Creek Watersheds. Los Angeles County Department of Public Works. May 6, 2004. Kim, L.H, M. Kayhanian, M.K. Stenstrom 2004. Event mean concentration and loading of litter from highways during storms. Science of the Total Environment Vol 330: 101-113. Lippner, G., R. Churchwell, R. Allison, G. Moeller, and J. Johnston 2001. A Scientific Approach to Evaluating Storm Water Best Management Practices for Litter. Transportation Research Record. TTR 1743, 10-15. SCVURPPP (Santa Clara Valley Urban Runoff Pollution Prevention Program). 2014. Pilot Trash Assessment Strategy. Prepared by EOA. February 1. CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR January 13, 2014 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan The Office of the City Auditor recommends acceptance of the Auditor’s Office Quarterly Report as of September 30, 2013. At its meeting on November 19, 2013, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Respectfully submitted, Houman Boussina Acting City Auditor ATTACHMENTS:  Attachment A: Auditor's Office Quarterly Report as of September 30, 2013 and Revised FY 2014 Work Plan (PDF)  Attachment B: Policy and Services Committee Meeting Minutes Excerpt (November 19, 2013) (PDF) Department Head: Houman Boussina, Acting City Auditor Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 19, 2013 The Honorable City Council Palo Alto, California City Auditor's Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan RECOMMENDATION The Office of the City Auditor recommends the Policy and Services Committee review and recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan. SUMMARY OF RESULTS In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues quarterly reports to the City Council describing the status and progress towards completion of the work plan. This report provides the City Council with an update on the first quarter for FY 2014 and an updated FY 2014 Work Plan. ATTACHMENTS:  Attachment A: Quarterly Report as of September 30, 2013 and Revised FY 2014 Work Plan (PDF) Department Head: Houman Boussina, Acting City Auditor Attachment A Page 2 Attachment A “Promoting honest, efficient, effective, and fully accountable city government." Attachment A 2 Fiscal Year (FY) 2014 First Quarter Update (July – September 2013) Overview The audit function is essential to the City of Palo Alto’s public accountability. As mandated by the City Charter and Municipal Code, the mission of the Office of the City Auditor (OCA) is to promote honest, efficient, effective, and fully accountable city government. We conduct performance audits and reviews to provide the City Council and City management with information and evaluations regarding the effectiveness and efficiency with which resources are employed, the adequacy of the system of internal controls, and compliance with policies and procedures and regulatory requirements. Taking appropriate action on our audit recommendations will help the City to reduce risks and protect its good reputation. Former City Auditor Jim Pelletier left the office on September 12, 2013. Houman Boussina, Senior Performance Auditor, has been appointed as Acting City Auditor until the recruitment for a new City Auditor is completed. Audits Below is a summary of our audit work for the first quarter of FY 2014 (as of September 30, 2013): Title Objective(s) Start Date End Date Status Results/Comments SAM1 – Follow-up to the 2008 Audit of Employee Ethics Policies and Results of 2013 Ethical Climate Survey This Special Advisory Memorandum (SAM) provides an update to the 2008 Audit of Employee Ethics Policies and also includes the results of an Ethical Climate Survey we conducted in May 2013. The objective of this survey was to understand how City employees view ethics at work and identify any ethics related risks that may need to be addressed. 5/2013 8/2013 Complete The overall score of the City’s first Ethical Climate Survey was medium. Based on the Institute for Local Government Scoring Matrix, this means that the City’s overall ethical climate is good but has room to improve. 1 A Special Advisory Memorandum (SAM) is utilized to communicate the results of time critical engagements including limited assessments, reviews, or evaluations as requested by management or the Council. These non-audit services do not typically conform to rigorous audit standards, but allow for important information to be provided to management in a quick, flexible manner and can be focused on singular issues. Attachment A 3 Title Objective(s) Start Date End Date Status Results/Comments Inventory Management Audit (formerly Utilities Asset Management) Specific concerns regarding the effective and efficient safeguarding of certain assets were identified during the risk assessment process. This audit will follow up on those concerns and assess the adequacy of controls over Utilities assets including compliance with relevant policies and the Municipal Code. 2/2013 12/2013 In Process In process as of 9/30/13. Met with management in September 2013 to discuss a preliminary draft outline of issues. Contract Oversight Audit: Trenching and the Installation of Electric Substructure This audit was initiated based on concerns raised in a hotline investigation. The audit objective was to determine if the Utilities Department effectively managed its $1.9 million contract with Casey Construction, Inc. for trenching services and the installation of electric substructure, in accordance with contract terms, the City of Palo Alto Municipal Code (Municipal Code), and relevant policies and procedures. 1/2013 12/2013 In Process In process as of 9/30/13. The audit report was presented to the Finance Committee on 11/5/13. To be scheduled on the City Council consent calendar in December 2013. Solid Waste Program Audit To determine whether there are adequate controls in place to effectively manage the City’s Solid Waste Program to ensure sufficient revenue to recover the cost of services while pursuing zero waste goals in accordance with applicable laws, regulations, and City policies and procedures. 5/2013 1/2014 In Process To be determined (TBD) Attachment A 4 Title Objective(s) Start Date End Date Status Results/Comments Performance Report (formerly the Service Efforts & Accomplishments report) / Citizen Centric Report To provide consistent, reliable information on the performance of City services to assist users in assessing whether the City is achieving its goals and objectives in an efficient and effective manner and to assist the City in meeting its responsibilities to be publicly accountable in the stewardship over public resources. 8/2013 1/2014 In Process These reports for FY 2013 will provide comprehensive and historical data and analysis that is not available in any other single report in the City. The reports will be available online and in hardcopy. The FY 2013 Performance Report will continue with last year’s redesigned format to provide an additional focus on performance management. Other Monitoring and Administrative Assignments Below is a summary of other assignments as of the first quarter of FY 2014 (as of September 30, 2013): Title Objective(s) Status Results/Comments Sales and Use Tax Allocation Reviews The OCA conducts sales and use tax monitoring in-house and also contracts with an outside vendor. Ongoing The OCA continues to submit inquiries to the State Board of Equalization. As of the end of the first quarter, the City received $93,331 in total Sales and Use Tax Recoveries. Due to processing lags at the State Board of Equalization, there are 41 potential misallocations waiting to be researched and processed (16 from OCA and 25 from the vendor). Total Sales and Use Tax Recoveries: FY 2014 ($47,161 from OCA inquiries and $46,170 from vendor inquiries). Quarterly Reporting Each quarter, the OCA provides Quarterly Status Updates and Sales Tax Digest Summaries for Council review. Ongoing N/A City Auditor Advisory Roles Provide guidance and advice to key governance committees within the City. Ongoing The City Auditor is an advisor to the following: Utilities Risk Oversight Committee, the Library Bond Oversight Committee, the Information Technology Governance Review Board, and the Information Security Steering Committee. Attachment A 5 Fraud, Waste, and Abuse Hotline Administration On August 16, 2012, we launched the City’s Fraud, Waste, and Abuse Hotline. As of September 30, 2013, we have received a total of eight complaints, of which all but two have been closed. One of the complaints resulted in an audit we conducted to address concerns about contract oversight. The chart below summarizes the status of complaints received in each fiscal year. Source: City of Palo Alto hotline case management system as of September 30, 2013 The hotline review committee (composed of the City Auditor, the City Attorney, and the City Manager or their designees) meets as needed to review all activity related to the hotline. During the first quarter of FY 2014, there was one new complaint (complaint number 8) submitted, two complaints were closed, and two existing complaints remained under investigation. Below is a summary of hotline activity during the first quarter of FY 2014 (as of September 30, 2013):2 Complaint Number Category Date Opened Status Action Taken 4 Bribery/Kickbacks 1/2013 Closed Unsubstantiated – Closed3 5 Policy Violation/Theft of Time 2/2013 Open Investigation in Progress 7 Policy Violation/Theft of Time 5/2013 Open Investigation in Progress 8 Hostile Work Environment 7/2013 Closed Unsubstantiated - Closed Source: City of Palo Alto hotline case management system activity (July 1, 2013 through September 30, 2013) 2 This table includes cases opened, closed, or ongoing during the quarter. Cases closed in prior periods are not included. 3 While the allegations in this case could not be substantiated, we detected a minor violation of the City’s gift policy and provided management recommendations for corrective action. We conducted a contract oversight audit as a result of other concerns raised during the investigation (see the Revised Fiscal Year 2014 Work Plan on page 6). 2 5 1 0 1 2 3 4 5 6 7 8 FY 2013 FY 2014 Status of Complaints Received in Fiscal Year Closed Complaints Open Complaints Attachment A 6 Revised Fiscal Year 2014 Work Plan4 The following table summarizes the revised FY 2014 work plan. The original work plan was presented to the Policy and Services (P&S) Committee on September 10, 2013. The FY 2014 Work Plan includes three audits carried over from the FY 2013 work plan and four new audits. Audit Department Preliminary Scope* Planned Hours*5 Council Committee Inventory Management (formerly Utilities Asset Management) ASD, Multiple Carryover from FY 2013. To determine if the City has adequate controls to ensure accuracy and completeness of inventory records, accountability for inventory movements, and the safeguarding of inventory and associated assets at the Municipal Services Center (MSC) and Regional Water Quality Control Plant (RWQCP). 450 Finance Solid Waste Program Public Works Carryover from FY 2013. To determine whether there are adequate controls in place to effectively manage the City’s Solid Waste Program to ensure sufficient revenue to recover the cost of services while pursuing zero waste goals in accordance with applicable laws, regulations, and City policies and procedures. 650 Finance Contract Oversight Audit Utilities, ASD Carryover from FY 2013. This is a new audit created as a result of a hotline investigation. The audit reviews the efficiency and effectiveness of controls over certain Utilities Department contracts. 400 Finance Software License Management IT, Multiple New in FY 2014. The Information Technology (IT) Department has identified ~222 applications within the City. This audit will evaluate controls over software license management to ensure the City is in compliance with relevant agreements and is using all licenses it is paying for. Will carry over into FY 2015. 500 P&S Utilities – Contract Solicitation and Award6 Utilities New in FY 2014. To evaluate the efficiency and effectiveness of controls over contract solicitation and award within the Utilities Department. 1006 N/A6 Utilities Customer Service - Rate and Billing Accuracy Utilities New in FY 2014. To evaluate whether rates are properly implemented and whether customers are accurately billed by the City. Will carry over into FY 2015. 800 Finance Franchise Fee Audit IT New in FY 2014. To determine if the franchisees have accurately calculated and remitted franchise fees in accordance with the Palo Alto Municipal Code and whether the City has adequate controls to discharge its responsibilities to administer and enforce state franchises. Will carry over into FY 2015. 600 Finance *Preliminary scope and/or planned hours may change based upon the preliminary survey of the audit. 4 The work plan includes audits identified and prioritized through the annual risk assessment process. The work plan does not include hours for the Performance Report (formerly the Service Efforts and Accomplishments report and Citizen Centric Report). 5 Planned hours for audits carried over from FY 2013 indicate remaining hours budgeted for FY 2014. For new audits, planned hours indicate the total budget for the audit. 6 Although originally planned as an audit, we plan to conduct this work as a non-audit service and to issue a Special Advisory Memorandum (SAM). Attachment A 7 Audit Horizon The table below summarizes one audit deferred from the original FY 2014 Work Plan and four audits suggested by members of the Policy and Services Committee on September 10, 2013. While we plan to include these audits in our annual risk assessment process, the Policy and Services Committee may request the Office of the City Auditor to either substitute work planned for FY 2014 with one or more of these audits or to include one or more of these audits in the FY 2015 Work Plan. Audit Department Preliminary Scope* Planned Hours* Council Committee Construction Project – Change Order Management Public Works Evaluate the efficiency and effectiveness of controls over the change order process within a major construction project. 800 P&S Public Benefits Planning and Community Environment Evaluate whether benefits and funds are properly accounted for and if funds are utilized in accordance with relevant regulations, policies, and governing documents. 600 P&S Special Districts (Parking) Funds Planning and Community Environment Determine whether parking funds (special assessment districts or Planned Community zones) are properly accounted for and utilized in compliance with applicable laws, regulations, policies, and governing documents. 400 P&S Disability Rates and Workers’ Compensation People, Strategies, & Operations Assess the effectiveness and efficiency of activities to manage and minimize disability retirements and workers' compensation claims. May include a review of processes to ensure employee safety, tracking and reporting activity, contract administration, and efficiency of claim processing. 700 P&S Procurement Administrative Services Assess the effectiveness and efficiency of the procurement process, with a focus on efficiency and timeliness. 800 P&S *Preliminary scope and/or planned hours may change based upon the preliminary survey of the audit. Attachment A Policy and Services Committee Minutes Excerpt Page 1 of Special Meeting November 19, 2013 6:00 PM Chairperson Kniss called the meeting to order at 6:17 P.M. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Holman, Klein, Kniss (Chair), Price Absent: Chair Kniss stated Agenda Item Number 2 would be discussed prior to Agenda Item Number 1. 1. City Auditor's Office Quarterly Report as of September 30, 2013 and the Revised FY 2014 Work Plan. Houman Boussina, Acting City Auditor, provided written summaries of the audit work in the Fiscal Year (FY) 2014 Work Plan, other monitoring and administrative assignments, and the Fraud, Waste and Abuse Hotline administration cases. A revised FY 2014 Work Plan was compiled with considerations for new staffing and priorities. The Policy and Services Committee (Committee) requested Staff consider five areas for possible audits. Those areas were listed on the Audit Horizon. The Committee could direct Staff to prioritize those areas within the FY 2014 or FY 2015 Work Plans. Audit Staff utilized a risk assessment process that selected the audits to be performed. Chair Kniss asked if the audits on the Audit Horizon could be accomplished in FY 2014. Mr. Boussina replied no. Chair Kniss asked if the Committee should select which audits Staff performed. Mr. Boussina indicated the Committee could do that. The existing FY 2014 Work Plan was based on a risk assessment process and the number of hours budgeted for audits. Council Member Price inquired whether the risk assessment for the Committee's proposed areas was not sufficient to warrant modification of the Attachment B MINUTES Page 2 of 3 Policy and Services Committee Special Meeting Draft Minutes 11/19/13 Work Plan. The revised FY 2014 Work Plan included the audits with the most risk and needed to be performed timely. Mr. Boussina answered yes, to the best of his knowledge. Council Member Holman inquired about the action Staff sought with respect to the Audit Horizon. Mr. Boussina noted the Committee requested Staff consider those areas for audit. After speaking with departmental Staff, he felt those audits could be accomplished. However, he asked the Committee to decide whether to substitute one or more of those audits for audits in the FY 2014 Work Plan or to add one or more to the FY 2015 Work Plan. Otherwise, he would proceed with audits selected by the risk-based process. Council Member Holman asked if Staff had insufficient time to accomplish another audit. Mr. Boussina responded yes. Audits would have to be substituted. Council Member Holman inquired whether audits in the Work Plan were based on existing evidence that they were the higher risk items. Mr. Boussina answered yes. Council Member Holman asked if the audit regarding Contract Oversight, Trenching and Installation of Electric Substructure would be placed on the Council Consent Calendar because of a unanimous vote by the Finance Committee. Mr. Boussina replied yes. He presented that audit to the Finance Committee which voted unanimously to accept the audit. Council Member Holman inquired whether Staff would add audits from the Audit Horizon to the FY 2015 Work Plan unless circumstances changed. Mr. Boussina explained the new City Auditor would include them as part of the risk assessment model, unless the Committee requested they be included in a Work Plan. Chair Kniss indicated audits on the Audit Horizon did not fall into a risk assessment category. She asked if the Committee could direct Staff to substitute one of the audits. Mr. Boussina replied yes. Attachment B MINUTES Page 3 of 3 Policy and Services Committee Special Meeting Draft Minutes 11/19/13 MOTION: Council Member Klein moved, seconded by Council Member Price that the Policy & services Committee move the City Council accept the Auditor’s Office quarterly report as of September 30, 2013 and the revised FY 2014 Work Plan. MOTION PASSED: 4-0 Attachment B CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR January 13, 2014 The Honorable City Council Palo Alto, California Finance Committee Recommendation to Accept Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2013 and Management Letter The Office of the City Auditor recommends acceptance of Macias Gini & O’Connell’s Audit of the City of Palo Alto’s Financial Statements as of June 30, 2013 and Management Letter. At its meeting on November 19, 2013, the Finance Committee approved and unanimously recommended the City Council accept this report. The Finance Committee minutes are included in this packet. Respectfully submitted, Houman Boussina Acting City Auditor ATTACHMENTS:  Attachment A: Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2013 and Management Letter (PDF)  Attachment B: Finance Committee Meeting Minutes Excerpt (November 19, 2013) (PDF) Department Head: Houman Boussina, Acting City Auditor Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 19, 2013 The Honorable City Council Palo Alto, California Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2013 and Management Letter RECOMMENDATION We recommend the Finance Committee review and forward to the City Council for its approval the City of Palo Alto’s audited financial statements for the fiscal year ended June 30, 2013 and the accompanying reports provided by Macias Gini & O’Connell LLP. DISCUSSION The City Charter requires the City Council (through the City Auditor) to engage an independent certified public accounting firm to conduct the annual external audit and report the results of the audit in writing to the City Council. Macias Gini & O’Connell LLP, a certified public accounting firm based in Sacramento, California, conducted the audits of the City’s financial statements for the fiscal year ended June 30, 2013. The Comprehensive Annual Financial Report (CAFR) and Single Audit Report including the following Independent Auditor’s Reports are provided to the Finance Committee by the Administrative Services Department:  Independent Auditor’s Report on the Financial Statements (CAFR)  Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards (Single Audit Report)  Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A‐133 (Single Audit Report) We are providing copies of the following financial statements and reports as prepared by MGO:  Report to the City Council (the “Management Letter”) – Attachment A  Independent Accountant’s Report on Applying Agreed–Upon Procedures Related to the Article XIII-B Appropriations Limit for the year ended June 30, 2013 – Attachment B  Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Independent Auditor’s Reports, Financial Statements and Supplementary Information for the year ended June 30, 2013 – Attachment C Attachment A Page 2  General Obligation Bonds Capital Projects Fund (a Fund of the City of Palo Alto) Independent Auditor’s Reports, Financial Statements, and Independent Accountant’s Report for year ended June 30, 2013 – Attachment D  Public Improvement Corporation (a Component Unit of the City of Palo Alto) Annual Financial Report for the year ended June 30, 2013 – Attachment E  Regional Water Quality Control Plant Independent Auditor’s Report for the year ended June 30, 2013 – Attachment F  Cable TV Franchise Independent Auditor’s Report and Statements of Franchise Revenues and Expenditures for the years ended December 31, 2012 and 2013 – Attachment G I would like to express appreciation to Macias Gini & O’Connell, and Laura Kuryk and her staff in the Administrative Services Department for their hard work and cooperation during the audit. ATTACHMENTS:  Attachment A: Report to the City Council FY 2013 (PDF)  Attachment B: Palo Alto GANN FY 2013 (PDF)  Attachment C: Palo Alto Transportation Development Act Funds FY 2013 (PDF)  Attachment D: Palo Alto General Obligation Bonds FY 2013 (PDF)  Attachment E: Palo Alto Public Improvement Corporation FY 2013 (PDF)  Attachment F: Palo Alto Regional Water Quality Control Plant FY 2013 (PDF)  Attachment G: Palo Alto Cable TV Franchise FY 2013 (PDF) Department Head: Houman Boussina, Acting City Auditor Attachment A Page 3 Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 Attachment A Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 Table of Contents Page(s) Transmittal Letter ........................................................................................................................................... i Required Communications ............................................................................................................................ 1 Current Year Recommendations and the Status of Prior Year Recommendations ....................................... 4 Attachment A Attachment A i Honorable Mayor and the Members of the City Council of the City of Palo Alto Palo Alto, California In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Palo Alto, California (City) as of and for the year ended June 30, 2013, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Following this letter, we have included a report on required communications to the governing body, as required by auditing standards generally accepted in the United States of America. This communication is intended solely for the information and use of the Mayor and City Council, the Finance Committee, management and others within the organization, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 8, 2013 Attachment A ii This page is intentionally left blank. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 1 REQUIRED COMMUNICATIONS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Palo Alto (City) as of and for the year ended June 30, 2013. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated July 30, 2013. Professional auditing standards require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the City’s basic financial statements. The City implemented four new Governmental Accounting Standards Board (GASB) pronouncements, consisting of GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements; GASB Statement No. 61, The Financial Reporting Entity: Omnibus; GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements; and GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:  Fair value of investments. The City’s investments are generally carried at fair value, which is defined as the amount that the City could reasonably expect to receive for an investment in a current sale between a willing buyer and a willing seller and is generally measured by quoted market prices.  Estimated allowance for losses on notes and loans receivable. The allowance for losses on notes and loans receivable was based on management’s estimate regarding the likelihood of collectability.  Useful life estimates for capital assets. The estimated useful lives of capital assets were based on management’s estimate of the economic life of its capital assets.  Accrued landfill closure/post-closure costs. The City has estimated, based on a study conducted by consultants, the closure/post-closure costs of the Palo Alto Landfill based on what it would cost to perform all currently mandated closure and post-closure care. Actual closure and post-closure care costs may be higher due to inflation variances, changes in technology, or changes in State or federal regulations. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 2 REQUIRED COMMUNICATIONS (Continued)  Valuation of the net other postemployment benefits (OPEB) asset. The net OPEB asset is the amount of cumulative City contributions that exceeded the actuarially determined annual required contributions, which is based upon certain approved actuarial assumptions.  Annual required contributions to pension and other postemployment benefit plans. The City is required to contribute to its pension and OPEB plans at an actuarially determined rate and to measure these benefit costs based upon certain approved actuarial assumptions.  Claims loss reserve. The City is exposed to a variety of risks of loss due to general liability, workers’ compensation and other claims and records an estimate of these losses based on actuarial studies performed by third party actuaries. These studies are prepared based on the City’s prior claims history, which is used as a basis for extrapolating losses for known and incurred but not reported claims. Actual loss experience may vary from these estimates. We evaluated the key factors and assumptions used to develop the accounting estimates described above in determining that they are reasonable in relation to the City’s basic financial statements taken as a whole. Certain financial statements disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were the disclosure of the City’s Pension Plan in Note 11, the Retiree Health Benefits in Note 12 and the commitments and contingencies in Note 16. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were no misstatements, other than those that were trivial, detected as a result of audit procedures. The City identified a note receivable in the amount of $3,000,000 that was expended in the year made (i.e., fiscal year 2009) rather than treating it as an asset and, accordingly, reversed the expenditure during the current year and restored the note receivable. The restoration of the note receivable should have been reported as a restatement of beginning fund balance, however, it is immaterial to the financial statements. During the audit, it has come to our attention that the City Auditor’s Office has identified accounting misstatements and internal control deficiencies over the reporting of inventories throughout the City. We met with the City Auditor’s Office and with management to assess the impact of these findings to the City’s financial statements. We believe the misstatements identified in the City’s inventory balances do not materially misstate the financial statements. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 3 REQUIRED COMMUNICATIONS (Continued) Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated November 8, 2013. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 4 CURRENT YEAR RECOMMENDATIONS None noted. STATUS OF PRIOR YEAR RECOMMEDATIONS 2011-01 A Comprehensive Disaster Recovery Plan Has Not Been Fully Developed and Tested (Significant Deficiency) General computer controls should ensure that plans have been developed and documented to provide contingency for unforeseeable events, including the recovery of operational and financial data in the event of a disaster. The City, however, has not completed the development of a comprehensive disaster recovery plan. City’s IT management stated the prolonged plan development process was due to a lack of sufficient resources. The lack of a comprehensive plan that has been fully tested places the City at an increased risk of loss of financial data in the event of a disaster that affects the City’s server room. We recommend the City’s Chief Information Officer (CIO), working with the City Manager, should plan to budget for the resources necessary to complete the development of a comprehensive disaster recovery plan. Once the plan is completed, it should be fully tested to ensure the City’s financial data can be restored in a reasonable amount of time. Current Year Status: In Progress. The CIO has budgeted for the development of a disaster recovery plan. The project was initiated in March 2013 and is expected to be completed by June 2014. 2011-02 The City’s IT Assets Are Exposed to an Active Water-Based Fire Suppression System (Significant Deficiency) General computer controls should ensure that IT assets are adequately protected from physical and environmental hazards. The City’s server room, however, still has an active water-based fire suppression system. This places the City’s IT assets at increased risk of damage should the system be activated or should a pipe rupture. We recommend the City’s CIO, working with the City Manager, should research the feasibility of implementing a dry fire suppression system in the City’s server room. Alternately, the active water-based system could be replaced by a dry-pipe system. If it is determined that the systems could be implemented, the City should budget for the replacement of the water-based system. Should the system replacement be deemed infeasible, alternative mitigating controls should be implemented, such as the installation of high temperature sprinkler heads and the development of a comprehensive disaster recovery plan. Current Year Status: Corrected. The City’s Information Security Manager (ISM) conducted the feasibility study of implementing a gas-based fire suppression system and found that impractical due to the physical architecture limitations of the server room. The cost to retrofit the room would be excessive and would cause unrealistic delays in service. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 5 STATUS OF PRIOR YEAR RECOMMEDATIONS (CONTINUED) 2011-02 The City’s IT Assets Are Exposed to an Active Water-Based Fire Suppression System (Significant Deficiency) In order to mitigate the risk of the water-based system, the following countermeasures have been implemented:  The ISM verified the server room has a dry-pipe fire suppression system with high temperature sprinkler heads and requires the activation of both a smoke sensor and the high temperature before water is released into the pipes.  Automated temperature and humidity monitoring devices have been installed.  A disaster recovery plan development project has begun and is expected to be completed by June 2014.  Several core IT systems are currently being moved to off-site premises. 2011-03 A Comprehensive IT Risk Assessment Has Not Been Performed (Significant Deficiency) General computer controls over the access to programs and data should require that a mechanism or procedures be in place to identify and react to risks arising from internal and external sources. A comprehensive means to identify IT risks is through the periodic performance of IT risk assessments. The City, however, has not performed a formal comprehensive and independent IT risk assessment to help identify the risks to the delivery of IT services and the accuracy and integrity of the City’s financial and personnel data. We recommend the City’s CIO (acting) should plan and budget for an independent IT risk assessment to be performed on the department’s functions. The risk assessment should focus on identifying all of the possible risks to the City’s IT department, the delivery of IT services and the accuracy and integrity of the City’s financial and personnel data. The risk assessment should quantify the likelihood of an event, the impact of the event and the mitigating controls that would address the possible risk. The risk assessment should also include network penetration testing to ascertain the vulnerabilities of the City’s computer network from hacking attempts. Current Year Status: In Progress. The City’s ISM has conducted a preliminary security assessment to identify areas of improvement. The ISM has initiated an Information Security Risk Assessment project to conduct a comprehensive assessment based on ISO 27001/2 by June 2014. The risk assessment will also include network penetration testing. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 6 STATUS OF PRIOR YEAR RECOMMEDATIONS (CONTINUED) 2011-04 City IT Department Does Not Have Oversight Over Non-Core Financial Applications (Significant Deficiency) The City has several applications that are used by the various departments. These include; Class, used by Parks and Recreation; Chameleon, used by Animal Services; Horizon, used by the Libraries; and Acella, used for Permitting. These applications are owned by the individual departments and not controlled nor managed by the City’s IT Department. Since management of the applications is decentralized, the individual applications may not adhere to best practices for application access (password configuration) or management of authorization profiles. This places the City’s network and financial data at increased risk of unauthorized access. We recommend the City’s Internal Auditor, working with the CIO (acting), should review the password configuration requirements being used in the City’s non-core financial applications. If it is found that the password requirements do not meet industry best practices shown in the table below, the password configuration settings within the applications should be updated, if possible. Account Setting Best Practices Password Length (Min.) 7-9 characters Expiration Period 30-60 days Account Lockout Threshold 3-5 invalid logon attempts will lock the account. Strong Passwords Required Yes Current Year Status: In Progress. The ISM’s draft password policy, as reported in Finding 6, is planned for release in June 2014. Additionally, the ISM has developed an information privacy policy and is in the process of developing information security policies that are aligned to ISO 27001 standards. The written and formal policies are expected to be released in June 2014. 2011-06 City Has Not Performed PCI Data Security Standards Compliance Assessment (Significant Deficiency) The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that all entities that process, store or transmit credit card information maintain a secure environment. Entities that do not comply with PCI DSS may be subject to fines, card replacement costs, forensic audits, brand damage, etc., by the major credit card brands should a breach event occur. The City, however, has not performed a compliance assessment for PCI DSS. We recommend the City Manager, working with the CIO (acting) should have a PCI compliance audit conducted over the City’s payment card practices and security measures. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2013 7 STATUS OF PRIOR YEAR RECOMMEDATIONS (CONTINUED) 2011-06 City Has Not Performed PCI Data Security Standards Compliance Assessment (Significant Deficiency) Current Year Status: Corrected. The City’s ISM, in December 2012, conducted a PCI-DSS risk-assessment. As a result of the assessment, several additional security measures have been implemented including:  Encrypting PCI stored data.  Replacement of the network firewall with two Barracuda Next Generation firewalls.  Development of password, information privacy and information security policies.  Conducting PCI-DSS compliance training to the City’s technical staff. Attachment A CITY OF PALO ALTO, CALIFORNIA Independent Accountant’s Report on Applying Agreed–Upon Procedures Related to the Article XIII-B Appropriations Limit For the Year Ended June 30, 2013 Attachment A 1 Independent Accountant’s Report on Applying Agreed-Upon Procedures Honorable Mayor and the Members of the City Council, of City of Palo Alto, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet of the City of Palo Alto, California (City), for the year ended June 30, 2013. These procedures, which were agreed to by the City and the League of California Cities (as presented in the publication entitled Article XIIIB Appropriations Limit Uniform Guidelines), were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The City’s management is responsible for the Appropriations Limit Worksheet. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed worksheets setting forth the calculations necessary to establish the City’s appropriations limit and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Worksheet, we added last year’s limit to total adjustments, and compared the resulting amount to this year’s limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet to the worksheets described in No. 1 above. Finding: No exceptions were noted as a result of our procedures. 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council. Finding: No exceptions were noted as a result of our procedures. Attachment A 2 We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the Appropriations Limit Worksheet. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIIIB of the California Constitution. This report is intended solely for the information and use of the City Council and City management and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 8, 2013 Attachment A CITY OF PALO ALTO, CALIFORNIA Appropriations Limit Worksheet For the Year Ended June 30, 2013 3 Appropriations limit, fiscal year 2011-2012 118,995,555$ Adjustment factors: Population growth 1.24+100 100 1.0124 Inflation 3.77+100 100 1.0377 Appropriations limit, fiscal year 2012-2013 125,012,860$ Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Independent Auditor’s Reports, Financial Statements and Supplementary Information For the Year Ended June 30, 2013 Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III For the Year Ended June 30, 2013 Table of Contents Page Financial Section Independent Auditor’s Report ....................................................................................................................... 1 Financial Statements: Balance Sheet ................................................................................................................................... 3 Statement of Revenues, Expenditures, and Changes in Fund Balance Deficit ................................ 4 Notes to the Financial Statements .................................................................................................... 5 Supplementary Information: Schedule of Construction Projects with Capital Outlay Expenditures............................................. 7 Internal Control and Compliance Section Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and the Transportation Development Act............................................... 9 Attachment A 1 Independent Auditor’s Report Honorable Mayor and the Members of the City Council of the City of Palo Alto Palo Alto, California Report on the Financial Statements We have audited the accompanying financial statements of the Pedestrian/Bicycle Facilities Grants (Grants) made to the City of Palo Alto, California (City), by the Metropolitan Transportation Commission, Transportation Development Act Funds, Article III as of and for the year ended June 30, 2013, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibilities Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Attachment A 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Grants as of June 30, 2013, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described in Note 1 to the financial statements, the financial statements of the Grants are intended to present the financial position and the changes in financial position of only that portion of the governmental activities and the major governmental fund of the City that is attributable to the activities of the Grants. They do not purport to, and do not, present fairly the financial position of the City as of June 30, 2013, and changes in its financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements. The accompanying schedule of construction projects with capital outlay expenditures (Schedule) is presented for purposes of additional analysis and is not a required part of the financial statements. The Schedule is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2013 on our consideration of the City’s internal control over the Grants’ financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Grants’ financial reporting and compliance. Walnut Creek, California November 8, 2013 Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Balance Sheet June 30, 2013 Assets Due from the Metropolitan Transportation Commission 15,000$ Liabilities, Deferred Inflows of Resources and Fund Balance Deficit Liabilities: Due to the City of Palo Alto 15,000$ Deferred inflows of resources: Unavailable Revenue 15,000 Fund balance deficit: Unassigned (15,000) Total liabilities, deferred inflows of resources and fund balance deficit 15,000$ See accompanying notes to the financial statements. 3 Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Statement of Revenues, Expenditures, and Changes in Fund Balance (Deficit) For the Year Ended June 30, 2013 Revenues Grant -$ Expenditures Capital outlay 15,000 Excess (deficiency) of revenues over (under) expenditures (15,000) Fund Balance - beginning of year - Fund Balance (Deficit) - end of year (15,000)$ See accompanying notes to the financial statements. 4 Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Notes to the Financial Statements For the Year Ended June 30, 2013 5 NOTE 1 – DESCRIPTION OF REPORTING ENTITY The accompanying financial statements are prepared from the accounts and financial transactions of the City of Palo Alto, California (City) for the projects funded under the Transportation Development Act of 1971 (TDA) Article III of the State of California, which include the construction of pedestrian and bicycle paths. The financial statements do not purport to present the financial position or changes in financial position of the City. The projects represent a portion of the accounts of the City and, as such, are included in the City’s basic financial statements. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The Pedestrian/Bicycle Facilities Grants (Grants) have been accounted for in the capital project fund, which is a major governmental fund type and is included in the City’s basic financial statements. The capital project fund accounts for resources used for acquisition and construction of capital facilities by the City, with the exception of those assets financed by proprietary funds. (b) Basis of Accounting The accompanying financial statements have been prepared on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are recorded when the related governmental fund liabilities are incurred. Grant revenues, which are received as reimbursement for specific purposes or projects, are recognized when they become measurable and available (received within 60 days after year-end). (c) Fund Balance (Deficit) The City reports fund balance for governmental funds in specific classifications (nonspendable, restricted, committed, assigned and unassigned) based on the extent to which the City is bound to the constraints on the specific purposes for which funds can be spent. At June 30, 2013, the Grants reported a fund balance deficit of $15,000. The fund balance deficit will be cured once the grant reimbursement becomes available to repay the funds advanced from the City. (d) Due to the City of Palo Alto Cash has been advanced to the Grants’ projects for expenditures paid by the City’s major capital projects fund for the benefit of the TDA Article III projects. The projects are obligated to immediately repay these advances upon receipt of reimbursement from the Metropolitan Transportation Commission. Attachment A CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III Notes to the Financial Statements (Continued) For the Year Ended June 30, 2013 6 NOTE 3 – COMPLIANCE REQUIREMENTS The TDA is defined at Chapter 4 of the California Public Utilities Code commencing with Section 99200. Funds received pursuant to Section 99235 of the TDA (Article 3) may only be used for facilities provided for exclusive use by the project. NOTE 4 – SECTION 99301 – INTEREST EARNED ON ALLOCATED FUNDS The City incurred and paid expenditures prior to the receipt of the Grant reimbursements; as a result, no interest was earned on Grant funds. Attachment A Title of Project Project Number Awards Carried Over from Prior Year Current Year Allocation/ (Recission) Total Awards Cumulative Capital Outlay Expenditures as of June 30, 2012 Current Year Capital Outlay Expenditures Cumulative Capital Outlay Expenditures as of June 30, 2013 Status of Project TDA 11-12 Bicycle Detection at Traffic Signals 12001042 55,597$ -$ 55,597$ -$ -$ -$ On-going TDA 12-13 Fabian Way Enhanced Bike Lane Improvements 13001027 - 43,359 43,359 - 15,000 15,000 On-going 55,597$ 43,359$ 98,956$ -$ 15,000$ 15,000$ The following schedule identifies the projects with capital outlay expenditures during fiscal year 2013: Schedule of Construction Projects with Capital Outlay Expenditures For the Year Ended June 30, 2013 CITY OF PALO ALTO, CALIFORNIA Pedestrian/Bicycle Facilities Grants Metropolitan Transportation Commission Transportation Development Act Funds, Article III 7 Attachment A 8 This page left intentionally blank. Attachment A 9 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards and the Transportation Development Act Honorable Mayor and the Members of the City Council of the City of Palo Alto Palo Alto, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the accompanying financial statements of the Pedestrian/Bicycle Facilities Grants (Grants) made to the City of Palo Alto, California (City), by the Metropolitan Transportation Commission, Transportation Development Act Funds, Article III as of and for the year ended June 30, 2013, and the related notes to the financial statements, and have issued our report thereon dated November 8, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over the Grants’ financial reporting to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over the Grants’ financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over the Grants’ financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exists that have not been identified. Attachment A 10 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Grants’ financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable statutes, rules and regulations of the Transportation Development Act, including Section 6666 of Title 21, of the California Code of Regulations, and the allocation instructions and resolutions of the Metropolitan Transportation Commission, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control over compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Walnut Creek, California November 8, 2013 Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Independent Auditor’s Reports, Financial Statements, and Independent Accountant’s Report For the Year Ended June 30, 2013 Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Financial Statements: Balance Sheet ......................................................................................................................................... 3 Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 4 Notes to the Financial Statements ........................................................................................................... 5 Other Reports: Independent Auditor’s Report On Internal Control over Financial Reporting and on Compliance And Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards .............................................................. 9 Independent Accountant’s Report on Compliance with Measure N ........................................................... 11 Status of Current Year and Prior Year Findings ......................................................................................... 13 Attachment A 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California Report on the Financial Statements We have audited the accompanying financial statements of the City of Palo Alto General Obligation Bonds Capital Projects Fund (Fund), a fund of the City of Palo Alto, California (City), as of and for the year ended June 30, 2013, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2013, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A 2 Emphasis of a Matter As discussed in Note 2(a) to the financial statements, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2013, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2013 on our consideration of the City’s internal control over the Fund’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Fund’s financial reporting and compliance. Walnut Creek, California November 8, 2013 Attachment A Assets Restricted cash and investments (Note 3)33,898,552$ Liabilities and Fund Balance Liabilities: Accounts payable and accrued liabilities 1,345,298$ Fund Balance: Restricted for capital projects 32,553,254 Total liabilities and fund balance 33,898,552$ CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND Balance Sheet June 30, 2013 (A Fund of the City of Palo Alto) See accompanying notes to the financial statements. 3 Attachment A Revenues Investment income 33,642$ Expenditures Capital outlay: Downtown Library 15,039 Mitchell Park Library and Community Center 8,842,373 Main Library new construction and improvements 615,093 Temporary Facility 132,996 Total capital outlay 9,605,501 Debt service - costs of issuance 540,399 Total expenditures 10,145,900 Excess (Deficiency) of Revenues over (under) Expenditures (10,112,258) Other Financing Sources (Uses) Proceeds from the issuance of bonds 20,695,000 Premium on bonds issued 1,011,615 Intergovernmental transfer to the City of Palo Alto's Library Project Debt Service Fund (391,341) Total other financing sourcse (uses) 21,315,274 Net change in fund balance 11,203,016 Fund balance, beginning of the year 21,350,238 Fund balance, end of year 32,553,254$ Changes in Fund Balance For the Year Ended June 30, 2013 CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND Statement of Revenues, Expenditures and (A Fund of the City of Palo Alto) See accompanying notes to the financial statements. 4 Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2013 5 NOTE 1 – BACKGROUND On November 4, 2008, more than two thirds of registered voters of the City of Palo Alto (City) approved Measure N and authorized the issuance and sale of general obligation bonds not to exceed $76,000,000 to be used to construct a new energy-efficient Mitchell Park Library and Community Center, expand and renovate the Main Library, and renovate the Downtown Library. Funds will also be used to provide additional space to expand library collections, add new children’s and group program areas, replace outdated lighting, provide modern ventilation and air conditioning systems and ensure seismic safety and enhance disabled access. On June 9, 2010, the City issued General Obligation Bonds, Election of 2008, Series 2010A (Library Bonds) to finance the costs of constructing a new energy efficient, environmentally friendly Mitchell Park Library and Community Center, renovating and expanding Main Library, and renovating the Downtown Library, including enhancements at all three facilities for seismic safety and disabled access, expanded space for library collections, meeting and study areas, and new air conditioning, ventilation and lighting systems (Project). Proceeds from the Library Bonds included par of $55,305,000 and a premium on issue of $3,766,208 for a total of $59,071,208. The Library Bonds are the first of two series of bonds to be sold and issued under the authorization to finance portion of the Project. During the fiscal year ended June 30, 2013, the remaining $20,695,000 was authorized and issued. Specific projects approved by Council to be funded by the Library Bonds are as follows: Amended Budget Expenditures Not Charged to Bond Proceeds Cumulative Bond Eligible Expenditures Encumbrances Outstanding Project Balance Remaining Downtown Library Improvements 4,565,826$ 356,987$ 4,162,594$ 45,630$ 357,602$ Mitchell Park Library 49,668,561 1,738,307 36,754,499 8,845,323 4,068,739 Library and Community Center Temporary Facility 795,387 155,529 504,597 23,861 266,929 Main Library New Construction and Improvements 25,134,783 428,630 2,292,350 20,391,916 2,450,517 Temporary Facility 542,218 42,355 229,431 4,888 307,899 Total 80,706,775$ 2,721,808$ 43,943,471$ 29,311,618$ 7,451,686$ Project As of June 30, 2013 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (a) Reporting Entity The accompanying financial statements present only the financial position and the changes in financial position of the General Obligation Bonds Capital Projects Fund (Fund) and do not purport to, and do not, present fairly the City’s financial position as of June 30, 2013, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2013 6 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (b) Basis of Presentation A capital projects fund (governmental fund) is used to account for the City’s General Obligation Bond Projects activities. Capital projects funds are used to account for financial resources (e.g., bond proceeds and investment income) that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition of land or acquisition and construction of major governmental facilities. This fund is a set of self-balancing accounts which comprise its assets, liabilities, fund balance, revenues and expenditures. (c) Basis of Accounting Basis of accounting refers to when revenues and expenditures are recognized. The projects are accounted for in a governmental fund type, and the modified accrual basis of accounting is used. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Expenditures are recognized when they are incurred. The City considers revenues susceptible to be available if the revenues are collected within ninety days after year-end, except for property taxes, which are collected within sixty days after year-end. (d) Fund Balance Fund balance is reported in specific classifications (nonspendable, restricted, committed, assigned and unassigned), which create a hierarchy primarily based on the extent to which the Fund is bound to the constraints of the specific purposes for which funds can be spent. The Fund only has restricted fund balance at June 30, 2013. Restricted fund balance includes amounts when constraints placed on use of resources are either: (1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation. The City will spend the most restricted dollars in accordance with restrictions imposed before less restricted resources in the following order: (a) committed; (b) assigned and (c) unassigned. (e) Intergovernmental Expenditures The Fund transferred $0.4 million to the City in order to allocate the bond proceeds to the City’s debt service fund to be used for future debt service payments. (f) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2013 7 NOTE 3 – RESTRICTED CASH AND INVESTMENTS The Fund’s investments are carried at fair value, as required by generally accepted accounting principles. The Fund adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in revenues for that fiscal year. (a) Project Funds Investment Policy Pursuant to terms of the Library Bonds trust agreement, bond proceeds to be used for project costs were remitted to and are maintained by the City as agent for the bondholders. The City’s Investment Policy allows it to invest in a variety of types of investments subject to maturity maximums, concentration limitations, and minimum credit quality requirements. Allowed investment types are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code, which includes the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its participants to invest certain proceeds of debt issues and surplus funds. CAMP’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The Fund reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share. (b) Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the fair values of the Fund’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Fund’s investments by maturity: Investment Type Amount Maturity Date Credit Rating California Asset Management Program 33,818,677$ 37 days AAAm Cash held with U.S. Bank 79,875 N/A N/A (c) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. As an external investment pool, the California Asset Management Program was rated AAAm as of June 30, 2013. Attachment A 8 This page left intentionally blank. Attachment A 9 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the City of Palo Alto General Obligation Bonds Capital Projects Fund (Fund), a fund of the City of Palo Alto, California (City), as of and for the year ended June 30, 2013, and the related notes to the financial statements, and have issued our report thereon dated November 8, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over the Fund’s financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over the Fund’s financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Attachment A 10 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Fund’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Walnut Creek, California November 8, 2013 Attachment A 11 Independent Accountant’s Report on Compliance with Measure N The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have examined the City of Palo Alto’s (City) compliance with certain provisions of Measure N for the year ended June 30, 2013, as follows: a) Proceeds from the sale of the Bonds were used only for the purposes specified in Measure N; b) Proceeds for the Bonds were deposited into a Library/Community Center Project Construction Fund held by the City; and c) The Administrative Services Director of the City filed an annual report with the City Council commencing not later than November 1, 2013, containing pertinent information regarding the amount of funds collected and expended, as well as the status of the Library/Community Center project listed in the Measure. Management is responsible for the City’s compliance with those requirements. Our responsibility is to express an opinion on the City’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City’s compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended June 30, 2013. This report is intended solely for the information and use of the City Council, the Oversight Committee, the City Auditor and the City’s management and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 8, 2013 Attachment A 12 This page left intentionally blank. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund to the City of Palo Alto) Status of Current Year and Prior Year Findings For the Year Ended June 30, 2013 13 Current Year Findings: No matters were noted. Status of Prior Year Findings: No matters were noted. Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Annual Financial Report For the Year Ended June 30, 2013 Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) For the Year Ended June 30, 2013 Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Management’s Discussion and Analysis (Unaudited) .............................................................................. 3 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position ................................................................................................................... 5 Statement of Activities ....................................................................................................................... 6 Fund Financial Statements: Balance Sheet ..................................................................................................................................... 7 Statement of Revenues, Expenditures, and Changes in Fund Balance ............................................... 8 Notes to the Basic Financial Statements .................................................................................................. 9 Attachment A 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto, California We have audited the accompanying financial statements of the governmental activities and the major fund of the City of Palo Alto Public Improvement Corporation (Corporation), a component unit of the City of Palo Alto, California (City), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Corporation as of June 30, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A 2 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3 through 4 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Walnut Creek, California November 8, 2013 Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Management’s Discussion & Analysis (Unaudited) For the Year Ended June 30, 2013 3 The City of Palo Alto Public Improvement Corporation (Corporation), a component unit of the City of Palo Alto (City), follows the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 (GASB 34), Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments. The Corporation is controlled by the City and was organized to assist the City in financing public improvements. The Corporation issues debt and turns the proceeds of the debt over to the City under lease agreements that provide a revenue source for the repayment of this debt. The Corporation has one debt issue outstanding and has turned the proceeds over to the City, which pledged certain lease payments as collateral for this debt as discussed in Note 4 to the financial statements. FISCAL 2013 FINANCIAL HIGHLIGHTS GASB 34 requires the issuance of government-wide financial statements as well as fund financial statements. The government-wide financial statements report the balance of the Corporation’s long-term debt while the individual fund statements do not. In fiscal year 2002, the Corporation issued its 2002B Downtown Parking Improvements COPs in the amount of $3.6 million. In fiscal year 2005, a partial redemption was completed by placing excess construction and debt service reserve funds into an escrow account to defease $900 thousand of the 2002B Downtown Parking Improvements COPs. As of June 30, 2013, the 2002B Downtown Parking Improvements COPs comprise the Corporation’s outstanding debt. Interest and fiscal agent charges were $107 thousand for fiscal year 2013, a decrease of $39 thousand from the prior year. The interest for leases on the assets securing this COP issues was $110 thousand, a decrease of $114 thousand from the prior year. The interest on leases from the City exceeded interest expense by $3 thousand, thereby resulting in an increase in net position of $3 thousand over the prior year. The Corporation ended fiscal year 2013 with total assets of $1.8 million, a decrease of $0.1 million from the prior year. Total assets consist of $251 thousand in cash and investments and $1.6 million of leases receivable from the City of Palo Alto. Total liabilities were $1.6 million, a decrease of $0.1 million from the prior year, and included $164 thousand of current liabilities as well as $1.4 million of long-term debt due in more than one year. At the fund level, the Corporation’s revenues nearly equaled the expenditures. As of June 30, 2013, the Corporation had one fund, the Debt Service Fund, which reported a $251 thousand restricted fund balance. Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Management’s Discussion & Analysis (Unaudited) For the Year Ended June 30, 2013 4 OVERVIEW OF THE CORPORATION’S BASIC FINANCIAL STATEMENTS The Basic Financial Statements are in two parts: 1) Management’s discussion and analysis (this part), 2) The basic financial statements, which include the government-wide and the fund financial statements, along with the notes to these financial statements. The basic financial statements comprise the government-wide financial statements and the fund financial statements. These two sets of financial statements provide two different views of the Corporation’s financial activities and financial positions, both short-term and long-term. The government-wide financial statements provide a long-term view of the Corporation’s activities as a whole, and comprise the statement of net position and the statement of activities. The statement of net position provides information about the financial position of the Corporation as a whole, including all its long-term liabilities on the full accrual basis, similar to that used by corporations. The statement of activities provides information about all the Corporation’s revenues and expenses on the full accrual basis, with the emphasis on measuring net revenues or expenses of the Corporation’s program. The statement of activities explains in detail the change in net position for the year. The fund financial statements report the Corporation’s operations in more detail than the corporate-wide statements and focus primarily on the short-term activities of the debt service fund. Fund financial statements measure only current revenues and expenditures; current assets, liabilities and fund balances; and they exclude capital assets and long-term debt. Together, these statements along with the notes to the financial statements are called the basic financial statements. DEBT ADMINISTRATION The Corporation issues debt in the form of Certificates of Participation (COPs) for future lease receipts from the City of Palo Alto. Legally, these COPs issues are the Corporation’s debt only; the City is liable only for the payment of the amounts set forth in the lease securing each COPs issue. As of June 30, 2013, the Corporation has one outstanding debt related to the 2002B Downtown Parking Improvement projects. ECONOMIC OUTLOOK AND MAJOR INITIATIVES The economy of the City of Palo Alto and its major initiatives for the coming year are discussed in detail in the City’s Comprehensive Annual Financial Report. CONTACTING THE CORPORATION’S FINANCIAL MANAGEMENT These Basic Financial Statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Corporation’s finances. Questions about these Statements should be directed to the Finance Department of the City of Palo Alto, 250 Hamilton Avenue, CA 94301. Attachment A Assets Cash and investments held for operations 12,813$ Cash and investments held by trustee 237,966 Investment in leases to the City of Palo Alto 1,560,000 Total assets 1,810,779 Liabilities Interest payable 33,800 Long-term debt: Due in one year 130,000 Due in more than one year 1,430,000 Total liabilities 1,593,800 Net Position Restricted for debt service 216,979$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Net Position June 30, 2013 See accompanying notes to the basic financial statements. 5 Attachment A Expenses Interest and fiscal agent charges 106,817$ Program revenues Interest on leases from the City of Palo Alto 109,525 Net program revenues 2,708 General Revenues Investment losses (54) Change in net position 2,654 Net position, beginning of the year 214,325 Net position, end of the year 216,979$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Activities For the Year Ended June 30, 2013 See accompanying notes to the basic financial statements. 6 Attachment A Assets Cash and investments held for operations 12,813$ Cash and investments held by trustee 237,966 Investment in leases to City of Palo Alto 1,560,000 Total assets 1,810,779$ Liabilities and Fund Balance Liabilities: Deferred revenue 1,560,000$ Fund balance: Restricted for debt service 250,779 Total liabilities and fund balance 1,810,779$ Reconciliation of fund balance to net position Fund balance restricted for debt service 250,779$ Accrual adjustment to remove deferred revenue from the balance sheet 1,560,000 Some liabilities, including bonds payable, are not due and payable in the the current period and therefore are not reported in the funds: Interest payable (33,800) Long-term debt due within one year (130,000) Long-term debt due in more than one year (1,430,000) Net position of governmental activities 216,979$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Balance Sheet June 30, 2013 Debt Service Fund See accompanying notes to the basic financial statements. 7 Attachment A Revenues: Lease receipts from the City of Palo Alto: Principal 125,000$ Interest 109,525 Investment losses (54) Total revenues 234,471 Expenditures: Debt service: Principal repayment 125,000 Interest and fiscal agent charges 109,525 Total expenditures 234,525 Net change in fund balance (54) Fund balance, beginning of the year 250,833 Fund balance, end of the year 250,779$ Reconciliation of net change in fund balance to net change in net position Net change in fund balances-total governmental funds (54)$ Amounts reported for governmental activities in the statement of activities are different because: Repayment of bond principal is an expenditure in the governmental funds, but in the statement of net position the repayment reduces long-term liabilities. 125,000 Some amounts reported in the statement of revenues, expenditures and changes in fund balances reflect the collection of an asset which are not includable as as revenues on the statement of activities. Change in deferred revenue (125,000) Change in interest payable 2,708 Change in net position of governmental activities 2,654$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2013 Debt Service Fund See accompanying notes to the basic financial statements. 8 Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2013 9 NOTE 1 – DESCRIPTION OF REPORTING ENTITY The Palo Alto Public Improvement Corporation (the Corporation) was incorporated in September 1983 under the General Nonprofit Corporation Law of the State of California to acquire, construct and lease capital improvement projects. The Corporation is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code. The Corporation provides financing of public capital improvements for the City through the issuance of Certificates of Participation (COPs), a form of debt which allows investors to participate in a stream of future lease payments. Proceeds from the COPs are used to construct projects which are leased to the City for lease payments which are sufficient in timing and amount to meet the debt service requirements of the COPs. The Corporation is an integral part of the City of Palo Alto. It primarily services the City and its governing body is composed of the City Council. Therefore, the financial data of the Corporation has also been included as a blended component unit within the City’s comprehensive annual financial report for the year ended June 30, 2013. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the Corporation. Eliminations have been made to minimize the double counting of internal activities. The statement of activities presents a comparison between direct expenses and program revenues for each function of the Corporation’s activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the Corporation’s funds. The emphasis of fund financial statements is on major individual funds, of which the Corporation only reports one debt service fund. (b) Major Fund Major funds are defined as funds that have either assets, liabilities, revenues or expenditures equal to ten percent of their fund-type total and five percent of the grand total. The Corporation has one fund which is reported as a major governmental fund in the accompanying financial statements: Debt Service Fund – This fund accounts for debt service payments on the Corporation’s long-term debt. (c) Investment in Leases Improvements financed by the Corporation are leased to the City for their entire estimated useful life and will become the City property at the conclusion of the lease. The Corporation therefore records the present value of the lease and considers the leased improvement to have been sold for this amount when leased. Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2013 10 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Net Position The government-wide financial statements utilize a net position presentation. Net position is further categorized as net investment in capital assets, restricted and/or unrestricted. As of June 30, 2013, the entire net position was considered restricted. Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. (e) Fund Balances At June 30, 2013, the Corporation’s governmental funds’ fund balances include the following classification: Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. (f) Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE Under the provisions of the Corporation’s COP issues, a Trustee holds and invests the Corporation’s cash held for purposes of bond reserves. (a) Interest Rate Risk Interest rate risk is the risk that a change in market interest rates will adversely affect the fair value of an investment. Normally, the longer it takes an investment to reach maturity, the greater will be that investment’s sensitivity to changes in market rates. Information about the sensitivity of the fair values of the Corporation’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Corporation’s investments by maturity: Weighted Average Investment Type Amount Maturity Money Market Mutual Funds 237,966$ 57 days Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2013 11 NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE (CONTINUED) (b) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The actual ratings as of June 30, 2013 for the Money Market Mutual Funds is AAAm, as provided by Moody’s Investors Services. (c) Investment Policy The Corporation must maintain required amounts of cash and investments with trustees under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the Corporation fails to meet its obligation under these debt issues. The California Government Code requires these funds to be invested in accordance with bond indentures or State statutes. All these funds have been invested as permitted under the Code. The Investment Policy is described in detail in the City of Palo Alto Comprehensive Annual Financial Report. The table below identifies the investment types that are authorized by the City’s Investment Policy. The table also identifies certain provisions of the City’s Investment Policy that address interest rate risk, credit risk and concentration of credit risk. The table addresses investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City rather than by the general provisions of the City’s investment policy. Maximum Maturity Minimum Credit Quality Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Government Securities 10 years N/A No Limit No Limit U.S. Government Agency Securities 10 years N/A No Limit (A) No Limit Certificates of Deposit 10 years N/A 20% 10% of the par value of portfolio Bankers Acceptances 180 days N/A 30% $5 million Commercial Paper 270 days AAA 15% $3 million (B) Local Agency Investment Fund N/A N/A No Limit $50 million per account Short-Term Repurchase Agreements 1 year N/A No Limit No Limit City of Palo Alto Bonds N/A N/A No Limit No Limit Money Market Deposit Accounts N/A N/A No Limit No Limit Mutual Funds N/A N/A 20% 10% Negotiable Certificates of Deposit 10 years N/A 10% $5 million Medium-Term Corporate Notes 5 years AA 10% $5 million 10 years AA/AA2 10% No Limit (A) (B) The lesser of $3 million or 10% of outstanding commercial paper of any one institution. Authorized Investment Type Bonds of State of California Municipal Agencies Callable and multi-step securities are limited to no more than 25% of the par value of the portfolio, provided that: 1) the potential call dates are known at the time of purchase, 2) the interest rates at which they "step-up" are known at the time of purchase, 3) the entire face value of the security is redeemed at the call date. Attachment A CITY OF PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2013 12 NOTE 4 – CERTIFICATES OF PARTICIPATION The Corporation’s changes in long-term debt are presented below: Balance June 30, 2012 Retirements Balance June 30, 2013 Current Portion Governmental Activity Debt: Certificates of Participation 2002B Downtown Parking Improvemnts 4.55 - 6.50%, due 03/01/2022 1,685,000$ 125,000$ 1,560,000$ 130,000$ On January 16, 2002, the Corporation issued the 2002B Downtown Parking Improvements Certificates of Participation in the amount of $3.6 million to finance the construction of certain improvements to the non-parking area contained in the City’s Bryant/Florence Garage complex. Principal payments are due annually on March 1 and interest payments semi-annually on March 1 and September 1 and are payable from lease revenues received from the City from available funds. The COPs are payable and secured by lease revenues received by the Corporation from any City of Palo Alto General Fund revenue source. Future annual debt service on the 2002B COPs is expected to be provided by the lease receipts discussed above, and is shown below: For the Year Ending June 30 Principal Interest Total 2014 130,000$ 101,400$ 231,400$ 2015 145,000 92,950 237,950 2016 150,000 83,525 233,525 2017 160,000 73,775 233,775 2018 170,000 63,375 233,375 2019-2022 805,000 134,550 939,550 Total 1,560,000$ 549,575$ 2,109,575$ Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Independent Auditor’s Report For the Year Ended June 30, 2013 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Financial Statements: Statement of Net Expenditures and Net Changes in Commitments ....................................................... 3 Statement of Quarterly Billings .............................................................................................................. 4 Notes to the Financial Statements ........................................................................................................... 5 Attachment A 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited the accompanying Statements of Net Expenditures and Net Changes in Commitments and Quarterly Billings of the City of Palo Alto Regional Water Quality Control Plant (Plant), an enterprise operation of the City of Palo Alto, California (City), for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Plant’s financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Basic Agreement between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction and Maintenance of a Joint Sewer System, dated October 10, 1968, and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998, as described in Note 2 of the financial statements. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Attachment A 2 Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 2 of the financial statements, the financial statements are prepared by the City of Palo Alto on the basis of the financial reporting provisions of the Basic Agreement between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction and Maintenance of a Joint Sewer System, dated October 10, 1968, and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of this agreement. The effects on the financial statements of the variances between the contractual basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Plant as of June 30, 2013, or changes in financial position for the year then ended. Unmodified Opinion on Contractual Basis of Accounting In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues, expenditures, commitments and billings of the Plant for the year ended June 30, 2013, in accordance with the financial reporting provisions of the Basic Agreement between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction and Maintenance of a Joint Sewer System, dated October 10, 1968, and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998, described in Note 2. Restriction on Use This report is intended solely for the information and use of the City Council and management of the Cities of Palo Alto, Mountain View and Los Altos, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 8, 2013 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Statement of Net Expenditures and Net Changes in Commitments For the Year Ended June 30, 2013 City of City of City of Total Mountain View Los Altos Palo Alto Direct Expenditures: Source control program 1,094,080$ 417,282$ 107,876$ 568,922$ Public outreach 78,814 30,060 7,771 40,983 Permitting and enforcement 1,099,393 415,680 24,627 659,086 Operations and maintenance 11,478,909 4,378,056 1,131,820 5,969,033 System improvement CIP (Note 3) 3,113,356 1,187,434 306,977 1,618,945 Total Direct Expenditures 16,864,552 6,428,512 1,579,071 8,856,969 Indirect Administrative Expenditures (Note 4): Source control program 773,799 295,127 76,297 402,375 Public outreach 1,191 454 117 620 Permitting and enforcement 378,990 143,296 8,489 227,205 Operations and maintenance 2,369,804 903,843 233,663 1,232,298 Total Indirect Expenditures 3,523,784 1,342,720 318,566 1,862,498 Debt Service Expenditures (Note 5): Refunding 1990 Series A Bonds 284,305 144,996 22,176 117,133 1999 Wastewater Treatment New Project 546,724 207,154 51,775 287,795 2009 State Water Resource Loan 555,726 210,565 52,627 292,534 Total Debt Service Expenditures 1,386,755 562,715 126,578 697,462 Total Expenditures 21,775,091 8,333,947 2,024,215 11,416,929 Deduct Joint Systems Revenues (Note 6) (191,919) (73,198) (18,923) (99,798) Net Expenditures 21,583,172 8,260,749 2,005,292 11,317,131 Net Changes in Commitments (3,775,620) (1,440,022) (372,276) (1,963,322) Net Expenditures and Net Changes in Commitments Due from Members 17,807,552$ 6,820,727$ 1,633,016$ 9,353,809$ See accompanying notes to the financial statements. 3 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Statement of Quarterly Billings For the Year Ended June 30, 2013 City of City of Mountain View Los Altos Billings by Quarter, Beginning: July 1, 2012 1,833,238$ 499,301$ October 1, 2013 2,121,864 515,677 January 1, 2013 1,833,238 499,301 April 1, 2013 2,107,085 556,782 Total quarterly billings 7,895,425 2,071,061 Net expenditures and net changes in commitments 6,820,727 1,633,016 Excess of total billings over net expenditures and net changes in commitments 1,074,698$ 438,045$ See accompanying notes to the financial statements. 4 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements For the Year Ended June 30, 2013 5 NOTE 1 – THE REPORTING ENTITY The Cities of Palo Alto, Mountain View and Los Altos (the Members) participate jointly in the cost of maintaining and operating the Regional Water Quality Control Plant and related system (the Plant). The Members share the original costs of acquisition and construction of the Plant in the same proportions as the allocation of capacity rights to them. The City of Palo Alto (the City) is the owner and administrator of the Plant. The Cities of Mountain View and Los Altos are entitled to use a portion of the capacity of the Plant for a period of 50 years as set forth in the Basic Agreement between the City of Palo Alto, the City of Mountain View and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated October 10, 1968 and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998. The original agreement, as amended, may terminate any time after 50 years provided that written notice of withdrawal is tendered ten years preceding the date of withdrawal. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Plant is an enterprise that is operated by the City and its operations are accounted for as an enterprise fund in the City’s basic financial statements. The accompanying financial statements are intended to present the Plant’s net expenditures and net changes in commitments and quarterly billings by the Plant to the Cities of Mountain View and Los Altos pursuant to the agreement of the Members as described above and are not intended to be a complete presentation of the Plant’s financial position or results of operations. Additionally, the capital cost and the outstanding debt of the Plant are not presented in these statements but are presented in the basic financial statements of the City. Plant expenditures, commitments and joint system revenues, debt service and industrial waste compliance expenditures are shared by the Members based on agreed upon allocation percentages. The expenditures and commitments, including indirect administrative expenditures (see Note 4), are allocated to each of the Members based primarily on their respective percentages of the annual sewage flow and treatment needed for suspended solids, chemical oxygen demand and ammonia. Commitments represent operating encumbrances with suppliers for long-term projects, which have not yet been completed. As of June 30, 2013, all commitments from the prior year in the amount of $3,775,622 were completed. Revenues from services, fines and penalties are allocated to each of the Members in the same proportions as those of expenditures and commitments. Debt service payments are allocated based on percentages established at the time of bond issuance. Industrial waste compliance (Public Outreach and permitting and enforcement) charges are allocated to Members primarily based on upon the number of industries and efforts required to maintain compliance with sewage use ordinances and other EPA regulations. Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements (continued) For the Year Ended June 30, 2013 6 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The percentages used for the year ended June 30, 2013, to allocate expenditures, commitments and revenues were: City of City of City of Mountain View Los Altos Palo Alto Public outreach, source control program, operations and maintenance, system improvement CIP, commitments and joint system revenues 38.14%9.86%52.00% Debt Services Expenditures: Refunding 1990 Series A Bonds 51.00%7.80%41.20% 1999 Wastewater Treatment New Project 37.89%9.47%52.64% 2009 State Water Resources Loan 37.89%9.47%52.64% Permitting and enforcement 37.81%2.24%59.95% The City is allocated 52.00% of total usage of the treatment plant. The City does not fully utilize its percentage allocation. Therefore, the City has entered into separate contracts to allocate portions of its excess to other entities. Fiscal year 2013 allocations are as follows: East Palo Alto Sanitary District 6.41% Stanford University 6.14% Town of Los Altos Hills 1.28% Remaining City Percentages 38.17% Total 52.00% The agreement the City has with the above entities has no effect on the partnership agreement between the Members. Billings are made in advance and are based on the adopted budget for the plant and estimated sewage flow. Excess billings (over) under net expenditures and net changes in commitments are offset against the subsequent year payments during the second quarter of the subsequent fiscal year. NOTE 3 – SYSTEM IMPROVEMENT CIP (MINOR CAPITAL) The basic agreement between the Members, dated October 10, 1968, provides that the administrator of the Plant is responsible for capital additions. These capital additions should be for the replacement of obsolete or worn-out units, or minor capital additions to improve the efficiency of the Plant’s operations. Per an addendum to the agreement dated March 16, 1998, the Members agreed that capital additions should not exceed $1.9 million in 1998-99 (base year). For futures years, the base year amount will be adjusted annually based on increases to the Consumer Price Index-Urban Wage Earners and Clerical Workers for the San Francisco-Oakland-San Jose area. Actual System Improvement CIP expenditures amounted to $3,113,356 for fiscal year 2013. Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements (continued) For the Year Ended June 30, 2013 7 NOTE 4 – INDIRECT ADMINISTRATIVE EXPENDITURES Indirect expenditures include those costs allocated from the City’s General Fund administrative services, which supports all operating departments of the City. Other indirect expenses are administrative charges from the City’s Internal Services Funds. These allocations are applied on a uniform basis throughout the City. The allocations are in accordance with the subsequent letter of agreement dated April 9, 1985. NOTE 5 – DEBT SERVICE EXPENDITURES Debt service expenditures include principal repayments, interest expenses and amortization of bond discount reduced by any interest income earned from cash with fiscal agent, related to the 1999 Series A Bonds (split for the portions used for the “New Project” and refunding of the 1990 Series A Bonds) and the 2009 State Water Resources loan. In prior years, the City, City of Mountain View, City of Los Altos, Town of Los Altos Hills, East Palo Alto Sanitary District and Stanford University agreed to issue new bonds (1999 Series A Bonds) to finance the rehabilitation of the Wastewater Treatment System’s two sludge incinerators and to refund the existing 1990 Series A Bonds. In October 2009, the City approved the 2009 State Water Resources Loan to finance the Ultraviolet Disinfection Project. 1999 Wastewater Refunding of 2009 Treatment 1990 Series A State Water New Project Bonds Resources Loan Total City of Palo Alto 1,669,500$ 573,771$ 3,017,767$ 5,261,038$ City of Mountain View 1,657,688 1,170,493 2,996,416 5,824,597 City of Los Altos 414,312 179,017 748,906 1,342,235 East Palo Alto Sanitary District 334,250 273,115 604,186 1,211,551 Stanford University 230,125 94,099 415,971 740,195 Town of Los Altos Hills 69,125 4,590 124,949 198,664 Total 4,375,000$ 2,295,085$ 7,908,195$ 14,578,280$ As required by the Indenture, the City established a debt service reserve fund for the Bonds (the “Reserve Account”), with a minimum funding level requirement in the Reserve Account (the “Reserve Requirement”). At the time it issued the Bonds, the City satisfied the Reserve Requirement with a deposit into the Reserve Account of a surety bond (the “Surety Bond”) in the amount of $1,647,300 issued by Ambac Indemnity Corporation (renamed to Ambac Assurance Corporation in 1997). On November 9, 2010, Ambac Financial Group Inc. (Ambac Financial) filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Ambac Financial is a holding company whose affiliates provide financial guarantees and financial services to its customers. Ambac Indemnity Corporation, now known as Ambac Assurance Corporation, is a subsidiary of Ambac Financial. Ambac has issued a reserve fund surety bond of $1,647,300 that expires on June 1, 2024 and is on deposit in the Reserve Fund account securing the Bonds. Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements (continued) For the Year Ended June 30, 2013 8 NOTE 5 – DEBT SERVICE EXPENDITURES (Continued) According to the Trust Agreement for these bonds, in the event that such surety bond for any reason terminates or expires, and the remaining amount on deposit in the Reserve Fund account is less than the required reserve, the City is to address such shortfall by delivering to the trustee a surety bond or a letter of credit meeting the criteria of a Qualified Reserve Facility under the Trust Agreement, or depositing cash to the General Account in up to twelve equal monthly installments. Information about Ambac Financial is available on Form 10-K and Form 10-Q filed by Ambac Financial; the City refers to this information for reference only, and does not intend to incorporate any such information herein. On May 1, 2013, Ambac Financial emerged from bankruptcy protection which had been filed under Chapter 11 of the Bankruptcy Code in November 2010. Ambac Assurance remains subject to rehabilitation proceedings undertaken by the Wisconsin Office of the Commissioner of Insurance. The City is not certain about the effect of the proceedings, if any, on the Surety Bond. NOTE 6 – JOINT SYSTEM REVENUES The Plant’s joint system revenues for the year ended June 30, 2013 total $191,919, which consisted of the following: Salt water marsh services 7,500$ Laboratory services from the City's Water Fund 44,547 Septic hauling services 135,126 Other revenues 4,746 191,919$ NOTE 7 – RELATED PARTY TRANSACTIONS During fiscal year 2013, the Plant paid the City $2,288,046for utility costs. Such costs are included in the Statement of Net Expenditures and Net Changes in Commitments as source control program, permitting and enforcement, and operations and maintenance expenditures. Vehicle replacement charges of $38,989 were paid to the City’s Equipment Replacement Fund, which is included in the Statement of Net Expenditures and Net Changes in Commitments as operations and maintenance expenditures. Attachment A CABLE TV FRANCHISE Independent Auditor’s Report and Statements of Franchise Revenues and Expenditures For the Years Ended December 31, 2012 and 2011 Attachment A CABLE TV FRANCHISE Table of Contents Page Independent Auditor’s Report ....................................................................................................................... 1 Financial Statements: Statements of Franchise Revenues and Expenditures ............................................................................. 3 Notes to the Financial Statements ........................................................................................................... 4 Attachment A 1 Independent Auditor’s Report Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited the accompanying Statements of Franchise Revenues and Expenditures of the Cable TV Franchise (Franchise) for the years ended December 31, 2012 and 2011, and the related notes to the financial statements, which collectively comprise the Franchise’s financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara and the Town of Atherton for the provision of cable television and video services as described in Note 1 of the financial statements. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1 of the financial statements, the financial statements are prepared by the City of Palo Alto on the basis of the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara and the Town of Atherton for Attachment A 2 the provision of cable television and video services, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of this agreement. The effects on the financial statements of the variances between the contractual basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Franchise as of December 31, 2012 and 2011, or changes in financial position or cash flows for the years then ended. Unmodified Opinion on Contractual Basis of Accounting In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and expenditures of the Franchise for the years ended December 31, 2012 and 2011, in accordance with the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara, and the Town of Atherton for the provision of cable television and video services, described in Note 1. Restriction on Use This report is intended solely for the information and use of the governing bodies and management of the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara and the Town of Atherton, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 8, 2013 Attachment A 2012 2011 Revenues: Franchise fees $ 1,691,763 $ 1,594,217 Expenditures: Franchise administration 56,250 74,147 Consulting fees 3,600 4,512 Total expenditures 59,850 78,659 Net receipts $ 1,631,913 $ 1,515,558 Amount Percent Amount Percent Allocation of Net Receipts: City of Palo Alto $ 810,493 49.7% $ 750,929 49.5% City of Menlo Park 429,336 26.3% 401,155 26.5% City of East Palo Alto 114,205 7.0% 146,251 9.6% Town of Atherton 160,212 9.8% 107,056 7.1% County of Santa Clara 85,227 5.2% 78,879 5.2% County of San Mateo 32,440 2.0% 31,288 2.1% Total $ 1,631,913 100.0% $ 1,515,558 100.0% CABLE TV FRANCHISE Statements of Franchise Revenues and Expenditures For the Years Ended December 31, 2012 and 2011 2012 2011 See accompanying notes to the financial statements. 3 Attachment A CABLE TV FRANCHISE Notes to the Financial Statements For the Years Ended December 31, 2012 and 2011 4 NOTE 1 – JOINT OPERATING AGREEMENT AND BASIS OF ACCOUNTING In July 1983, a Joint Exercise of Powers Agreement was entered into by and between the Cities of Palo Alto, Menlo Park, East Palo Alto, the Counties of San Mateo and Santa Clara, and the Town of Atherton (the “Members”) for the purpose of obtaining a state-of-the-art cable service for residents, businesses, and institutions, within each of their jurisdictions in the most efficient and economical manner possible. On August 9, 2000, the City of Palo Alto (the “City”), acting on behalf of the Members, signed a Franchise Agreement with TCI Cablevision of California, Inc., a wholly owned subsidiary of AT&T Broadband, third party contractor, which was granted a non-exclusive franchise to construct, operate, maintain and repair a cable television system within the Members jurisdictions (Franchise Agreement). In 2002, the Franchise Agreement was transferred from AT&T Broadband to Comcast Corporation. TCI Cablevision of California, Inc. also signed an asset purchase agreement with Cable Communications Cooperative of Palo Alto, Inc. (CCCOPA), the former cable television system operator/owner, and acquired the system. In October 1988, the Members entered into a Joint Operating Agreement in which the City was granted the power and the authority to administer and coordinate the activities of the franchise and exercise the rights and responsibilities of the City pursuant to the Franchise Agreement. The activities are administered by the City and are accounted for within the General Fund and the Technology Fund of the City’s basic financial statements. The program is accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual (both measurable and available) and expenditures are recognized when the liability is incurred. On January 1, 2007, the Digital Infrastructure and Video Competition Act (DIVCA) went into effect. Under DIVCA, cable and video service franchises are now granted exclusively by the California Public Utilities Commission (Commission) rather than by local franchising entities. On March 30, 2007, the Commission granted AT&T a statewide franchise. Comcast was allowed to seek a state franchise after January 1, 2008, when another state franchise holder (in this case AT&T) entered the local market. On January 2, 2008, the Commission granted Comcast a state franchise. On June 9, 2009, the Members approved an amended and restated Joint Exercise of Powers Agreement, in substitution of the existing Joint Exercise of Powers Agreement and the Joint Operating Agreement, to reflect changes in the law due to DIVCA and to continue to allow the City to administer the cable and video franchise enforcement and monitoring process for state franchise holders. The accompanying financial statements are intended to present the Franchise’s revenues and expenditures pursuant to the Joint Exercise of Powers Agreement and are not intended to be a complete presentation of the Franchise’s financial position or results of operations. As compensation for services under the state franchise agreements, AT&T and Comcast pay annual franchise fees in an amount equal to 5% of annual gross revenues, taking into account a reasonable adjustment for bad debts. From these fees the City of Palo Alto is first reimbursed for out-of-pocket franchise administration costs. The remaining fees are distributed to each Member according to the percentage of revenues derived from the residents and businesses in each of the entities compared to revenues in total. Attachment A CABLE TV FRANCHISE Notes to the Financial Statements For the Years Ended December 31, 2012 and 2011 5 NOTE 2 – PRIOR FRANCHISE SETTLEMENTS A prior Franchise Agreement with CCCOPA was set to expire on March 24, 2001. On June 21, 1999, the City of Palo Alto hired a cable communications consultant and retained the services of a law firm to assist in the franchise renewal process. On July 31, 2000, CCCOPA reimbursed the City $185,000 toward the actual costs incurred as part of the franchise renewal efforts. On July 24, 2000, the City reached a settlement with CCCOPA in the amount of $220,000 to resolve outstanding claims resulting from CCCOPA’s alleged failure to fully perform under the prior Franchise Agreement. On November 22, 2004, the City reached a settlement agreement with Comcast regarding cable plant construction claims in the amount of $175,000. This money was to be used towards the institutional network connection costs. In 2006, the City conducted a franchise compliance audit performed by the City Auditor’s Office. A settlement was reached in the amount of $155,391. In addition, CCCOPA paid the City a $250,000 grant to use to acquire, install, and/or maintain equipment to be used in connection with an institutional network defined in the Franchise Agreement. The settlements and grant have been deposited and are being held by the City and earning interest. The City has since spent a part of the balance on various projects including installing and maintaining the institutional network equipment. As of December 31, 2012, the remaining balance on deposit with the City, including $5,913 in interest receivable, was $912,016. Attachment A FINANCE COMMITTEE WORKING MINUTES Page 1 of 6 Regular Meeting November 19, 2013 The Finance Committee met on this date in the Council Chambers at 6:59 P.M., 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Shepherd, Schmid Absent: 1. Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2013 and Management Letter. Houman Boussina, Acting City Auditor, reported Macias Gini and O'Connell (MGO) presented eight reports including the City's Comprehensive Annual Financial Report (CAFR). MGO issued an unmodified opinion for all the City's basic financial statements, which meant MGO concluded that the statements were presented fairly in all material respects. MGO did not have any recommendations; however, the report to the Council contained the status of prior year recommendations. Of five outstanding significant deficiencies MGO reported in the prior year, two were corrected and three were in progress. Some recommendations covered areas that were also addressed in audits conducted by the Office of the City Auditor. Staff met with MGO to discuss concerns regarding internal control deficiencies and financial misstatements in the City's inventory balances. MGO shared Staff's concerns regarding controls over inventory management, but concluded overall that the City's financial statements were not materially misstated. The audits conducted by MGO focused on financial reporting and material misstatements. Audits conducted by the Office of the City Auditor addressed risks involving operational compliance and strategic objectives that may not necessarily have a material impact on the City's financial statements. David Bullock, Macias Gini and O’Connell, provided eight reports and one Management Letter and issued unmodified opinions. The language of modified opinions changed because of new audit standards implemented in 2013. The City issued two financial statements which were not in accordance with Generally Accepted Accounting Principles (GAAP), the Cable TV Franchise audit and the Regional Water Quality Control Plant audit. Both reports were prepared in order to meet contractual requirements. The City's CAFR information was reported on a GAAP basis. MGO made one finding Attachment B WORKING MINUTES Page 2 of 6 Finance Committee Regular Meeting Working Minute: 11/19/2013 regarding the federal awards audit under the City's procurement process. The Planning Department was required to ensure that vendors were eligible for federal contracts. That finding was considered to be an internal control finding rather than a compliance finding. One prior year finding related to the schedule of federal awards not being complete. Staff made necessary corrections to ensure grants were reported properly. The Management Letter encapsulated any comments and required communications. In accordance with new accounting pronouncements, the City implemented four new standards, none of which were significant. Two other statements were required to be implemented in the following two years. One affected reporting of debt, and the other affected pension obligations to employees. There were two items not corrected in the financial statements. One related to notes and the other to inventory. Council Member Schmid requested Mr. Bullock comment on questions raised in 2011 regarding Information Technology (IT) security. Mr. Bullock indicated MGO's IT experts helped identify areas for IT improvements. MGO issued six findings in 2011, one of which had been corrected. Two findings were corrected in 2013. The City determined one finding would not be implemented because of a cost-benefit analysis and because the City had other mitigating controls. The remaining three findings were in progress. Jonathan Reichental, Chief Information Officer and Director of Information Technology, reported the IT Department extensively discussed the issue of the fire suppression system and visited several data centers to gain information. The fire suppression system was a dry pipe set-up. The temperature in the room had to reach a certain level before the system was invoked. By the time the system was invoked, the servers would be destroyed by fire. If smoke occurred in the server location, the Fire Service would inspect the room and attempt to extinguish a fire well before water sprayed the room. He remained concerned that the City had an extensive amount of equipment in one location without sufficient recourse or back-up equipment at a different location. Staff was in the process of moving core systems into the cloud, which was essentially another location. Moving data to the cloud would provide the best method for disaster recovery. Council Member Schmid inquired whether Staff believed the cloud environment provided adequate security for City data. Mr. Reichental answered yes. Staff would not move data to the cloud without sufficient diligence and assessment. Many vendors now provided secure cloud services specifically for government-related data. Attachment B WORKING MINUTES Page 3 of 6 Finance Committee Regular Meeting Working Minute: 11/19/2013 Council Member Schmid asked if Staff would resolve the two critical issues by mid-year 2014. Mr. Reichental indicated the City would be in a better position. Staff would uncover additional risks during a risk assessment. Protecting City data would never be complete because cyber attacks continued and became more sophisticated. Council Member Schmid inquired about sensitive issues regarding estimates and fair value of investments. Mr. Bullock reported the purpose of that portion of the audit was to identify those areas where numbers could be manipulated. MGO was required to report estimates contained in the financial statements, because estimates involved management's judgment. MGO highlighted areas in the financial statements where judgment was involved in recording estimates. Council Member Schmid understood the City's investment policy was fairly secure in the sense that the City invested in dated, short-term securities. Mr. Bullock stated investment policies for governments were typically simple and did not risk principal. Council Member Schmid requested Mr. Bullock comment on the City's relationship with the California Public Employees' Retirement System (CalPERS) with respect to pension and retiree health accounts. Mr. Bullock inquired if Council Member Schmid meant the risks CalPERS took with portfolios. Council Member Schmid replied yes, the City's responsibilities and the security of CalPERS' assumptions. Mr. Bullock commented that CalPERS was widely regarded. There were concerns about how CalPERS invested and reported funds. He could not comment on how CalPERS invested funds. Vice Mayor Shepherd referred to the negative news reports regarding Fannie Mae and Freddie Mac investments, and asked if the City had any exposure to risk because of prior investments in Fannie Mae and Freddie Mac. Mr. Bullock did not judge the quality of investments chosen by the City. MGO only ensured the investments were reported properly. Attachment B WORKING MINUTES Page 4 of 6 Finance Committee Regular Meeting Working Minute: 11/19/2013 Vice Mayor Shepherd inquired whether MGO only utilized the book value of investments. Mr. Bullock answered yes. To his knowledge, the City's portfolio did contain any asset-backed securities. Vice Mayor Shepherd questioned whether Staff should present information to the Finance Committee (Committee) regarding investments. Lalo Perez, Chief Financial Officer, explained that the Council adopted a policy of investing in only a certain grade of securities. If a security fell from that investment grade, then Staff would present information to the Council. With respect to Fannie Mae and Freddie Mac investments, he understood the Federal Government would grandfather any securities issued under the old format. The investment grade would change for the new format. Most likely the new format would not meet the City's investment policy, and Staff would not procure those types of securities. Vice Mayor Shepherd suggested the Committee follow up at a future meeting. Council Member Schmid was shocked to read on page 22 an inflation rate of 3.77 percent when he understood inflation was under 2 percent. Mr. Bullock reported the appropriations limit was adopted by the City Council at the beginning of the year. That number was not the inflation rate presented by the Bureau of Labor Statistics. It was the California Per Capita Income change. The City followed the State's inflationary factor. Council Member Schmid felt the rate was still a little high. With respect to the Mitchell Park encumbrances outstanding, he asked if MGO reviewed the percentage of completion when reviewing items such as encumbrances. Mr. Bullock answered no. MGO reviewed the remaining amount on the contracts. Council Member Schmid clarified that MGO did not review the remaining amount of funds to be spent. Mr. Bullock explained that not all the funds may be contracted; therefore, MGO reviewed the contracts the City entered into and amounts expended to date. The remaining amount represented the amount of funds to which the City was obligated under the contract. Attachment B WORKING MINUTES Page 5 of 6 Finance Committee Regular Meeting Working Minute: 11/19/2013 Council Member Schmid inquired whether MGO reviewed the time period through June 30, 2013. Mr. Bullock indicated the number should be the amount remaining to be spent under contract as of June 30, 2013. Chair Burt requested Mr. Bullock summarize changes scheduled for 2015 regarding pension obligation reporting. Mr. Bullock stated in the CAFR MGO reported the schedule of funding progress, which was the City's position in the pension plan as of an actuarial date. The City reported the 2011 actuarial valuation in the 2013 report, because that was the most recent valuation available from CalPERS. The actuary estimated the City's obligation as of June 30, 2011. Under new requirements, CalPERS could no longer wait two years to report that information. In the 2013 report, the City would have to report the 2012 information. CalPERS was working to present that information more quickly to cities. Chair Burt inquired whether that change was the one Mr. Perez expressed previously regarding two-year blending. Mr. Perez indicated the two-year blending was a different change. CalPERS was receiving pressure to shorten the two-year delay in reporting information. Mr. Bullock explained that the assets column contained an actuarial basis of assets with smoothing and other factors. That would no longer be the appropriate basis to measure. The City would utilize the actual net position of the City's portion of the CalPERS plan as of the date of the valuation. In other words, the City would compare the actuarial liability to the actual fair value of the assets held in the City's plan. Chair Burt asked if the City would be comparing a future obligation to a present cash value. Mr. Bullock responded yes. CalPERS would discount it back using the discount rate. The City's 2015 financial statements would contain the 2014 estimated obligation and the investments held at CalPERS as of June 30, 2014. That would be the measurement date, and that was what the City would report. To the extent liabilities exceeded assets, the difference would be reported on the government wide financial statements as the net pension liability. It would be a hard number on the City's financial statements. It would not be contained in fund statements for the governmental funds. Attachment B WORKING MINUTES Page 6 of 6 Finance Committee Regular Meeting Working Minute: 11/19/2013 Enterprise Funds would also present it on a full accrual. The City would have more disclosure. There could be some changes in terms of the amortization period and other things that affected how the liability was calculated and how the contribution rates were determined. There would be a significant number of impacts to the financial statements. Mr. Perez noted that Staff would present the latest actuarial reports to the Committee in December 2013. MOTION: Council Member Schmid moved, seconded by Council Member Berman to recommend the Finance Committee review and forward to the City Council for its approval the City of Palo Alto’s audited financial statements for the fiscal year ended June 30, 2013 and the accompanying reports provided by Macias Gini & O’Connell LLP. MOTION PASSED: 4-0 ADJOURNMENT: This meeting was adjourned at 8:41 P.M. Attachment B City of Palo Alto (ID # 3825) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: 411 Lytton Historic Designation Title: Approval to Designate a Residence Located at 411 Lytton Avenue to the City of Palo Alto’s Historic Inventory in Category 2, and Adoption of a Resolution and Record of Land Use Action at the Request of the Owner From: City Manager Lead Department: Planning and Community Environment Recommendation The Historic Resources Board (HRB) and City staff recommend that the City Council approve the Record of Land Use Action (Attachment A) designating the residential building at 411 Lytton Avenue to the City’s Historic Inventory as a significant building in Category 2 consistent with the Criteria for Designation of historic structures in Palo Alto Municipal Code (PAMC) Section 16.49.040(b), the definition of Category 2 in Section 16.49.020(b), with an additional finding that the building appears eligible for listing on the National Register of Historic Places under Criteria A and C as determined by the City’s historic survey consultant, Dames & Moore, in its February 2001 “Final Survey Report.” Background The one-story historic house is located on a 2,843 square-foot mid-block lot on Lytton Avenue between Kipling and Waverley Streets. Because the house is unusually close to the sidewalk the historic presence of the building on the street is strong, and a comprehensive rehabilitation and restoration would enhance downtown’s heritage character. The house is an unusual example of a square cottage, a building type that best conveys the character of Palo Alto during its earliest years. The front façade of the house is designed with perfect symmetry and all four facades are unified under the hipped pyramidal roof which terminates in wide overhanging eaves with exposed rafters over the shingled walls. The strongest feature of the house is the unique front porch whose roof gracefully curves down to a pair of miniature Doric columns, a combination of elements that gives the front façade a dollhouse character. City of Palo Alto Page 2 The property is located in the Community Downtown-Commercial district, including the Pedestrian Combining District (CD-C(P)). The house is not currently on the City’s Historic Inventory. During 1997-2000 Palo Alto conducted a citywide historic survey of several thousand buildings with the goal of identifying properties eligible for the National Register of Historic Places and the California Register of Historical Resources. The survey produced a large “Final Survey Report” and individual property DPR (Department of Parks and Recreation) forms for all properties that the survey determined eligible for listing on the National Register, one of which was 411 Lytton Avenue. The DPR form (Attachment B) describes the house, summarizes the history of the site, the structure, and the use of the property, and concludes that 411 Lytton appears eligible for listing on the National Register, the federal list of properties important to the history of the United States. Discussion The owner of 411 Lytton Avenue is requesting Historic Inventory designation in Category 2 to facilitate a future historic rehabilitation project for the structure. This future request would also include a request for a Floor Area Bonus that would be used in the City’s Transferable Development Rights (TDR) program. Floor Area Bonuses are reserved for individual Category 1 and 2 buildings (and contributing buildings in historic districts) located in the City’s downtown CD commercial zone. If Council decides to designate the property as a Category 2 historic resource, the property owners would be eligible to request floor area bonuses and apply for TDRs as described in the Downtown Commercial District (CD) ordinance (recently amended Chapter 18.18 of the PAMC). The project would not be a “grandfathered” project under the previous TDR ordinance, and therefore would only be eligible for Floor Area Ratio bonuses, not parking bonuses TDRs may only be granted upon a successful completion of a historic rehabilitation and the recordation of a historic preservation covenant on the property. The City has not received a request for a historic rehabilitation. Any request for a historic rehabilitation would need to be analyzed by the Planning Division and reviewed by the HRB at a public hearing. In May 2012, the property owner’s qualified historic consultant, PAST Consultants, LLC, submitted a “Historic Structure Report” (HSR) to the City’s Planning Division (Attachment C). The HSR for 411 Lytton Avenue also includes information and analysis which, when provided separately, is known as a “Historic Resource Evaluation” (HRE) whose goal is to determine whether a historic property meets eligibility standards for listing on the federal and/or state registers of historic resources. Such determination requires an assessment of the integrity of the property, that is whether the property retains its physical historic character or whether that character has been lost over time to significant alteration of character-defining features. The City of Palo Alto Page 3 HSR for 411 Lytton Avenue is, therefore, unusually comprehensive in scope, providing both eligibility for the National and California Registers and guidance for future projects. On July 18, 2012, the HRB conducted a public hearing to review the historic analysis and application materials as part of the request for the historic designation. Historic Resources Board Review The HRB, at its meeting on July 18, 2012, reviewed the application to designate 411 Lytton Avenue to the historic Inventory and a finding that that property appears eligible for listing on the National Register. In order to be placed on the Historic Inventory a property must meet some or all of the six Criteria for Designation provided in the Designation section of the Historic Preservation Ordinance and it must be consistent the definition of the requested historic Category as cited in the Definitions section of the Ordinance. City staff’s recommendation to the HRB was that the property was eligible for designation under Criteria 1, 2, 3, 5, and 6, as described in Municipal Code Chapter 16.49.040(b). The house does not meet Criterion 4 because the residential use is not rare. In addition, staff recommended that the house be added to the Historic Inventory as a Category 2 structure. As described in PAMC 16.49.020(b), Category 2 is defined as follows: “Category 2: ‘Major building’ means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained.” Staff finds that the house at 411 Lytton Avenue meets the definition of a Category 2 “Major Building” because (1) the square cottage building type is important in the early history of Palo Alto and the Bay Area region, (2) the house is a fine example of a square cottage due to its careful proportions and the unusual design of the front porch, (3) the builder, James Wells, was one of the most important builders of the earliest period of Palo Alto, and (4) the house, as seen from the street is almost unaltered after more than 110 years. A detailed description of staff’s findings and analysis is contained in the July 18, 2012 staff report to the HRB (Attachment C). The HRB unanimously recommended approval of the request for designation of the structure as Category 2 on the City’s Historic Inventory with a finding that the structure appears eligible for listing on the National Register (6-0-0-1, Boardmember Smithwick absent). Resource Impact City of Palo Alto Page 4 There is no direct impact on City resources associated with the recommended action. Policy Implications The recommended action furthers the Comprehensive Plan goal and policies encouraging the conservation and preservation of Palo Alto’s historic buildings. Environmental Review Historic designation of a property is not a project under the California Environmental Quality Act (CEQA), per Section 21065. Attachments:  Attachment A: Record of Land Use Action (DOCX)  Attachment B: Departmemt of Parks and Recreation Form (PDF)  Attachment C: HRB Staff Report, July 18, 2012 (PDF) Page 1 of 4 ATTACHMENT A ACTION NO. 2014-01 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 411 LYTTON AVENUE: HISTORIC RESOURCES BOARD; 12PLN-00223 (HAYES GROUP ARCHITECTS, APPLICANT) On January 13, 2014, the Council approved the designation of the residence at 411 Lytton Avenue to a Category 2 historic resource on the City’s Historic Inventory List, making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On June 4, 2012, Hayes Group Architects, applicant, requested Historic Resources Board review for the designation of the residence at 411 Lytton Avenue as a Category 2 structure on the City’s Historic Inventory, as provided in Municipal Code Chapter 16.49 (“The Project”). B. Following staff review, the Historic Resource Board (HRB) reviewed the Project on July 18, 2012, and recommended approval of the Project (6-0-0-1). The HRB’s actions are described in City Council Staff Report #3825. SECTION 2. Environmental Review. This project is exempt from the provisions of the California Environmental Quality Act (CEQA), per Section 15301. SECTION 3. Designation Findings. A. The following criteria, as specified in Municipal Code Section 16.49.040 (b), shall be used as criteria for designating historic structures/sites to the historic inventory: 1. The structure or site is identified with the lives of historic people or with important events in the city, state or nation; 2. The structure or site is particularly representative of an architectural style or way of life important to the city, state or nation; 3. The structure or site is an example of a type of building which was once common, but is now rare; 4. The structure or site is connected with a business or use which was once common, but is now rare; Page 2 of 4 5. The architect or building was important; 6. The structure or site contains elements demonstrating outstanding attention to architectural design, detail, materials or craftsmanship. B. The definition of Category 2 in Municipal Code Section 16.49.020 (b) must also be met to allow the designation of the structure. Category 2 Definition: "Major building" means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained. The residence at 411 Lytton Avenue meets criteria 1, 2, 3, 5, and 6 above for designation to the Historic Inventory and meets the Category 2 definition for the following reasons:  Constructed in 1901, the residence is believed to be the oldest surviving residential structure in the Commercial Downtown (CD) district and exemplifies Palo Alto’s early development and working class housing styles;  Due to its architectural merit, including a symmetrical front façade with a uniquely designed Colonia Revival projecting front porch with miniature columns, the residence is an outstanding example of the Square Cottage type, which was common at the beginning of the twentieth century, but is now relatively rare;  The residence retains a high degree of integrity with many original exterior character defining features retained since its construction in 1901. Minor alterations have either retained or restored these features. The building meets the definition of Category 2 based on its association with Palo Alto’s early city and regional development and for its architectural merit, and  The builder of 411 Lytton Avenue, James W. Wells, is described in the Dames and Moore “Final Survey Report” as “one of the most important builders in early Palo Alto.” The report also notes that Wells was “one of Palo Alto’s pioneer residents and leading contractors” and that “Wells built numerous small Page 3 of 4 square cottages in the original grid of Palo Alto in the 1890- 1900s.” C. National Register of Historic of Historic Places listing. The structure appears to be eligible for listing on the National Register of Historic of Historic Places, as described in the Department of Parks and Recreation form prepared by Dames & Moore, February 2001, under Criterion A and C, as provided as Exhibit A. SECTION 4. Standard Findings. A. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. B. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. C. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. Page 4 of 4 SECTION 5. Project Approval Granted. Application 12PLN-00223 is granted for the designation to a Category 2 historic resource on the City’s Historic Inventory. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney Exhibit A: Department of Parks and Recreation Form, 411 Lytton Avenue ~ ~ CITY OF PA AL Agenda Date: To: From: Subject: 1 July 18,2012 Historic Resources Board Dennis Backlund Historic Preservation Planner Historic Resources Board Staff Report Department: Planning and Community Environment 411 Lytton Avenue [12PLN-00223]: Application by Hayes Group Architects in behalf of Ehikian & Conlpany, owner, for Historic Resources Board review and recommendation of a proposal to designate an example of the square cottage building type, constructed in 1901, to the City of Palo Alto's Historic Inventory in Category 2. Zone District: CD-C(P) RECOMMENDATION Staff recommends that the Historic Resources Board recommend that the City Council designate the residential building at 411 Lytton Avenue to the City's Historic Inventory as a significant building in Category 2 consistent with the Criteria for Designation of historic structures in Municipal Code Section 16.49.040(b), specifically Criteria 1,2, 3, 5, and 6, and the definition of Category 2 in Section 16.49.020(b), with the additional finding that the building appears eligible for listing on the National Register of Historic Places under Criteria A and Cas detemlined by the City's historic survey consultant, Dames & Moore, in its February 2001 "Final Survey Report." BACKGROUND The owner of 411 Lytton Avenue is requesting Historic Inventory designation in Category 2 to facilitate a future application for a Floor Area Bonus that would be used in the City's Transferable Development Rights (TDR) program (Attachment A). Floor Area Bonuses are reserved for individual Category 1 and 2 buildings (and contributing buildings in historic districts) located in the City's downtown CD commercial zone. As provided by the Municipal Code's zoning ordinance, applications for a Floor Area Bonus must be accompanied by a rehabilitation plan that will "remedy all the known rehabilitation needs" of the historic building as determined by the Director of Planning. The one-story historic house is located on a 2,843 square-foot mid-block lot on Lytton Avenue between Kipling and Waverley streets. Because the house is unusually close to the sidewalk the historic presence of the building on the street is strong, and a comprehensive rehabilitation and restoration would enhance downtown's heritage character 411 Lytton Avenue Historic Designation Page 1 of5 The house is an unusual example of a square cottage, a building type that best conveys the character of Palo Alto during its earliest years. The front fa9ade of the house is designed with perfect symmetry and all four facades are unified under the hipped pyramidal roof which terminates in wide overhanging eaves with exposed rafters over the shingled walls. The strongest feature of the house is the unique front porch whose roof gracefully curves down to a pair of miniature Doric columns, a combination of elements that gives the front fa9ade a dollhouse character. The Dames and Moore DPR Form for the House During 1997-2000 Palo Alto conducted a citywide historic survey of several thousand buildings with the goal of identifying properties eligible for the National Register of Historic Places and the California Register of Historical Resources. The methodology of the survey followed the ""Guidelines for Local Surveys" published by the National Park Service and it was reviewed and approved by the California Office of Historic Preservation. The survey produced a large "Final Survey Report" and individual property DPR (Departnlent of Parks and Recreation) forms for all properties that the survey determined eligible for listing on the National Register, one of which was 411 Lytton Avenue (Attachment B). The DPR form describes the house, summarizes the history of the site, the structure, and the use of the property, and concludes that 411 Lytton appears eligible for listing on the National Register, the federal list of properties important to the history of" the United States. The Historic Structure Report In May 2012 the property owner's qualified historic consultant, PAST Consultants, LLC, submitted a "Historic Structure Report" (HSR) to the City's Planning Division (Attachment C). A Historic Structure Report is a document developed by the National Park Service to establish a knowledgeable foundation for any physical treatments that might be applied to a historic property: a description of the history of the site, an analysis of existing physical conditions, an assessment of alterations that have occurred since original construction, and recommendations for rehabilitation and, in some cases, restoration. The HSR for 411 Lytton Avenue also includes information and analysis which, when provided separately, is known as a "'Historic Resource Evaluation" (HRE) whose goal is to determine whether a historic property meets eligibility standards for listing on the federal and/or state registers of historic resources. Such determination requires an assessment of the integrity of the property, that is, whether the property retains its physical historic character or whether that character has been lost over time to significant alteration of character-defining features. The HSR for 411 Lytton Avenue is, therefore, unusually +.--____ ------"'c,......omprebensive in scope, providing both eligibility for the National and CalifO-ml-«ia~R",,-,:eg~i(,.k)st",e'*irs!t-iatwnf\;dl:-------- guidance for future projects. The HSR includes a formal evaluation of the integrity of the house based on the integrity assessment standards contained in National Register Bulletin 15 which divides historic integrity into seven aspects which are to be analyzed one by one: integrity of location, design, setting, materials, workmanship, feeling, and association. The HSR concludes that 411 Lytton Avenue retains all seven aspects of integrity and that much of the house is unaltered since 1901. Much of 411 Lytton Avenue Historic Designation Page 2of5 Stanford professors, Joseph Grant Brown and Samuel B. Charters. Also, as stated in the applicant's "Historic Structure Report," the house represents a common practice in early Palo Alto of a property owner building a house with the intention of renting it "to boarders, either Stanford faculty, students or local residents working nearby in the rapidly growing town." • With respect to Criterion 2, the house, as described in the Dames and Moore DPR form, is an example of a typical early Palo Alto building type-a square cottage ... " The section on square cottages in the Dames and Moore "Final Survey Report," February 2001, concludes "collectively [square cottages] convey, better than any other buildings or building types, the character of Palo Alto in its early years." Also, square cottages were built throughout the Bay Area and, therefore, this building type is significant regionally as representing the early history of the Bay Area's built environment. • With respect to Criterion 3, square cottages have become rare in Palo Alto's downtown CD commercial district because during the 1960s and 1970s a number of them were demolished for new business buildings or parking lots. The house at 411 Lytton A venue is believed to be the oldest surviving residential structure in the downtown CD district. • With respect to Criterion 5, the builder of 411 Lytton Avenue, James W. Wells, is described inthe Dames and Moore "Final Survey Report" as "one of the most important builders in early Palo Alto." The report also notes that Wells was "one of Palo Alto's pioneer residents and leading contractors" and that "Wells built numerous small square cottages in the original grid of Palo Alto in the 1890-1900s." In 1903 Wells built for himself a large Renaissance and Baroque-inspired home at 365 Guinda Street which Dames and Moore found in its DPR form for the property to be eligible for the National Register. The Dames and Moore "Final Survey Report" deemed several homes built by Wells as eligible for the National Register. Also, several homes built by Wells are listed on the City's Historic Inventory including the landmark Bernard May beck "Sunbonnet" house of 1899 at 1061 Bryant Street, the landmark Colonial Revival Rubenfien house of 1897 at 501 Kingsley Avenue, and an important Craftsman pavilion bungalow (demolished in 1992) at 465 Melville Avenue built in 1898. • With respect to Criterion 6, the house at 411 Lytton Avenue exhibits a perfectly symmetrical front fa9ade with a uniquely designed Colonial Revival projecting front porch with miniature columns, and the roof dormer centered over the front porch repeats the proportions of the house, as described in the Dames and Moore DPR form. Definition of Category 2 Municipal Code Section 16.49.020(b) states: "'Historic categories' means those categories established to define and categorize the historic stOlctures/sites on the historic invento*-'ryf-o-'-' -------- Category 2 is defined as follows: "Category 2: 'Major building' means any building or group of buildings of major regional importance, meritorious works of the best architects or an outstanding example of an architectural style or the stylistic development of architecture in the state or region. A major building may have some exterior modifications, but the original character is retained." Staff finds that the house at 411 Lytton Avenue meets the defmition of a Category 2 "Major Building" because (1) the square cottage building type is important in the early history of Palo . Alto and the Bay Area region, (2) the house is a fine example of a square cottage due to its careful 411 Lytton Avenue Historic Designation Page 4 of5 proportions and the unusual design of the front porch, (3) the builder, James Wells, was one of the most important builders of the earliest period of Palo Alto, and (4) the house, as seen from the street is almost unaltered after more than 11 0 years. Summary The house at 411 Lytton Avenue meets five of the six Criteria for Designation in the Historic Preservation Ordinance, and is consistent with the Ordinance definition of a Category 2 building. The Dames and Moore DPR form for the house concludes that 411 Lytton Avenue appears eligible for listing on the National Register of Historic Places as an example of a square cottage and for its association with the early residential developnlent of the city and through its initial professor tenants the comlection of Palo Alto with Stanford University. The applicant's Historic Structure Report prepared by a qualified historic consultant demonstrates, based on integrity standards of the National Register, that the house retains a high level of historic integrity and is in its essentials nearly unaltered since 1901. For these reasons staff recommends that the house is eligible for designation to the Historic Inventory in Category 2. RESOURCE IMP ACT There is no direct impact on City resources associated with the recommended action. POLICY IMPLICATIONS The recommended action furthers the Comprehensive Plan goal and policies encouraging the conservation and preservation of Palo Alto's historic buildings. ENVIRONMENT AL REVIEW Historic designation of a property is not a project under the California Environmental Quality Act (CEQA), per Section 21065. ATTACHMENTS Attachment A: Applicant's Project Letter to the HRB and Staff Attachment B: Dames and Moore DPR Form for 411 Lytton Avenue Attachment C: Historic Structure Report and Existing Conditions Plans for 411 Lytton Avenue COURTESY COPIES Brad Ehikian, owner PAST Consultants, LLC PREPAREDBYTI~~ Dennis Backlund, Hni~reservation Plann.:,r REVIEWED BY: ~/ ~ STEVEN TURNER Advance Planning Manager 411 Lytton Avenue Historic Designation Page 5 of5 CITY OF PALO ALTO OFFICE OF THE CITY CLERK January 13, 2014 The Honorable City Council Palo Alto, California Second Reading: Ordinance for Electric Vehicles Supply Equipment Requirement for all New Single Family Residential Constructions (First Reading : December 9, 2013 PASSED: 9-0) This Ordinance was first introduced to City Council on December 9, 2013, where it passed unanimously. This is the required second reading. ATTACHMENTS:  Draft Ord Electric Vehicle Charging (PDF) Department Head: Donna Grider, City Clerk NOT YET APPROVED 131105 dm 0160060 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Adopting Section 16.14.370 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Green Building Standards Code and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The adoption and amendment of Section A4.106.8 of the California Green Building Standards Code is justified on the basis of local topographical and geographical conditions. Failure to address and significantly reduce greenhouse gas emissions could result in rises to sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City. The aforementioned conditions create hazardous conditions for which departure from California Green Building Standards Code is required. SECTION 2. Section 16.14.370 of the Palo Alto Municipal Code is adopted to read as follows: 16.14.370 Section A4.106.8 Electric Vehicle (EV) Charging. Section A4.106.8 of the California Green Building Standards Code is added and amended to read: A4.106.8 Electric Vehicle (EV) Charging. New detached single-family dwellings shall comply with the following requirements for electric vehicle supply equipment (EVSE): (a) The property owner shall provide as minimum a panel capable to accommodate a dedicated branch circuit and service capacity to install at least a 208/240V, 50 amperes grounded AC outlet (Level 2 EVSE). The raceway shall terminate in close proximity to the proposed location of the charging system into a listed cabinet, box, enclosure, or receptacle. The raceway shall be installed so that minimal removal of materials is necessary to complete the final installation. The raceway shall have capacity to accommodate a 100- ampere circuit. (b) Design. The proposed location of a charging station may be internal or external to the dwelling, and shall be in close proximity to an on-site parking space. The proposed design must comply with all applicable design guidelines, setbacks and other code requirements. SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the NOT YET APPROVED 131105 dm 0160060 2 Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. 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 ordinance will have a significant effect on the environment. SECTION 5. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Development Services ____________________________ Director of Administrative Services CITY OF PALO ALTO OFFICE OF THE CITY CLERK January 13, 2014 The Honorable City Council Palo Alto, California Second Reading: Adoption of the Ordinance for Penalties on Expired Permit Enforcement for Residential Project (First Reading : December 9, 2013 PASSED: 9-0) This Ordinance was first introduced to City Council on December 9, 2013, where it passed unanimously. This is the required second reading. ATTACHMENTS:  Draft Ordinance- Housing Permit Expiration (PDF) Department Head: Donna Grider, City Clerk NOT YET APPROVED 131204 dm 0160059 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Section 16.04.090 of the Palo Alto Municipal Code to Adopt Local Amendments to the California Building Code, Adopting Chapter 16.61 to Impose Penalties for Abandoned Construction and Related Findings The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: Amendment of Section 105.5 of the California Building Code is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault. This fault is about 74 mi long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage and risk to public safety as a result of seismic activity by encouraging prompt completion of construction. SECTION 2. Section 16.04.090 of the Palo Alto Municipal Code is amended to read as follows: 16.04.090 Section 105.5 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. 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. The chief building official is authorized to grant, in writing, no more than three extensions of permits that would otherwise expire for periods not more than 180 days each and may require: 1) that the construction documents be revised to comply with current codes; and 2) payment of all current and applicable fees. Extensions shall be requested in writing and justifiable cause demonstrated. Additional extensions beyond three may only be granted with the approval of the City Council. NOT YET APPROVED 131204 dm 0160059 2 The chief building official is authorized to grant, in writing, one or more renewals of the expired permits and may require: 1) that the construction documents be revised to partially or fully comply with current codes; 2) payment of a fee; and 3) payment of a penalty pursuant to Chapter 16.61 of the Palo Alto Municipal Code, as it may be amended from time to time. SECTION 3. Chapter 16.61 (Expired Permits for Residential Construction and Demolition) of the Palo Alto Municipal Code is adopted to read as follows: 16.61.010 Application This chapter shall apply to all residential construction and demolition, including, but not limited to, all additions, alterations, modifications, repairs, and improvements, that require a building permit or demolition permit. 16.61.020 Timely Renewal of Expired Permits In the event a permit expires under section 16.04.090 for suspension or abandonment of work, the property owner shall seek renewal of the permit within thirty (30) days following its expiration. 16.61.30 Penalty for Expired Permits A property owner shall be subject to the following penalties for violation of section 16.61.020: Time from permit expiration Penalty 0 to 30 days $0 31st day through 60th day $200.00 per day (i.e., $6,000.00 maximum penalty applicable to this 30-day period) 61st day through 120th day $400.00 per day (i.e., $24,000.00 maximum penalty applicable to this 60-day period) 121st day and every day thereafter $800.00 per day (a) For purposes of this section, if a renewed permit expires and the property owner has not advanced a project to the next level of required inspection, the calculation of penalties shall relate back to the date of the previous permit expiration. (b) The chief building official may reduce or waive a penalty accrued under this chapter upon finding that the property owner acted in good faith and either: (1) the delay was attributable to circumstances beyond the property owner’s control; or (2) imposition of the full accrued penalty would harm the public interest, provided, however, that and reduction or waiver of more than $10,000 must be approved by the City Council. NOT YET APPROVED 131204 dm 0160059 3 16.61.040 Appeal of Assessed Penalty A property owner may request a hearing to contest a citation issued under this chapter in accordance with Chapter 1.12. 16.61.050 Construction of Fence In the event a permit remains expired for more than thirty (30) days, the chief building official may require the construction of a wood fence at least six (6) feet tall, if necessary to secure the property from unauthorized entry and to minimize the aesthetic impacts of the construction visible from the public right of way. Such fence shall comply with the requirements of Chapter 16.24. 16.61.060 Public Nuisance Declared Any violation of this chapter shall constitute a public nuisance and, in addition to being subject to any other remedies allowed by law, may be abated as provided in Chapter 9.56 of the Palo Alto Municipal Code. SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 5. 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 ordinance will have a significant effect on the environment. // // // // // // // NOT YET APPROVED 131204 dm 0160059 4 SECTION 6. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Deputy City Attorney City Manager ____________________________ Director of Planning and Community Environment City of Palo Alto (ID # 4369) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Seismic Upgrade Project Amendment #1 w/ URS Title: Approval of Amendment Number 1 to Contract #C10131413 in the Amount of $84,660 with URS Corporation to Provide Additional Services Associated With the Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing Reservoirs and Rehabilitation of Three Receiving Stations Project WS-07000, WS-08001 and WS-09000, for a Total Not to Exceed Amount of $567,052 From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve Amendment Number 1 to Contract #C10131413 in the amount of $84,660 with URS Corporation to provide additional services associated with the Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing City Reservoirs and Rehabilitation of Three Receiving Stations Project WS-07000, WS-08001 and WS-09000 (CMR 139:10) for a total revised contract not to exceed amount of $567,052. Background On March 8, 2010, Council awarded a contract to URS Corporation for the Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing City Reservoirs and Rehabilitation of Three Receiving Stations Project (CMR 139:10). Council approved a total budget of $401,993 and a contingency amount of $80,399 for this project. To date, the entire contingency amount has been used for additional services. The request for proposals for this project was sent to twenty nine engineering consulting firms on November 2, 2009. URS Corporation was selected because of its professional qualifications, strength of the proposed project team, past successful experience designing similar complex projects, familiarity with the project design and construction issues and City procedures. The City of Palo Alto maintains a water system consisting of five receiving stations from the City of Palo Alto Page 2 SFPUC’s Hetch Hetchy aqueduct system and seven reservoirs. Of the seven existing reservoirs, five of those were constructed in the 1960’s. Mayfield Reservoir, the City’s oldest reservoir, was constructed in the late 1920’s and was retrofitted this past year for seismic upgrades. Four of the City’s reservoirs are above ground circular steel tanks, two are above ground concrete tanks (Mayfield and Boronda Reservoirs) and one is a below grade concrete tank (El Camino Park Reservoir, completed in 2013). The City’s existing receiving stations were constructed in the late 1950’s when the City connected to the Hetch Hetchy system. Each station is contained in an underground vault. Although the City’s water system has been properly maintained over the years, the system is aging and needs extensive rehabilitation work in order to ensure that these critical components are functioning during a major seismic event. This project enhances the performance reliability of these existing facilities. Discussion After the original contract with URS Corporation was signed and accepted by the City (CMR 139:10), Engineering staff requested additional design and construction management services be provided to accommodate recently discovered operational requirements of the City’s water system and ensure proper inspections and construction oversight during the construction period. Operational constraints of the City’s water system prohibit taking all of the existing reservoirs and receiving stations out of service simultaneously for rehabilitation. In addition to this, Operations staff has been monitoring water use over the past year and have determined that the Boronda Reservoir cannot be taken out of service between the months of May and September. This reservoir is extremely critical during the summer months when demand is high. Therefore, in order to minimize operational exposure of low water supply, the rehabilitation of the reservoirs and receiving stations had to be staggered such that no two reservoirs and no two receiving stations are offline at the same time. As a result, the larger project, which is currently out to bid as a Request for Proposal (RFP) for design and construction management services, will need to be extended by approximately three years. This RFP requests design and construction management services for the remaining four steel reservoirs (Corte Madera, Park, Dahl and Montebello Reservoirs) and three receiving stations (Page Mill, Arastradero and California Receiving Stations). The RFP was issued on December 16, 2013 and will be awarded to the most qualified consultant in early 2014. Total completion of the Boronda Reservoir project is now anticipated to be December 2014. This, along with required design modifications that are needed to resolve pre-existing conditions that were not anticipated at the start of the project, have doubled the design and construction management efforts associated with this project. The Boronda Reservoir was originally bid for seismic retrofit work along with the Mayfield Reservoir back in 2011. Retrofit work at the Mayfield Reservoir was completed in October 2012. Once construction was completed and the reservoir filled, it was found that the reservoir was leaking at a rate higher than what is allowed by current standards, as referenced in the September 16, 2013 Council-approved staff report (ID# 4057). As a result, City staff determined City of Palo Alto Page 3 that the reservoir needed to be taken offline and repaired immediately. Because the Mayfield and Boronda Reservoirs cannot be taken out of service at the same time due to emergency fire protection storage requirements, the Boronda portion of the work was terminated from the construction contract in order to avoid any delay claims by the contractor. At this time, Mayfield leak repairs have been completed and work can now proceed on Boronda. Retrofit work on a reinforced concrete tank is highly specialized and requires construction inspection by a qualified contractor. Due to the specialized requirements for inspection and the timing of getting the work completed at Boronda before the high water demand summer months, it is recommended that URS Corporation remain as the engineer of record for this portion of the project. In order to ensure cost-effectiveness, the design will need to be repackaged through this amendment (Amendment #1) in order to allow for a separate construction contract for the Boronda Reservoir work. Amendment #1 covers the City’s consultant efforts to repackage and rebid the design for Boronda, a change in timing scope for construction sequencing purposes, additional services that were needed to perform a thorough leak investigation and assessment at the newly rehabilitated Mayfield Reservoir (which has already been completed), and dispute resolution with the contractor (which has already been completed as well). The following describes the additional work for the expanded scope in the proposed contract amendment: Exhibit A – Scope of Services for Additional Professional Services Exhibit A includes additional scope that will be needed to see the Boronda Reservoir construction through to completion. The work in Exhibit A increases the budget for these services by $84,600 and incorporates additional design items as requested by City staff, preparation of a separate bid package for the Boronda Reservoir work, consultations with the City regarding current contractor disputes on the Mayfield Reservoir portion of the project, assessment, design and construction management efforts associated with the Mayfield Reservoir emergency leak repair, bid and construction management assistance associated with the project time extension and project management associated with the project time extension. The items list in Exhibit A will be paid through Amendment Number 1 and increases the budget for these services by $84,660. Resource Impact The attached Amendment Number 1, Exhibit A, requests an additional appropriation of $84,660 City of Palo Alto Page 4 for the contract titled Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing City Reservoirs and Rehabilitation of Three Receiving Stations Project. There is sufficient budget in WS-07000, WS-08001 and WS-09000 (CMR 139:10) to fund the additional work under this contract. Current staffing levels and the level of expertise needed to see the Boronda Reservoir work through to completion prevent City staff from being able to perform this additional work. Amendment Number 1 will allow for additional design, inspection and construction management work needed to finish the project. The incremental cost increase by project task is summarized in the following table: Task Description Budget 5 Changes to Task 2 Design Scope $15,188 6 Consulting Regarding Contractor Dispute $8,664 7 Mayfield Reservoir Emergency Leak Repair $9,924 8 Bid and Construction Management $32,548 9 Project Management $18,336 Amendment 1: $84,660 Original Contract Amount: $482,392 New Project Total $567,052 Policy Implications Amendment Number 1 does not represent a change to existing policy. This recommendation is consistent with the Council-approved Utilities Strategic Plan (Staff Report 1880), especially Key Strategy No. 1, “Ensure a high level of system reliability in a cost effective and timely manner.” Environmental Review This project has a categorical exemption from CEQA per Section 15301 (Existing Structures) of the CEQA Guidelines. Attachments:  Attachment 1: URS Contract (PDF)  Attachment 2: Summary Justification of Consultant Agreement (PDF) 1 AMENDMENT NO. 1 TO CONTRACT NO. C10131413 BETWEEN URS CORPORATION AND THE CITY OF PALO ALTO This agreement (“Amendment No: 1”) is made and entered into on this ________ day of ________, _____ (“Effective Date”) by and between URS Corporation, dba URS Corporation Americas, a Nevada Corporation, with its principal place of business located at 1333 Broadway, Suite 800, Oakland CA 94618 ("CONSULTANT"), and City of Palo Alto, a chartered California municipal corporation, with its principal place of business located at 250 Hamilton Avenue, Palo Alto, California 94301 ("CITY"). CONSULTANT and CITY may be referred to herein individually as a “Party” or collectively as the “Parties” or the “Parties to this Amendment No. 1. RECITALS WHEREAS, on or about March 8, 2010, CONSULTANT and CITY entered into an Agreement (Contract No. C10131413) for Professional Consulting Services for Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing City Reservoirs and Rehabilitation of Three Receiving Stations Project (the “Agreement"): WHEREAS, the Parties desire to amend the scope of services of the Agreement to increase the CONSULTANT’s, time periods of performance and payment, services and/or responsibilities to be provided to the CITY; and WHEREAS, the Agreement provides that any amendments shall be valid only when expressed in writing and signed by the Parties. NOW THEREFORE, in consideration of the mutual understandings and agreements contained herein, the Parties agree to amend the Agreement as follows: AMENDMENT NO. 1 PROVISIONS 1. The Basic Services of CONSULTANT as described in the Agreement are amended and supplemented as follows: Additional services to be performed by CONSULTANT and its representatives as described in Exhibit A, attached and incorporated by this reference, related to rehabilitation of existing water storage facilities. 2. The responsibilities of CITY as described in the Agreement are amended and supplemented as follows: This Amendment does not change the responsibilities of CITY as described in the Agreement, other than the obligation to pay for the CONSULTANT’s additional services as set forth herein and in Exhibit A attached hereto. 3. The time periods for the performance of CONSULTANT's services as set forth in the Agreement are amended and supplemented as follows: The time periods for the performance as described in Section 2 of the Agreement are changed as described in Exhibit A. The time period in the Agreement was set to end on 2/27/12 and is herein changed to end on 12/31/14. 2 4. The payment for services rendered by CONSULTANT shall be as set forth below: This Amendment No. 1 increases the “Not-to-Exceed” amount of the Agreement by $84,660 from $482,392 to $567,052. CITY and CONSULTANT expressly acknowledge the “Not-to- Exceed” nature of this Agreement: The CONSULTANT will be paid for progress on the Tasks on a time and materials basis, but if the total amount for payment of a task is exhausted and work remains to be completed within the scope of the task, and within the assumptions noted, then the CONSULTANT will continue to perform the task until completed without any additional compensation. 5. Except as herein modified, all terms and conditions of the Agreement shall remain in full force and effect. In the event of a conflict in the terms of the Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall control. The Parties acknowledge and accept the terms and conditions of this Amendment No. 1 as evidenced by the following signatures of their duly authorized representatives. It is the intent of the Parties that this Amendment No. 1 shall become operative on the Effective Date first set forth above. CITY OF PALO ALTO, CALIFORNIA, APPROVED AS TO FORM: ____________________________ ________________________ City Attorney City Manager ATTEST: ____________________________ City Clerk “CITY” URS CORPORATION dba URS CORPORATION AMERICAS By: ______________________________________ Name: ______________________________________ Title: ______________________________________ “CONSULATANT” 3 EXHIBIT A TO AMENDMENT NO. 1 TO CONTRACT NO. C10131413 BETWEEN URS CORPORATION AND THE CITY OF PALO ALTO Scope of Services for Additional Professional Services Assessment, Design and Construction Management Services for Coating and Seismic Upgrades of Six Existing City Reservoirs and Rehabilitation of Three Receiving Stations This Amendment No. 1 amends the scope of professional services initiated in the Agreement between the City of Palo Alto (CITY) and URS Corp. (CONSULTANT or URS) dated March 8, 2010. This amendment was prepared at the request of the City to provide additional engineering professional services, the extent of which could not be fully anticipated in the generation of previous agreements. BACKGROUND Original Scope of Services and Budget The original scope of services and authorized budgets included in the Agreement are listed below. The full description of services is found in Exhibit A of the Agreement. The scope covers seismic upgrades at six reservoirs (Mayfield, Boronda, Monte Bello, Dahl, Park, and Corte Madera) and three SFPUC turnouts (Page Mill, California and Arastradero). Description of Service Authorized Budget Task 1 – Assessment $88,972 Task 2 – Design $152,909 Task 3 – Construction Management and Support $128,153 Task 4 – Additional Services $31,959 Contingency Release $80,399 Total $482,392 The contingency was previously released to cover the following out of scope tasks:  Emergency leak repairs at Mayfield Reservoir,  Consulting regarding contractor disputes,  Preparing a Design Memorandum Update to the existing design for the seismic upgrade to the Boronda Reservoir to reflect changes to the 30% design documents created approximately three years ago, and  Preparation of a new separate bid package for the four steel tanks and three turnouts. Need for this Contract Amendment In 2013, the project scope has changed so that the City would like to rebid construction of the Boronda Reservoir Upgrades. In addition, construction of the upgrades of the steel tanks and turnouts has been stretched out over 3 years, causing a projected dramatic increase in construction management costs, which they would like to rebid. Therefore this contract amendment includes revisions to the original scope plus some new tasks, such as some minor design changes, repackaging the Boronda Reservoir plans and specifications into its own construction bid package, work to close out the Emergency Leak Repair at Mayfield Reservoir project, additional consulting regarding contractor disputes, and additional Project Management services related to the project time extension. 4 WORK SCOPE Description of Changes to Original Work Scope Task 2: Design URS has prepared 70% drawings and specifications for the four steel tanks and three turnouts project. Finalizing the design and specifications for this project is deleted from URS’ work scope. Task 3: Construction Management and Support The original construction management budget assumed one bid, one contractor, and upgrade work on the six reservoirs and three turnouts. Construction work on the Mayfield Reservoir upgrades only has been completed. The upgrades at Boronda were deleted from the contractor’s scope of work and will be rebid. Construction management and support for five reservoirs (the 4 steel tanks and Boronda) and three turnouts are deleted from URS’ work scope. Description of Additional Services to be added to the Agreement The City has requested that URS perform the following additional work: Task 5: Changes to the Scope for Task 2, Design of the Tank Upgrade Project.  URS will prepare a separate bid package (design plans and specifications) for the Boronda Reservoir Upgrades and update the design. Deliverables:  Bid-ready plans and specifications for upgrades at Boronda Reservoir. Assumptions:  Deliverables shall be in electronic format. Task 6: Consulting Regarding Contractor Disputes. URS will provide consultation and services as requested regarding disputes with and termination of the portion of the Mayfield and Boronda Reservoirs Seismic Upgrade contract with Anderson Pacific Engineering Company, including conference calls, attending meetings, reviewing schedules and other project documents, and assisting with letting of a contract for performance of the upgrades to the Boronda Reservoir. Deliverables:  Preparation of a draft and final memorandum relating to Anderson Pacific’s deficient work at the Mayfield Reservoir.  Preparation of a plan and associated specifications to repair the landscaping and repaving at Mayfield Reservoir.  Other deliverables as requested by the City. Assumptions:  A total of 3 site visits of 1 URS staff are assumed. Task 7: Mayfield Reservoir Emergency Leak Repair. At the request of the City, URS has assisted in investigation, evaluation, planning and leak repair execution to address water leaking from Mayfield Reservoir. Most of URS’s effort has been covered by the original project contingency but some minor additional tasks are required. URS will continue to provide engineering services relating to the project, including but not limited to the following:  Review of contractors’ billing statements.  Project closeout. 5  Consultation regarding the safe operation of Mayfield Reservoir Deliverables:  Contractor billing statement with URS review comments  Disk with URS leak repair photos and inspection reports  Email with recommendations on the safe operation of Mayfield Reservoir to avoid overfilling Assumptions:  The project is nearly complete with only the listed minor tasks to perform. See level of effort assumptions in cost table. This task includes one field visit by the design team of 3 of URS’ technical staff. Task 8: Bid-and Construction-Phase Services for Boronda Reservoir Upgrades Project URS will provide bid and award assistance on the Boronda Reservoir Upgrade project. Deliverables:  Respond to questions from bidders  Addenda (if required)  Bid review and recommendations. Assumptions:  The project will be competitively bid.  One addenda cycle (if required).  Attendance at 1 (prebid) meeting in Palo Alto. URS will provide submittal reviews and special inspections during construction for the Boronda Reservoir Upgrade project. URS will prepare a change order with 2 items requested by the City that were not able to get in the bid package: a new aluminum vault cover and a tank isolation valve. Deliverables:  Review comments on 10 submittals and 6 resubmittals.  Daily Inspection Reports  2 Change order drawings and 2 specs to add aluminum vault cover and isolation valve Assumptions:  City staff will be responsible for construction management and daily inspections.  City staff will track submittals and RFIs. City will review most of the submittals including non- technical submittals. URS will review 10 primarily structural submittals.  Attendance at 1 (kickoff) meeting.  A URS structural engineer will provide inspections on 10 6-hour days, plus 2 hours of travel each day and 1 hour of preparation. Task 9: Project Management associated with the Project Time Extension. The original construction management budget assumed the project originally described in the Agreement would be complete by February 27, 2012. URS will provide project management for the additional work described in this Amendment, through December 2014, or for an additional 12 months. URS will review, evaluate, and report to the City monthly on project progress, anticipated project duration, cost and duration trends, provide monthly invoices with a progress report, maintain project correspondence, information, QAQC, and all other project-related documentation , and maintain continuous and ongoing communications with the City. Deliverables: 6  Monthly progress reports and invoices  Phone conferences as needed to communicate project progress, schedule and budget.  Meeting agendas and minutes. Assumptions:  There will be bi-monthly meetings with the City for a total of 6. 7 Amendment 1 Budget The amounts to be paid for each of the tasks described above, is as follows. In the event that work to complete the tasks described above, within the assumptions identified above, exceed the following amounts, URS will continue to provide the services provided within each task without any further compensation: Task Description Budget 5 Changes to Task 2 Design Scope $15,188 6 Consulting Regarding Contractor Dispute $8,664 7 Mayfield Reservoir Emergency Leak Repair $9,924 8 Boronda Bid and Construction-Phase Services $32,548 9 Project Management $18,336 Amendment 1: $84,660 Original Contract Amount:$482,392 New Project Total : $567,052 Note: See budget spreadsheet for detailed hourly breakdown. Amendment 1 Project Schedule The anticipated project milestones are:  January 2014 – Submit Revised Final Design of Boronda Upgrades  February 2014 – Bid and Award Project  March – May 2014 – Construction Period  June – July 2014 – Project Closeout The original contract included assessment, design and construction management services for seismic upgrades of six existing reservoirs (Mayfield, Corte Madera, Boronda, Park, Dahl and Montebello Reservoirs), recoating of four steel tank reservoirs (Corte Madera, Park, Dahl and Montebello Reservoirs) and rehabilitation of three receiving stations (Page Mill, Arastradero and California Receiving Stations). All assessment activities have been completed by the consultant (URS Corporation). In addition, the consultant has provided design and construction management services for the Mayfield Reservoir work. Due to recently identified operation constraints, City staff has requested that URS finish their design and construction management services for the Boronda Reservoir only. All design and construction management services for the remaining four steel tanks and three receiving stations are currently being solicited to other consultants through the Request for Proposal (RFP) process. City staff anticipates a new contract for this remaining work to be signed in early 2014, with construction starting in late 2014. The consultant has provided assessment services for six existing reservoirs and three existing receiving stations and design services for seismic upgrades of two existing reservoirs and construction management services for one existing reservoir. As part of this Amendment, URS Corporation will: 1) prepare a bid package for the Boronda Reservoir work, 2) consult with City staff regarding contractor disputes, 3) assess, design and manage work associated with the Mayfield Reservoir emergency leak repair (Staff Report ID# 4057) and 4) provide project management, bid and construction management assistance for the Boronda Reservoir work. Consultant services were planned, and funds for this work were approved by Council in March 2010. Current staffing levels and the level of expertise needed for the assessment, design and construction management prevented City staff from being able to perform this work themselves. The work associated with this staff report is not part of a new project, but part of an existing contract that was approved by Council in March 2010. In 2009, a Request for Proposal (RFP) was issued by the Purchasing Department for this work. Out of the seven companies that provided a proposal, URS Corporation was selected because of their professional qualifications, strength of the proposed project team, past successful experiences with similar projects and familiarity with the project design, construction issues and City procedures. URS Corporation is not a small or local business. They have offices located all over the world. However, the engineers working on this project are located in their Oakland and San Francisco offices. In addition, all subcontractors to URS are located in the San Francisco Bay Area. URS Corporation is currently working on two projects (Well Rehabilitation Project & Seismic Upgrade Project) with the City of Palo Alto Utilities Department. The work associated with this staff report is not part of a new project, but part of an existing contract that was approved by Council in March 2010. The City of Palo Alto’s Utility Department has been pleased with the performance of URS Corporation on the two current projects (Well Rehabilitation Project & Seismic Upgrade Project). The term of the original agreement was approximately two years. Amendment #1 extends the term of the agreement to December 31, 2014. Costs were determined based on assessment hours, design hours, project management and construction management efforts needed to see the project through to completion. The current Amendment (Amendment #1) is the only amendment that will be needed for this project. None. City of Palo Alto (ID # 4370) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Extend the term of Rail Shuttle Bus Administration Title: Approval of Amendment No. 21 to Contract No. S0114750 With The Peninsula Corridor Joint Powers Board for Rail Shuttle Bus Administration to Extend the Term for Six Months and Add $26,684 for a Total Not To Exceed Amount of $2,930,612 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the City Manager to execute the attached amendment to the Rail Shuttle Bus Administration Agreement with the Peninsula Corridor Joint Powers Board (JPB), extending the term of the agreement for six months through June 30, 2014 and adding $26,684 to cover the City’s Embarcadero shuttle operating costs during the period January 1, 2014 through June 30, 2014. This will increase the cumulative contract expenditure limit to $2,930,612 Background In 1999, the City and JPB entered into the Rail Shuttle Bus Administration agreement for the provision of shuttle bus services for the Palo Alto shuttle program, through the JPB Caltrain shuttle bus program. The agreement provides that the agencies may extend the term of the agreement upon mutual consent. There have been twenty contract extensions since the original agreement was executed. The original JPB agreement contained terms and conditions for two distinct services: (1) the basic Embarcadero/Baylands Caltrain commuter peak period shuttle route, which is part of the Caltrain commuter shuttle program and subsidized up to 75% by the JPB, and (2) expanded shuttle routes, including the Crosstown shuttle and special school commute service, funded exclusively by City of Palo Alto. In January 2011, the City Council approved a three year contract with MV Transportation to provide direct service for the Crosstown shuttle and that route was subsequently removed from the JPB program. However, City continues to contract City of Palo Alto Page 2 with the JPB for the Embarcadero Shuttle, which is a part of the Caltrain peak hour commuter shuttle program and is subsidized heavily by the JPB. Discussion The twenty-first amendment to the agreement, in letter format (Attachment A) dated December 11, 2013, provides for continued shuttle services for the Palo Alto shuttle program from January 1, 2014, through June 30, 2014. In previous years, the agreement was extended to cover funding periods in calendar year increments. However, this year JPB staff is in the process of updating the original Rail Shuttle Bus Service Administration Agreement from 1999. The new updated agreement will be provided to the City in the first quarter of 2014 and will be in effect from July 1, 2014 to match fiscal year calendars. Staff is requesting that the Council approve the attached amendment to the Rail Shuttle Bus Administration Agreement (S0114750) to provide continuing operation of the Caltrain Embarcadero/Baylands shuttle program for the next six months until the new agreements are available. In January, the City plans to release a Request for Proposals (RFP) for the Palo Alto shuttle program, primarily for the Crosstown shuttle route. The RFP will include an add alternate element for the Embarcadero shuttle route so that the City can compare costs to operate both shuttles directly including additional shuttle routes that are proposed as part of the city’s growing Transportation Demand Management (TDM) Program. The cost of the Embarcadero/Baylands commute period shuttle service for six months from January 1, 2014 through June 30, 2014 is estimated to be $106,734. The contract amendment with the JPB stipulates that the City reimburse the JPB a sum of $26,684, equal to 25 percent of the cost of the peak period Embarcadero/Baylands commute shuttle. If the RFP costs for taking over the Embarcadero shuttle route are not feasible, the City will have the option to extend the JPB agreement again for one year increments. Resource Impact Funding included in the FY 2014 operating budget for the Palo Alto Shuttle program is sufficient to cover the service and operating costs for the Embarcadero Shuttle. No additional resources will be required at this time. The extension of this agreement with the JPB will not impact the contract with MV Transportation that provides service for the Crosstown shuttle. Policy Implications City of Palo Alto Page 3 This request is consistent with existing Council direction to continue and expand the Palo Alto shuttle project. Environmental Review On August 2, 1999, the City Council approved a Negative Declaration finding the shuttle project would not result in any significant environmental impact. Attachments:  Attachment A: Caltrain Joint Powers Board Contract Extension Letter Agreement dated December 11, 2013 (PDF) December II, 2013 Ms. Ruchika Aggarwal City of Palo Alto Transportation Planner PO Box 10250 Palo Alto, Ca 94303 RE: EXTENSION OF BAYLANDS/EMBARCADERO SHUTTLE BUS ADMINISTRATION AGREEMENT Dear Ms. Aggarwal: Peninsula Corridor Joint Powers Board ("JPB") staff is updating and standardizing the many old and outdated Rail Shuttle Bus Service Administration Agreements, some of which go back almost 20 years. Volhile we had the best of intentions to have the new agreement completed by this time, some last minute changes have required a slight delay. We are projecting the new base agreements will be complete in the first quarter of the new calendar year, in preparation for the next fiscal year, beginning on July 1,2014. Once complete, the new updated agreement shall replaee the existing agreement that past letter extensions have referenced. While the update is in progress, we have decided to provide one final six month extension of the existing agreement. The existing Shuttle Bus Administration Agreement between the City of Palo Alto ("City") and the JPB dated March 30, 1998 ("Agreement") terminates on December 31, 2013. This Letter Agreement extends the term of the Agreement for a SIX MONTH period from January 1,2013 through June 30, 2014 ("Extension Period") by mutual consent, as permitted in the Agreement. All tem1S of the Agreement remain in full force and effect, except as expressly revised herein. The City will be required to pay the JPB $26,684 during the Extension Period, constituting twenty-five percent (25%) ofthe $106,734 estimated cost of operating Embarcadero Caltrain Shuttle during the Extension Period. The Embarcadero service is currently operating at a cost per passenger of approximately $3.83. The maximum cost per passenger benchmark is $4.00 per passenger. The additional riders from other entities support continuation of this route. PENINSULA CORRIDOR JOINT POWERS BOARD 1250 San Carlos Ave. -P.O. Box 3006 San Carlos, CA 94070-1306 650.508.6269 5263414.1 City of Palo Alto (ID # 4368) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Policy and Service Committee Recommendation for the Expenditure of up to $30,000 for teen programs Title: Policy and Services Committee Recommendation for $30,000 Expenditure for Teen Program From: City Manager Lead Department: Community Services Recommendation Policy and Services Committee recommends Council approve the expenditure of up to $30,000 from the net revenue collected from 455 Bryant Street rent, of which 75 percent is committed to teen programs, to: 1. Hire an hourly staff person or contractor to develop and maintain a calendar of events, programs and services for Palo Alto teens. 2. Develop and implement an evening drop in program for high school students at the new Mitchell Park Library and Community Center. Background During the 2014 budget process and the Finance Committee discussions, Chair Burt requested information on a past plan to split excess revenues from a City property rental stream with 75 percent allocated to Teen Programs and 25 percent to the General Fund (GF). On December 10, 2001 (Attachment A - CMR: 444:01), Council reviewed and approved two of four staff recommendations pertinent to Chair Burt’s questions: 1) Direct staff to issue taxable Certificates of Participation to construct non-parking space on Lot S/L site of commercial use and utilize net revenues to fund youth and teen programs. 2) Approve subsidizing Barker Hotel assessment by using rental revenues from non-parking space on Lot S/L site. City of Palo Alto Page 2 The current occupant of the non-parking site (455 Bryant) is Form Fitness. The funding adopted by Council was based on a Youth Master Plan (Attachment B) and a teen survey which found that additional revenues to support teen programs is a higher priority than building a new Teen Center on the non-parking S/L site where the former teen center was located. The December 10, 2001 report substantiates the following formula used to calculate revenue for teen programs (Attachment A). Annual rent less annual debt service less subsidy to Baker Hotel = Net Revenue time 75 percent = Teen Revenue Support. Debt service payments began in FY 2003 with rental revenue streams beginning FY 2005. In FY 2009 a positive net revenue stream was realized to support teen programs. The cumulative net rental revenue from FY 2009 through FY 2013 designated to teen programs is $217,334. At its June 13, 2013 meeting, the City Council unanimously approved a motion to refer the matter to the Policy and Services Committee, to discuss and provide a recommendation to the full Council on a sustainable expenditure plan for teen program funding based upon anticipated future revenue from the dedicated funding source. In addition, the Council asked the Policy and Services Committee to provide a recommendation on which Boards and Commissions should consider the program. Discussion On November 19, 2013 the Policy and Services Committee discussed the matter with Community Services staff and several high school students who are working on developing an expenditure plan for the new revenue stream for teen programs and services (Attachment C - Staff Report - Policy and Services Committee meeting, November 19, 2013). At the November 19 Policy and Services Committee meeting staff and students shared how the community outreach was going to engage a diverse and broad number of Palo Alto teens in the process. The outreach has included the following activities:  Teens Survey  Focus Groups  Interviews with Youth Serving Agencies  Best Practice Review City of Palo Alto Page 3 Several themes have emerged from the outreach thus far which are described below: The Teen Survey, which yielded more than 500 responses, found teens typically participate in activities between 3-6pm during the week and on Saturdays and Sundays. Palo Alto teenagers are engaged in a remarkable diversity of extracurricular activities with most teenagers already participating in a wide variety of programs, clubs and activities. When asked what geographic area teens would like to see more teen programs the response was Downtown, My Neighborhood and Mid-Town predominantly. Teens prefer opportunities for unstructured spaces and self-directed socialization, relaxation, music, arts and fun. While there is interest in more fun things to do, Palo Alto teens also shared they have very little free time, with homework being the greatest reason for the lack of free time. In the focus groups, many teens talked about the high level of stress they feel and the need for more opportunities to relax. The kinds of activities teens expressed would help encourage the reduction of stress included music, art, sports, dance, yoga and more opportunities for social connectedness among peers outside of school. When teens were asked during the focus group and on the survey how might you spend the new funding stream to support Palo Alto teens? Work opportunities and internships, low cost or free food, space to “hang out”, music, stress reduction, low pressure unstructured programs all stand out as core interests. Additional feedback from talking to Palo Alto teens is interest in more to do downtown. Many teens say downtown is great, easy to get to, has a great “vibe,” but there is not enough to do for teens outside of spending money, of which they have little of. They like the idea of a place to go dancing or other sorts of activities, particularly on Friday evenings in the downtown area. There is also an ardent interest in additional tutoring opportunities. Many teens said they would take advantage of such an offering if there were Stanford University students involved helping run the program, rather than peer tutoring that is available to them through school. Another teen focus group is planned for late January 2014 and staff will continue to work with the teen community, Palo Alto based youth serving agencies, Palo Alto Unified School District to develop a sustainable expenditure plan for Council consideration. While the community outreach continues staff did propose two expenditure recommendations to the Policy and Services Committee, to use a small portion of the funds at this time. The two expenditure recommendations (below) were unanimously approved by the Policy and Services Committee: City of Palo Alto Page 4 1. It is clear from the survey responses and in talking with Palo Alto teens that there remains a lack of awareness of programs and activities available for teens in Palo Alto. Ironically this was also a finding in the Youth Master Plan of 2003. Consequently, staff feels it would be prudent to invest in hiring an hourly staff person to oversee a student intern program to track teen programs and services for Palo Alto teens, and to use social media and other outreach vehicles to maintain a current calendar of events, programs and services of interest to Palo Alto teens. A program called Click PA (www.ClickPA.org) which aims to provide this needed service, already exists, but is it unfunded and led by volunteers. Investing in temporary staff or contractor to work closely with Palo Alto teens to maintain the Click PA website will be a valuable tool for teens to become more aware of existing opportunities for enriching, social, fun experiences in Palo Alto for teens. (Attachment D - Draft Budget – Total Cost $10,000). 2. It is also very clear that high school age teens are interested in a safe, unstructured space to hang out. Staff recommends we develop and implement an evening drop in program for high school students at the Mitchell Park Library and Community Center this fiscal year, as soon as possible after opening the new center. The program would be designed to capture the spirit of the feedback we are hearing from teens for a space that includes low cost or free food, social gathering, music, arts and other stress reduction activities in a somewhat unstructured program design. Moreover, staff proposes that Palo Alto teens from the Children’s Theater Teen Arts Council, Recreation’s Teen Advisory Board and Library Teen Advisory Board among other teens interested in this program work together with staff to help design and run the new high school evening program. (Attachment E - Draft Budget – Total Cost $20,000). The Policy and Services Committee were very supportive of the above recommendations and appreciated the opportunity to talk directly with teens at the November 19, 2013 meeting. The committee members asked for more details on how the money for the recommendations above would be spent, so draft budgets are attached for each recommendation. Staff will return to Policy and Services Committee in February or March with additional recommendations. The Policy and Services Committee looks forward to further discussion with staff and teens, for how best to activate the new funding to support teen programs and services. Council also asked what boards and commissions may need to be involved. Staff is making sure youth and teen interests groups and leadership boards are very involved in the process and are including Parks and Recreation Commission in the process. As mentioned above staff will return to the Policy and Services Committee in early 2014 to discuss a more fully developed City of Palo Alto Page 5 expenditure plan, after which the expenditure plan will be included in the City’s annual budget process for Council review and approval. Resource Impact The estimated cost to implement the two staff recommendations is $30,000 or less in total. The cumulative amount collected from the 455 Bryant Street rental revenue, of which 75 percent is committed to teen programs, from FY 2009 through FY 2013, available for to Teen Programs is $217,334. Attachments:  Attachment A - CMR 444:01 (PDF)  Attachment B - Youth Master Plan (PDF)  Attachment C - Staff Report Nov 19 - 2013 (PDF)  Attachment D - ClickPA budget proposal_draft3 (PDF)  Attachment E - Teen Drop In Budget (PDF)  Attachment F - Excerpt from November 19, 2013 P&S Minutes (DOC) CMR:444:01 Page 1 of 9 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: DECEMBER 10, 2001 CMR: 444:01 SUBJECT: 1) ADOPTION OF ATTACHED RESOLUTION ORDERING FURTHER CASH PAYMENTS FOR SECOND SERIES OF UNIVERSITY AVENUE AREA OFF-STREET PARKING ASSESSMENT DISTRICT BONDS; AND 2) CONFIRMATION TO ISSUE TAXABLE CERTIFICATES OF PARTICIPATION TO CONSTRUCT NON-PARKING AREA ON LOT S/L; RENT SPACE FOR COMMERCIAL USE AND UTILIZE NET REVENUE TO FUND TEEN PROGRAMS; AND 3) APPROVAL TO USE NET REVENUE FROM NON- PARKING RENTAL SPACE TO SUBSIDIZE BARKER HOTEL ASSESSMENT 4) DIRECT STAFF TO REFUND AND REFINANCE 1992 CERTIFICATES OF PARTICIPATION FOR CIVIC CENTER IMPROVEMENTS REPORT IN BRIEF The City is ready to initiate the second phase of financing for construction of the new downtown parking garages and the non-parking area on the Lot S/L site. By adopting the attached resolution, Council will begin the “cash collection” process necessary before issuing assessment improvement bonds in early March. Construction on both garages is expected to begin in early April. Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 2 of 9 Staff is also requesting Council reaffirmation and direction on several other financing and funding issues. On May 14 2001, Council endorsed a funding plan for teen programs by allocating 75 percent of net revenues from commercial rentals in the non-parking space on Lot S/L. To build this space and realize the revenues, taxable debt must be issued. Staff will return on December 17 2001, requesting formal Council approval. In this report, staff is also requesting Council approval to use a portion of the net rental revenues to subsidize part of the Barker Hotel’s new assessment. Staff’s recommendation on this subsidy fulfills a commitment made on March 19, 2001 to find a solution to the Palo Alto Housing Corporation’s petition on this matter. Finally, staff is requesting approval to move forward with refunding and refinancing the City’s 1992 Civic Center Certificates of Participation based on current low interest rates and expected savings. This action will postpone a significant expense this fiscal year as well as result in net present value savings. Financial impacts from approved actions above will be included in midyear adjustments to the 2001-02 budget and in upcoming budgets. These impacts are detailed in the Resource Impact section of this CMR. Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 3 of 9 RECOMMENDATION Staff recommends that Council: 1. Adopt and approve the attached Resolution (Attachment B) "Ordering Further Cash Payments and Directing Actions with Respect Thereto" for the University Avenue Off-Street Parking Assessment District. 2. Direct staff to issue taxable Certificates of Participation to construct non-parking space on Lot S/L site for commercial use and utilize net revenues to fund youth and teen programs. 3. Approve subsidizing Barker Hotel assessment by using rental revenues from non- parking space on Lot S/L site. 4. Direct staff to pursue refunding and refinancing of 1992 Certificates of Participation for Civic Center improvements. BACKGROUND On March 19, 2001, property owners in the University Avenue Off-Street Parking Assessment District approved a new assessment that would refund prior parking improvement bonds and provide funding for the design and construction of two new parking structures on Lots R and S/L (CMR:170:01). The financing plan for the parking structures consisted of two phases or two series of bonds. After a required thirty day cash payment period in which district property owners had the opportunity to pay all or part of their assessment, staff initiated the first of two financing phases to construct the garages. This phase included: refunding prior parking bonds; reimbursing the General Fund previously advanced project costs; and obtaining new funding to complete final design of the garages. On May 14 2001, Council approved a resolution to issue and sell the first series of bonds (CMR:237:01). Bonds in the amount of $9,135,000 were sold successfully on June 13, 2001. In addition to building a parking structure on the Lot S/L site, Council approved construction of a non-parking area that will be an extension of the parking garage. Costs for building this extension remain the responsibility of the City’s General Fund. Initial plans for this area were to house a downtown teen center, with the remaining space used for retail and other commercial purposes. Rent from commercial users was to be used to offset the City’s debt service costs for constructing the non-parking area. As a result of a Youth Master Plan study and student survey conducted in spring 2001, an alternative proposal for delivering youth and teen services was presented to Council on May 14, 2001. Members of the Palo Alto Youth Council shared results of a student survey indicating that 77 percent of respondents preferred having more programs, activities, and special events rather than a new downtown teen center. The survey, along with input from a variety of teen advisory boards, indicated a strong desire for teen- created programs and events such as film festivals, dance parties and ski trips. To fund Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 4 of 9 new programs and events, the Youth Council endorsed a staff proposal to allocate 75 percent of net revenues derived from commercially renting the entire non-parking area to funding youth and teen activities. Council endorsed this new plan (See Attachment A for selected minutes with Council discussion on this item). DISCUSSION Each of the actions requiring Council approval are described below: University Avenue Off-Street Parking Assessment District Bonds – Second Series Given approval of the new assessment district on March 19, 2001 and a plan to begin construction of the new garages in spring 2002, it is necessary to begin the process of issuing a second series of improvement bonds. As with the first series, Council is requested to adopt the attached resolution that sets in motion notification of a 30 day cash payment period when property owners have the option to pay their assessments to avoid incurring financing and future interest costs. Property owners who do not pay cash will have their assessments financed through the bond issuance. Upon Council approval of the resolution, cash payment notices will be mailed to the property owners before the end of December. After the cash payment period ends in late January, staff will return to Council in early February for approval of a resolution that authorizes the issuance and public sale of bonds and approves the necessary financing documents. Now, staff estimates that $36,332,000 in bonds will be required to cover management, acquisition, construction, and financing costs for the two new garages. Combined with the first issuance, a total of an estimated $45,467,000 in bonds will have been issued on behalf of the assessment district. This translates into an estimated annual assessment of $1.45 per square foot for property owners of properties assessed once the entire assessment is bonded (this includes the refinanced 1977 and 1989 parking bond assessments estimated at $.35 per square foot). As mentioned in prior reports, the City of Palo Alto is responsible for paying a share of the assessments under Proposition 218. The proposition requires that public properties benefiting from the improvements must be assessed and that the local agency (City) must separate general from special benefits to property owners with the general benefits to be paid by the local agency. Like any property owner, the City has an option to either pay its assessments in cash or finance them over the life of the bonds. Also, like any property owner, the City may save some money by avoiding some initial financing costs. An analysis based on expected interest rates for the City’s portfolio (5.0 to 5.5 percent) versus the anticipated interest rates on the assessment bonds (5.0 to 5.5 percent), indicates that there are no economic benefits to the City under either option. Instead, the City should make its decision on more strategic or policy driven considerations. If the cash payment option is selected, staff can identify a $699,000 payment that will not have to be made in the 2001-02 budget as a result of refinancing the 1992 COPs (see discussion below in section 3). This option, however, will require a draw on the Budget Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 5 of 9 Stabilization Reserve of approximately $521,000. Such a draw is not optimal in the short- term given the City’s revenue picture and “strengthening the bottom line” effort. The option to finance will result in an ongoing, annual payment of around $77,000 for the next 30 years. The City has tended to be conservative about issuing debt and conserving the use of future resources. Staff does recommend, however, that the City pays this annual assessment since it is relatively small and will provide some immediate relief to current pressures on General Fund resources. By refinancing, the City will be relieved of the $699,000 payment due this year. Staff will return with the appropriate budget adjustments in the 2001-02 Midyear Report based on Council direction. Non-Parking Area on S/L Site The City of Palo Alto’s General Fund is responsible for all expenses associated with building the non-parking area expansion on the S/L site. The current estimate for constructing this facility is $3.1 million. Including financing costs, approximately $3.6 million in bond proceeds will need to be generated. Based on the current plan to rent this area for commercial use and utilize net revenues for teen programs and other purposes, it is necessary for the City to issue taxable debt. With Council’s approval, staff will pursue taxable Certificates of Participation to finance the non-parking area. Staff proposes using the Civic Center as the asset needed to raise funds for the S/L extension and for refinancing the 1992 COPs. These COPs will be issued separately from the assessment improvement bonds and separately, but simultaneously with the refinanced 1992 COPs. The taxable COPs and tax-exempt refunding COPs will be issued as separate series, but will be marketed with the same Official Statement. Staff will return to Council on December 17 for authority to issue both series of COPs (estimated at $8.0 million) and to approve the necessary financing documents. Taxable COPs result in a slightly higher interest rate and annual lease or debt service payments. Assuming a 20 year amortization period, an interest cost of 6.8 percent, and $3.6 million in bond proceeds, the estimated annual lease payment for this facility will be around $331,000. Rental revenues, based on renting available space on the first floor for retail purposes ($4.50 per square foot) and space on the second floor for office use ($5.00 per square foot), are projected at $462,000, with net revenues of $131,000 annually. Projected rental rates are based on information provided by a local developer and somewhat reflect the current weakness in commercial rates. Staff proposes that net revenues be used to subsidize the Barker Hotel assessment, for youth and teen services, and for other General Fund services. At the March 19 public hearing, the Palo Alto Housing Corporation (PAHC) requested that the City subsidize the new assessment on the Barker Hotel based on its use as low-income housing and minimal usage of parking space. Council was receptive to this request and directed the City Manager to develop a solution. Staff recommends that net revenues from the commercial space leasing be used to subsidize the PAHC assessment. Based on current assessment projections, the subsidy would equal around $7,600 annually. This amount is derived by Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 6 of 9 calculating the incremental amount of assessment related to the new garages for the SRO space. PAHC will be responsible for that part of the new assessment related to the commercial space on the first floor of the Barker site. Remaining net revenues would then be distributed according to the proposal approved by Council on May 14 (see Attachment A for the minutes from the meeting). Seventy five percent of the net revenues would be allocated to youth and teen services and 25 percent would be used for General Fund purposes. Based on the projections and uses recommended above, it is estimated at this time that $92,000 would be allocated annually for youth and teen programs and $31,000 would be available for General Fund use. These allocations would increase as rental rates are increased over time. Refunding and Refinancing of 1992 Certificates of Participation As a result of falling interest rates, staff and the City’s financial advisor recommend refinancing the 1992 Certificates of Participation issued for improvements to the Civic Center. Current outstanding principal on these COPs is $3,520,000. Analysis shows estimated net present value savings of $139,000 or 3.8 percent of outstanding bonds (net of all costs of issuing the refunding). A refinancing also provides the City with an opportunity to push out and amortize a $699,000 payment (due in March 2002) over the remaining life of the bonds (bonds mature in 2012). By not making this payment in 2001-02, the City can re-budget these funds for other purposes such as the payment of its downtown assessment obligations (see above) or simply reduce expenditures in 2001-02 as part of the “strengthening the bottom line” effort. The City is still required to make this payment, albeit in a different timeframe. The City’s financial advisor prepared a second refinancing scenario for City staff to consider. It analyzed the benefits of refinancing the 1992 COPs over the next 20 years instead of repaying them within the next 10 years. Based on an estimated interest cost of 4.7 percent, there were modest net present value savings of $52,000 or 1.5 percent of outstanding bonds. The primary benefit of pursuing this option is that it would lower annual lease payments in years 2003-05 from $815,000 to $256,000, thereby relieving the General Fund of nearly $560,000 annually in lease payments. This option provides short- term relief, especially if the recession lingers longer than expected, but it extends the life of a City obligation with no significant economic savings. Staff does not recommend this option because it does not provide reasonable savings, unduly extends the City’s debt obligations, and constrains the use of future City resources. RESOURCE IMPACT Staff’s recommendations have a positive impact of $540,000 on the 2001-02 budget. This positive impact is the sum of the 1992 COPs lease payment expense of $699,000 (reduced expenditure) and the City’s 2001-02 assessment obligation of $159,000 (increased expenditure). Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 7 of 9 University Avenue Off-Street Parking Assessment District Bonds – Second Series By issuing approximately $36,332,000 in the second assessment bond series for the University Avenue Assessment District, the City will be responsible for collecting special assessments in the Assessment District to service an estimated $45,467,000 in improvement bonds. This translates into an estimated, annual cost of $1.45 per square foot annually for each property assessed when total bonds are issued and assessments are collected. Staff recommends that the City finance its assessment obligation resulting in an estimated annual assessment payment of $77,400. Non-Parking Area on S/L Site Based on a $3.6 million bond issue, the City can expect an annual debt service payment of $331,000 based on a 20 year amortization period and an interest rate of around 6.8 percent. Given the expected rental rates for commercial use and the commitments discussed above, the following fiscal impacts are anticipated. Rental Revenues $462,000 Debt Service $331,000 Barker Hotel Subsidy $ 7,600 Net Revenues $123,400 Teen Programs at 75% $ 92,600 General Fund at 25% $ 30,800 Refunding and Refinancing of 1992 Certificates of Participation Based on the recommendation above, a refinancing of the 1992 Civic Center COPs shows that the City can realize $138,000 in net present value savings (net of all costs of issuing the Refunding COPs). The City can also delay and re-amortize a lease payment of $699,000 due this fiscal year. This can either relieve the City of a budgeted expense in a fiscal year when revenues are stressed or be reallocated for other purposes. POLICY IMPLICATIONS The recommendations in this report are consistent with prior Council direction. Staff’s recommendation to refinance the 1992 Certificates of Participation is based on economic savings or lower lease payments to relieve pressure on a fund’s commitments is also consistent with prior refinancing efforts approved by Council. TIMELINE 2001 December 17 Resolutions approving issuance of COPs for non-parking area on Lot S/L and refinancing 1992 Civic Center COPs and adoption of required financing documents. December 27 Publish Notice of COPs sale Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 8 of 9 December 28 Mail cash payment notices to Assessment District Property Owners 2002 January 8 Bid documents on COPs distributed to underwriters January 16 Bids on COPs received and awarded January 28 Cash payment period ends, determine final bond size, and distribute financing documents to rating agencies and bond insurers January 29 Receive COPs proceeds February 4 Council adopts resolutions authorizing assessment bonds and approving required financing documents February 7 Publish notices of assessment bond sale February 11 Week Ratings presentation on assessment bonds February 28 Bids on assessment bonds received March 18 Assessment Bond closing; bond proceeds received April Construction of garages and non-parking area begins ENVIRONMENTAL ASSESSMENT An Environmental Impact Report for the parking structures was prepared as part of the PC zoning application and was certified by Council on December 20, 1999, by adoption of Resolution No. 7917. ATTACHMENTS Attachment A: Selected Agenda Item and Minutes from Council Meeting of May 14, 2001 Attachment B: Resolution Ordering Further Cash Payments and Directing Actions With Respect Thereto Attachment C: Notice for Mailing on cash payment option Attachment D: Notice for Publication Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] CMR:444:01 Page 9 of 9 PREPARED BY: JOE SACCIO Manager, Investments and Debt DEPARTMENT HEAD APPROVAL: CARL YEATS Director, Administrative Services CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d1] City of Palo Alto YOUTH MASTER PLAN REPORT February 4, 2003 VISION STATEMENT ur vision is that all youth in Palo Alto will have safe, healthy, positive experiences that support them in the development of behaviours, skills, attitudes, knowledge, and values necessary to realize their full potential. O -i- EXECUTIVE SUMMARY he City of Palo Alto youth want and deserve a voice in their com- munity. Although youth are frequently seen as problems, they can be assets and resources, especially when officials are seeking effective solutions to community problems. Our youth are the foremost experts on their experiences, needs, and interactions with other segments of the community. Involving youth in local decision- making taps this important knowledge and promotes their full and healthy development. The City, by adding teens to key decision-making bodies, can give teens a direct role in establishing local policies and setting city priorities. Promoting the engagement and involvement of youth in our community should include hosting a youth forum for discussions, appointing youth to local boards or commissions, and the continuation of a youth council and advisory board for middle and high school youth. These opportunities may only reach a small percentage of a city’s youth, but they make a powerful statement to all young people and adults that youth are valued members of the community. Several of these elements can be combined to create a multi-tier framework for youth participation and involvement, allowing large numbers of youth to become involved in civic activities. Young people themselves will help to define and refine the vision for youth participation and involvement in our community and local government. The following report highlights these important aspects of community involvement in developing and implementing a Youth Master Plan. The efforts of the Youth Master Plan Steering Committee supported the teens in creating a youth- driven plan. T -ii- CONTENTS VISION STATEMENT EXECUTIVE SUMMARY PARTICIPANTS 1.0 BACKGROUND 2.0 PLANNING PROCESS 3.0 THE PLAN Goal No. 1 — Encourage and continue to provide opportunities for youth participation in our community. Goal No. 2 — Improve communication and awareness of youth recreational and social programs. Goal No. 3 — Ensure an on-going collaborative process that coordinates, supports, and monitors youth programs and services. 4.0 SUMMARY ATTACHMENTS Youth Master Plan Data Base Teen Center Needs Assessment Articles Published Postiive Alternatives for Youth In Memory of Debbie Moore January 6, 2002 -iii- PARTICIPANTS PALO ALTO CITY COUNCIL MEMBERS Victor Ojakian, Mayor and Judy Kleinberg, Councilwoman ADMINISTRATIVE STAFF Pat Briggs, Director of Children’s Theatre Dawn Calvert, Superintendent of Recreation Pat Dwyer, Police Chief Kathy Espinoza-Howard, Director of Human Services Leon Kaplan, Director of Arts and Culture Patrick Larkin, Supervisor of Recreation Debbie Moore, Positive Alternatives for Youth Manager Bobbi Ross, Recreation Manager Ernesto Sarmiento, Recreation Coordinator Dan Williams, Director of Recreation VOLUNTEER CONSULTANT Jim Bronson YOUTH MASTER PLAN STEERING COMMITTEE Becky Beacom, Palo Alto Medical Foundation Richard Beckwith, Palo Alto Parks and Recreation Commission Roy Blitzer, Palo Alto Human Relations Commission Derek Chan, Youth Community Service Raissa Gebhard, Jordan Middle School, Assistant Principal Susie Hodges, Youth Community Service Cathy Kroymann, Palo Alto Unified School District (PAUSD) Board Member Jeanne Labozetta, Family Service Mid-Peninsula Linda Lenoir, PAUSD, Nurse Dan Logan, YMCA of Palo Alto Te rry Naylor, Voluntary Transfer Program, PAUSD Judy Palmer, Medical Professor, Retired Irv Rollins, Palo Alto Unified School District Ken Russel, Palo Alto Human Relations Commission Barry Taylor, YMCA of the Mid-Peninsula Caitlin Whitaker, Youth Community Service Karen White, Parent Teacher Association Council -iv- 1.0 BACKGROUND he impetus for creating a Youth Master Plan (YMP) originated from a joint study Session of the Palo Alto Youth Council and the City Council in March 2000, whereby the YMP was defined as a process to develop a focused and organized approach to the delivery of programs and services to youth and their families. It was then determined that a Youth Master Plan would benefit the entire community in many ways, including determining existing services and overlaps; identifying service gaps and addressing the needs of all youth and evaluating personal assets and skills needed by youth to grow into healthy adults. In October 2000, a Youth Master Plan Steering Committee was formed and included approximately 40 committee members from the following agencies: Palo Alto City Council, Parks and Recreations Commission, Community Services Department Staff, Police Department Staff, Youth Council, Youth Advisory Board, Palo Alto Unified School District Board and Administration, Palo Alto schools, Parent Teacher Association (PTA), Stanford University, all major youth serving agencies, youth sports agencies, business community, faith community, and health care agencies. The Steering Committee began its efforts to define the basic components of a Youth Master Plan which included: establishing a vision for youth in Palo Alto, conducting a needs assessment and contracting a facilitator to create a document. The committee agreed to hire a facilitator, to guide the committee through the process in the most efficient and cost effective manner. However, this youth-driven process and training approach became lengthy and costly. A decision was made to work with a short-term volunteer consultant to assist the committee with the planning process, including grant preparation. The initial goal was to obtain grant funding as well as obtain financial support from the City’s budget and those agencies serving on the Steering Committee. Unfortunately, after grant proposals were submitted, funding was denied and no City funds were available to facilitate the on-going process. T -1- 2.0 PLANNING PROCESS he Youth Master Plan Steering Committee began with a primary objective to carry out a youth-driven process to determine what services are available that support youth in leading healthy and productive lives, which services are needed and how to achieve the needed services. The secondary objective was to educate community leaders and youth service organizations about youth needs and how to support them in developing healthier lives and becoming effective community members. The YMP Steering Committee approached the planning process by asking the question, “How well are Palo Alto’s youth doing?” Are the financial resources allocated to the appropriate areas for the positive development of youth and teens in our community? A definition for youth to be served was defined by the committee in January 2001. The target age group for the plan was identified as 11 years-18 years old. In order to begin an education and outreach process, the City needed a mechanism to survey the development skills of youth and teens. A tested measurement process would be required, with an aspect that could establish statistically what major categories were needed to develop a healthy child. The Search Institute Survey could provide this measurement tool. Discussion of a survey process continued throughout the planning sessions. The expectation is not to see instant growth in a youth’s asset skills, but to increase Development Asset experiences. The evaluation process keeps the program’s focus on the larger purpose of a youth plan – to strengthen personal skills by increasing Developmental Assets. All full-time recreation program managers, coordinators and support staff would be trained in a general course on the Search Institute’s 40 Developmental Assets, which are factors that most people recognize as important for healthy development. Each program manager and coordinator would be required to identify the Developmental Assets that are applicable to their program or project. A more intensive training would be given to program managers and coordinators on the identification of Developmental Assets, interpretation of the statistical results and how to communicate with parents, youth and community members regarding the value of asset building. Hourly staff would be trained periodically throughout the year, with those in lead positions attending specific trainings. At Summer-in-Service training, a two-hour training would be provided to all new and returning seasonal hourly staff on Developmental Assets. Several organizations like YMCA and YWCA are already utilizing Developmental Assets as a core of curriculum designs. Excellent partnerships are developed when working with Developmental Assets organizations. The similar curriculum philosophy reduces conflicts in joint program design. Palo Alto City Staff investigated "The Cornerstone Project" implemented in Santa Clara County. "The Cornerstone Project" is based on the 40 Developmental Assets researched and created by the Search Institute of Minneapolis. "The Cornerstone Project" was a collaboration of community leaders and organizations from throughout Santa Clara County. The survey conducted by "The Cornerstone Project" details the information received from nearly 7,000 local 7th to 12th graders as they tell how adults are doing in guiding them to adulthood. The survey results call for everyone to begin working together to T -2- support young people to build the developmental assets that are the cornerstones of healthy youth development and a strong community. As a result of the investigation into "The Cornerstone Project," two City of Palo Alto CSD staff, Debbie Moore, Positive Alternatives for Youth Manager (2000-2002) and Patrick Larkin, Supervisor of Recreation were sent to the Search Institute in Minneapolis, for training in the 40 Developmental Assets. Bobbi Ross, Positive Alternatives for Youth Manager (2002 to present) has trained the ACS Board of Directors on the 40 Developmental Assets. In addition to the 40 Developmental Assets, the City of Palo Alto recognized that "Youth Development Competencies" would play an important role in the process of creating a Youth Master Plan. 2.1 Proposed Work Plan ■Identify and contact consultants and other cities that have conducted a Youth Master Plan process to make recommendations on proceeding with the YMP process by October 15, 2001. ■Create a project plan and timeline. ■Gather existing data on youth needs, behaviors, attitudes, etc. and current available services to incorporate into the YMP process by November 15, 2001. ■Request and obtain commitments of collaborative partners to provide monies toward the cost of hiring a consultant by November 15, 2001. ■Develop an RFP and submit to the Purchasing Department to identify a consultant by November 30, 2001. ■Hire a consultant by February 15, 2002. 2. Sub-Committees The planning process consisted of a needs assessment, data analysis and development of a plan. Sub- committees, made up of members of the YMP Steering Committee, were formed and met on an individual basis. Each sub-committee had primary responsibility for collecting, analyzing, and presenting the information it collected. ■Mission/Vision Sub-Committee: Responsible for developing the Vision and Mission State- ment for the YMP and presenting to the YMP Steering Committee for approval. ■Data Collection Sub-Committee: Responsible for obtaining existing data, surveys, reports, etc. pertaining to issues and needs of youth and information on existing resources, programs, and services for youth in Palo Alto and presenting information to the Youth Master Plan Steering Committee for approval. The Human Services Department with the support of Family Resources, and the sub-committee were able to compile a Community Resource database (Attachment 1). The list was reviewed and studied by the YMP Steering Committee and then sent on to the Youth Assessment and Marketing Committees. -3- ■Assessment Sub-Committee: Responsible for researching and recommending potential survey methods (such as written and/or phone surveys, focus groups, public forums) that will assist in identifying issues, needs and gaps in service to the youth of Palo Alto. And will present the information to the YMP Steering Committee for approval. The sub-committee worked closely with the Data Collection Sub-Committee to prevent duplication of work(s) already completed. ■Facilitator Sub-Committee: Responsible for determining if there is a need for a facilitator to assist in the YMP process and if so, identifying and interviewing potential facilitators. The sub- committee made a recommendation to the YMP Steering Committee for approval. ■Marketing Sub-Committee: Responsible for developing a plan to inform the community on a Youth Master Plan and the process for completing the YMP, as well as how to “market” the finished product to the community. Members of the sub-committee may also participate in the marketing strategy (i.e., writing newspaper articles, participating in the cable TV productions, etc.). The sub-committee presented their plan to the YMP Steering Committee for approval. ■Funding/Finance Sub-Committee: Responsible for researching potential funding sources to finance the cost of completing the YMP process (including facilitator, survey, printing costs, etc.) and made recommendations to the YMP Steering Committee. 3. Action Teams Palo Alto Youth Council Palo Alto Youth Council (PAYC) is a group of fifteen high school students from the Palo Alto area. The Council was created to serve as a task force to identify and address the issues that face teens in the community. One of the first YMP projects was to survey 500 Palo Alto Youth on the need for a teen center verses the need for additional teen programs and services. The results of the survey indicated that the teen populations desire was to have more teen programs rather than a teen center. A request was made to City Council to lease the proposed teen center space with 75% of revenue going into the teen program account and new recreational and social programs created by teens for teens (ideas generated through Youth Council and other Teen Advisory Boards). (Attachment 2) The youth driven process moved to analyze and identify areas of interest. The research established the following findings: Palo Alto had many resources for middle school and high school youth. The Palo Alto Youth needed target marketing for these existing resources. The PAYC’s largest accomplishment is the teen activity database (Attachment 3) that was compiled in conjunction with the YMP. The PAYC survey (Attachment) addressed the recreational needs of teens in Palo Alto. The results of the survey found there is not a lack of activities for teens in the community, but a lack of awareness of the activities. Over the course of a year, they researched and collected information on teen activities, programs, and teen oriented businesses and organized the information into categories (i.e., sports, community, restaurants, clubs, billiards, movies, and general recreation). The database, with over 55 entries, was submitted to the Palo Alto Weekly News to raise awareness in local teens. Based on PAYC survey results, it was determined that the following areas were priorities for teen engagement in the community: -4- ■Advertisement and awareness of teen oriented programs and activities. ■Developing relationships with other local youth groups for joint projects. ■Support and volunteering in the community. These priorities were addressed by PAYC. The action team contributed articles written and produced by youth to the local papers (Attachment 4). Members of the PAYC volunteered to serve in several public events, including the Palo alto Weekly’s Moonlight Run, ticket takers and food servers at the Senior New Year’s Eve Day Bash, operate craft and game booths at the winter Solstice and Winter Fest Celebrations and the Hippity Hop Easter Celebration, and helped at the Break Dance Competitions. The PAYC put youth representation in several of the City planning committees and projects that would affect youth in the near future. In addition to the Youth Master Plan, youth served on the Mitchell Park Community Center/Library Project Site Committee, and the Main Library and Art Center Project Committee to provide a younger voice in these normally adult-dominated groups. Positive Alternatives For Youth Positive Alternatives for Youth provides programs that improve school performance, strengthen life skills and social adjustment, and decrease criminal involvement, through collaborative com- munity efforts. The Positive Alternatives for Youth (PAY) Program is a collaborative effort of various agencies (Attachment 5) to offer youth a future life alternative by providing participants with academic support, job coaching, mentoring, and other youth services. Participants, in addition to having a chance to talk with other teens and work on creative problem solving, are connected with reliable trustworthy adults who are interested in talking and helping them face challenges. They are urged to set high standards for themselves and to take their participation in the program seriously. Participants gain competence, confidence and self-reliance through guided group discussions and learn the skills needed to launch a successful future. They are encouraged to learn from one another, to appreciate one another, and to treat their PAY match as a caring partner. Youth Community Service Youth Community Service (YCS) promotes the ethic of service, fosters youth leadership, builds community and enhances education by providing community service, service learning, and leader- ship activities to East Palo Alto, Menlo park, and Palo Alto young people in grades K-12. Since 1990, YCS has engaged young people in service opportunities that allow them to learn more about themselves and their community. YCS has grown from 200 students in its first year to over 2,000 students who participate in both one-time and on-going service experiences in and out of the classroom. YCS is a local collaboration that unites young people across cities, school districts, and counties. Ravenswood City School District, Palo Alto Unified School District, City of Palo Alto, City of East Palo Alto and YWCA of the Mid-Peninsula sponsor the YCS collaboration. The Palo Alto Rotary Club and Haas Center for Public Service at Stanford University are supporting partners. YCS Programs are: -5- ■Community Service and Leadership: Through this program YCS offers after-school service clubs for more than 200 students at 7 middle schools and 3 high schools in East Palo Alto, Menlo Park, and Palo Alto. The program includes YCS Fellows, an 8-month leadership course for 10 high school students that provides training and skills development to enable youth leaders to better engage their peers in service. YCS also sponsors numerous one-time service days throughout the school year, involving nearly 800 students in service on an annual basis. ■Service Learning: Offers support to teachers who are working to use service as a teaching tool to bring the real world into their classroom and make their curriculum more relevant. To this end, YCS provides training and technical assistance to teachers at the 25 elementary, middle and high schools in both the Ravenswood (East Palo Alto) and Palo Alto School Districts. In addition, YCS helps local teaches and community agency staff become better service learning leaders at their schools and agencies through the Service Learning Leadership Development Program and the national Kellogg Learning in Deed Initiative. ■Summer of Service (SOS): An 8-week summer camp, brings together over 60 local middle school students to contribute to the community, develop leadership skills, and make new friends. Students serve in small groups, addressing a variety of issues; the environment, poverty and homelessness, child development and health. Earlier this year, Summer of Service received the Award of Excellence, the highest award given by the California Parks and Recreation Society (CPRS) for quality youth programming. Adolescent Counseling Services Adolescent Counseling Services (ACS), founded in 1975, addresses the emotional and development needs of adolescents and their families in a changing society. ACS runs three programs: a residential treatment facility for teen girls; an outpatient adolescent substance abuse treatment program; and an on-campus counseling program. ACS presented a 7-minute video from the Emerging Youth Issues Forum held November 8, 2000. The Forum brought together youth to identify issues that adolescents will be facing over the next 5 years. The video presented several teens talking about adolescent issues. The two main topics stressed by these teens were isolation and stress they felt in school and their home life. ___________ In summary, members of the YMP Steering Committee, Palo Alto Youth Council and other community members came together to unite on common goals in order to support the Palo Alto community’s middle and high school youth and their families. The objectives initiated by the youth, for the youth are clearly identified in the following Plan section of this report. -6- 3.0 THE PLAN he purpose of the Palo Alto Youth Master Plan is to engage and support the Palo Alto community’s middle and high school youth and their families. The objectives initiated by the youth for the youth in the Youth Master Plan include: 1.Encourage and continue to provide opportunities for youth participation in our community. 2.Improve communication and awareness of youth recreational and social programs. 3.Ensure an ongoing collaborative process that coordinates, supports and monitors youth programs and services. Each of the objectives is clearly identified in the short-term and long-term approaches. To be effective in reaching these objectives, the City of Palo Alto Recreation staff recommends that the City should continue to provide the following: ■Adequate/current staff support for planning and implementing the goals. ■Opportunities for youth to meet with City Council members and Commissions. ■Continuation of youth program development and evaluation of program effectiveness. ■Opportunities for addressing emerging and existing needs. Goal #1: Encourage and continue to provide opportunities for youth participation in our community. Young people need safe, healthy and fun activities where they can engage in positive behavior so that they can grow into healthy adults. Currently, there are a variety of programs and services available to the youth in the City of Palo Alto. However, youth do not always participate in these programs due to inconvenient scheduling, lack of transportation, lack of awareness, or cost of the program. New programs must be developed and implemented continuously to meet un-addressed and emerging needs, and to build on the strengths and abilities of the youth in our community. 1A.Desired Outcome Every young person will have the opportunity to participate in recreational, social, educational, and enrichment programs offered in the Palo Alto community. 1B. Action Steps Completed 2000-2002 ■The City of Palo Alto Youth Council (PAYC) promotes teen opportunities in the community incollaboration with the Palo Alto Weekly News, to create a teen activities database that can be accessed through Palo Alto Online. ■PAYC developed a documentary on “Teens and Stress in Palo Alto”. T -7- ■PAYC hosted a debate at the YAK ATTACK 2001 on religion in school. ■Teen Recreation staff created a Youth Drop-In Center at Mitchell Park Community Center (MPCC) to engage youth in after-school recreational, social and enrichment programming. ■City staff coordinated shuttle service from Jordan Middle School to the new Drop-in Center at MPCC. ■Collaborated with the Mitchell Park Library staff to offer after-school homework help opportunities for students. ■Recreation staff created a Junior Advisory Board comprised of ten middle school students to advise recreation staff on program interests and needs to offer for middle school youth. ■City staff implemented a Middle School Dance program to include all PAUSD middle school youth. ■Recreation Division program staff implemented new break dance practice workshops targeting middle and high school youth. ■City staff coordinated shuttle service for after-school transportation from Gunn and Palo Alto High School. ■Recreation Division recruits teen volunteers to participate and help in implementing citywide special events. ■Created and implemented “Teen Band Night” a program for high school youth. ■City of Palo Alto provides a Counselor-In-Training (CIT) program for middle school age students. ■Collaborated with PAUSD to implement,”Summer Survivor” and “Camp at the Drop,” two middle school summer camp programs. ■Recreation Division program staff implemented new break dance practice workshops targeting middle and high school youth. ■Teen Recreation staff collaborated with the YMCA and the Ventura community, to approve a portable skate park at Ventura Neighborhood Center for teens. -8- ■Teen Recreation staff attended job fairs at the high schools for summer staff recruitments. ■The Recreation staff collaborates and participates on (Youth Community Services) YCS steering committee to offer numerous service projects for teens at schools throughout the community. ■Positive Alternatives for Youth (PAY) provide leadership training and community service internship opportunities for middle school youth. ■Yo uth Council representatives participated on the Mitchell Park Community Center /Library Project Site Committee. NOTE: The Fee Waiver Program continues to be available for all recreation-sponsored activities as well as for participation in community youth sports leagues. 1C. Short-term Action Steps ■The PAYC is in the process of completing a documentary on the “Top Ten Fun Things For Teens To Do in Palo Alto.” ■Recreation staff and Youth Council Advisor are investigating the opportunity for a Youth- produced TV show. ■City staff is exploring the development of new funding/grant opportunities (corporate sponsors) for youth development programming. ■City staff will evaluate youth access to public transportation. ■City staff will assess the effectiveness of the fee waiver program. ■City staff will work collaboratively with Youth and Teen Recreation Services (YTRS) to evaluate best practices relating to teen programming. ■Staff will maintain an open dialog between city businesses, the Palo Alto Police Dept. and all youth-related businesses in the community. 1D. Long-term Action Steps ■Promote recognition celebration for youth volunteers (Youth Council, Teen Advisory Board, Junior Advisory Board, YCS, YMCA, PAY Community Intern Program, CIT, etc.) ■Develop innovative marketing strategies targeting teens in order to increase participation in teen programs. Goal #2: Improve communication and awareness of youth recreational and social programs. Many youth and families are not using available resources due to communication barriers, which include not being aware of existing youth programs and difficulties in accessing information and services due to language and/or cultural barriers. -9- 2A.Desired Outcome Mass Communication is key in promoting opportunities for youth and teens. The city must target market to youth and teens to get the message out through unconventional methods that will attract this population to the programs and services available. A community able to provide a wide-range of diverse and appropriate print and non-print media to inform all residents of the full range of programs available to teens is needed. 2B. Action Steps Completed 2000-2002 ■YMP Steering Committee will continue its support of the Youth Master Plan and open up opportunities for teens to accomplish their goals as sited in the Plan. ■Staff will establish two-way communication with Junior Advisory Board to promote discussion on interests and activities needed for middle school youth in our community. ■YMP Marketing Committee teen member had written recognition of peer accomplishments in a local newspaper article. ■Collaborated with MPACC to enable teens to develop skills in the media that will teach them how to express their thoughts to the public. ■PAYC developed a PAYC Web Site, which will continue to highlight current PAYC projects and programs. ■PAYC worked with the Palo Alto Weekly News to update and create a website for teen activities on Palo Alto Online. ■Recreation and PAUSD will continue to collaborate and market new and innovative programs for teens during the summer months. ■Teen Representatives should continue to be identified for participation on all committees relating to projects or services affecting teens (i.e., MPCC/Library Project). -10- 2C.Short-term Action Steps ■Community youth organizations will utilize the Youth Council and other teen action groups as two-way channels of communication. ■PAYC will work with the Palo Alto Weekly on developing a teen activities link to Palo Alto Online. ■City staff will collaborate with local agencies to get information on services offered that will be of interest to teens and improve their socialization skills. ■City staff will work collaboratively with PAUSD to create and implement safe and enriching experiences for teens during the summer months. ■Teen Forums will take place annually beginning April 2003, which will discuss topics that relate to current teen, issues affecting Palo Alto youth. 2D. Long-term Action Steps ■Teen Advisory Board (TAB) will promote positive teen contributions to the community through news media coverage. ■TAB will work to create a documentary educating parents and teens, highlighting fun and interesting activities for youth in our community. ■PAYC will work with City Council on an annual basis to discuss the role of teens regarding the decision-making processes that relate to the teens in Palo Alto. ■A Palo Alto teen representative appointed to every Commission related to issues and activities for this age group (i.e., PARC, HRC, etc.) Goal #3: Ensure an ongoing collaborative process that coordinates, supports and monitors youth programs and services. The Youth Master Plan will be evaluated and revised by the Palo Alto Youth Council and other teen advisory boards, and reviewed by appropriate City Commissions and advisory groups as needed. A diverse selection of strong activities and programs enables youth to develop into well-rounded members of the -11- community and maintain productive, healthy lifestyles. 3A.Desired Outcome Community agencies and organization collaborate in order to provide multiple youth services addressing the needs of teens and to leverage community resources for the benefit of the teens. 3B. Action Steps Completed 2000-2002 ■Collaboration established with the Mitchell Park Library staff and Recreation Center staff to offer an after-school drop-in program, which will include a homework help and recreation socialization component. ■City Staff implemented “Summer Survivor Camp” for middle school students in collaboration with the PAUSD in summer of 2001 and 2002. ■City staff and PAUSD staff collaborated and implemented “Camp at the Drop,” a program targeting middle school age youth for the summer of 2002. ■Recreation Division has expanded their offerings for teens, including tennis lessons provided by a senior community volunteer, city-wide middle school dances, Monday night Break Dance practices, Dance Classes provided by volunteer professionals, implemented a new drop-in center, implemented the new teen band nights program, the annual Break Dance Contest, implementing additional summer camps targeting middle school youth, and created Junior Advisory Board for Middle School youth. ■Collaboration with Recreation staff, the YMCA and the Ventura Community to develop skateboarding elements placed at the Ventura Neighborhood Center. 3C.Short-term Action Steps ■Continue to develop a relationship with the school district staff and other local youth serving agencies to enhance and enrich the quality of services offered to youth in Palo Alto. ■City staff, PAYC will develop a relationship with Human Relations Commission in order to support teens to address their concerns in a safe and caring environment through a teen forum. -12- ■Work with agencies that provide a variety of services for youth in order to provide a holistic approach to teen services. ■Establish collaboration with the Lucie Packard Children’s Hospital and their health out reach program to implement a teen forum focusing on teen related issues. 3D. Long-term Action Steps ■The Youth Council will refer to the YMP annually and implement collaborative projects using existing resources related to the goals of the plan. ■Continue collaborations with community agencies serving youth and teens in Palo Alto. ■Bi-annually, the Youth Council will evaluate the YMP to determine the overall effectiveness of the action items identified in the plan to make adjustments based on the current trends and issues involving this age group. -13- 4.0 SUMMARY he Youth Master Plan incorporates the successes of present youth programming, and identifies the short-term action projects without a need for additional funding resources. The long-term action items could require future funding sources. These additional funds could become available through the Council’s agreement to return a net income from the leasing of the parking garage (originally the teen center) back to teen programs. The Youth Master Plan documents what we as a City and Community are successfully accomplishing for our teens. This approach will now be evaluated and reviewed on an annual basis by the City’s Youth Council and Teen Advisory Boards and City Council. Our commitment as a City is for the Plan to become a living document that is passed on from year to year with continued support for engaging youth in our community. T -14- ATTACHMENTS 1. Youth Master Plan Database 2. Teen Center Needs Assessment 3. Teen Activity Database 4. Articles Published 5. Positive Alternatives for Youth -15- Recommendation Staff recommends that the Policy and Services Committee recommend to the City Council approval of the expenditure of up to $30,000 from the net revenue collected from 455 Bryant Street rent, of which 75 percent is committed to teen programs, to: 1. Hire an hourly staff person to develop and maintain a calendar of events, programs and services for Palo Alto teens. 2. Develop and implement an evening drop in program for Palo Alto high school students at the new Mitchell Library and Community Center. Background During the 2014 budget process and the Finance Committee’s discussion, Chair Burt requested information on a past plan to split excess revenues from a City property rental stream with 75 percent allocated to Teen Programs and 25 percent to the General Fund (GF). On December 10, 2001 (Attachment A ‐ CMR: 444:01), Council reviewed and approved two of four staff recommendations pertinent to Chair Burt’s questions: 1) Direct staff to issue taxable Certificates of Participation to construct non‐parking space on Lot S/L site of commercial use and utilize net revenues to fund youth and teen programs. 2) Approve subsidizing Barker Hotel assessment by using rental revenues from non‐parking space on Lot S/L site. The current occupant of the non‐parking site (455 Bryant) is Form Fitness. The funding adopted by Council was based on a Youth Master Plan (Attachment B) and teen survey which found that additional revenues to support teen programs is a higher priority than building a new Teen Center on the non‐parking S/L site where the former teen center was located. The December 10, 2001 report substantiates the following formula used to calculate revenue for teen programs (Attachment A). Annual rent less annual debt service less subsidy to Baker Hotel = Net Revenue time 75 percent = Teen Revenue Support. Debt service payments began in FY 2003 with rental revenue streams beginning FY 2005. In FY 2009 a positive net revenue stream was realized to support teen programs. The cumulative net rental revenue from FY 2009 through FY 2013 designated to Teen Programs is $217,334. At its June 13, 2013 meeting, the City Council unanimously approved a motion to refer to the Policy and Services Committee to discuss and provide a recommendation to the full Council on a sustainable expenditure plan for teen program funding based upon anticipated future revenue from the dedicated funding source. In addition, the Council asked the Policy and Services Committee to provide a recommendation on which Boards and Commissions should consider the program. Discussion In September 2013, the Community Services (CSD) and Library departments assembled a team of staff that oversees teen programs to consider how we might best use the new funding stream in preparation for meeting with the Policy and Services Committee. Staff has gathered substantial feedback from the teen community and wants to share some early insights and discuss with the Committee what boards and commissions may need to be involved. For guidance, staff initially reviewed the 2003 Youth Master Plan (Attachment B).The following excerpt, which speaks to the new revenue stream, is from page 4 of the Youth Master Plan: One of the first Youth Master Plan projects was to survey 500 Palo Alto Youth on the need for a teen center versus the need for additional teen programs and services. The results of the survey indicated that the teen population’s desire was to have more teen programs rather than a teen center. A request was made to City Council to lease the proposed teen center space with 75% of the revenue going into the teen program account and new recreational and social programs created by teens for teens. A key message illustrated in the above excerpt is the need to engage Palo Alto teens in developing recommendations for how we might best use these new funds. Staff has completed, or in some cases is in the process of conducting, the following activities in order to develop and recommend a sustainable expenditure plan for Council review:  Teens Survey  Focus Group  Interviews with Youth Serving Agencies  Best Practice Review For the purpose of this report staff focused on feedback from a recent teen survey and teen focus group conducted in fall 2013. CSD, Library staff, and the Palo Alto Youth Council drafted the survey (Attachment C). Teens primarily distributed the survey to other teens. The outreach to encourage survey responses included the following:  Student Facebook pages  Gunn and Paly class pages  Art Center Maker Space participants  Art Center teen volunteers  Teen Arts Council participants  Click PA  Focus on Success students  YCS middle school and high school clubs  Palo Alto Youth Council  Teen Advisory Board  ROCK  PSN student representatives  PAUSD Student Activities Directors To date, the City received 503 survey responses and will continue to gather responses through the month of November. The non‐open ended survey questions that lend themselves to a graph can be viewed on the City of Palo Alto website at: www.CityofPaloAlto/teens. In addition, on October 18, 2013 the City conducted a teen focus group. Teens from a variety of interest groups were invited, including the Children’s Theater Teen Arts Council, Recreations Teen Advisory Board and Palo Alto Youth Council to the Lucie Stern Community Center for frozen yogurt and a fun in‐depth conversation about how the City can best use the new funding for teen activities. Thirty teens attended the focus group. The teens participated in a facilitated exercise to envision a teen friendly Palo Alto community. A large map was taped to the floor allowing teens to walk and crawl over it. The map included some key streets and places of interest for orientation otherwise the map was blank. There were three parts to the exercise: 1) The teens worked in small groups to write and draw on the map those areas where they saw the greatest needs, and those areas with apparent gaps that needed additional or expanded teen programs and services. 2) Each teen was sworn in as Mayor of Palo Alto and given $450 to fund those additional or expanded teen programs and services as illustrated on the map. 3) Each teen was then given three colored dots representing themselves individually and asked to place each dot on the map where they thought they would most likely be. Several themes have emerged from the teen survey, focus group and community outreach thus far that are described below. With respect to the survey, of the 503 respondents most were high schools students and 27% were seniors. There is a good mix of Palo Alto and Gunn High school participation. Approximately 60% of the respondents are female 40% are male. Teens appear to spend most of their free time in their neighborhoods or at school according to the survey. Not surprising, teens typically participate in activities between 3‐6pm during the week and on Saturdays and Sundays. Many teenagers are already participating in a wide variety of programs, clubs and activities. Palo Alto teenagers are engaged in a remarkable diversity of extracurricular activities. When asked what geographic area, teens would like to see more teen programs, Downtown, My Neighborhood and Mid‐Town topped the list. Teens prefer opportunities for unstructured spaces and self‐directed socialization, relaxation, music, arts and fun. Palo Alto teens also have very little free time. Homework is the greatest reason for the lack of free time. In the focus group we also heard that cost of activities is often a barrier. In the focus group, many teens also talked about stress, and the need for more opportunities to relax and de‐stress. Some additional feedback in both the survey and focus group is many Palo Alto teens are unaware of existing programs and services for teens. Transportation challenges are also a factor. Teens indicated that getting to and from places of interest is not easy or convenient. When asked during the focus group how might you spend the money to support Palo Alto teens, work opportunities and internships, low cost or free food, space to “hang out”, music, stress reduction, low pressure unstructured programs and services stand out as core interests. These findings are also consistent with the survey results. Additional feedback from talking to Palo Alto teens is the interest for more to do downtown. Many teens say that downtown is great, easy to get to, has a great “vibe,” but there is not enough to do outside of buying something to eat. They love the idea of a place to go dancing or other sorts of activities, particularly on Friday evenings. There was also strong interest in tutoring opportunities from Children’s Theater Teen Arts Council, Recreations Teen Advisory Board and Palo Alto Youth Council. Many said they would take advantage of such an offering if there were Stanford students helping run the program, rather than peer tutoring that is available to them through school. Although staff are not yet ready to submit a complete expenditure plan recommending how the available funds and future funds may be utilized staff do have two recommendations to use a small portion of the funds this fiscal year. Staff recommends proceeding with the following: 1. It is clear from the survey responses and in talking with Palo Alto teens that there remains a lack of awareness of programs and activities available for teens in Palo Alto. Ironically this was also a finding in the Youth Master Plan Process of 2003. Consequently, staff feels it would be prudent to invest in hiring an hourly staff person to oversee a student intern program to track teen programs and services for Palo Alto teens, and to use social media and other outreach vehicles to maintain a current calendar of events, programs and services that may be of interest to Palo Alto teens. A program called Click PA (www.ClickPA.org) which aims to provide this needed service, exists, but is it unfunded and led by volunteers. Investing in temporary staff to work closely with Palo Alto teens to maintain the Click PA website will be a valuable tool for teens to become more aware of existing opportunities for enriching, social, fun experiences in Palo Alto for teens. 2. It is also very clear that high school age teens are interested in a safe, unstructured space to hang out. Staff recommends we develop and implement an evening drop in program for Palo Alto high school students at Mitchell Library Community Center this fiscal year as soon as possible after opening the new center. The program would be designed to capture the spirit of the feedback we are hearing from teens for a space that includes low cost or free food, social gathering, music, arts and other stress reduction activities in a somewhat unstructured program design. Moreover, staff propose that Palo Alto teens from the Children’s Theater Teen Arts Council, Recreation’s Teen Advisory Board and Library Teen Advisory Board among other teens interested in this program work together with staff to help design and run the new high school evening program at the new Mitchell Library Community Center. Staff will continue to work with the teen community, Palo Alto based youth serving agencies, PAUSD develop additional plans for a sustainable expenditure plan for Council consideration. Council also asked what boards and commissions may need to be involved. Staff recommendation is to ensure youth and teen interests groups and leadership boards are involved in the process, and to return to Policy and Services Committee early 2014 with a more fully developed expenditure plan. After which the expenditure plan can be included in the City’s annual budget process for review and approval. Resource Impact The estimated cost to implement the two staff recommendations is $30,000 or less in total. This is a rough estimate as more work is needed develop the recommendations. The cumulative amount collected from the 455 Bryant Street rental revenue, of which 75 percent is committed to teen programs, from FY 2009 through FY 2013, available for to Teen Programs is $217,334. Click PA Budget Proposal ATTACHMENT D Recruitment Responsibilities Term & Hours Compensation & Budget clickPA supervision & City liaison Click PA Program Manager COPA contract position to support Click PA • Mentors and advises teen interns • Monitors and supports projects, and helps teens meet deadlines • Accompanies and support teens in community outreach • Schedules bi-monthly teen meetings and monthly event blogger meetings; ensures appropriate event set-up • Takes meeting minutes and shares with teens and event bloggers • Responsible for food at all meetings and events • Manages production of all print materials • Manages food and print budget • Signs off on school community service hour logs for teens and event bloggers • Reports outcomes to Community Engagement Committee on click PA's activities • Works with teens to determine bench marks and performance measures; ensures they are met • Leads teen intern meetings and attends event blogger meetings during ramp-up phase, works up to 230h; average of 10 hrs/week after ramp-up phase, works up to 400h/ fiscal year; average of 8 hrs/week $25/hr budget 230 hours $5 , 7 5 0 clickPA core Teen Staff PR and Outreach Manager Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • initiates and secures community outreach, collaboration and support • writes press releases • writes content for all print materials • works with Social Media Manager to draft text for invitations, emails, and web content • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) Editor-in-Chief and Events Manager Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • acts as event blogger liaison • reviews, edits, and censors all event/opportunity/review submissions, both from event bloggers and the public • Supports PR and Outreach Manager and Social Media Manager by proof- reading and editing relevant text and drafts • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) Tech and Media Manager Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • responsible for video and photo content on clickPA.org • trouble-shoots website functionality • updates website side-bar featured events • regularly checks public feedback about website functionality and finds ways to include suggestions into clickPA.org • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) Graphic Designer Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • designs all print material • creates and manages clickPA's visual identity • supports PR and Outreach Manager, Social Media Manager, and Tech and Media Manager by providing formats, logos, and templates • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) Budget for Ramp-up Phase Jan - June 2014 $9,480 cl i c k P A s t a f f a n d v o l u n t e e r s $1 , 2 0 0 Click PA Budget Proposal ATTACHMENT D Journalist Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • goes to key teen events in and around Palo Alto • reviews events and takes photos/video • provides Editor-in-Chied with reviews/summaries to proof-read, and then posts on clickPA • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) Social Media Manager Palo Alto HS student; recruited by existing core staff and program manager; event bloggers considered first for vacant position • responsible for clickPA gmail inbox; responds to all emails and updates core staff about important communication • establishes tone of clickPA facebook page and manages content • initiates outreach to local teens though social media forums (facebook, buzzfeed, twitter, etc.) • attends bi-monthly core staff meetings and monthly event blogger meetings • adds events to clickPA 1 year commitment; can be renewed 3 times; commits to working an average of 3-8 hours/week internship; receives community service for all hours logged; paid $200 stipend per academic quarter, i.e. spring, summer, fall $200 (spring) clickPA Volunteers clickPA Event Bloggers up to 10 HS students from Palo Alto and surrounding communities; recruited by core staff with support from program manager • finds information about fun teen activities in and around Palo Alto • attends and reviews events (optional) • finds opportunities and deals for teens (optional) • adds events, opportunities, and reviews to event blogger google doc • attends monthly event blogger meetings 1 academic semester commitment; can be renewed 7 times; commits to working 2-4 hours/week Volunteer position; may log up to 4 community service hours/week.; first to be considered for vacant core staff positions $0 $0 pay for refreshments for core staff meetings expecting no more than 22 annual core staff meetings budget $20 per core staff meeting $220 pay for food for event blogger meetings expecting no more than 10 annual event blogger meetings budget $60 per event blogger meeting $300 Printing Budget n/a $2,000 Domain Registration n/a $10pay for clickpa.org domain name registration; due in January of each year cl i c k P A b u d g e t s n/a pay for print materials clickPA staff and volunteers Food Budget $1,200 $2 , 5 3 0 High School Teen Drop-In Draft Budget ATTACHMETN E Recruitment Responsibilities Term & Hours Compensation & Budget Drop-In Core City Staff & Supervision Teen Drop In Coordinator Recreation Leader III • Works with teen community to deveop activities, including themes, special events, workshops, and other activities. • Monitors and supports teen staff. • Accompanies and support teens in community outreach and marketing efforts • Schedules bi-monthly teen meeting; ensures appropriate event set-up • Takes meeting minutes and shares with teens and Supervisor • Monitors budget, including tracking expenses and reporting on budget status monthly to Supervisor • Signs off on school community service hour logs for teens • Leads teen meetings and attends all drop-ins and special events 10 hours/week, School Year $19/hr budget $4.700 $4 , 7 0 0 Drop-in Teen Staff Teen Recreation Leader I (4)Current Palo Alto HS student • works with team to develop and implement monthly special events for teen drop-in community. • works with team to develop and launch creative marketing and outreach plan to local teen community, meeting previously set attendance goals. • attend bi-monthly team meetings. • attends and manages special events and all teen drop-ins. 12 hours/month, School Year $9/hr budget $4,560 $4 , 5 6 0 Miscellaneous Expenses Marketing & Outreach n/a $2,000 $2 , 0 0 0 Program Supplies & Materials n/a $8,740 $8 , 7 4 0 TOTAL # $20,000 •Transportation for special event field trips (college tours, community service events, etc.) • Program Supplies & Food •Print - flyers, banners, postcards, promotional items, etc. • Advertising - print ads (student newspaper), social media ads, etc. • Outreach Campaigns - staff time to conduct outreach events on campus and at other offsite locations Total Budget cl i c k P A s t a f f a n d v o l u n t e e r s Mis c e l l a n e o u s Policy and Services Committee EXCERPT Special Meeting November 19, 2013 6:00 PM 2. Recommend to Council the Expenditure of up to $30,000 From the Net Revenue Collected From 455 Bryant Street Rent, of Which 75 Percent is Committed to Teen Programs, to Hire an Hourly Staff Person to Develop and Maintain a Calendar of Events, Programs and Services for Palo Alto Teens; and to Develop and Implement an Evening Drop in Program for Palo Alto High School Students at the New Mitchell Library and Community Center. Chair Kniss presumed students from both Palo Alto High School and Gunn High School could participate in the drop-in program. Rob De Geus, Assistant Director of Community Services, introduced Fabian Garduno, Jessica Feinberg, Max Krawczyk and Riley Burt. In 2003, the City Council and Youth Council agreed to eliminate the Teen Center in Downtown Palo Alto in order to lease the space. Net revenue from the lease was intended to be used for teen programs and services. In 2009, the lease began to generate net revenue. At the current time, the net revenue totaled approximately $217,000. Staff expected the lease to generate approximately $75,000 annually in revenue. In preparation for the meeting, Staff from the Library Department and Community Services Department worked to develop recommendations for funding. The Palo Alto Youth Master Plan indicated funds had to be utilized for programs and services geared to teens. Staff performed a teen survey, held a focus group with teens, interviewed youth-serving agencies and partners, and reviewed best practices across the Peninsula. The teen survey received 531 responses to date; 40 percent of responses were from Gunn High School, 30 percent from Palo Alto High School, and 20 percent from middle schools. The primary question in the survey concerned gaps in services and programs. The survey indicated students, particularly high school students, were not interested in structured, organized programs. Students did not appear to have a low-key, unstructured, stress-free space. Stress was mentioned frequently in the survey. Other important topics were low-cost or no-cost food, music and performing arts, outdoor activities, science and technology, and tutoring. Staff would provide survey information to the Palo Alto Unified School District for their use. Jessica Feinberg from Project Safety Net, reviewed the survey data, categorized responses and shared the information with the Policy & Services Committee (Committee). MINUTES Chair Kniss noted the report would provide teen interests in order for the Committee to make a recommendation to the Council. Ms. Feinberg reported survey respondents were interested in semi- structured activities, activities with low commitment, outdoorsmanship, drama and music, arts, noncompetitive sports, movie nights, a teen support center, a teen job center and indoor areas for gathering. Riley Burt, Teen Arts Council, provided details of the Children's Theatre. The Teen Arts Council produced one show per year. With additional funding, the Teen Arts Council could produce larger or more shows and host other events. A calendar of teen events was important. Max Krawczyk, Youth Council, felt a fundamental problem was teens' lack of awareness of programs. In addition to new programs, the Teen Center should have more connections to high schools. Fabian Garduno, Teen Arts Council, did not believe there were activities and events specifically for high school teens. A teen job center could provide internships for teens. Mr. De Geus reported Staff would continue reviewing survey information and holding focus groups with students. A focus group with 30 students revealed teens clustered activities around Downtown, the Lucie Stern Center and Mitchell Park. Students wanted a bowling alley, inexpensive dining and Wi- Fi. Students indicated transportation and cost were problems for them. Council Member Klein appreciated the information; however, it did not appear to be connected with the Agenda Item. Mr. De Geus viewed the meeting as a check-in regarding funding for teen services and programs. Staff was working through outreach to understand where to invest funds. He provided the information so that a Staff recommendation to the Committee in February 2014 would not surprise the Committee. Chair Kniss noted the Agenda Item was to hire someone to develop and maintain a calendar. Staff was brainstorming about programs and services that could be implemented. Mr. Krawczyk felt a Staff person was needed to prioritize teen activities. Chair Kniss assumed the Staff person would identify teen programs, services and events. Mr. De Geus reported the person would create an online, social media calendar as a central place where Palo Alto teens could find activities. Staff was working to narrow the large number of interests. MINUTES Chair Kniss reiterated that the Committee would discuss and act on Staff's recommendation. There were many needs in the community. Council Member Price referenced the second part of the recommendation regarding a drop-in program and inquired whether Staff was seeking approval of the two concepts. She asked if Staff would return to the Committee with a detailed recommendation for a plan to utilize funds in support of items identified in the survey. Mr. De Geus answered yes. Staff planned to return with an expenditure plan that was broader and more significant than the current Agenda Item. Staff requested approval of an hourly Staff person to support teen interests, to develop and maintain a calendar of events, and an unstructured drop-in program at the new Mitchell Park Center. The drop-in program would address interests identified in the survey. Committee feedback regarding teen interests would be helpful as Staff performed outreach. Council Member Price felt some of the items identified in the survey were already in existence. The Committee could approve and recommend the Staff recommendation to the Council for further deliberation. Mr. De Geus hoped the item would be presented on the Council's Consent Calendar. Chair Kniss believed Council Members would support the item, especially as funding was available. Council Member Holman inquired whether a portion of the $30,000 would fund Click PA; the Twitter service program. Mr. De Geus responded yes. Council Member Holman asked if the Staff person would be a temporary position. Mr. De Geus explained the position was considered temporary because it was not a full-time, benefited position. Council Member Holman asked how much of the $30,000 amount would be paid to a Staff person and how much to programming. Mr. De Geus stated $5,000 would be paid to the Staff person from January to June 2014 and $10,000 for a full year. Some funds would be paid for marketing and promotion to make teens aware of the calendar. Approximately $10,000 would be utilized for the Click PA program and $20,000 would support the drop-in program at Mitchell Park. MINUTES Council Member Holman inquired whether the Staff person would coordinate promotion of new and existing programs. She asked why teens were not aware of existing programs. Mr. De Geus reported the intent of Click PA and the Staff person was to let teens know about existing programs. Teens needed one simple, easy-to- access, social media calendar for all event, volunteer, intern and job information. Mr. Garduno felt a calendar on a website that teens utilized would increase awareness. Mr. Krawczyk suggested schools could advertise teen programs. Someone should work with teens to develop programs and to get teens invested. Council Member Klein recommended Staff provide the Council with a breakdown of how funds would be spent. He asked if private school students were included in the survey. Mr. De Geus indicated some responses were received from private school students. Council Member Klein remarked that teen programs would have two budgets; $217,000 for one-time expenditures and $75,000 annually for ongoing expenses. He asked how use of the two funds would evolve. Mr. De Geus did not have a complete answer for Council Member Klein. Staff was capturing feedback from partners and students and beginning to filter the data to make logical recommendations for use of funds. Council Member Klein suggested Staff first develop a timeline and a process. If the process was not completed by May, Staff would need to recruit new teens to participate. Mr. De Geus indicated that was one of the reasons Staff wanted to implement some programs now so current senior students could participate. Council Member Klein hoped the process would move faster. Chair Kniss believed Staff was providing a checkpoint for the Committee. She asked if Staff had reviewed the Cupertino drop-in center. The center was located in the library and was well used and well known. The new library would provide an opportunity for teen programs. A teen job center did not exist in Palo Alto and development of one would be relatively easy with social media. Council Member Klein expressed concern, from a budgetary standpoint, about the concept of providing low-cost food. He wondered whether Staff MINUTES should separate that idea into another discussion item and provide facts and figures. Mr. De Geus was not sure how to provide low-cost food and did not want to spend a great deal of funds on food. However, affordable food at an event was important to teens. Council Member Price inquired whether Staff would return to the Council or the Committee in early 2014 with a detailed budget for expenditures. Mr. De Geus planned to return to the Committee in February 2014 with a more detailed plan of fund expenditures and provide that to the Council as soon as possible thereafter. Ms. Feinberg indicated teens would be agreeable to paying for food at a drop-in center or gathering spot. Not many low-cost food establishments were open later in the evening. A major factor was the inconvenience of providing their own food at events. Mr. De Geus reported Staff was talking with Ada's Café about providing food at evening events. Chair Kniss suggested Staff consider food trucks. Mr. Garduno felt a small snack bar at the Mitchell Park drop-in program would be appropriate. Chair Kniss looked forward to the next phase. MOTION: Council Member Price moved, seconded by Council Member Klein that the Policy and Services Committee move Staff recommendation to the City Council for approval of the expenditure of up to $30,000 from the net revenue collected from 455 Bryant Street rent, of which 75 percent is committed to teen programs to: 1. Hire an hourly staff person to develop and maintain a calendar of events, programs and services for Palo Alto teens. 2. Develop and implement an evening drop-in program for Palo Alto high school students at the new Mitchell Library and Community Center. MOTION PASSED: 4-0 Council Member Holman suggested Staff provide a breakdown of expenses for Staff and programming and identify other programs under the second part of the recommendation. Chair Kniss felt other locations for a drop-in center were available in the community. City of Palo Alto (ID # 4379) City Council Staff Report Report Type: Action Items Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Weed Abatement Public Hearing Title: Public Hearing: On Objections to Weed Abatement and Adoption of Resolution Ordering Weed Nuisance Abated From: City Manager Lead Department: Fire Recommendation Staff recommends that Council hold a public hearing to hear and consider any objections to the proposed destruction and removal of weeds, and adopt the attached Resolution ordering the abatement of weed nuisances in the City of Palo Alto. Executive Summary The City of Palo Alto contracts with Santa Clara County Agriculture and Resource Management to remove and destroy weeds, as defined in Chapter 8.08 of the Palo Alto Municipal Code. This hearing allows all those affected and listed on the County’s 2014 Weed Abatement Program Commencement Report to be heard and have their objections and comments considered by Council before the Council adopts a resolution ordering the abatement of weed nuisances in the City. Background The Council adopted Resolution 4261 on November 18th, 2013 and declared weeds to be a nuisance and ordered the abatement of that nuisance as called for in Chapter 8.08 of the Palo Alto Municipal Code. The Resolution provided for a public hearing date of January 13, 2014 and required notice to interested property owners and the public. Discussion The Santa Clara County Department of Agriculture and Resource Management administer the contract for abatement of weeds within the City of Palo Alto. Upon notification of the City Council’s November 18th, 2013 action declaring weeds to be a nuisance and ordering City of Palo Alto Page 2 abatement thereof, the Department of Agriculture and Resource Management took proper steps to notify each property owner by mail of the proposed weed abatement action on respective properties and posted, on the public notice bulletin board, a list of the properties affected. The Department of Agriculture and Resource Management has furnished copies of the property listing to the City Clerk and the City Fire Marshal. The City Clerk also posted and published notice of the hearing as required. At this public hearing, property owners may appear and object to the proposed weed destruction or removal. After the hearing and consideration of any objections, the council may allow or overrule any or all objections. If objections are overruled, the Council is deemed to have acquired jurisdiction to proceed with abatement of weed nuisances upon Council Adoption of the attached resolution. The County will be asked to perform the abatement work to destroy and remove any weeds. Resource Impact All Charges for the weed abatement services are included as a special assessment on bills for property taxes levied against the respective lots and parcels of land, which are considered liens on these properties. Policy Implications This procedure is consistent with existing City policies and Chapter 8.08 of the Municipal Code. Environmental Review Santa Clara County has determined the Weed Abatement Program to be Categorically Exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA guidelines Sections 15308. Attachments:  Weed Abatement 2014 pdf (PDF)  0170003 RESO Weed Abatement Declaring Weeds Nuisance Jan 13 2014 (PDF) 140106 sh 0170003 Resolution No. ________ Resolution of the Council of the City of Palo Alto Declaring Weeds to be a Nuisance and Setting January 13, 2014 for a Public Hearing for Objections to Proposed Weed Abatement R E C I T A L S A. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, are anticipated to develop during calendar year 2014 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto sufficient to constitute a public nuisance as a fire menace when dry or are otherwise combustible, or otherwise to constitute a menace to the public health as noxious or dangerous. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, which are anticipated to develop during calendar year 2014 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto, are hereby found and determined to constitute a public nuisance. Such nuisance is anticipated to exist upon some of the streets, alleys, sidewalks, and parcels of private property within the City, which are shown, described, and delineated on the several maps of the properties in said City which are recorded in the Office of the County Recorder of the County of Santa Clara, reference in each instance for the description of any particular street, alley, or parcel of private property being hereby made to the several maps aforesaid, and, in the event of there being several subdivision maps on which the same lots are shown, reference is hereby made to the latest subdivision map. SECTION 2. THEREFORE, IT IS ORDERED that the said public nuisance be abated in the manner provided by Chapter 8.08 of the Palo Alto Municipal Code: IT IS FURTHER ORDERED that a public hearing shall be held on Monday, the 13th day of January, 2014, at the hour of 7:00pm, or as soon thereafter as the matter may be heard, at the Council Chambers of the Civic Center of said City, at which the Council shall hear objections to the proposed weed abatement of such weeds and give any objections due consideration; IT IS FURTHER ORDERED that the Fire Chief of the City of Palo Alto is directed to give notice of the public hearing in the time, manner and form provided in Chapter 8.08 of the Palo Alto Municipal Code. SECTION 3. Unless the nuisance is abated without delay by the destruction and removal of such weeds, the work of abating such nuisance will be done by the County of Santa Clara Department of Agriculture and Resource Management Office on behalf of the City of Palo 140106 sh 0170003 Alto, and the expenses thereof assessed upon the lots and lands from which, and/or in the front and rear of which, such weeds shall have been destroyed and removed. SECTION 4. The Santa Clara County, County Counsel has determined the Weed Abatement Program to be categorically exempt from the provisions of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15308. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Assistant City Attorney City Manager _____________________________ Director of Administrative Services _____________________________ Fire Chief City of Palo Alto (ID # 4120) City Council Staff Report Report Type: Action Items Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Housing Element Zoning Revisions Title: Public Hearing: Ordinance to Amend Sections 18.04.030 (Definitions), 18.16.060 (CN Zone), 18.18.060 (CD Zone), 18.20.030 (ROLM(E) Zone) and Add Section 18.46 (Reasonable Accommodation) of Title 18 (Zoning) of Palo Alto Municipal Code to Implement 2007-2014 Housing Element Programs From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the Council adopt an Ordinance (Attachment A) to implement five programs in the City’s Housing Element by amending Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) to make the following changes: 1. Amend Section 18.04.030 (Definitions) to add definitions for Emergency Shelter, Supportive Housing and Transitional Housing to comply with the definitions found in State law and to conform to the requirements of Government Section Code 65583. 2. Amend Section 18.16.060 (Development Standards for CN, CC, and CS Districts) to increase the density for residential projects in the CN zone district from 15 units per acre to 20 units per acre for CN parcels in Housing Inventory Sites list of the Housing Element. 3. Amend Section 18.20.030 (Land Uses for MOR, ROLM, ROLM(E), RP and GM Districts) to add Emergency Shelters for the Homeless as a permitted use in the portion of the ROLM (E) District located east of Highway 101, and to establish performance and design standards for emergency shelters as outlined in the Palo Alto Quality Assurance Standards for Emergency Shelters (Attachment B). 4. Add Chapter 18.46 (Requests for Reasonable Accommodation for Accessibility) to establish a process for persons with disabilities to seek a modification to the zoning regulations to eliminate regulatory barriers to providing housing for persons with a disability as required by State law. Typical improvements that would be considered for reasonable accommodation provisions include ramps, walls, handrails, elevators or lifts, or similar physical improvements necessary to accommodate a person’s disability. 5. Revise Section 18.16.060(c) (CN zoning) and 18.18.060(c) (CD zoning) to be consistent with the current Housing Element which does not allow exclusive residential uses for City of Palo Alto Page 2 identified parcels in the Housing Element. Executive Summary The proposed changes to the zoning code outlined in the attached Draft Ordinance would implement five programs included in the City’s Housing Element, which was certified by the State Department of Housing and Community Development on August 15, 2013. The changes would (i) modify the Commercial Neighborhood (CN) district to increase densities from 15 to 20 dwelling units per acre on those sites included in the Housing Element, (ii) permit transitional and supportive housing by right where multifamily housing is permitted, as required by State law; (iii) allow emergency shelters as a permitted use in the ROLM (E) district east of Highway 101 pursuant to specific design and management standards; (iv) establish a process for Requests for Reasonable Accommodation pursuant to State Law; and (v) prohibit exclusively residential projects (as opposed to mixed use projects) in certain commercial zones. These zoning amendments, in addition to the adoption of the density bonus ordinance, are significant because they must be adopted in order for the City to be eligible for the State’s streamlined process for the 2015-23 Housing Element Update, which is due January 31, 2015. There are other programs in the 2007-2014 Housing Element requiring zoning amendments, which will be brought to the City Council for consideration later this year. Background The proposed changes to the zoning code are meant to address the following five programs contained in the adopted Housing Element. Program H2.2.5 Revise the Zoning Ordinance to increase the density of up to 20 units per acre on CN-zoned parcels included in the Housing Inventory Sites. As part of the State requirements for Housing Inventory Sites, housing elements must include analysis of identified sites which demonstrate density standards to accommodate a jurisdiction’s regional need for all income levels, including lower-income households. While jurisdictions can theoretically provide an analysis demonstrating how adopted densities accommodate the regional housing need for lower income households, in practice, HCD requires that sites meet default densities established by statute. For Palo Alto, the law includes a default density of 20 units per acre (Government Code Section 65583.2(c)(3)(B)). In addition, the Council provided direction to staff to identify Housing Inventory Sites (HIS) City of Palo Alto Page 3 within the El Camino Real, University Avenue and California Avenue corridors. A total of 32 Neighborhood Commercial (CN) zoned parcels were identified and included in the HIS list. In order to meet the State default density, the Housing Element directs the City to revise the CN zone to provide for densities of 20 dwelling units per acre for sites on the HIS list. Currently, per the City Code, the CN zoning district allows for a maximum density of 15 dwelling units per acre in a mixed use development. This zoning amendment would only apply to CN zoned parcels in the HIS. Please note that while this change assists the City in complying with Housing Element law, at most it is expected to yield an additional 64 units citywide. Program H3.3.8 Amend the Zoning Code to allow transitional and supportive housing by right in all multifamily zone districts which allow residential uses only subject to those restrictions that apply to other residential uses of the same type in the same zone. In 2008, the State legislature passed Senate Bill 2 (SB2). As part of the bill, it provided that transitional and supporting housing be considered a residential use. As a residential use, the proposed transitional and/or supportive housing would subject only to those restrictions that apply to other residential uses of the same type in the same zone. The definitions of transitional housing and supportive housing have been revised within the City Municipal Code to specify that these housing types are considered to be a multi-family residential use. Program H3.5.1 Amend the Zoning Code to allow emergency shelters by right with appropriate performance standards to accommodate the City’s unmet need for unhoused residents within an overlay of the ROLM(E) zone district located east of Highway 101. As part of the same SB2 bill, the State required jurisdictions to identify potential site(s) or a zoning district that emergency shelters can be permitted without discretionary review by the local government. The ROLM(E) zone district has been designated to meet the SB2 requirements. Staff has enlisted Inn Vision’s assistance in developing emergency shelter standards for the ROLM(E) district and will report back to Council on the progress of this effort. If a developer submits plans that meet all the standards, no additional discretionary review can be required. The permit would be considered ministerial and permitted “by right”. Program H4.1.6 Amend the Zoning Code to provide individuals with disabilities reasonable accommodation in rules, policies, practices and procedures that may be necessary to ensure reasonable access to housing. The purpose of this program is to provide a process for individuals with disabilities to make requests for reasonable accommodation in regard to relief from the City of Palo Alto Page 4 various land use, zoning, or building laws, rules, policies, practices and/or procedures of the City. In the HCD review of the City’s draft Housing Element, HCD required that the City have a City- wide Reasonable Accommodation (RA) policy. The federal Fair Housing Act ("FHA") and the California Fair Employment and Housing Act ("FEHA") impose an affirmative duty on local governments to make reasonable accommodations (i.e., modifications or exceptions) in their zoning laws and other land use regulations and practices when such accommodations "may be necessary to afford" disabled persons "an equal opportunity to use and enjoy a dwelling." While the City does have a RA policy for its BMR program, it was inadequate for HCD purposes. The Reasonable Accommodation Policy has been proposed for inclusion as Chapter 18.46 “Requests for Reasonable Accommodation for Accessibility” in the Municipal Code. An example of a reasonable accommodation request could be allowing a wheelchair ramp to encroach within a setback without the requirement of planning review. If there are other discretionary items that require review, the RA request would be part of the discretionary review. But the reviewing body would not have discretionary review over the RA request. Title 18 Housing Element Clean Up Items There are some existing sections of Title 18 that were approved to implement programs from the previous HE programs. These sections need to be revised or removed from the zoning code to be consistent with the current HE. When preparing the current HE, the Council provided direction that no additional non-residentially zoned parcels be converted to exclusively residential uses. The proposed ordinance will revise or remove the following sections from Title 18: 1. 18.16.060(c) Exclusive Residential Uses In CN, CS, CC and CC(2) zone districts This section will be revised to state that exclusive residential use is prohibited in the CN, CS, CC and CC(2) zone districts. 2. 18.18.060(c) Exclusive Residential Uses in CD zone district This section will be revised to state that exclusive residential use is prohibited in the CD zone district. Discussion Because of the number of actions included in the draft ordinance proposed for Council City of Palo Alto Page 5 adoption, the table below has been prepared to provide a brief summary of each action with an explanation of why the action is needed. Code Section Amended Subject Reason for Action 18.04.030 Revise definitions to allow supportive, transitional and Emergency shelter Comply with State law (SB2) 18.16.060 Increase maximum density for CN zoned parcels in the HIS from 15 units per acre up to 20 units per acre (32 parcels. +64 more units max) Meet State default density requirement 18.20.030 Add Emergency Shelter as permitted use in the ROLM(E) zone district with no discretionary review if meet zoning standards Comply with State Law (SB2) 18.46 Create a City wide Reasonable Accommodation policy Compliance with Fair Housing Act and the California Fair Employment and Housing Act 18.16.060(c) and 18.18.060(c) Revised section to prohibit exclusive residential use from the CN and CD zone, respectively. Revised to be consistent with the current Housing Element, which does not allow exclusive residential uses in the CD and CN zones. Eligibility for Housing Element Streamlined Update The 2015-2023 Housing Element update deadline is January 31, 2015, and the City will find it challenging to meet this deadline particularly if it cannot qualify for the Streamlined Update procedure developed by HCD. The Streamlined Update will reduce the time needed for HCD review of a Housing Element. Currently, HCD had 60 days to review the draft Housing Element and then 90 days to review the final approved draft. This does not include time needed for City staff to respond to draft comments prior to submitting the approved draft. The HCD review process for the current HE was over 13 months. The Streamlined Update process reduces the entire review time to 60 days. In the Streamline Review process, jurisdictions will not need to prepare a completely new draft City of Palo Alto Page 6 Housing Element. Only certain sections of the Housing Element would need to be updated. Those sections include: 1. Housing Needs Assessment 2. Person with Special Needs 3. At-Risk Units 4. Potential Governmental and Non-governmental Constraints. 5. Sites Inventory and Analysis 6. Analysis of Internal Consistency of the General Plan Jurisdictions may be eligible for the voluntary streamline review process if the jurisdiction has completed the following items: 1. Rezone of adequate sites has been completed. 2. Approval of zoning to permit emergency shelters without discretionary action. 3. Zoning to permit transitional and supportive housing as a multi-family residential use. 4. Policies, ordinances or procedures established to allow reasonable accommodation for persons with disabilities. 5. Adoption of Density Bonus ordinance consistent with Government Code Section 65915. If these items are not completed, the jurisdiction would need to have its element reviewed using the longer review schedule. Based on the short time frame given to update the Housing Element, having to adhere the longer review schedule would seriously compromise the City’s ability to meet the January 31, 2015 HCD deadline and there are significant risks and penalties associated with not meeting the deadline. Planning and Transportation Commission Review Palo Alto Municipal Code (PAMC) Chapter 18.80 describes the process for amendments to the City’s zoning regulations. Pursuant to Section 18.80.090, the PTC is to set forth the findings and determinations of the PTC with respect to the proposed changes initiated by the Commission in a written recommendation to City Council. Council would consider the PTC recommendations in a public hearing. The PTC’s determination for its recommendation should include why the public interest or general welfare require these amendments. City of Palo Alto Page 7 On December 11, 2013, the Planning and Transportation Commission reviewed the attached ordinances relating to implementation of the Housing Element. The main PTC concern involved the reasonable accommodation policy. While fully supportive of implementing the policy, the PTC directed staff to research if the reasonable accommodations improvements (ramps, walls, handrails, elevators or lifts, or similar physical improvements necessary to accommodate a person’s disability) can be linked to the tenure of the applicant in the residence. The PTC questioned whether or not the reasonable accommodation improvements could be removed once the tenure of the applicant in the residence ceases. It is possible to require these accommodations to be removed after the qualifying resident leaves; however, staff proposes monitoring the types of improvements requested under the ordinance before imposing this requirement. Staff anticipates that some improvements might be beneficial in the long run while imposing nominal neighborhood compatibility or aesthetic concerns. The PTC unanimously recommended that the City Council adopt the Ordinance to implement programs in the City’s Housing Element to amend Title 18 (Zoning). The minutes of the PTC meeting are included as Attachment C. Next Steps As stated, staff anticipates presenting additional Housing Element programs that require zoning ordinance amendments in the future. Some of the other Housing Element programs include lot consolidation programs, creating an incentive program for small lots and considering other possible programs to increase the density yields for projects with affordable housing components. Staff is also initiating work on the 2015-2023 Housing Element Update, which will begin with demographic analysis and public outreach. The Council’s Regional Housing Mandate Committee will be meeting to discuss the update regularly. Policy Implications The proposed changes to the zoning code are consistent with the 2007-2014 Housing Element of the Palo Alto Comprehensive Plan because these changes implement the programs outlined in the Housing Element by allowing for increased density on sites designated as housing inventory sites by the Housing Element within the CN zone district, providing opportunities for emergency shelters for the homeless with appropriate performance standards within the ROLM(E) zone district, allowing for placement of transitional and supportive housing as required by State law, and providing a process for requests for reasonable accommodation for physical improvements to housing for persons with disabilities. City of Palo Alto Page 8 As noted above, approval of the draft ordinance, as well as the proposed density bonus ordinance, would make the City eligible for HCD’s streamlined process for the 2015-2023 Housing Element Update, which is due on January 31, 2015. Timeline If approved by the Council, the ordinance would require a 2nd no less than 10 days after the initial approval. The ordinance would become effective 31 days after the 2nd reading adoption by the City Council. Environmental Review The proposed Ordinance updating the zoning ordinance to implement the 2007-2014 Housing Element were considered as a part of the implementation program contained in the Housing Element. The potential environmental impacts of implementation of the Housing Element were reviewed as a part of the Negative Declaration prepared for the Housing Element. This document determined that no adverse environmental impacts would result from implementation of the policies and programs outlined in the 2007-2014 Housing Element, and the Negative Declaration and Housing Element were approved by the City Council on June 17, 2013 by Resolution No. 9349. The proposed changes to the zoning ordinance would modify existing programs and add procedures which provide suitable sites for emergency shelters to comply with SB2, and establish procedures to make accommodations for persons with disabilities. Further, each individual project will be subject to its own environmental review. Attachments:  Attachment A: Draft Housing Element Program Ordinance Amendments (PDF)  Attachment B: December 11, 2013 Planning and Transportation Commission Draft Excerpt Minutes (DOC)  Attachment C: Correspondence (PDF) Not Yet Approved 1 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 Ordinance No. ______ Ordinance of the Council of the City of Palo Alto Amending Sections 18.04.030 (Definitions), 18.16.060 (Development Standards for CN, CC, and CS Districts), and 18.20.030 (Land Uses for MOR, ROLM, RP and GM Districts) of Title 18 (Zoning), and adding Chapter 18.46 (Requests for Reasonable Accommodation for Accessibility) to Title 18 (Zoning) of the Palo Alto Municipal Code to Implement the adopted 2007-2014 Housing Element The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and declares as follows: A. On June 17, 2013, the City Council adopted the 2007-2014 Housing Element to provide a framework for housing opportunities in the City of Palo Alto. This ordinance implements some of the policies and programs contained in the Housing Element by updating the City’s Below Market Rate Housing Program to apply to projects with three or more units, allow for increased density (from 15 units per acre to 20 units per acre) on sites designated as Housing Inventory Sites (HIS) by the Housing Element within the CN zone district, provide opportunities for emergency shelters for the homeless with appropriate performance standards within the ROLM(E) zone district east of Highway 101, provide opportunities for placement of transitional and supportive housing as required by State law, and to provide a process for requests for reasonable accommodation to remove constraints to the development of housing for individuals with disabilities and provide reasonable access to housing. B. The 2007-2014 Housing Element includes programs (Programs H2.2.5, H3.1.1, H3.5.1 and H4.1.6) which require that these changes to the zoning code be adopted. Staff anticipates that the changes to the density in the CN district and the change in the Below Market Rate Housing Program to include any project with three or more units will be an important tool to help the City accommodate its Regional Housing Needs Allocation (RHNA) numbers. The changes to allow emergency shelters in certain locations subject to performance standards and to allow opportunities for transitional and supportive housing will bring the zoning code into compliance with the provisions of Government Code Section 65583 and 65589.5 . The reasonable accommodations program will remove constraints to providing necessary improvements to housing for persons with disabilities. C. The federal Fair Housing Amendments Act of 1988 and the California Fair Employment Act require local governments to make reasonable accommodation in their land use and zoning regulations and practices when such accommodation may be necessary to provide individuals with disabilities an equal opportunity to housing. The Not Yet Approved 2 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 Attorney General of the State of California has recommended that cities implement fair housing reasonable accommodation procedures for making land use and zoning determinations to further the development of housing for individuals with disabilities. A fair housing reasonable accommodation procedure for individuals with disabilities to seek relief in the application of zoning regulations will further Palo Alto’s compliance with federal and state fair housing laws and provide greater opportunities for the development of critically needed housing for individuals with disabilities. SECTION 2. Section 18.040.030(a)(50) (Definition of Emergency Shelters) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby added to read as follows: (50) "Emergency shelter" means a facility or use, which provides temporary housing (six months or less) for homeless individuals or families and may involve supplemental services. Supplemental services may include, but are not limited to, meal preparation, an activities center, day care for homeless person's children, vocational rehabilitation and other similar activities. SECTION 3. Section 18.040(a)(135.5) (Definition of Supportive Housing) is added to read as follows: (135.5) "Supportive Housing" means housing with no limit on length of stay, that is occupied by target populations, as defined by Section 53260(d) of the California Health and Safety Code, and that is linked to on- or off-site services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community. Supportive housing shall be considered as a multiple-family use and only subject to those restrictions that apply to other multiple-family uses of the same type in the same zone. Supportive housing programs may use residential care homes wholly or as a part of their overall facilities. SECTION 4. Section 18.040(a)(138) (Definition of Transitional Housing) is added to read as follows: (138) "Transitional Housing" means buildings configured as rental housing developments, but operated under program requirements that call for termination of assistance and recirculation of the assisted units to another eligible program recipient at some predetermined future point in time, which shall be no less than six months. Support services may include meals, counseling, and other services, as well as common areas for residents of the facility. Transitional housing shall be considered a multiple-family use and only subject to those restrictions that apply to other multiple-family uses of the same type in the same zone. Transitional housing programs may use residential care homes wholly or as part of their overall facilities. Not Yet Approved 3 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 SECTION 5. Section 18.16.060 (Development Standards for CN, CC, and CS Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to read as follows: 18.16.060 Development Standards (a) Exclusively Non-Residential Uses Table 3 specifies the development standards for exclusively non-residential uses and alterations to non-residential uses or structures in the CN, CC, CC(2) and CS districts. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. TABLE 3 EXCLUSIVELY NON-RESIDENTIAL DEVELOPMENT STANDARDS CN CC CC(2) CS Subject to regulations in Section Minimum Site Specifications Site Area (ft2) Site Width (ft) Site Depth (ft) None Required Minimum Setbacks Front Yard (ft) 0 – 10’ to create an 8’ – 12’ effective sidewalk width (1), (2), (8) None Required (8) 0 – 10’ to create an 8’ – 12’ effective sidewalk width (1), (2), (8) 0 – 10’ to create an 8’ – 12’ effective sidewalk width (1), (2), (8) Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code Rear Yard (ft) None required Interior Side Yard (ft) Street Side Yard (ft) 20’ (2) None required Minimum Yard (ft) for lot lines abutting or opposite residential districts or residential PC districts 10’ (2) 10’ (2) 10’ (2) 10’ (2) Build-To-Lines 50% of frontage built to setback (7) 33% of side street built to setback (7) Minimum setbacks from alleys for structures other than public parking garages (ft) (3) Corner lots, from rear lot line on the alley Not applicable 8’ Not applicable Corner lots, from side lot line on the alley None All lots other than corner lots 20’ Maximum Site 50% None Required Not Yet Approved 4 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 CN CC CC(2) CS Subject to regulations in Section Coverage Maximum Height (ft) Standard 25’ and 2 stories 50’ 37’ (4) 50’ Within 150 ft. of a residential district (other than an RM-40 or PC zone) abutting or located within 50 feet of the site 35’ 35’ 35’ Maximum Floor Area Ratio (FAR) 0.4:1 2.0:1 0.4:1 18.18.060(e) Maximum Floor Area Ratio (FAR) for Hotels N/A - (5) 2.0:1 2.0:1 18.18.060(d) Daylight Plane for lot lines abutting one or more residential zone districts other than an RM-40 or PC zone Initial Height at side or rear lot line (ft) - (6) - (6) - (6) - (6) Slope - (6) - (6) - (6) - (6) (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line. (3) No setback from an alley is required for a public parking garage. (4) As measured to the peak of the roof or the top of a parapet; penthouses and equipment enclosures may exceed this height limit by a maximum of five feet, but shall be limited to an area equal to no more than ten percent of the site area and shall not intrude into the daylight plane. (5) See additional regulations in subsection (e) of this Section 18.16.050. (6) The initial height and slope shall be identical to those of the most restrictive residential zone abutting the site line in question. (7) Twenty-five-foot driveway access permitted regardless of frontage; build-to requirement does not apply to CC district. (8) A 12-foot sidewalk width is required along El Camino Real frontage. (b) Mixed Uses Table 4 specifies the development standards for new residential mixed use developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. TABLE 4 MIXED USE DEVELOPMENT STANDARDS Not Yet Approved 5 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 CN CC C C(2) CS Subject to regulations in: Minimum Site Specifications Site Area (ft2) None required Site Width (ft) Site Depth (ft) Minimum Setbacks Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Front Yard (ft) 0’ – 10’ to create an 8’ – 12’ effective sidewalk width (8) None Required (8) 0’ – 10’ to create an 8’ – 12’ effective sidewalk width (8) 0’ – 10’ to create an 8’ – 12’ effective sidewalk width (8) Rear Yard (ft) 10’ for residential portion; no requirement for commercial portion Rear Yard abutting residential zone district (ft) 10’ Interior Side Yard if abutting residential zone district (ft) 10’ Street Side Yard (ft) 5’ Build-To-Lines 50% of frontage built to setback(1) 33% of side street built to setback(1) Permitted Setback Encroachments Balconies, awnings, porches, stairways, and similar elements may extend up to 6’ into the setback. Cornices, eaves, fireplaces, and similar architectural features (excluding flat or continuous walls or enclosures of interior space) may extend up to 4’ into the front and rear setbacks and up to 3’ into interior side setbacks Maximum Site Coverage 50% 50% 100% 50% Landscape/Open Space Coverage 35% 30% 20% 30% Usable Open Space 200 sq ft per unit for 5 or fewer units (2), 150 sq ft per unit for 6 units or more (2) Maximum Height (ft) Standard 35’ (4) 50’ 37’ 50’ Within 150 ft. of a residential zone district (other than an RM-40 or PC zone) abutting or located within 50 feet of the site 35’ 35’ (5) 35’ (5) 35’ (5) Daylight Plan for lot lines abutting one or more residential zoning districts Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line Residential Density (net)(3) 15 or 20(9) See sub- section (e) below 30 30 Maximum Residential Floor Area Ratio (FAR) 0.5:1 (4) 0.6:1 0.6:1 Not Yet Approved 6 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 CN CC C C(2) CS Subject to regulations in: Maximum Nonresidential Floor Area Ratio (FAR) 0.4:1 2.0:1 0.4:1 Total Mixed Use Floor Area Ratio (FAR) 0.9:1 (4) 2.0:1 1.0:1 Minimum Mixed Use Ground Floor Commercial FAR (6) 0.15:1 0.15:1 0.25:1 (7) 0.15:1 Parking See Chapters 18.52 and 18.54 (Parking) 18.52, 18.54 (1) Twenty-five-foot driveway access permitted regardless of frontage; build-to requirement does not apply to CC district. (2) 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 six feet; and (4) minimum common open space dimension twelve feet. (3) Residential density shall be computed based upon the total site area, irrespective of the percent of the site devoted to commercial use. (4) For CN sites on El Camino Real, height may increase to a maximum of 40 feet and the FAR may increase to a maximum of 1.0:1 (0.5:1 for nonresidential, 0.5:1 for residential). (5) For sites abutting an RM-40 zoned residential district or a residential Planned Community (PC) district, maximum height may be increased to 50 feet. (6) Ground floor commercial uses generally include retail, personal services, hotels and eating and drinking establishments. Office uses may be included only to the extent they are permitted in ground floor regulations. (7) If located in the California Avenue Parking Assessment District. (8) A 12-foot sidewalk width is required along El Camino Real frontage. (9) Residential densities up to 20 units/acre only on Housing Inventory Sites identified in the 2007-2014 Housing Element. (1) Residential and nonresidential mixed use projects shall be subject to site and design review in accord with Chapter 18.30(G), except that mixed use projects with four or fewer residential units shall only require review and approval by the architectural review board. (2) Nonresidential uses that involve the use or storage of hazardous materials in excess of the exempt quantities prescribed in Title 15 of the Municipal Code, including but not limited to dry cleaning plants and auto repair, are prohibited in a mixed use development with residential uses. (3) Residential mixed use development is prohibited on any site designated with an Automobile Dealership (AD) Combining District overlay. (c) Exclusively Residential Uses Exclusively residential uses are generally prohibited in the CN, CS, CC, and CC(2) zone districts. Such uses are allowed, however, where a site is designated as a Housing Opportunity Site in the Housing Element of the Comprehensive Plan. Such sites shall be developed pursuant to the regulations for the multi-family zone designation (RM-15, RM-30, or RM-40) identified for the site in the Housing Element. SECTION 6. Section 18.18.060 (Development Standards for CD District) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to read as follows: 18.18.060 Development Standards Not Yet Approved 7 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 (c) Exclusively Residential Uses Exclusively residential uses are generally prohibited in the CD zone districts. Such uses are allowed, however, where a site is designated as a Housing Opportunity Site in the Housing Element of the Comprehensive Plan. Such sites shall be developed pursuant to the regulations for the multi-family zone designation (RM-15, RM-30, or RM-40) identified for the site in the Housing Element. SECTION 7. Section 18.20.030 (Land Uses for MOR, ROLM, RP and GM Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to read as follows: 18.20.030 Land Uses (a) Permitted and Conditionally Permitted Land Uses Table 1 lists the land uses permitted or conditionally permitted in the industrial and manufacturing districts. TABLE 1 INDUSTRIAL/MANUFACTURING DISTRICT LAND USES [P = Permitted Use ▪ CUP = Conditional Use Permit Required] MOR ROLM ROLM(E) RP RP(5) GM Subject to regulations in Chapter: ACCESSORY AND SUPPORT USES Accessory facilities and activities customarily associated with or essential to permitted uses, and operated incidental to the principal use. P P P P Chs. 1840, 18.42 Automatic Teller Machines P P P P 18.20.030(d) Home Occupations, when accessory to permitted residential uses. P P P P Chs. 18.40, 18.42 EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Business and Trade Schools P Religious Institutions P P P Colleges and Universities P P P Private Clubs, Lodges, or Fraternal Organizations CUP CUP CUP CUP Private Schools (K-12) CUP CUP CUP CUP HEALTH CARE SERVICES Ambulance Services CUP Convalescent Facilities CUP CUP Medical Office P CUP CUP Medical Research P P P 18.20.030(c) Not Yet Approved 8 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 [P = Permitted Use ▪ CUP = Conditional Use Permit Required] MOR ROLM ROLM(E) RP RP(5) GM Subject to regulations in Chapter: Medical Support Retail P 18.20.030(b) Medical Support Services P 18.20.030(b) MANUFACTURING AND PROCESSING USES Manufacturing P P P Recycling Centers CUP CUP CUP Research and Development CUP P P P Warehousing and Distribution P P P OFFICE USES Administrative Office Services P P CUP Financial Services CUP CUP Professional and General Business Office P P PUBLIC/QUASI-PUBLIC USES Service and Equipment Yards P Utility Facilities CUP Utility Facilities essential to provision of utility services but excluding construction/storage yards, maintenance facilities, or corporation yards CUP CUP CUP RECREATION USES Commercial Recreation CUP CUP CUP Neighborhood Recreational Centers CUP RESIDENTIAL USES Single-Family Not permitted 18.20.040(b) Two-Family Not permitted Multiple-Family CUP CUP CUP Residential Care Homes P P P CUP RETAIL USES Eating and Drinking Services, excluding drive-in and take-out services CUP CUP CUP Retail Services CUP CUP CUP SERVICE USES Animal Care, excluding boarding and kennels P Boarding and Kennels CUP Day Care Centers P P P CUP Emergency Shelters for the Homeless P (ROLM(E) 18.20.030(d) Family Day Care Homes Small Family Day Care P P P P Large Family Day Care P P P P General Business Services P Lodging Hotels providing not more than 10% of rooms with kitchens CUP Not Yet Approved 9 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 [P = Permitted Use ▪ CUP = Conditional Use Permit Required] MOR ROLM ROLM(E) RP RP(5) GM Subject to regulations in Chapter: Mortuaries and Funeral Homes P Personal Services CUP CUP CUP Vehicle Services Automobile Service Stations, subject to site and design review in accord with the provisions of Chapter 18.30(G) CUP CUP Automotive Services CUP Off-site new vehicle storage for auto dealerships located in Palo Alto CUP CUP TEMPORARY USES Temporary Parking Facilities, provided that such facilities shall remain no more than five years CUP CUP CUP CUP TRANSPORTATION USES Passenger Transportation Terminals CUP (b) Limitations on Medical Support Service and Medical Support Retail Uses in the Medical Office and Medical Research (MOR) Zone (1) The intent of this limitation is to restrict medical support service and medical support retail uses in the Medical Office and Medical Research (MOR) zone in order to preserve and facilitate space for medical offices and medical research facilities. (2) Floor area devoted to medical support services and medical support retail uses in the Medical Office and Medical Research (MOR) zoning district shall not exceed twenty percent (20%) of the total gross floor area within the district. (3) The director may require a report from the property owner or applicant whenever application is made to the city to develop new space for medical support service or medical support retail uses or to convert existing space to such uses. The report shall identify the gross floor area of buildings on each site within the zoning district and the gross floor area of medical support service and medical support retail uses for each site. The director may, from time to time, establish procedures and standards implementing this Section 18.20.030(b). (c) Automatic Teller Machines (1) Automatic teller machines may be allowed as an accessory use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts when incidental to a primary use on the site and when accessible only from the interior of a building. Not Yet Approved 10 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 (2) Automatic teller machines may be allowed as a permitted use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts when incidental to a primary use on the site and when accessible from the exterior of a building. Staff level Architectural Review is required prior to issuance of a building permit. (d) Emergency Shelters for the Homeless Emergency shelters for the homeless may be allowed as a permitted use in the ROLM(E) district on properties located east of Highway 101, subject to the following performance and design standards. Performance and Design Standards for Emergency Shelters for the Homeless An emergency shelter for the homeless shall conform to all site development standards and performance criteria of the ROLM(E) zone district except as modified by the following performance and design standards: (1) The construction of and/or renovation of a building for use as an emergency shelter shall conform to all applicable building and fire code standards. (2) There shall be provided one parking space for each three (3) beds in the emergency shelter. (3) Shelters shall have designated smoking areas that are not visible from the street and which are in compliance with all other laws and regulations. (4) There shall be no space for outdoor congregating in front of the building adjacent to the street and no outdoor public telephones. (5) There shall be a refuse area screened from view. (6) Maximum Number of Persons/Beds. The emergency shelter for the homeless shall contain no more than 40 beds. (7) Size and location of exterior and interior on-site waiting and client intake areas. Shelters shall provide 10 square feet of interior waiting and client intake space per bed. In addition, there shall be two office areas provided for shelter staff. Waiting and intake areas may be used for other purposes as needed during operations of the shelter. (8) On-site management. On-site management and on-site security shall be provided during hours when the emergency shelter is in operation. Not Yet Approved 11 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 (9) The emergency shelter provider shall submit an operations plan that addresses the standards for operation contained in the Palo Alto Quality Assurance Standards for Emergency Shelters for the Homeless. (10) Distance to other facilities. The shelter must be more than 300 feet from any other shelters for the homeless. (11) Length of stay. Temporary shelter shall be available to residents for no more than 60 days. Extensions up to a total stay of 180 days may be provided if no alternative housing is available. (12) Outdoor lighting shall be sufficient to provide illumination and clear visibility to all outdoor areas, with minimal shadows or light leaving the property. The lighting shall be stationary, and directed away from adjacent properties and public rights-of- way. SECTION 8. Chapter 18.46 (Requests for Reasonable Accommodation for Accessibility) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby added to read as follows: Chapter 18.46 REQUESTS FOR REASONABLE ACCOMMODATION FOR ACCESSIBILITY Sections: 18.46.010 Purpose 18.46.020 Applicability 18.46.030 Application Requirements 18.46.040 Review Procedure 18.46.050 Required Criteria for Reasonable Accommodations 18.46.060 Decisions 18.46.070 Appeal 18.46.080 Effect of Chapter 18.46.010 Purpose The purpose of this chapter is to provide a formal procedure to request reasonable accommodation for persons with disabilities seeking equal access to housing under the Federal Fair Housing Act and the California Fair Employment Act (the Acts) in the application of zoning laws and other land use regulations, policies and procedures, and to establish relevant criteria to be used when considering such requests. 18.46.020 Applicability Not Yet Approved 12 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 In order to make specific housing available to an individual with a disability, any person may request a modification or exception to the rules, standards and practices for the siting, development and use of housing or housing-related facilities that would eliminate regulatory barriers and provide a person with a disability equal opportunity to housing of their choice. Typical improvements which may be considered for reasonable accommodation provisions include ramps, walls, handrails, elevators or lifts, or other similar physical improvements necessary to accommodate a person's disability. The reasonable accommodation would allow exceptions to setback, lot coverage and floor area provisions of the zoning code that are deemed necessary to accommodate these improvements. A person with a disability is a person who has a physical or mental impairment that limits or substantially limits one or more major life activities, anyone who is regarded as having such impairment, or anyone who has a record of such impairment. This Chapter applies only to those persons who are defined as disabled under the Acts. 18.46.030 Application Requirements (a) Requests for reasonable accommodation shall be initiated by submitting a completed application form to the Director of Planning and Community Environment, signed by the property owner, together with the appropriate fee, as established by resolution adopted by the city council, and shall be filed in the office of the planning division of the Department of Planning and Community Environment. The following information shall be included with the application: (1) The applicant's name, address and telephone number; (2) Address of the property for which the request is being made; (3) The current use of the property; (4) The basis for the claim that the individual is considered disabled under the Acts, including supporting medical documentation from a qualified medical expert in support of the request for accommodation; (5) The zoning code provision or other city regulation or policy from which the reasonable accommodation is being requested; and (6) An explanation of why the reasonable accommodation is necessary to make the specific property accessible to the individual. (b) Any information identified by an applicant as confidential shall be retained in a manner so as to respect the privacy rights of the applicant and shall not be made available for public inspection. (c) A request for reasonable accommodation in regulations, policies, practices and procedures may be filed at any time that the accommodation may be necessary to ensure equal access to housing. A reasonable accommodation does not affect an individual’s obligations to comply with other applicable regulations not at issue in the requested accommodation. Not Yet Approved 13 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 (d) If an individual needs assistance in making the request for reasonable accommodation, the Planning and Community Environment Department will provide assistance to ensure that the process is accessible. (e) Review with other planning applications. If the project for which the request for reasonable accommodation is being made also requires some other discretionary approval under this Title (including but not limited to architectural review, conditional use permit, or variance), the application shall be submitted and reviewed at the same time as the related applications. 18.46.040 Review Procedure Notwithstanding any other provisions of this chapter, the Director of Planning and Community Environment shall have the authority to consider and take action on requests for reasonable accommodation. The application shall be reviewed ministerially without discretionary review or public hearing. If the application is granted because the requirements and criteria are met, the applicant may proceed with a building permit. If the application is submitted concurrent with an application requiring discretionary review, the procedures for the discretionary review shall be followed. 18.46.050 Required Criteria for Reasonable Accommodations Any decision on an application under this chapter shall be supported by a written statement addressing the criteria set forth in this section. In making a determination regarding the reasonableness of a requested accommodation, the determination shall be consistent with fair housing laws and based on the following criteria: (a) Whether the housing that is subject to the request for reasonable accommodation will be used for an individual with a disability under the Acts. (b) Whether the request for reasonable accommodation is necessary to make specific housing available to an individual with a disability under the Acts. (c) Whether the requested reasonable accommodation would impose an undue financial or administrative burden on the community. (d) Whether the requested accommodation would require a fundamental alteration to the City's zoning requirements, development standards, policies or procedures. (e) Whether the requested reasonable accommodation would adversely impact surrounding properties or uses. Not Yet Approved 14 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 (e) Whether there are reasonable alternatives that would provide an equivalent level of benefit without requiring a modification or exception to the City's applicable rules, standards and practices. 18.46.060 Decisions The Director of Planning and Community Environment shall issue a written determination of the action and may grant or deny the accommodation request based on the criteria outlined in this chapter. The written decision on the request for reasonable accommodation shall explain in detail the basis of the decision including compliance with the criteria set forth in Section 18.46.050 of this Chapter. The written decision of the Director shall be final unless an applicant submits an appeal following the appeal procedure established in Section 18.46.070. 18.46.070 Appeals (a) The applicant requesting the reasonable accommodation may appeal the Director of Planning and Community Environment adverse decision. The appeal shall be in writing and shall be submitted to the Planning and Community Environment Department within ten (10) calendar days of the Director of Planning and Community Environment’s decision. (b) If an individual needs assistance in filing an appeal on an adverse decision, the Department will provide assistance to ensure that the appeals procedure is accessible. (c) All appeals shall contain a statement of the grounds for the appeal. Any information identified by an applicant as confidential shall be retained in a manner so as to respect the privacy rights of the applicant and shall not be made available for public inspection. (d) The appeal shall be heard by the Planning and Transportation Commission in a public hearing pursuant to the procedures established for discretionary actions in Chapter 18.77. (e) Notice of the hearing shall be given by publication but need not be sent to nearby property owners. 18.46.080 Effect of Chapter This chapter shall be interpreted and applied in accordance with the Acts; nothing in this chapter shall be deemed to create greater rights than exist under the Acts. SECTION 9. CEQA. The proposed Ordinance updating the zoning ordinance to implement the 2007-2014 Housing Element were considered as a part of the Not Yet Approved 15 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 implementation program contained in the Housing Element. The potential environmental impacts of implementation of the Housing Element were reviewed as a part of the Negative Declaration prepared for the Housing Element. This document determined that no adverse environmental impacts would result from implementation of the policies and programs outlined in the 2007-2014 Housing Element, and the Negative Declaration and Housing Element were approved by the City Council on June Resolution by Resolution No. 9349. The proposed changes to the zoning ordinance would modify existing programs and add procedures which provide below market rate housing opportunities, suitable sites for emergency shelters to comply with Government Code Section 65583, and establish procedures to make accommodations for persons with disabilities. Further, each individual project will be subject to its own environmental review. SECTION 10. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. / / / / / / / / / / / / / / / / / / / / / / / / / / Not Yet Approved 16 ORD Amend Title 18 (Zoning) to Implement Housing Element Revised: January 7, 2014 130107 jb 0131163 SECTION 11. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Senior Assistant City Attorney City Manager ____________________________ Director of Planning & Community Environment 1 Planning and Transportation Commission 1 Verbatim Minutes 2 December 11, 2013 3 4 DRAFT EXCERPT 5 6 7 Housing Element Zone Code Changes - Review and recommendation to City Council to Adopt 8 an Ordinance to amend Title 18 (Zoning) of the Palo Alto Municipal Code to Implement 2007-9 2014 Housing Element programs. (Tim Wong – tim.wong@cityofpaloalto.org) 10 11 Chair Michael: He’s gone home and Commissioner Tanaka is rejoining us shortly, but let’s 12 commence as we have a quorum. And the next topic is the Housing Element Zone Code 13 Changes beginning with a staff report. 14 15 Tim Wong, Senior Planner – Housing: Yes, staff has prepared a brief presentation considering, 16 but prior to beginning I would just like to point out a couple quick corrections with staff’s 17 recommendation in the staff report. In Recommendation 2 it is to amend Section 18.16, not 18 .15060 of the zoning code and with Recommendation 5 it is to revise Section 1.1, a 18.18.060 19 not 18.19. So I’d like to just point out those two corrections. 20 21 So good evening, my name is Tim Wong and I’m a Senior Planner and I have a brief, yeah again 22 a brief presentation for you tonight regarding a number of proposed zoning amendments as part 23 of the Housing Element program implementation process and this is for the 2007-2014 Housing 24 Element. Some background, as you know the City has been working on the 2007-2014 Housing 25 Element Update for some time and in August of 2013 the City received a letter from Department 26 of Housing and Community Development (HCD) certifying that the City’s Housing Element was 27 in compliance with Housing Element State Law. And within the Housing Element there were a 28 number of programs proposed to achieve the objectives of the Housing Element including 29 meeting our City’s Regional Housing Needs Allocation (RHNA) requirement and other State 30 requirements. 31 32 This is the first of two rounds of Housing implementation Programs. These zone amendments 33 before you are the less complicated, the low hanging fruit if you will, and also to help meet some 34 State requirements. A second round of program implementation will be before you in I 35 anticipate in about six months. And the second round of the zone amendments will be a little 36 more complicated. It’ll be lot consolidation program and zoning incentives for development of 37 smaller units consistent with what was discussed in the previous item. Also just as a side note 38 the Density Bonus Zone Amendment, which the Planning and Transportation Commission (PTC) 39 reviewed a few months ago is on a separate track and that will be heard by the Council in 40 January. 41 42 And so I would like to start off by explaining some of the State requirements. The first State 43 requirement is SB2. It is a piece of legislation that was passed in actually 2007, implemented in 44 2008 that strengthened Housing Element Law in support of the emergency shelters and 45 transitional and supportive housing. So in SB2 it said that transitional and supportive housing 46 are to be considered as multi-family residential uses and only subject to those jurisdictions 47 requirements for multi-family residential uses. So jurisdiction could not require more than just 48 what is required of multi-family residential uses. Also SB2 required jurisdictions to designate a 49 Attachment B 2 zoning district or potential sites that emergency shelters could be permitted without discretionary 1 review. 2 3 And so in response to the SB2 requirements staff proposes to amend the definitions section of the 4 zoning code to add supportive housing and transitional housing as multi-family residential uses 5 and also to amend the Research Office Light Manufacturing (ROLM) East Embarcadero, excuse 6 me, east of Highway 101 zone district to add emergency shelters as a permitted use and to 7 establish performance and design standards. Therefore if a developer submits an application that 8 meets the emergency shelter standards in the ROLM E zone district it must be approved without 9 discretionary review. So therefore this is a by right use. And this is a map showing the ROLM E 10 zone district. All those parcels in that zone district are with the crosshatched red crisscross. So 11 any parcel in that zone district would be eligible for the emergency shelter use and standards. 12 13 The next state requirement is the RHNA requirement for the 2007-2014 Housing Element the 14 City was assigned 2,860 units and after subtracting out approved and built units there was still 15 1,646 units that needed to be identified in the Housing Inventory Sites (HIS) to accommodate 16 there were enough sites to accommodate 1,680 units including 32 Neighborhood Commercial or 17 (CN) zoned sites, but in order to reach that 1,680 figure staff had proposed that the CN zone sites 18 would be increased to a maximum of 20 units per acre. Currently the zoning standard is 15 units 19 per acre maximum. So the City’s proposal is to amend the CN zone district. That should be 20 18.16060 to increase the density for residential projects of CN zoned parcels in the HIS from 15 21 units to 20 units. And again, just to note that this increase in zoning density are for those CN 22 zoned parcels in the City’s HIS. All other CN zoned parcels outside of the, not identified in the 23 HIS would remain at 15 units per acre. 24 25 And lastly HCD required that the City adopt a citywide Reasonable Accommodation policy. 26 Reasonable Accommodation allows persons with disabilities to seek regulatory relief from 27 zoning requirements to access their homes. So for example, if a person with a disability wished 28 to put a wheelchair ramp within a required setback through the Reasonable Accommodation 29 policy there would be no discretionary action taken to approve the wheelchair ramp in that 30 required setback such as a variance or an Home Improvement Exception (HIE). So staff 31 proposes to add Chapter 18.46 that establishes a process for the Reasonable Accommodation 32 request. 33 34 And lastly there are a couple zoning clean up items. In the previous zoning in the 1999 to 2006 35 Housing Element as a program to that it allowed exclusive residential use for those CN and CD 36 zoned sites in that HIS, but staff received direction from Council that there would be no more 37 loss of non-residential or commercial zoned properties or parcels therefore staff is removing that 38 exception. So therefore, exclusive residential is now prohibited in those two zones. And this is 39 hard to read, but a quick summary or table of your requested actions tonight, the sections and the 40 reason for the action. 41 42 And while it is important to implement some of the proposed programs in the 2007-2014 43 Housing Element there is also significance for the upcoming 2015-2023 Housing Element 44 update. For that HCD has developed what is known as a streamlined review to review housing 45 elements. Previously HCD review could take up to a period of months, up to 13 months, 46 sometimes longer, but they have what is known as a streamlined review, which now takes 60 47 days. And for that is significant because the City in order to meet the January 31, 2015, deadline 48 of the next Housing Element update we will need to use, utilize the 60 day streamlined review. 49 3 So in order for jurisdiction to complete or to be eligible for the streamlined review it must 1 complete these following, the following items: to rezone the adequate sites, which we’re doing 2 through the CN revision; approve zoning to permit emergency shelters, so you’re designating the 3 ROLM E zoning district; zoning to permit transition and supportive housing as a multi-family 4 residential use in updating the definitions, that’s being done; and then policies, ordinances, and 5 procedures established to allow Reasonable Accommodation, that is being done in adding a new 6 chapter for Reasonable Accommodation; and lastly, adoption of a Density Bonus Ordinance, 7 which will be done separately. And therefore in sake of brevity here is a summary of the zoning 8 recommendations that staff is recommending, but for the exact language I suggest you refer back 9 to the staff report. And that concludes my presentation. 10 11 Chair Michael: So thank you for that. We have one public speaker. 12 13 Vice-Chair Keller: The public speaker is Herb Borock. 14 15 Herb Borock: Good evening Chair Michael and Commissioners. I have three comments. The 16 first regarding emergency shelters for the homeless and the ordinance at the top of Page 11 of the 17 draft ordinance it refers to a Palo Alto quality assurance standards for emergency shelters for the 18 homeless, but it doesn’t say what they are. When there is a use permit say for temporary shelter 19 and there’s a process and conditions are placed on it, so I think that there are going to be such 20 quality assurance standards that the Council should adopt them by the effective date of the 21 ordinance. Staff believes that it doesn’t require an ordinance for those and it can be adopted in 22 one vote and takes effect immediately then there’s even enough time for the Commission to 23 review them and make a recommendation although that’s, may not even be necessary, but those 24 should be in place in public and have Council adoption. 25 26 The second topic is the reasonable accommodations for accessibility. Usually when you have 27 entitlements they go with the land, but here you’re providing something that goes with an 28 individual and I don’t think they should stay in place if that individual is no longer in the housing 29 so there should be language in the ordinance that requires removing the modifications or 30 exceptions to the rules, standards, and practices for the siding development in use of housing or 31 housing related facilities when the person who requires those accommodations is no longer in 32 that housing. 33 34 The third comment refers I believe it’s only in one place in the ordinance and that’s in findings 35 and recitals refers to SB2. I know that people who work in the field use the number of the bill 36 from a previous legislature as sort of a shorthand way of referring to something, but I don’t think 37 it’s appropriate in an ordinance. This is a codified bill then the portion, the section and title of 38 the California code is what should be mentioned there or may have a popular title name or either 39 way or at least the if not that then the statute year and chapter. Thank you. 40 41 Chair Michael: Does staff have a response to any of these comments by Mr. Borock? 42 43 Mr. Wong: Well in regards to the quality assurance standards we do have some drafted, we’re 44 still working on them. But those should be prepared shortly and also in regards to SB2, yes. 45 SB2 has, was passed to amend Government Code Section 65583 and the change will be made. 46 And with the Reasonable Accommodation I’m not sure. 47 48 4 Hillary Gitelman, Director: I think we’ll have to look into the Reasonable Accommodation 1 comment. I don’t know, I don’t know that’s State law and whether we’re going to be able to 2 make that change. 3 4 Chair Michael: Ok, well just follow up as appropriate that would be fine. So turning back to the 5 Commission open it up for any questions or comments that the Commissioners may have. 6 Commissioner Martinez. 7 8 Commissioner Martinez: Regarding changing the CN to 20 units per acre as I think you said in 9 our HIS most of them are pretty small. So even if, and there are a few that are 10,000 square feet 10 or larger. They are small sites. So I just following up on the California Avenue Concept Plan 11 most of the sites there are 5,000 square feet, maybe there’s a few 10,000 square feet, and there 12 are some that are on our inventory. That doesn’t provide very many units. It doesn’t see how 13 we’re really achieving either the density that we’re looking for or achieving our RENA goals. 14 Shouldn’t that standard be upped a bit? 15 16 Mr. Wong: Excuse me, could you please repeat that last, should the standard be? 17 18 Commissioner Martinez: The density from 20 units shouldn’t it be 40 units or something like 19 that to achieve our responsibility for the housing needs assessment goals? 20 21 Mr. Wong: Well, my response is every, first to start our surplus was so small that my response 22 would be every little bit helps in regards to meeting our RHNA requirements. Yes with this 23 increase in density we would only get possibly there were 32 parcels on the CN zoned parcels on 24 the HIS. Staff had I think we’d probably get 15 to 20 units more through the up zone, but seeing 25 how our surplus is about 15 units right now that, this does help. And in regards to going up to 40 26 or something higher than that well 20 was chosen because the State assigned the City a default 27 density of 20 units per acre. So this was an increase in zoning that wouldn’t create significant 28 impacts I believe and also help meet our default density requirements. 29 30 Ms. Gitelman: I guess I would add let’s save that idea. I mean we committed to rezone or to 31 increase the density to 20 units to the acre on these sites in this Housing Element, but that next 32 Housing Element is staring us in the face after the first of the year. So we could consider higher 33 densities on some of these sites in the next cycle. 34 35 Commissioner Martinez: Good point. I’ll go with that. And then my second question maybe is 36 more to the Chair as it may be time to reconstitute a new Housing Element subcommittee. I 37 remember the days when I was first asked to serve on that. I think it was 2010 and I think I’ve 38 served long enough so maybe the Chair might be thinking about constituting a new 39 subcommittee to work with staff really right after the first of the year and really being in on some 40 of this conversation so that in our subcommittee reports we can have a report back once a month 41 or something without having to ask Tim to come here for this update. My recommendation is 42 it’s a tradition for the Chair to be part of the subcommittee, but I would since he’s not here 43 recommend Commissioner Panelli to work with you. Now I was joking about that, but I think he 44 would be a really fine, enthusiastic Commissioner to work on that. So just take it under 45 advisement and be aware that we should be actively involved as part of our responsibility very 46 shortly. Thank you. 47 48 Chair Michael: Commissioner King. 49 5 1 Commissioner King: Thank you. So I have a question regarding the Reasonable 2 Accommodation. Could you describe what would either be the most common or atypical use, 3 specific use for that? 4 5 Mr. Wong: Commissioner King we have not had that many requests for Reasonable 6 Accommodation, but I think the example I pointed out would probably be a more common one; a 7 wheelchair ramp maybe in the side yard setback for example, to be able to access a side-yard 8 door or something along those types, along that type. That would be probably the most common 9 example. But I think Reasonable Accommodation requests can have a whole range of potential 10 requests, but that’s the one that comes to mind. Can you think? 11 12 Ms. Gitelman: Yeah, I can’t think of another example off the top of my head, but again it’s, this 13 is a State law. We really we don’t have a lot of discretion. It’s kind of like the Density Bonus 14 law where they, the State says you have to do this and you have to adopt a local ordinance to 15 effectuate the State rules. 16 17 Commissioner King: Got it. I guess I’m just trying to understand based on the public comment 18 is there a potential for some abuse that someone would use that to build some mark, something 19 with a market value that then they would then gain market value when they leave the premises 20 that we would then want to not allow that potential, a potential for abuse is what I’m trying to 21 understand. 22 23 Ms. Gitelman: Well again we’ll research that particular suggestion, but the Reasonable 24 Accommodation requirements have been in State law for a while and as Tim mentioned we 25 rarely if ever, well, maybe once in the last few years have gotten a request for Reasonable 26 Accommodation. So I mean it’s an existing law. It hasn’t been the subject of abuse thus far. 27 28 Commissioner King: Ok. It would seem prudent to include something there’s a take if in fact it 29 is running with the property as the public commenter mentioned it would seem reason, prudent to 30 then include something that even if we don’t actively enforce it that addresses that issue that if 31 the requestor in need of Reasonable Accommodation leaves the premises that it can revert back 32 to zoning (interrupted) 33 34 Ms. Gitelman: We’ll have to go back and review the State Statutes. If we can put something like 35 that in the ordinance we will. 36 37 Commissioner King: Ok, great. 38 39 Mr. Wong: And if I might add? Commissioner King, one of the requirements to get, to be 40 granted a Reasonable Accommodation request is you must have a medical reason therefore I 41 don’t think chances for abuse due to a medical reason are, there would be opportunities for that. 42 43 Commissioner King: Yeah, it would be a, if you believe all people are good it would never 44 happen and most people are good, but there could be somebody who says, “Hey I’m going,” I’m 45 getting to the extremes, somebody says, “I’m going to make every two years I get this like extra 46 bedroom beyond zoning and then I sell the house because I can make”… who knows? I, people 47 are creative on that side too. So I just it seems if it doesn’t, it seems reasonable to address. 48 Thanks. 49 6 1 Chair Michael: Commissioner Tanaka. 2 3 Commissioner Tanaka: So agree with what the public the, my fellow Commissioner and public 4 speaker mentioned about the Reasonable Accommodation. It should ride with the person, not the 5 property. It makes total sense to me. The one thing I wanted to understand is just about so are 6 we currently meeting our RHNA numbers right now? You said we were 15 over so we have a 7 15 unit surplus, correct? 8 9 Mr. Wong: Correct, but that is a very fluid number because we’ve had some parcels on the HIS 10 be proposed for lesser density than estimated, but we’ve also had other properties developed for 11 more. So it’s very fluid, but as we speak right now we have a very small surplus. 12 13 Commissioner Tanaka: Ok. And does the, does Association of Bay Area Governments (ABAG) 14 is it a requirement that you maintain it throughout the life of the Element or at the time the 15 Element is approved? 16 17 Mr. Wong: It’s throughout the life through 2014 and in the Housing Element they required that 18 we add a program that we would actively monitor the development of the HIS sites. So we will 19 be monitoring for the life of this Housing Element, but after January 15th or January 31st of 2015 20 when the new starts it’s unknown whether that program will continue in the new Housing 21 Element update. 22 23 Commissioner Tanaka: Ok. I was just thinking back to what the Planning Director said whether 24 we should save our bullets for later. If we don’t need it now, why use it? Why not up zone it 25 later when you actually need the units, unless we think those 15 are going away between now 26 and the end of January 31st, which is only a month and a half from now. 27 28 Ms. Gitelman: I should clarify that we committed to do this, this adjustment to the CN zone to 29 have that little bit of surplus. It’s something that we’re required to do because of the 30 commitments that we made in the Housing Element. I would say anything over and above that 31 we should hold our fire and maybe address that in the next cycle. 32 33 Commissioner Tanaka: Ok, I misheard. So I thought this was optional. If it was optional then I 34 would say that (interrupted) 35 36 Ms. Gitelman: Unfortunately no. I mean the State wants you to have a surplus. We have a very 37 skinny surplus, but they want you to maintain that. 38 39 Commissioner Tanaka: Ok. My other point was just that if we don’t anticipate the surplus from 40 going under, going under the surplus before a month and a half from now then maybe it’s wise to 41 use this bullet on the next round instead of this round. 42 43 Chair Michael: Vice-Chair Keller. 44 45 Vice-Chair Keller: Thank you. So first I’m going to address what was brought up by 46 Commissioner Tanaka about the increase in density from 15 units to 20 units. And that is it is 47 my understanding and staff please correct me if I’m wrong, that those sites that are on the HIS 48 list that are not developed may be carried forward to the next time. Is that correct? And 49 7 therefore if we have a surplus now we can use it next time. So there’s no harm in adding to the 1 surplus now, it’s not going to change our RHNA number for next time, which are already locked 2 in stone as far as I can tell. So we might as well do it and as the Planning Director indicated 3 we’re committed to doing that. 4 5 So but the second thing is my understanding and correct me if I’m wrong that not only are we 6 required to have a certain number of housing units on the HIS, but we’re also required to have a 7 certain level of affordability for these units and affordability for these units is based on having a 8 minimum density of 20 units per acre and that’s their State definition of what affordable zoning 9 is as opposed to affordable housing. And would these numbers be needed for achieving our 10 affordable zoning threshold? 11 12 Ms. Gitelman: That’s what Tim referred to as the default density. The State statues basically say 13 that if you meet that default density the sites are deemed to accommodate low and very low 14 income housing whether they actually do or not is not addressed in statute, but the default 15 density is designed to insure that jurisdictions achieve densities that the State believes will 16 encourage affordable housing. 17 18 Vice-Chair Keller: And my understanding is that the RHNA numbers not only include overall 19 numbers, but they include a certain amount for very low, low, and moderate and that we might 20 need these numbers to achieve the sum of the low, very low, and moderate and I don’t know if 21 that’s the case, but that might be another threshold that we needed to meet for this and this would 22 help us meet that threshold as well. So I’m not sure where we are in that, but it’s another 23 purpose of increasing the zoning to 20 units per acre. 24 25 Ok, so a few questions. Pardon me, but I don’t know what transitional housing is. Could you 26 enlighten me? Thank you. 27 28 Mr. Wong: Commissioner Keller, we have the transit, the definition of transitional housing per 29 the Health and Safety Code Section means buildings configured as rental housing developments, 30 but operated under program requirements that call for the termination of assistance and 31 recirculation of the assisted unit to another eligible program recipient at some predetermined 32 future time, point in time, which shall be no less than six months. 33 34 Vice-Chair Keller: No, I read it. I don’t know what it means. So perhaps you can convert it 35 from legalize to plain English and explain to me what the transitional housing is used for. 36 37 Mr. Wong: I’m sorry. It’s part of the kind of whole continuum of care if you will that the first 38 order is emergency shelters. If a homeless person needs some shelter then they go to the 39 emergency shelter, but transitional shelter, transitional housing is when maybe that person has 40 gotten a little more on his feet and needs somewhere to stay for a little bit longer so that he can 41 or she can stabilize to go into affordable housing. So it’s a part of that entire continuum of care. 42 43 Vice-Chair Keller: Thank you. So perhaps you could also tell me what supportive housing is 44 because I don’t know what, I didn’t look up Section 53260(d) of the California Health and Safety 45 Code. So perhaps you can enlighten me? 46 47 Mr. Wong: Supportive housing is just housing with supportive services and so that’s 48 (interrupted) 49 8 1 Vice-Chair Keller: Is that like nursing homes or assisted living or things like that? 2 3 Mr. Wong: That I am not sure of, but supportive housing could be housing for those that had 4 previous probably drug issues, those type of that there are things in place to help them 5 (interrupted) 6 7 Vice-Chair Keller: Or developmentally disabled? 8 9 Mr. Wong: That’s another type of supportive housing. 10 11 MOTION 12 13 Vice-Chair Keller: Thank you. And I just leave it up to the Chair to appoint people, but I would 14 be interested in serving on the Housing subcommittee. So if I may can I make a Motion? So I 15 Move that the staff recommendation particularly amending Section 18.04.030, amending Section 16 18.16.060, amending Section 18.20.030, amending, adding Chapter 18.46, revising Section 17 18.18.060(c) as in Charlie. Also change the reference to SB2 in the preamble section to refer to 18 that Section of the California Code. And finally a recommendation that staff explore whether it 19 is reasonable to require some sort of removal of accommodations when the requester no longer 20 occupies the property, perhaps when the property is sold or perhaps when there is a building 21 permit issued for the property then that’s the opportunity to check whether the resident who 22 requested the accommodation is still there. 23 24 SECOND 25 26 Chair Michael: Is there a second? Seconded by Commissioner Tanaka. Vice-Chair Keller do 27 you want to speak any further to your Motion? 28 29 Vice-Chair Keller: Just one comment and response to something that Commissioner Martinez 30 mentioned. And that is I’m wondering just for a thought for the future whether we need to have 31 density limits or whether we should simply have Floor Area Ratio (FAR) and envelope limits. 32 And if people wish to build more density to that, to those FAR and envelope limits feel free 33 because typically most developments will maximize the amount of unit sizes and we seem to 34 want to encourage smaller units. So I don’t, if somebody can figure out a way to fully park and 35 build 30 units within that FAR and height and building envelop limits feel free. So that’s just a, 36 it’s not a thing I want to add to the Motion, it’s just something to think about. Thank you. 37 38 Chair Michael: Commissioner Tanaka did you want to speak to your second? Ok. We’re ready 39 to vote. All in favor of the Motion? It’s unanimous. Good job. With Commissioners King, 40 Tanaka, Martinez, Vice-Chair Keller, and Chair Michael voting in favor and Commissioner 41 Alcheck and Panelli absent. 42 43 MOTION PASSED (4-0-2, Commissioners Alcheck and Panelli absent) 44 Minor, Beth From: Sent: To: Subject: Robert Moss <bmoss33@att.net> Wednesday, January 08, 2014 11:04 AM Council, City Proposed CN Zone Changes Mayor Shepherd and Councilmembers; Subject: Proposed Revisions to CN Zone ClTY f': P'~{'C O/::F"'CE:: I • ...J '"_'--. [\1 \ J I ~ /' J~'.I ~ ""1 3 w. fli" -'"'l f~~." • "I • n; " l ~~~! fl· .j Jan. 8,2014 I urge you not to approve the proposed changes to the CN zone. Either reject the staff report entirely or send the subject back for much more study. The proposals before you would have major negative impacts on the community, EI Camino businesses, and nearby residential neighborhoods. I was one of the three Barron Park residents that created the CN zone more than 35 years ago. The two women moved from Palo Alto years ago so I am the only remaining CN creator. Neither staff nor most councilmenbers are familiar with the reasons for CN zone creation or how it has complied with our intent over the decades. Let me inform you. We wanted to encourage low density retail along EI Camino, and to replace the many auto-related operations and whore houses on the street with locally-serving businesses where residents could walk to shop. We also wanted the buildings to be low in scale so that they would fit with the adjacent residential sites. In many cases there are single family homes right behind the commercial strip separated only by a narrow alley. Therefore we wanted low density, low height buildings in CN, no more than 30 or 35 feet, the height of nearby homes. Since a second floor is allowed within that height we assumed that the uses would be related to retail, or offices, although housing was considered possible. The then Director of Planning said housing on the second floor was very unlikely because that would require underground parking for the site, and that was too expensive. Since then the economics have changed and underground parking is common, encouraging upper floor residential over commercial. Traffic and parking on EI Camino were problems, even 30 years ago. There was (and still is) spill-over parking on residential streets from EI Camino businesses, especially from the auto repair sites. Over time most of those sites were replaced by retail uses, although a few changed to offices. For example, the Happy Donuts site was a muffler repair shop in the 1970s and 1980s. The whore houses were removed during a city-wide enforcement effort in the mid to late 1970s, so we no longer have over 30 whore houses in Palo Alto, most along EI Camino. That plus the CN zone application to most of our section ofEI Camino encouraged the type of locally-serving retail that was our goal. As an aside, once we presented the CN zone staff liked it so much that they applied it elsewhere, such as at Charleston Plaza. Remember the intent of CN zoning was to encourage low density neighborhood-serving retail, allowing people to walk to stores and shop locally. It was not to increase residential uses. Unfortunately that is exactly what the staff proposal does. Originally the lowest density residential zone was RM-lO, ten units/acre. That was replaced by RM-15 years ago, so by default housing density in CN increased from 10 to 15 units/acre. There was no rational reason to increase the housing density in CN then and certainly no reason to increase density to 20 units/acre now. Our Housing Element has been accepted. We do not have a firm new housing potential requirement yet from ABAG. Accepting the requirement that lowest housing density must be 20 units/acre would impact adversely the CN zone, without any environmental impact studies, no traffic studies, no consideration of the impact of higher density on schools, neighborhood compatibility, and city finances. 1 City Manager Keene noted each housing unit costs the city budget about $2S00/year more for city services than it returns in taxes. Adding housing along El Camino will only increase those costs, plus worsen traffic congestion on our busiest street. CN sites along El Camino aren't very desirable locations for housing. The existing housing projects on El Camino are on large sites with the buildings set well back from the sidewalk. The proposal for housing development at the old Compadres site locates the housing at the rear of the site, mainly away from El Camino. That is impossible on most CN sites since the lots are shallow, typically 100 feet deep. The combination of underground parking needed for CN sites developed with higher density housing, and the greater potential for developer profits from more housing will encourage demolition of existing affordable retail buildings, replacing them with more intense uses, increasing rental costs and driving out smaller, local retailers. CN sites are supposed to be limited to ground floor retail, a concept that was adapted and copied later for much of downtown. Office uses are allowed with staff rev~ew and approval, for example the former Manpower occupant at El Camino and Curtner. If sites are encouraged to redevelop to add that higher density housing, over time retail will be replaced by offices, defeating the intent of the CN zone and the goal of making El Camino a street serving local residents with needed stores. Another potential negative impact is concessions required when BMR housing is included on a site. A developer could offer a few BMR units on a small CN site and then insist on concessions increasing height, FAR, reducing setbacks, or daylight planes. The result would be a project totally defeating the intent of CN to encourage buildings for ground floor retail that fit with nearby homes. Another very undesirable part of the staff report is limiting review of smaller housing developments to the ARB. On some of the smaller CN sites even four housing units can have a noticeable negative impact. There is no reason to eliminate Planning Commission review of any and all mixed-use developments in the CN zone. The ARB looks only at design, ignoring traffic impacts, cumulative impacts of city-wide and area-wide developments, traffic and parking congestion, or other· land use issues. Those factors must have full review, and the Planning Commission is the first place that must begin. Neither the increase in housing density nor limiting review to the ARB for smaller housing projects takes into account potential cumulative impacts. Last year staff agreed that developments should consider cumulative impacts from current and proposed projects in Palo Alto but also in nearby cities including Mountain View, Los Altos and Menlo Park. The proposal to increase CN housing density and limit review of projects with fewer housing units to the ARB assures that those cumulative impacts will be ignored. This is the wrong time to be increasing density in any of our commercial zones, especially CN. It is bad policy to limit reviews of new projects to the ARB when those projects may contribute to cumulative negative impacts on traffic, parking, retail viability, neighborhood character and compatibility. It is the wrong time to search for more potential housing sites. This proposal is all harm and no benefits. It should not be approved or adopted. Yours truly, Bob Moss 2 City of Palo Alto (ID # 4329) City Council Staff Report Report Type: Action Items Meeting Date: 1/13/2014 City of Palo Alto Page 1 Summary Title: Density Bonus Ordinance Title: Public Hearing: Council Review and Adoption of an Ordinance for a New Chapter 18.15 (Residential Density Bonus) to include in Title 18 of the Palo Alto Municipal Code to Implement Government Code Section 65915 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council adoption of an Ordinance (Attachment A) for a New Chapter 18.15 (Residential Density Bonus) to include in Title 18 of the Palo Alto Municipal Code, implementing Government Code Section 65915 in accordance with State law. Executive Summary The State’s Density Bonus law gives a developer additional density over the maximum allowable density and provides regulatory relief to local zoning requirements if the developer provides a certain percentage of affordable housing in the development. The State law also requires that local jurisdictions adopt density bonus and concession requirements as part of their local municipal code, and the City committed to do so in Program 3.1.10 of its adopted Housing Element. The proposed ordinance would comply with State law and implement Program 3.1.10 of the Housing Element; it would also clarify sections of the government code and include local preferences intended to steer applicants towards some specific concessions rather than others. Background The State Density Bonus Law (Section 65915 of the Government Code) was first adopted in 1979. The law allows developers who offer affordable units in their developments a density bonus above what the zoning ordinance would typically allow. City of Palo Alto Page 2 In 2004, the State Legislature passed SB 1818, which significantly amended Section 65915 of the Government Code. The changes to the law, effective on January 1, 2005, required local jurisdictions to adopt a density bonus ordinance in their local codes, and required:  A sliding scale of density bonuses from 20%-35% depending on the number of affordable units provided;  Provision for up to three (3) development concessions or incentives, depending on the number of affordable units provided;  A density bonus if land is donated for very low income housing. In accordance with the State statute, the 2007-2014 Housing Element Update includes a program (Program 3.1.10) requiring the City to adopt a local density bonus ordinance. Adoption of a local ordinance will make the State requirements more clear and accessible for local builders and concerned citizens, and also provides an opportunity for the City to define “concessions” the City would like to offer and under which circumstances. Without a local ordinance, builders and developers have broad flexibility to request concessions and the City has limited flexibility to deny them. Handled correctly, density bonuses can be an important tool in the production of affordable units thereby reducing the City’s need to identify more parcels for its Housing Inventory Sites to meet its unmet RHNA requirements. The draft ordinance provides a menu of zoning concessions, which have been vetted by the Planning and Transportation Commission (PTC) and Regional Housing Mandate Committee (RHMC) as serving two goals: (1) promoting the production of affordable housing and (2) minimizing impacts to neighboring properties. If the developer chooses from the menu of concessions, the concession would be granted automatically. These “menu” concessions are generally considered to have minimal adverse impacts when compared to other possible concessions. If a developer requests a concession that is not on the menu, the requested concession is reviewed as part of the underlying land use application review with the appropriate Approval Authority (the City Council or the Director of Planning and Community Environment) granting or denying the concession request. While the law gives local agencies very little discretion to deny concession requests, the draft ordinance requires developers who are requesting concessions that are not on the menu to provide financial information demonstrating that the requested concession is necessary for the provision of the affordable housing. This process has the benefit of steering the developer towards the menu of pre-vetted concessions. City of Palo Alto Page 3 The City Council’s Regional Housing Mandate Committee (RHMC) considered the proposed ordinance and recommended its adoption on November 14, 2013. The Planning and Transportation Commission (PTC) also considered and recommended the ordinance for adoption. A brief summary of each meeting has been provided below. October 19, 2011 The PTC directed staff to develop an ordinance that contained the menu of concessions. As part of the Study Session, three main issues were raised:  A concern was raised that a developer, with the use of the concession(s), could circumvent height limits and/or other zoning requirements without the City’s ability to review the impacts;  Eligibility for a concession by simply meeting City’s minimum BMR requirements.  The City’s ability to request for financial documentation in support of the requested concession(s). The last of these items is discussed further below. Regarding the first item, multi-unit residential and mixed-use projects are generally subject to CEQA and impacts can be considered in that context, although the State law limits local agencies’ discretion to require reductions in the unit count or to deny concessions. Regarding the second item, the California Appeals Court has recently ruled that even when affordable housing is provided because of a local zoning requirement, that housing makes the project eligible for a density bonus. The ordinance has been updated to reflect this ruling. January 9, 2013 The PTC considered the formal draft ordinance including the menu of concessions. There was continued discussion about the following items:  Developer’s ability to supersede the City height limits.  The City’s BMR requirements triggering density bonus.  Requirement to submit a project pro-forma in support of a requested concession not on the menu.  Quantified concessions instead of more general, open ended concessions. Again, the third and fourth of these items are discussed further below. The first and second items are addressed as part of the October 19, 2011 summary above. City of Palo Alto Page 4 March 5, 2013 Staff returned with a revised ordinance that:  Quantified the concessions on the menu, and  Reduced the pro forma requirement from mandatory submittal of the project pro forma to requesting financial information when necessary. With these revisions, the PTC recommended approval of the draft ordinance by a vote of 7-0. The verbatim minutes from the January 9 and March 5, 2013 PTC meetings have been included as Attachment B and C, respectively, for reference. September 12, 2013 The RHMC reviewed the PTC recommended draft ordinance. During the discussion, the RHMC provided staff with a number of comments and requests. Some of these included:  A suggestion that project pro formas be required of all concession requests;  A request to clarify the effects of the concession including a visual depiction of the concessions on the menu;  If a setback concession is requested in a mixed use development, the setback should only apply to the residential portion of the development, and  All concessions on the menu should be quantified. The RHMC directed staff to revise the ordinance based on the requests. The meeting was continued to give time for staff to analyze the committee’s requests and prepare revisions. November 13, 2013 Staff returned to the RHMC with a revised ordinance that reflected the RHMC input with staff responses to each of the RHMC comments. Staff’s analysis is presented in the discussion section below, along with the resulting revisions and recommendations of the RHMC. The resulting recommendations included:  Eliminate the front yard setback concession, reduction of private and public open space concessions from the menu of concessions.  All menu concessions must meet applicable design standards and guidelines and cannot be adjacent to low density residential zones. If adjacent to low density residential zones, additional review is required. City of Palo Alto Page 5  Reducing the allowable intrusion into the daylight plane from 50% of the length of the adjacent lot line to 25%.  In a mixed used development, a requested setback concession would only apply to the residential portion of the project.  The density bonus and/or concessions only apply to the life of the structure and do not “run” with the property.  Density bonus and concessions do not apply to Planned Community (PC) zoning districts. The RHMC did receive electronic written correspondence from the public with a number of questions and comments. Staff has responded to each of the questions and comments. Some of the public’s comments have been incorporated into the ordinance. The submitted correspondence (with staff response in red) has been included as Attachment B. With the requested revisions, including the elimination and modification of some of the proposed concessions, the RHMC recommended approval of the draft ordinance by a vote of 4-0. Discussion The draft density bonus ordinance incorporates the mandatory elements of State law, including: statutory definitions of qualifying projects, required density levels, reduced parking standards for qualifying projects and required statutory findings for denial. The draft ordinance differs from the State law in two key respects: (1) it establishes a local application process for applying for density bonuses and concessions that allows the City to ensure qualifying projects and (2) establishes a tiered system for claiming concessions thereby providing an incentive for developers to choose zoning concessions from a pre-vetted menu of concessions. Without a local ordinance it is more difficult for the City to verify the developer/applicant’s entitlement to concessions and bonuses. A developer would have unconstrained ability to select which concessions to use. Pro Forma Requirement The pro forma requirement was thoroughly discussed by the PTC and the RHMC. In an initial draft of the ordinance, if a developer requested a non-menu concession, the submittal of the project pro forma was required. The Commissioners were divided on this issue. Some Commissioners supported the requirement in that the pro forma was necessary since it was the only way to verify if the concession was actually needed. Other Commissioners felt the submittal requirement for a pro forma would discourage developers from requesting density bonus or concessions, and therefore it would discourage the production of affordable housing. The PTC compromise gave the PCE Director the ability to request financial information and not necessarily a pro forma if the developer chose a “non-menu” concession. City of Palo Alto Page 6 The RHMC also discussed the requirement at length and initially recommended that a pro forma be required for all concessions. However after discussion, the Committee recommended that the draft ordinance retain its current requirement for a pro forma for concessions not on the menu. This essentially provides an incentive for developers to choose from the menu of concessions in the ordinance rather than proposing concessions that are not on the list. Again, concessions on the menu are considered less complex and less impactful than other potential concessions not on the menu. Mixed Use Development Setback Concession The RHMC also discussed concessions related to setback reductions. The RHMC directed staff to revise the ordinance to clarify that if a setback reduction was requested for a mixed use project, the setback concession could only apply to the residential portion of the development where it is feasible to do so. Based on the RHMC’s concerns, staff has revised the ordinance. In all instances, the setback concession would also need to be consistent with design guidelines. Protection of low density residential neighborhoods Language has been added to each “menu” concessions to protect low-density residential neighborhoods. In addition to meeting the applicable design guidelines, if the project is adjacent to low-density residential zones such as R-1 or RM, the requested concessions would not automatically be granted and would be reviewed as part of the Architectural Review process with a decision by the Director of Planning to the City Council. This is in contrast to a project not adjacent to a low-density district which would automatically be granted the requested concessions from the menu. Daylight Plane Concession The proposed daylight plane concession reads “Reduction in daylight plane requirements not to exceed 25% of the length of the adjacent lot line.” Staff’s intent in drafting this concession was to allow architectural features to protrude into the daylight plane by a limited amount. For example, in the case of a developer who wants to build on a lot that is 50-feet by 100-feet and subject to daylight plane requirements, the developer could request to protrude into the daylight plane for a total of 25-linear feet adjacent the 100 foot lot line. Please note that the “amount of massing’ of the protrusion is not limited in the concession language, only the amount of linear feet allowed to protrude into the daylight plane. City of Palo Alto Page 7 Timeline If approved, a second reading of the ordinance is required not less than ten (10) days from the approval date. The ordinance would become effective thirty one (31) days from the second reading of the ordinance. Policy Implications The proposed density bonus ordinance is consistent with the policies and programs in the recently certified Housing Element. In the Housing Element, Program 3.1.10 of the current 2007-2014 Housing Element calls for the adoption of a revised density bonus program ordinance. The draft ordinance meets the requirements of the program, and allows the City to exercise more control over the concessions that are available under State law for affordable housing development. Approval of a density bonus ordinance is a requirement to be eligible for the State’s Streamlined Update review process for the 2015-2023 Housing Element update. Environmental Review The proposed Ordinance revises the requirements for granting a residential density bonus to comply with revisions to State law enacted by the Legislature through the adoption of Senate Bill 1818. Adoption of the draft density bonus ordinance will only codify allowances that developers have been able to use in housing developments since 2005. The revisions modify the criteria and incentives offered to qualifying developments but do not authorize construction not already permitted under the City’s existing codes. It is uncertain how many project applicants will seek to utilize the provisions of State law and this Ordinance and where such projects might be located in the City. Further, each individual project will be subject to its own environmental review. Consequently, the attached proposed ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this Ordinance may have a significant effect on the environment. Attachments:  Attachment A: Draft Density Bonus Ordinance (with redline) (PDF)  Attachment B: Public Comment dated November 14, 2013 with staff response (in red) (PDF) Not Yet Approved 1 130102 jb 0131158 Rev. January 7, 2014 Ordinance No. ______ Ordinance of the Council of the City of Palo Alto Adopting New Chapter 18.15 (Residential Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Government Code Section 65915 The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and declares as follows: A. The State Density Bonus Law (Section 65915 of the Government Code) was first adopted in 1979. The law allows developers who offer affordable units in their developments a density bonus above what the zoning ordinance would typically allow. Originally, developers received a density bonus of 25% if they met the density bonus requirements. B. In 2004, the State Legislature passed SB 1818, which significantly amended Section 65915 of the Government Code. The significant changes to the law, effective on January 1, 2005, included:  A higher maximum market-rate unit density bonus of 35% for a lower percentage of affordable units provided;  A sliding scale of market-rate density bonus percentages from 20%-35% depending on the percentage of affordable units provided;  Provision for up to three (3) development concessions or incentives, depending on the percentage of affordable units provided;  Granting the developer a density bonus if they donate land for very low income housing; and  Required jurisdictions to implement Density Bonus law through local codes. C. In the past, the City has applied the Density Bonus law on an ad hoc basis to both market rate and affordable developments. Palo Alto Family Apartments, located at 801 Alma Street and developed by Eden Housing, is a 50 unit affordable rental development. Eden requested concessions to encroach into the required setbacks, exceed the maximum floor area ratio (FAR) and to not provide private useable open space. The development at 195 Page Mill Road also requested concessions to allow residential uses in the General Manufacturing (GM) zoning district and to exceed the maximum FAR in return for providing 17 affordable housing units (20% of the total units). D. The 2007-2014 Housing Element Update includes a program (Program 3.1.10) requiring that a density bonus ordinance be adopted that is consistent with Not Yet Approved 2 130102 jb 0131158 Rev. January 7, 2014 Government Code 65915. Staff anticipates that density bonus will be an important tool to help the City accommodate its Regional Housing Needs Allocation (RHNA) numbers. SECTION 2. Chapter 18.15 (Residential Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby added to read as follows: Chapter 18.15 Residential Density Bonus Sections: 18.15.010 Purpose 18.15.020 Definitions 18.15.030 Density Bonuses 18.15.040 Development Standards for Affordable Units 18.15.050 Development Concessions and Incentives 18.15.060 Waiver/Modification of Development Standards 18.15.070 Child Care Facilities 18.15.080 Application Requirements 18.15.090 Review Procedures 18.15.100 Regulatory Agreement 18.15.010 Purpose The purpose of this chapter is to: (a) Comply with the state density bonus law under California Government Code section 65915. (b) Establish procedures for implementing state density bonus requirements as set forth in California Government Code Section 65915, as amended. (c) Facilitate the development of affordable housing consistent with the goals, objectives, and policies of the City’s Comprehensive Plan Housing Element. 18.15.020 Definitions Whenever the following terms are used in this Chapter, they shall have the meaning established by this section: (a) "Affordable Rent" means monthly rent, including a reasonable allowance for utilities and all fees for housing services, for rental Restricted Affordable Units reserved for Very Low or Lower Income Households, that does not exceed the following: Not Yet Approved 3 130102 jb 0131158 Rev. January 7, 2014 (i) Very Low Income: 50 percent of the area median income for Santa Clara County, adjusted for presumed household size, multiplied by 30 percent and divided by 12. (ii) Lower Income: 60 percent of the area median income for Santa Clara County, adjusted for presumed household size, multiplied by 30 percent and divided by 12. (b) "Affordable Sales Price" means the maximum sales price at which Very Low, Lower and Moderate Income Households can qualify for the purchase of Restricted Affordable Units as set forth in the City of Palo Alto’s Below Market Rate Housing Program. The sales price shall be considered affordable only if it is based on a reasonable down payment, and monthly housing payments (including interest, principal, mortgage insurance, property taxes and assessments, fire and casualty insurance, homeowners association fees, property maintenance and repairs, and a reasonable allowance for utilities), all as determined by the City, that are equal to or less than: (i) Very Low Income: 50 percent of the area median income for Santa Clara County, adjusted for presumed household size, multiplied by 30 percent and divided by 12. (ii) Lower Income: 80 percent of the area median income for Santa Clara County, adjusted for presumed household size, multiplied by 30 percent and divided by 12. (iii) Moderate Income: 120 percent of the area median income for Santa Clara County, adjusted for presumed household size, multiplied by 30 percent and divided by 12. (c) "Applicant" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities who seeks Development permits or approvals from the City of Palo Alto. (d) "Approval Authority" means the person or body that is authorized to approve a Development as specified in the City of Palo Alto Municipal Code. Approval Authority shall also include recommending bodies such as the Architectural Review Board and the Planning and Transportation Commission. (e) "Below Market Rate Housing Program" means Chapter 18.14 of the Palo Alto Municipal Code and the Administrative Guidelines for the Below Market Rate Program. Not Yet Approved 4 130102 jb 0131158 Rev. January 7, 2014 (f) "Child Care Facility" means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers. (g) "Concession or Incentive" as used interchangeably means such regulatory concessions as specified in Government Code Section 65915(k) to include: (i) A reduction of site Development Standards or architectural design requirements which exceed the minimum applicable building standards approved by the State Building Standards Commission pursuant to Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback, coverage, and/or parking requirements which result in identifiable, financially sufficient and actual cost reductions; (ii) Allowing mixed use development in conjunction with the proposed residential development, if nonresidential land uses will reduce the cost of the residential project and the nonresidential land uses are compatible with the residential project and existing or planned development in the area where the Development will be located; and (iii) Other regulatory Concessions proposed by the applicant or the City which result in identifiable financially sufficient, and actual cost reductions. (h) "Density Bonus" means a density increase over the Maximum Residential Density granted pursuant to Government Code Section 65915 and this Ordinance. (i) "Density Bonus Units" means those dwelling units granted pursuant to the provisions of this Chapter which exceed the otherwise Maximum Residential Density for the development site. (j) "Development" means all developments pursuant to a proposal to construct or place five (5) or more additional dwelling units on a lot or contiguous lots including, without limitation, a planned unit development, site plan, subdivision, or conversion of a non- residential building to dwelling units. (k) "Development Standard" means a site or construction condition such as a height limitation, a setback, or a floor-area ratio, that applies to a Development pursuant to any ordinance, general plan element, specific plan, charter, or other City condition, law, policy, resolution, or regulation. A “site and construction condition” is a development regulation or law that specifies the physical development of a site and buildings on the site in a Development. Not Yet Approved 5 130102 jb 0131158 Rev. January 7, 2014 (l) "Discretionary Permit" means any permit issued for the Development which requires the exercise of judgment or deliberation from the Approval Authority, including but not limited to conditional use permits, variances, site plans, design review, planned development permits, general and specific plan approvals and amendments, zoning amendments, and tentative and parcel maps. (m) "Lower, Very Low, or Moderate Income” means annual income of a household that does not exceed the maximum income limits for the income category, as adjusted for household size, applicable to Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Sections 50079.5, 50105, or 50093 of the California Health and Safety Code. (n) "Maximum Residential Density" means the maximum number of dwelling units permitted in the Development by the City’s Comprehensive Plan Land Use Element and Zoning Ordinance at the time of application, excluding the provisions of this Chapter. If the maximum density allowed by the Zoning Ordinance is inconsistent with the density allowed by the Land Use Element of the City’s Comprehensive Plan, the Land Use Element density shall prevail. (o) "Non-Restricted Unit" means all dwelling units within a Development excluding the Restricted Affordable Units. (p) “Qualifying Mobilehome Park” means a mobilehome park that limits residency based on age requirements for housing older persons pursuant to Section 798.76 and 799.5 of the Civil Code. (q) "Qualifying Resident" means senior citizens or other persons eligible to reside in a Senior Citizen Housing Development or Qualifying Mobilehome Park. (r) "Regulatory Agreement" means a recorded and legally binding agreement between an applicant and the City to ensure that the requirements of this Chapter are satisfied. The Regulatory Agreement, among other things, shall establish: the number of Restricted Affordable Units, their size, location, terms and conditions of affordability, and production schedule. (s) "Restricted Affordable Unit" means a dwelling unit within a Development which will be available at an Affordable Rent or Affordable Sales Price for sale or rent to Very Low, Lower or Moderate Income households. (t) "Senior Citizen Housing Development" means a Development consistent with the California Fair Employment and Housing Act (Government Code Section 12900 et. seq., including 12955.9 in particular), which has been "designed to meet the physical and social needs of senior citizens," and which otherwise qualifies as "housing for older persons" as that phrase is used in the federal Fair Housing Amendments Act of 1988 (P.L. 100-430) and Not Yet Approved 6 130102 jb 0131158 Rev. January 7, 2014 implementing regulations (24 CFR, part 100, subpart E), and as that phrase is used in California Civil Code Section 51.2 and 51.3. 18.15.030 Density Bonuses This Section describes the Density Bonuses that will be provided, at the request of an applicant, when that applicant provides Restricted Affordable Units as described below. (a) The City shall grant a 20 percent (20%) Density Bonus when an applicant for a Development of five (5) or more dwelling units seeks and agrees to construct at least any one of the following in accordance with the requirements of this Section and Government Code Section 65915: (i) At least 10 percent (10%) of the total dwelling units of the Development as Restricted Affordable Units affordable to Lower Income Households. For each one percent (1%) increase in the percentage of restricted Lower Income units, a Development will receive an additional one and one-half percent (1.5%) density bonus up to thirty-five percent (35%) of the Maximum Residential Density; or (ii) At least five percent (5%) of the total dwelling units of the Development as Restricted Affordable Units affordable to Very Low Income Households. For each one percent (1%) increase in the percentage of restricted Very Low Income units, a Development will receive an additional two and one- half percent (2.5%) density bonus up to thirty-five percent (35%) of the Maximum Residential Density; or (iii) A Senior Citizen Housing Development; or (iv) A Qualifying Mobilehome Park. (b) The City shall grant a five percent (5%) Density Bonus when an applicant for a Development of five (5) or more additional dwelling units seeks and agrees to construct, in accordance with the requirements of this Section and Government Code Section 65915, at least 10 percent (10%) of the total dwelling units in a common interest development as defined in California Civil Code Section 1400351 for Moderate Income Households, provided that all dwelling units in the Development are offered to the public for purchase. For each one percent (1%) increase in the percentage of restricted Moderate Income units, a Development will receive an additional one percent (1%) density bonus up to thirty-five percent (35%) of the Maximum Residential Density. Not Yet Approved 7 130102 jb 0131158 Rev. January 7, 2014 (c) No additional Density Bonus shall be authorized for a Senior Citizen Development or Qualifying Mobilehome Park beyond the Density Bonus authorized by subsection (a) of this Section. (d) When calculating the number of permitted Density Bonus Units, any fractions of units shall be rounded to the next highest number. An applicant may elect to receive a Density Bonus that is less than the amount permitted by this Section; however, the City shall not be required to similarly reduce the number of Restricted Affordable Units required to be dedicated pursuant to this Section and Government Code Section 65915(b). (e) Each Development is entitled to only one Density Bonus, which shall be selected by the applicant based on the percentage of Very Low Restricted Affordable Units, Lower Income Restricted Affordable Units, or Moderate Income Restricted Affordable Units, or the Development’s status as a Senior Citizen Housing Development or Qualifying Mobilehome Park. Density bonuses from more than one category may not be combined. In no case shall a Development be entitled to a Density Bonus of more than thirty-five percent (35%). (f) The Density Bonus Units shall not be included when determining the number of Restricted Affordable Units required to qualify for a Density Bonus. When calculating the required number of Restricted Affordable Units, any resulting decimal fraction shall be rounded to the next larger integer. (g) Any Restricted Affordable Unit provided pursuant to the City’s Below Market Rate Housing Program shall be included when determining the number of Restricted Affordable Units required to qualify for a Density Bonus or other entitlement under this Chapter. However, the payment of a housing impact or in lieu fee shall not qualify for a Density Bonus or other entitlement under this Chapter. (h) Certain other types of development activities are specifically eligible for a Density Bonus pursuant to State law: (i) A Development may be eligible for a Density Bonus in return for land donation pursuant to the requirements set forth in Government Code Section 65915(g). (ii) A condominium conversion may be eligible for a Density Bonus or Concession pursuant to the requirements set forth in Government Code Section 65915.5. (i) As provided in Section 18.15.080(c), development proposed with rezoning to the Planned Community zone district are entitled to densities approved as part of the rezoning and shall not be entitled to a density bonus in addition to the units entitled by the rezone. Not Yet Approved 8 130102 jb 0131158 Rev. January 7, 2014 (i)(j) Notwithstanding any provision of this Chapter, all Developments must satisfy all applicable requirements of the City's Below Market Rate Housing Program, which may impose requirements for Restricted Affordable Units in addition to those required to receive a Density Bonus or Concessions. Table 1 summarizes the density bonus provisions described in this Section. Table 1 Density Bonus Summary Table Restricted Affordable Units or Category Minimum Percentage of Restricted Affordable Units Percentage of Density Bonus Granted Additional Bonus for Each 1% Increase in Restricted Affordable Units Percentage of Restricted Units Required for Maximum 35% Density Bonus Very Low Income 5% 20% 2.50% 11% Lower Income 10% 20% 1.50% 20% Moderate Income 10% 5% 1% 40% Senior Citizen Housing 100% 20% ------ ------ Qualifying Mobile Park 100% 20% ------ ------ Note: A density bonus may be selected from only one category up to a maximum of 35% of the Maximum Residential Density. 18.15.040 Development Standards for Affordable Units (a) Restricted Affordable Units shall be constructed concurrently with Non- Restricted Units unless both the City and the applicant agree within the Regulatory Agreement to an alternative schedule for development. (b) Moderate Income Restricted Affordable Units shall remain restricted and affordable to the designated income group for a minimum period of 59 years (or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program). Very Low and Lower Restricted Affordable Units shall remain restricted and affordable to the designated income group for a period of 30 years for both rental and for-sale units (or a longer period of time if required by a construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program). (c) In determining the maximum Affordable Rent or Affordable Sales Price of Restricted Affordable Units, the presumed household size as set forth in the City’s Below Market Rate Housing Program shall be used, unless the Development is subject to different assumptions imposed by other governmental regulations. Not Yet Approved 9 130102 jb 0131158 Rev. January 7, 2014 (d) Restricted Affordable Units shall be built on-site and be dispersed within the Development, except as permitted in subsection (e) of this Section. The number of bedrooms of the Restricted Affordable Units shall be equivalent to the bedroom mix of the Non-Restricted Units in the Development; except that the applicant may include a higher proportion of Restricted Affordable Units with more bedrooms. The design, square footage, appearance and general quality of the Restricted Affordable Units shall be compatible with the design of the Non-Restricted Units in the Development. The Development shall comply with all applicable Development Standards, except those which may be modified as provided by this Chapter. (e) Circumstances may arise in which the City Council finds that the public interest would be served by allowing some or all of the Restricted Affordable Units associated with one Development to be produced and operated at an alternative development site. Where the applicant and the City form such an agreement, the resulting linked developments shall be considered a single Development for purposes of this Chapter. Under these circumstances, the applicant shall be subject to the same requirements established by this Chapter for the Restricted Affordable Units to be provided on the alternative site. (f)(e) A Regulatory Agreement, as described in Section 18.15.090, shall be made a condition of the Discretionary Permits for all Developments pursuant to this Chapter. The Regulatory Agreement shall be recorded as a restriction on the Development. The Regulatory Agreement shall be consistent with the City’s Below Market Rate Housing program guidelines. 18.15.050 Development Concessions and Incentives This Section includes provisions for providing Concessions or Incentives pursuant to Government Code Section 65915. (a) By Right Parking Incentives. Upon request by the applicant, a Development that is eligible for a Density Bonus may provide parking as provided in this subsection (a), consistent with Government Code Section 65915(p), inclusive of handicapped and guest parking: (i) Zero to one bedroom unit: one on-site parking space; (ii) Two to three bedroom unit: two on-site parking spaces; (iii) Four or more bedroom unit: two and one-half parking spaces. If the total number of spaces required results in a fractional number, it shall be rounded up to the next whole number. For purposes of this subsection, this parking may be provided through tandem parking or uncovered parking, but not through on-street parking. Not Yet Approved 10 130102 jb 0131158 Rev. January 7, 2014 (b) Other Incentives and Concessions. A Development is eligible for other Concessions or Incentives as follows: (i) One Concession or Incentive for a Development that makes at least ten percent (10%) of the total dwelling units affordable to Lower Income households; or at least five percent (5%) of the total dwelling units affordable to Very Low Income households; or at least ten percent (10%) of the total dwelling units affordable to Moderate Income households in a common interest development. (ii) Two Concessions or Incentives for a Development that makes at least twenty percent (20%) of the total dwelling units affordable to Lower Income households; or at least ten percent (10%) of the total dwelling units affordable to Very Low Income households; or at least twenty percent (20%) of the total dwelling units affordable to Moderate Income households in a common interest development. (iii) Three Concessions or Incentives for a Development that makes at least thirty percent (30%) of the total dwelling units affordable to Lower Income households; or at least fifteen percent (15%) of the total dwelling units affordable to Very Low Income households, or at least thirty percent (30%) of the total dwelling units affordable to Moderate Income households in a common interest development. Table 2 summarizes the provisions of Concessions or Incentives described in subsection (a). Table 2 Concessions and Incentives Summary Table Target Group Restricted Affordable Units Very Low Income 5% 10% 15% Lower Income 10% 20% 30% Moderate Income (Common Interest Development) 10% 20% 30% Maximum Incentive(s)/Concession(s) 1 2 3 Notes: 1. Concessions or Concessions Incentives may be selected from only one category (very low, lower, or moderate) 2. No concessions or Concessions are available for land donation, or for Senior Citizen Housing Developments and Qualifying Mobilehome Parks that do not contain Restricted Affordable Units. (c) In submitting a request for Concessions or Incentives, an applicant may request the specific Concessions set forth below. The following Concessions and Incentives are deemed not to have a specific adverse impact as defined in Section 18.15.090 (b)(ii). Not Yet Approved 11 130102 jb 0131158 Rev. January 7, 2014 (i) Up to a 5025% average reduction of a side yard setback requirement if the design is consistent with the applicable design standards and guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones; (ii) Up to a 50% average reduction of the front yard setback requirements so long as setback is consistent with the design guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones; (iii)(ii) Up to a 50% average reduction of the rear yard setback requirements so long as the setback is consistent with the applicable design standards and guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones; (iv)(iii) A percentage increase in the height limit equal to the Density Bonus percentage for which the Development is eligible if necessary to accommodate the Restricted Affordable Units, with a maximum increase of one foot per Affordable Unit, unless adjacent to R-1, R-2, RMD and other low density residential zones, and no event to exceed fifty (50) feet; (v)(iv) Up to fifty percent (50%)An increase in the Floor Area Ratio (FAR) up to 50% or up to the square footage of the Restricted Affordable Units, whichever is less. For a mixed use project, the applicant can elect to receive this FAR bonus for the entire project or for just the residential portion of the project. Any FAR bonus under this section shall be consistent with the applicable height requirements and only apply to the residential portion of the mixed use project; (vi)(v) Reduction in daylight plane requirements not to exceed 5025% of the length of the adjacent lot line, so long as the intrusion is consistent with applicable design standards and guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones; (vii)(vi) Up to fifty percent (50%) increase over the maximum site coverage requirement or up to the square footage of the Restricted Affordable Units, whichever is less; (viii) Up to a 50% reduction in private open space; or (ix) Up to a 50% reduction in public open space. (g)(f) The setbacks referenced in this Section shall not include Special Setbacks as defined in Section 20.08.020. Not Yet Approved 12 130102 jb 0131158 Rev. January 7, 2014 (h)(g) The setbacks referenced in this Section shall only apply to the residential portion of any mixed use (residential and non-residential) development where it is feasible to setback portions of the development differently. (f) For Developments that propose to construct one hundred percent (100%) of the dwelling units (except a manager's unit) as Restricted Affordable Units that are affordable to Very Low and/or Lower Income households, the Council may grant additional Concessions or Incentives or exceed the limits set forth in (i) to (ixvi) above if the Council finds that such Concessions or Incentives are required to provide for affordable housing costs, as defined in Section 50052.3 of the Health and Safety Code and are in the interest of the public health, safety, or welfare. (g) Nothing in this Chapter shall be construed to require the provision of direct financial Concessions for the Development, including the provision of publicly owned land by the City or the waiver of fees or dedication requirements. 18.15.060 Waiver/Modification of Development Standards An applicant may apply for a waiver or modification of Development Standards that will have the effect of physically precluding the construction of a Development at the densities or with the Concessions or Incentives permitted by this Chapter. The developer must demonstrate that Development Standards that are requested to be waived or modified will have the effect of physically precluding the construction of a Development meeting the criteria of subsection (a) of Section 18.15.030 at the densities or with the Concessions or Incentives permitted by this Chapter. 18.15.070 Child Care Facilities (a) When an applicant proposes to construct a Development that is eligible for a Density Bonus under Section 18.15.030 and includes a child care facility that will be located on the premises of, as part of, or adjacent to, the Development, the City shall grant either: (i) An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the square footage of the child care facility; or (ii) An additional Concession or Incentive that contributes significantly to the economic feasibility of the construction of the child care facility. (b) The City shall require, as a condition of approving the Development, that the following occur: Not Yet Approved 13 130102 jb 0131158 Rev. January 7, 2014 (i) The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the Restricted Affordable Units are required to remain affordable pursuant to Section 18.15.040. In the event the childcare operations cease to exist, the Director of Planning and Community Environment may approve an alternative community service use for the child care facility. (ii) Of the children who attend the child care facility, the children of Very Low, Lower and Moderate Income households shall equal a percentage that is equal to or greater than the percentage of Restricted Affordable Units in the Development that are required for Very Low, Lower and Moderate Income households pursuant to Section 18.15.030. (c) Notwithstanding subsections (a) and (b) above, the City shall not be required to provide a density bonus or a Concession or Incentive for a child care facility if it finds, based upon substantial evidence, that the community has adequate child care facilities. 18.15.080 Application Requirements An application for a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard shall be made as follows: (a) An application for a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard shall be submitted with the first application for a Discretionary Permit for a Development and shall be processed concurrently with those Discretionary Permits. The application shall be on a form prescribed by the City and shall include the following information: (i) A brief description of the proposed Development, including the total number of dwelling units, Restricted Affordable Units, and Density Bonus Units proposed. (ii) The zoning and comprehensive plan designations and assessor's parcel number(s) of the project site, and a description of any Density Bonus, Concession or Incentive, waiver or modification, or revised parking standard requested (iii) A vicinity map and preliminary site plan, drawn to scale, including building footprints, driveway and parking layout. (iv) If a Concession or Incentive is requested, a brief explanation as to the actual cost reduction achieved through the Concession or Incentive and Not Yet Approved 14 130102 jb 0131158 Rev. January 7, 2014 how the cost reduction allows the applicant to provide the Restricted Affordable Units. (v) If a waiver or modification is requested, a brief explanation of why the Development Standard would physically preclude the construction of the Development with the Density Bonus, Incentives, and Concessions requested. (vi) Site plan showing location of market-rate units, Restricted Affordable Units, and Density Bonus units within the proposed Development; (vii) Level of affordability of the Restricted Affordable Units and proposed method to ensure affordability; (viii) For Concessions and Incentives that are not included within the menu of Incentives/Concessions set forth in subsection (c) of Section 18.15.050, the application requires the submittal of the project proforma to the Director, providing evidence that the requested Concessions and Incentives result in identifiable, financially sufficient, and actual cost reductions. The cost of reviewing the project proforma, including, but not limited to, the cost to the City of hiring a consultant to review the financial data, shall be borne by the applicant. The proforma information shall include all of the following items: (A) The actual cost reduction achieved through the Concession; (B) Evidence that the cost reduction allows the applicant to provide affordable rents or affordable sales prices; and (C) Other information requested by the Planning Director. The Planning Director may require additional financial information include information regarding capital costs, equity investment, debt service, projected revenues, operating expenses, and such other information as is required to evaluate the financial information; (ix) If a waiver or modification of a Development Standard is requested, the applicant shall provide evidence that the Development Standard for which the waiver is requested will have the effect of physically precluding the construction of the Development with the Density Bonus and Concessions requested; Not Yet Approved 15 130102 jb 0131158 Rev. January 7, 2014 (x) If a Density Bonus or Concession is requested for a land donation, the application shall show the location of the land to be dedicated, provide proof of site control, and provide evidence that all of the requirements and each of the findings included in Government Code Section 65915(g) can be made; (xi) If a density bonus or Concession is requested for a child care facility, the application shall show the location and square footage of the child care facilities and provide evidence that all of the requirements and each of the findings included in Government Code Section 65915(h) can be made. (xii) If a Density Bonus or Concession is requested for a condominium conversion, the applicant shall provide evidence that all of the requirements found in Government Code Section 65915.5 can be met. (b) In accordance with state law, neither the granting of a Concession, Incentive, waiver, modification, or revised parking standard, nor the granting of a Density Bonus, shall be interpreted, in and of itself, to require a general plan amendment, zoning change, variance, or other discretionary approval. (c) The Planned Community (PC) zone district is intended to accommodate developments requiring flexibility under controlled conditions not attainable under other zoning districts. Because of the flexible nature of the PC zone, which determines site specific requirements including density, the Chapter does not apply to this zoning district. (c)(d) This Chapter implements State Density Bonus law. Any Density Bonus, Incentive, Concession, revised parking standard, waiver, or modification sought by an Applicant shall be made pursuant to this Chapter and may not be combined with similar requests under State Density Bonus law. 18.15.090 Review Procedures An application for a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard shall be acted upon by the Approval Authority concurrently with the application for the first Discretionary Permit. The granting of a Density Bonus shall not be deemed approval of the entire Project or approval of any subsequent discretionary permit. (a) Before approving an application for a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard, the Approval Authority shall make the following findings, as applicable: Not Yet Approved 16 130102 jb 0131158 Rev. January 7, 2014 (i) The Development is eligible for the Density Bonus and any Concessions, waivers, modifications, or revised parking standards requested. (ii) Any requested Concession or Incentive will result in identifiable, financially sufficient, and actual cost reductions based upon the financial analysis and documentation provided. The City finds that the Concessions and Incentives included in Section 18.50.050(c) will result in identifiable, financially sufficient, and actual cost reductions. (iii) If the Density Bonus is based all or in part on donation of land, a finding that all the requirements included in Government Code Section 65915(g) have been met. (iv) If the Density Bonus, Concession or Incentive is based all or in part on the inclusion of a child care facility, a finding that all the requirements included in Government Code Section 65915(h) have been met. (v) If the Concession or Incentive includes mixed-use development, a finding that all the requirements included in Government Code Section 65915(k)(2) have been met. (vi) If a waiver or modification is requested, a finding that the Development Standards for which the waiver is requested would have the effect of physically precluding the construction of the Development with the Density Bonus and Concessions permitted. (b) Any granted Density Bonus and/or Concession(s) shall terminate with the demolition, destruction or other removal of the structure receiving the Density Bonus and/or Concession. (bc) If the findings required by subsection (a) of this Section cannot be made, the Approval Authority may deny an application for a Concession, Incentive, waiver or modification only if it makes one of the following written findings, supported by substantial evidence: (i) The Concession, Incentive, waiver or modification is not required to provide for Affordable Rents or Affordable Sales Prices; or (ii) The Concession, Incentive, waiver or modification would have a specific, adverse impact upon public health or safety or the physical environment or on real property listed in the California Register of Historic Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the Development unaffordable to Low and Moderate Income households. For the purpose of this subsection, Not Yet Approved 17 130102 jb 0131158 Rev. January 7, 2014 "specific adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions as they existed on the date that the application for the Development was deemed complete; or (iii) The Concession, Incentive, waiver or modification is contrary to state or federal law. (c) If the Approval Authority is not the City Council, any decision denying a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard may be appealed to the City Council within fourteen days of the date of the decision. 18.15.100 Regulatory Agreement (a) Applicants for a Density Bonus, Incentive, Concession, waiver, modification or revised parking standard shall enter into a Regulatory Agreement with the City. The terms of the draft agreement shall be approved as to form by the City Attorney and reviewed and revised as appropriate by the Director of Planning and Community Environment, who shall formulate a recommendation to the Approval Authority for final approval. (b) Following execution of the agreement by all parties, the completed Density Bonus Regulatory Agreement, or memorandum thereof, shall be recorded and the conditions filed and recorded on the Development. (c) The approval of the Regulatory Agreement shall take place prior to tentative map approval, and recordation shall take place prior to final map approval, or, where a map is not being processed, prior to approval of the final Discretionary PermitArchitectural Review approval. The Regulatory Agreement shall be binding to all future owners and successors in interest. (d) The Regulatory Agreement shall be consistent with the guidelines of the City’s Below Market Rate Program and shall include at a minimum the following: (i) The total number of dwelling units approved for the Development, including the number of Restricted Affordable Units; (ii) A description of the household income group to be accommodated by the Restricted Affordable Units, and the standards for determining the corresponding Affordable Rent or Affordable Sales Price; (iii) The location, dwelling unit sizes (square feet), and number of bedrooms of the Restricted Affordable Units; Not Yet Approved 18 130102 jb 0131158 Rev. January 7, 2014 (iv) Term of use restrictions for Restricted Affordable Units of at least 59 years for Moderate Income units and at least 30 years for Low and Very Low units; (v) A schedule for completion and occupancy of Restricted Affordable Units; (vi) A description of any Concession, Incentive, waiver, modification, or revised parking standard, if any, being provided by the City; (vii) A description of remedies for breach of the agreement (the City may identify tenants or qualified purchasers as third party beneficiaries under the agreement); and (viii) Other provisions to ensure implementation and compliance with this Section. SECTION 3. CEQA. The proposed Ordinance revises the requirements for granting a residential density bonus to comply with revisions to State law enacted by the Legislature through the adoption of Senate Bill 1818. Adoption of the draft density bonus codifies allowances that developers have been able to use in housing developments since 2005. Further, the revisions modify the criteria and incentives offered to qualifying developments but do not authorize construction not already permitted under the City’s existing codes. Also, it is uncertain how many project applicants will seek to utilize the provisions of State law and this Ordinance and where such projects might be located in the City. Further, each individual project will be subject to its own environmental review. Consequently, this ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this Ordinance may have a significant effect on the environment. SECTION 4. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. / / / / / / Not Yet Approved 19 130102 jb 0131158 Rev. January 7, 2014 / / / / / / / / Not Yet Approved 20 130102 jb 0131158 Rev. January 7, 2014 SECTION 5. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Senior Assistant City Attorney City Manager ____________________________ Director of Planning & Community Environment 1 Wong, Tim Subject:RE: November 14, 2013, Regional Housing Mandate Committee, Government Code Section 65915 From: herb borock [mailto:herb_borock@hotmail.com] Sent: Thursday, November 14, 2013 2:00 PM To: Clerk, City; Council, City Cc: Wong, Tim; Aknin, Aaron Subject: November 14, 2013, Regional Housing Mandate Committee, Government Code Section 65915 Herb Borock P. O. Box 632 Palo Alto, CA 94302 November 14, 2013 Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 ATTN: REGIONAL HOUSING MANDATE COMMITTEE NOVEMBER 14, 2013, REGIONAL HOUSING MANDATE COMMITTEE AGENDA ITEM #1: GOVERNMENT CODE SECTION 65915 Dear City Council: Please consider delaying action on this agenda item until the Committee and the public have the following information on a timely basis: 1. Minutes of the Committee's September 12, 2013, meeting. Minutes do not require approval by the RHMC. They are posted online by the City Clerk when finalized. The minutes to the September 12 meeting were posted online on October 10, 2013. 2. A marked-up copy of the draft ordinance that shows the changes made to the version you had available at your last meeting. The additional changes from the November 14 RHMC meeting have been outlined in the CMR. 3. Cross-references in the staff report to the page numbers and subsection numbers for each of the changes made to the draft ordinance. Planned Community Zone Districts 2 The Planned Community (PC) Zone District provides a way to create a site specific zone district that provides public benefits on site. It does not seem appropriate to me that a PC zone district should be permitted to get the benefit of Government Code 65915. Please include language in the draft ordinance that prohibits the use of the Residential Density Bonus ordinance with PC zone districts, since the PC zone district already provides a way to get increased residential density. A section has added to the draft ordinance that states that PC zone districts are not eligible for density bonus and concession benefits. Section 18.15.040 This version of Section 18.15.040 has two subsections "(b)". Subsection 18.15.040(d)(sic) [actually 18.15.040(e)], beginning with the word "Circumstances" is shaded to indicate that it is a provision required by State law. No such language appears in Government Code Section 65915. The paragraph beginning with the word "Circumstances" and the reference to it in the previous paragraph should both be deleted from the draft ordinance. Government Code Section 65915(i) in the definition of "Housing Development" says "For the purpose of calculating a density bonus, the residential units shall be on contiguous sites that are the subject of one development application". There is no provision in State law that permits the transfer of development rights for Restricted Affordable Units as described in Section 18.15.040. That subsection should be deleted from the draft ordinance. There is a provision in State law at Government Code Section 65915(g) that applies to donated land, but that is not the same thing as the density transfer proposed in the draft ordinance. This provision was added to give the City additional flexibility in the event a non-contiguous development was proposed. An example of this is the Mayfield Housing projects where the affordable units for one site were consolidated onto another site. As this type of arrangement can alternatively be addressed through a development agreement or Planned Community Zone, staff has eliminated this provision in the local density bonus ordinance. Section 18.15.050(f) 3 There is no authority in Government Code Section 65915 that permits the City to grant more Concessions or Incentives than allowed by State law. Government Code Section 65915(n) permits the City to grant a density bonus greater than that described in State law, provided there is an enabling local ordiance that permits the greater density bonus, but there is no comparable authorization for the City to grant more Concessions or Incentives. Under standard rules of statutory construction, including the legislative history regarding the creation of Section 65915(n), the City lacks the authority to grant more Concessions or Incentives than permitted by State law, with or without an enabling City ordinance. Please delete Section 18.15.050(f). The purpose and intent of Government Code Section 65915 is to provide additional density and incentives to encourage the production of affordable housing. Staff believes that to allow for greater density bonus and incentives than what is required to further make affordable housing production more attractive is consistent with the purpose and intent of the law. Section 18.15.050(c)(vii) This subsection would permit increaing the site coverage of a development up the square footage of the Restricted Affordable Units, but that much additional site coverage would not be needed to accomodate those units if they appear on multiple floors of a development. I'm not sure what the correct language should be, but the amount of additional site coverage allowed seems to be too large. Assuming that the development is multiple floors, this concession may not be necessary. But this concession remains as part of the menu to give a developer some additional flexibility. Section 18.15.050(b), Table 2, Notes 1 and 2 Notes 1 and under Table 2 refer to "Concessions and Concessions". The references should be to "Concessions and Incentives". This has been corrected. Section 18.15.080(a)(xii) This paragraph in the draft ordinance refers to State law regarding density bonuses for condominium conversions, but provides no language to 4 comply with the strict timeline for processing such applications, and no standards to follow to make a decision on any such application. Government Code Section 65915.5(d) says, "The city ... shall ... within 90 days of receipt of a written proposal, notify the applicant in writing of the manner in which it will comply with this section. The city ... shall establish procedures for carrying out this section, which shall include legislative body approval of the means of compliance with this section." At a minimum, the draft ordinance should identify the City Council as the Approval Authority after receiving a recommendation from the Planning and Transportation Commission, and should require Council action within the 90 day time limit in State law. The process is already in place since the condominium conversion process requires the approval of the City Council per City Municipal Code 21.40. The density bonus request would be processed as part of the condominium conversion process. Sections 18.15.080, 18.15.090, and 18.15.100 All applications covered by the proposed ordinance would require Architectural Review by the Architectural Review Board (ARB) because the proposed ordinance applies to projects of at least five dwelling units (Palo Alto Municipal Code Section 18.76.020(b)(2)(B) ("(2) Major Projects. The following are "major projects" for the purposes of the architectural review process set forth in Section 18.77.070, and are subject to review by the architectural review board: (B) Any multiple-family residential construction project that contains three or more units"). The language of the last three sections of the proposed ordinance should make clear that the ARB reviews and makes a recommendation about the application for a Density Bonus, Incentive, Cocession, waiver, modification, or revised parking standard as part of the ARB's review and recommendation of the entire project application, rather than the Approval Authority making a ministerial decision under Chapter 18.15 independently of the ARB review process As written, the draft ordinance at Section 18.15.100(c) would have the Approval Authority (i.e., the Director of Planning and Community Environment) approve a Regulatory Agreement before Architectural Review approval, but is silent about whether the Director would approve a Regulatory Agreement before the ARB recommendation to the Director about Architectural Review or whether the ARB would make a recommendation about the Regulatory Agreement. Also, the appeal process in Section 18.15.090(c) appears to be a process independent of the the processing of the rest of the application reviewed by the ARB. Would there be an appeal fee required if there is an independent appeal process for Chapter 18.15? 5 The term Approval Authority has been expanded to include recommending bodies such as ARB and PTC. With respect to appeals, the City typically charges a single appellate fee for a bundled fee, although it has the ability to charge separate fees. Section 3 of Ordinance The first sentence of Section 3 (CEQA) refers to Senate Bill 1818 and says says "The proposed Ordinance revises the requirements ...". As I pointed out in my letter to the Council of August 19, 2013, the current version of Government Code Section 65915 is not the version in Senate Bill No. 1818 (Statutes 2004, Chapter 928) that has since been amended and restated in its entirety twice. It makes more sense to refer to Government Code Section 65915, rather han an obsolete bill number. Also, the ordinance is not "revising" anything. It is "adopting" something for the first time. Changes have been made to refer to Government Section 65915 and not the older Senate Bill. Section 18.15.030(b) As described more fully below, the reference to California Civil Code Section 1351 will be obsolete on January 1, 2014, when the correct reference will be to Section 4100. The updated reference to Civil Code Section 4100 has been incorporated into the new ordinance. Two Copies of State Law Attached to Staff Report Fred Balin pointed out in his email message yesterday that there are two copies of Government Code 65915 attached to the staff report. As I pointed out in my letter to the Council of August 19, 2013, Section 65915 ws amended, effective January 1, 2014, to make various technical conforming changes to reflect a revision and recodification of the Davis- Sterling Common Interest Development Act. The conforming change to Section 65915(b)(1)(D) amended the reference to the Civil Code from Section 1351 to Section 4100. Ok. Section 1351 is referenced in Section 18.15.030 (b) of the ordinance and has been changed to Section 4100. The online version of the California Code used by staff to create the 6 attachments to the staff report was accessed from the former State site (http://www.leginfo.ca.gov/calaw.html) that contains a warning (Searching California Law no longer works properly on this site. Please click here to access our new Legislative Information site for searching California Law.) The new link takes you to a version of the Government Code Section 65915 that includes a notation to the dates of the two version of that section at the end of the section (http://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=1.&title=7.&part= &chapter=4.3.&article=) Thank you for your consideration of these comments. Sincerely, Herb Borock cc: Aaron Aknin Tim Wong 1 Planning and Transportation Commission 1 Verbatim Minutes 2 January 9, 2013 3 4 EXCERPT 5 6 Draft Density Bonus Ordinance Review: Request by Planning Division staff for PTC review 7 and recommendation to City Council for the adoption of the Density Bonus Ordinance with 8 Menu of Concessions 9 10 Chair Martinez: [Note—beginning of what Chair Martinez said cut off on the tape] provide the 11 Commission of the Density, the proposed Density Bonus Ordinance with a recommendation to 12 the Council. We will begin with a staff report. 13 14 Tim Wong, Senior Planner: Good evening, my name is Tim Wong and I’m a Senior Planner with 15 the City and this evening before you is the City’s Draft Density Bonus Ordinance. Density 16 Bonus is a state law that allows developers to build additional, a density above the maximum 17 allowable in exchange for providing affordable units in the development. And in 2004 through 18 SB 1818 the State significantly revised the Density Bonus Law. Many things were revised in the 19 law, but more significantly it increased the density bonus percentage for a lower amount of 20 affordable units or a lower percentage of affordable units in the development and it allowed for a 21 greater number of concessions to be allowed on one project. In addition it required jurisdictions 22 to adopt the state law into local ordinances. And that’s why we are here this evening. 23 24 In October of 2011 the Planning and Transportation Commission (PTC) held a study session to 25 review some of these revisions, but primarily to focus on allowable concessions and how to 26 evaluate granting these concessions. There were many items discussed, however there were 27 three items that were more commonly discussed if you will regarding concessions and they were 28 concerns about how using concessions can circumvent the City’s height limits. In addition 29 because of the City’s 15 percent Below Market Rate (BMR) requirement if a developer met the 30 BMR requirement would they be eligible for a credit? A Density Bonus Credit of one 31 concession. And lastly there was discussion about requesting financial documentation from the 32 developers to document the need of the requested concession. 33 34 At this session PTC was provided with two ordinances that had different approaches towards 35 density or towards concessions, San Mateo and the City of Santa Monica. The City of Santa 36 Monica ordinance was a little more structured with quantifiable concessions and a little more 37 detailed in how to grant the concession while the City of San Mateo was a little more flexible 38 and had more flexible language in their ordinance. And at the end of the session PTC directed 39 staff to prepare the draft ordinance more in the style of the City of Santa Monica and their menu 40 of concessions. 41 42 So what you have before you is a Draft City Density Bonus Ordinance. And some parts of the 43 ordinance include provision for a menu of concessions. So if you choose from these menus of 44 concessions no additional review is necessary per the ordinance. And these concessions that 45 have been listed in the menu were concessions drawn from past requests from approved projects: 46 increased Floor Area Ratio (FAR), encroachment in setbacks, and also requests for additional 47 height. And if the developer chooses not to choose from the menu of concessions additional 48 review is required from the approval authority and as part of the underlying discretionary permit. 49 2 And the ordinance does also include the financial information will need to be submitted as part 1 of this, part of that request. And lastly, staff anticipates that the Density Bonus Ordinance will 2 be a key tool for the City in achieving its Regional Housing Needs Allocation (RHNA) 3 requirements. And Cara will talk about some of the legal issues encountered in drafting the 4 ordinance. 5 6 Cara Silver, Senior Assistant City Attorney: Thank you Tim. Cara Silver, Senior Assistant City 7 Attorney. So the State Density Law is similar to the Housing Element Law in that it is a State 8 requirement that is essentially forced on cities. We don’t as a charter city see this very often in 9 the planning arena because we have the ability in most areas to adopt our own laws, but this is 10 one area where the State has required cities to comply with uniform requirements. 11 12 The current State Density Bonus Law in state law requires cities to adopt implementing 13 ordinances. So the substance of the law is essentially incorporated into the draft ordinance that 14 you have in front of you and there’s little discretion really to vary on the substance, but certainly 15 there is some flexibility on the procedures for implementing the ordinance. One of the highlights 16 for this evening that I wanted to bring up is the statutory findings that need to be made before if 17 the Commission is to deny an incentive or a concession. And so state law requires that certain 18 findings be made, that those findings be made in writing, and that of course substantial evidence 19 supports those findings. So we have incorporated those findings into the ordinance in section 20 18.15.090 and it’s important that some of the other requirements in the ordinance are driven by 21 those findings. And so that’s really the crucial part of your decision making here is that we want 22 to make sure that any additions or changes to the state law of course incorporate those findings. 23 24 One of the issues that is in, that we’ve discussed in the past with the Planning Commission is 25 financial information that is required from applicants. And so since one of the findings that for 26 denial relates to the financial aspect of the project and the economic viability of the project we 27 have included in the proposed ordinance in section 18.15.080 (A)(8) a requirement that the 28 applicant submit a pro forma in the event that they are requesting an exception or an incentive 29 that is not listed in our menu of options that Tim referred to. 30 31 Two final legal issues, one relates to the height limit. Again in the menu of concessions that 32 we’ve incorporated into our existing, into our proposed ordinance we have specified that 33 developments can exceed the height limits in existing residential zones, but we have specified in 34 the concessions that the height limit though can only go up to 50 feet in compliance with of 35 course the Comprehensive Plan. Now this is something that is an open issue. It could be that 36 applicants could request a height variance in excess of 50 feet and it’s still an open issue as to 37 whether the City has the ability to grant incentives that nevertheless are inconsistent with 38 existing zoning codes or even Comprehensive Plan limits. So that’s just an issue that we’re 39 footnoting at this point. 40 41 The final legal issue that we’re raising at this point is the relationship of the Density Bonus Law 42 with the BMR program. Of course in the current state of the law is that inclusionary housing 43 requirements are not applicable to rental housing given a recent court decision. So for rental 44 housing projects they typically pay housing fees and they do not provide restricted BMR units in 45 a rental housing project. However for sale condo projects inclusionary housing is still legally 46 applicable and one of the questions that was raised at the last study session by one of the 47 Commissioners was if we impose our existing inclusionary housing requirement on a for sale 48 project that automatically triggers Density Bonus. And so I think that we did some further 49 3 research on what other cities do and the existing state law and it does appear that the state law 1 does not really specifically address this issue. So it’s a policy issue of whether you want to have 2 the inclusionary housing requirement automatically trigger Density Bonus or do you want to 3 require that the inclusionary housing requirement be met first and then an applicant can apply for 4 additional Density Bonus units or incentives by derestricting an additional increment of housing. 5 So the proposed ordinance is written right now to first require that the inclusionary housing, the 6 BMR existing program be satisfied and then additional incentives would take place on top of that 7 by requiring additional derestricted units. So that highlights I think the legal issues and think 8 there’s any further wrap up? 9 10 Curtis Williams, Director: Thank you Cara, I just wanted to also add that and emphasize as Tim 11 did I think the last slide there, that this is an important component of our Housing Element 12 implementation program and that the Commission did include a number of mentions in the 13 Housing Element about certain incentives and concessions being allowed in consistency with this 14 ordinance to be developed. So this is a key part of that and will be a key part of being able to 15 show the State that we’ve complied. 16 17 Tim recounted for you some of the process here. The Commission has seen this over multiple 18 meetings, but it is a situation where we’re trying to implement the State’s overall objectives but 19 we’re trying to tailor something that fits the Palo Alto situation and trying to be a bit more 20 specific about relating the nature of the concession and the extent of the concession to the extent 21 and type of the Below Market Rate housing that’s being provided. So I know those of you who 22 have sat through some of the discussions on anything from 195 Page Mill Road to the 101 Lytton 23 and some other projects know how open ended that those discussions were because of some of 24 these state laws. So we do think this is important. We want to hear your thoughts and 25 recommendation on whether this is ready to move forward to the Council at this point. But 26 again, we think it’s a very important policy document for the City to try to set parameters around 27 the appropriate level of extensions or exceptions to allow. Thanks. 28 29 Chair Martinez: Thank you. Questions from the Commission? Commissioner Keller, questions. 30 31 Commissioner Keller: Yes, so you stated Madame City Attorney that the BMR inclusionary 32 requirements must be satisfied first for sale projects so for example, a BMR requirement 15 33 percent would not trigger a concession, but a BMR provision of 25 percent would trigger one 34 concession. Is that, am I understanding correct? 35 36 Ms. Silver: That’s the way the proposed ordinance in front of you is drafted. We believe though 37 that it’s a policy call. You can go either way on that issue. 38 39 Commissioner Keller: Well firstly I do agree with that policy, but I was, I read the ordinance and 40 I couldn’t figure out where in the ordinance it says that and I found some things that may not be 41 consistent with that so that’s what confuses me. 42 43 Chair Martinez: Further questions? 44 45 Commissioner Keller: No, but maybe you can give her a moment to respond. 46 47 Chair Martinez: Can we move on and then we’ll come back? 48 49 4 Commissioner Keller: You want to come back to that? But let me mention one thing just in 1 particular that will, for example, if you look on page 11 of the ordinance it talks about for 2 number four percentage increase in the height limit and then it’s based on a maximum increase 3 of one foot per affordable unit. That would actually be one foot for excess affordable unit over 4 the required for the BMR. So there’s little things like that that I don’t think are necessarily and I 5 couldn’t find anywhere, maybe I misread it, but that’s an issue. So that’s, also, for five that the 6 extra restricted affordable units we’re talking about. So that’s the kind of thing that I was 7 confused about, but I wasn’t sure where it was. So maybe you can tell me. Thank you. 8 9 Ms. Silver: It’s on page 7, letter G. “Any restricted affordable unit provided pursuant to the 10 City’s Below Market Rate housing program shall not be included when determining the number 11 of restricted affordable units required to qualify for a Density Bonus or other entitlement under 12 this chapter.” 13 14 Commissioner Keller: Thank you. That’s helpful, but I think that there other places in the 15 ordinance where, when you’re actually computing it based on a number that you also have to 16 exclude that number. Am I being clear? 17 18 Ms. Silver: I think what we need to do is change the term to restricted affordable units in those 19 places that you referenced. 20 21 Commissioner Keller: Yes. Ok, thank you. 22 23 Chair Martinez: Yes, Commissioner Tanaka. 24 25 Commissioner Tanaka: So my basic question is for this ordinance, and it’s kind of a general 26 question so maybe you can help me understand this, for the SB 1818, how much above or below 27 or I guess what I’m trying to get at is the qualitative feel of how much above the SB 1818 are we 28 doing? If at all or is it below? I’m just trying to just gage whether are we doing the minimum to 29 meet it or are you going above it? Or are we, I guess you can’t go below it. So maybe someone 30 could respond to that. I’m just trying to get a, because I didn’t actually read the SB 1818 myself, 31 so I don’t understand where we are compared to the state mandates. 32 33 Mr. Wong: Commissioner Tanaka we are meeting SB 1818. Nothing above and certainly not 34 below. So and I’ll be happy to provide you a copy if you really have some free time of SB 1818. 35 36 Commissioner Tanaka: Ok, and then the other clarifying question is I think the City Attorney 37 mentioned that it only applies for ownership units, not rental units. Is that right? 38 39 Ms. Silver: No. The Density Bonus Law applies both to rental and for sale. They City’s 40 inclusionary housing BMR program now no longer applies to rental housing. We cannot require 41 the construction of affordable deed restricted houses under a now not so recent court case. 42 43 Commissioner Tanaka: I see. Thank you. 44 45 Chair Martinez: Commissioner Alcheck. 46 47 Commissioner Alcheck: I’d like to ask the Planning Department whether they feel this ordinance 48 which could be described as setting the bar higher than the current ordinance will result in the 49 5 actual development of fewer Below Market Rate units. As I understand it very few applicants 1 apply for this bonus under the current ordinance. And I wonder if we will be inadvertently 2 discouraging that sort of development further. 3 4 Mr. Williams: Thank you Commissioner Alcheck. I think the, there’s a couple of parts to that. 5 One is very few in fact I’m not aware of anyone who has applied for the Density Bonus part of 6 this in Palo Alto who has ever asked for increased number of units, which you’re allowed to do 7 under this ordinance and under state law based on number of Below Market Rate units. So the 8 density part no one has done that currently. I don’t think this makes a lot of difference as far as 9 the potential for doing that because I still think things like parking and other considerations limit 10 it in a way that probably wouldn’t happen. 11 12 What does, what has happened on a handful of occasions now we’ve had where an applicant has 13 requested the concessions part. So I think that’s what we’re focused on is the incentives or 14 concessions part of it. And that has certainly been beneficial in terms of those applicants being 15 able to do their projects. I don’t know whether they would have done them without it or with a 16 lesser amount but I think what we’re doing here clearly is restricting to a level in terms of those 17 concessions less than what they could do without us having this implementing ordinance or if 18 our implementing ordinance just more or less mimicked SB 1818, which is what San Mateo’s 19 kind of did. Is that correct? Yeah, so that was basically was just reiterating the same language. 20 So I think we are restricting it. Whether it’s enough, whether it’s so much that it will drive 21 someone away from doing a project, I don’t know, but it’s certainly not encouraging more 22 housing than leaving it alone or adopting the state language. But it’s pretty hard to gage how 23 significant that is. 24 25 I do think one thing it does by this what Cara was just talking about the difference between for 26 sale and rental is this will be more beneficial for rental projects than it will be for sale because 27 you’re going to have to really get up there in terms of percentage of BMR to get the benefit out 28 of this for a for sale project. 29 30 Chair Martinez: Vice-Chair, questions? 31 32 Vice-Chair Michael: So I think to the extent that what you’ve told us is that this proposed 33 ordinance would be consistent with what’s required by the state law. It actually seems pretty 34 straightforward. To the extent that the City hasn’t recently received many if any applications for 35 Density Bonus I think Commissioner Alcheck’s question about whether we might in pursuit of 36 the goals set forth in the Housing Element or the with the housing allocation targets have a 37 policy of encouraging qualified developers to take advantage of this would be of interest. 38 39 I think I had one question that I was interested in. The submission of the pro forma financials as 40 set forth in 18.15.080 (A)(8), which seems to me to be a fairly straightforward and helpful 41 process. And I just know a similar issue comes up sometimes when you have a Planned 42 Community (PC) application and the question of public benefit and the nature of the public 43 benefit and the sort of quantity of public benefit. And I should find it useful here that there is a 44 process for some review of pro forma financials to sort of quantify certain decisions consistent 45 with the standards set forth in the ordinance. And I find that helpful. So I think that those are 46 my only comments, not really questions. 47 48 6 Chair Martinez: Good lead in. It seems that I wanted to get back to grilling the City Attorney. 1 I’m kidding. It seems to me that there are very few times where the pro formas would be offered 2 by the developer and mostly it would be sort of self-inflicted. The developer claimed that the 3 only way they could afford to do this project is if they get these concessions and then rightly so 4 somebody should ask well show us the paperwork. But in other situations where developer says 5 in order to make good use of this site I need to decrease the setbacks or I need a better FAR. It’s 6 not so much a question of the pro formas or the profitability of it, it’s more about the quality of 7 the land use. And so wouldn’t we be limited, somewhat constrained in asking for pro formas 8 Ms. City Attorney? Or Madame City Attorney as Commissioner Keller referred to you. 9 10 Ms. Silver: Thank you Chair Martinez. The way the ordinance is currently drafted the pro 11 formas are only requested in a situation where additional incentives that are not on the menu of 12 options are requested. So if somebody wants just a standard concession of waiving a setback 13 that falls in the menu and so a pro forma would not be requested. But in a limited situation 14 where an additional incentive is being requested one of the findings that the approving authority 15 needs to make is whether that particular concession is financially needed to make the project 16 viable. And so you know it seems appropriate in that situation then to request a pro forma 17 because that’s really the only substantial evidence that you would have to evaluate that issue. 18 19 Chair Martinez: Ok, but what if the applicant said “I will give the City a million dollars if I can 20 increase my density, a million dollars to build affordable housing elsewhere.” That’s not on the 21 menu I don’t think. So would the pro formas be required there? 22 23 Ms. Silver: Yeah, I think that that’s a development agreement essentially. It’s not really an 24 incentive or concession that is anticipated under Density Bonus Law. 25 26 Chair Martinez: Ok. On page four of the staff report near the top it talks about, let’s see, the 27 required units are to be built on site and then the third bullet says, “Includes the option for off-28 site development.” To me that sounds kind of contradictory. So could you clarify what that 29 means? 30 31 Mr. Wong: Chair Martinez actually it already has been done where there were two projects, 2650 32 Birch was required through Density Bonus to provide one affordable unit, but what happened 33 was 195 Page Mill, which also received two concessions in providing 17 affordable units the unit 34 at 2650 Birch was effectively transferred if you will to 195 Page Mill. There are distance 35 requirements. I think it cannot be more than a half a mile from the project site. Does that ring a 36 bell? But so the Density Bonus was fulfilled that way, but it was transferred to another 37 development which was nearby, kind of the off-site fulfillment of that for 2650. 38 39 Chair Martinez: Ok. My next question on the concessions we haven’t talked much about it and I 40 hope we can give some input tonight on that because I think this is a big deal. Why aren’t we 41 quantifying it? Why aren’t we saying yes, building height can go up one story? Why is it left 42 open ended? 43 44 Mr. Wong: It was left open ended to provide a little additional flexibility in providing those 45 concessions by not providing those quantified objectives if you will it will help show HCD that 46 we are serious about using Density Bonus as a tool to achieve our RHNA numbers and also to 47 provide that additional flexibility for the developer. 48 49 7 Chair Martinez: But we realize building height is a big deal in this town. So shouldn’t we be a 1 little bit more careful on how we offer it? 2 3 Mr. Wong: Well I do believe for that one particular concession for height we have capped it at 4 50 feet. And also there’s a proportionality in the number of affordable units offered so therefore 5 if in the height concession you can’t just provide one affordable unit in five and get unlimited 6 height. So it was an attempt to limit for height limit or quantify the restriction for height. 7 8 Mr. Williams: I mean we have quantified, is that what you’re talking about? The height 9 limitation relative to, it’s not floors, but it’s foot per affordable unit not to exceed 50 feet. So 10 there is, I mean there is a formula. 11 12 Chair Martinez: But isn’t that our limit anyway, 50 feet? Or is there something different? 13 14 Mr. Williams: Pardon? 15 16 Chair Martinez: Isn’t that our height limit anyway? 17 18 Mr. Williams: All our residential zones are less are 40 feet, 35 feet, etcetera. 19 20 Chair Martinez: Oh, ok. I get that. Since I have your attention (interrupted) 21 22 Mr. Williams: And then we have something I think a little different for mixed use somewhere. 23 Or no, ok we just left it at 50. What I think our thought was that if it was going to go over 50 24 feet though that need to then come to the Commission and go through that discretionary process. 25 26 Chair Martinez: Ok. Since I have your attention Mr. Williams isn’t, can you explain the what the 27 expectations for RHNA goals would be through implementation of this? Is it more perception or 28 is there a real number that we can identify in this? 29 30 Mr. Williams: It’s more perception. I mean I don’t think we can identify that this is going to 31 mean that 100 more units are going to be able to be accommodated in a future area. I mean what 32 the State’s looking for in terms of Housing Element compliance is that we are taking actions that 33 do provide some flexibility in this regard and do provide some incentives and concessions but 34 they don’t ask us to try to quantify how many more units that would specifically result in. And 35 we haven’t, we’ve estimated on our site analysis based on generally what can be done within 36 existing zoning parameters, but we did assume a little bit more for what the CN zone and that 37 we’ll have to amend the code to allow that. But this helps with that. It sort of helps support 38 some of the other arguments about when they question us about well these sites look kind of 39 tight and can you really get the kind of yield out of them that I think this is a section that will 40 help us tell them that we do have the flexibility to modify some of these standards to work. 41 42 Chair Martinez: And then the setbacks concession. I remember in the debate about 801 Alma the 43 proposed setbacks on all sides and the response from the City. I don’t think I was on the 44 Commission then; I was just here paying attention to what was going on. The City said well 45 that’s more than one concession and I don’t know how it ended up, but what’s being built are 46 units that everybody has said are too close to the streets as their first impression of this thing 47 going up. Seems to me that setbacks are too precious to be a concession. That it comes to us as 48 good land use practice and it comes to us as having to do with life safety as well. And light and 49 8 air and separation from neighbors and I really question whether that one should be on the table as 1 a concession. Were there other items that you considered that as potential candidates for 2 concessions that we could hear about? 3 4 Mr. Williams: I don’t think there, I don’t know if there were. Tim can answer that, but I just say 5 on the setbacks I understand what you’re saying. I think if it’s that critical in that situation that 6 we have authority under our zoning and design review powers to say that there is that kind of 7 especially if there’s a life safety type of issue, but it seems to me that from what I’ve seen on a 8 number of projects that there are several that it’s been almost a no brainer that having a reduced 9 setback was not impacting anyone and could be done. So I would hate to take that away and just 10 sort of blanket say you can’t get a concession for that. Maybe there’s a way to qualify it in here 11 or something so that there’s a point at which it’s not allowed. Maybe it’s too open ended the 12 way it is right now, but there are many times when setback isn’t affecting anyone that’s an easy 13 way to go to gain more flexibility on the site or yield on the site or something like that. 14 15 Chair Martinez: Seemingly so but anybody who I’ve talked to about 801 Alma complains about 16 the front setback. So that one wasn’t so easy to go and we gave it up. Granted it’s not, the 17 building’s not going to fall over onto somebody on the sidewalk, but (interrupted) 18 19 Mr. Williams: Yeah and it’s not done and it’s not any closer than several other buildings right in 20 the next blocks either direction. 21 22 Chair Martinez: Lower, much lower buildings that are closer (interrupted) 23 24 Mr. Williams: Some of them are pretty, ok. 25 26 Chair Martinez: But anyway I really think that one should be really considered a land use 27 decision more for Planning staff then for Architectural Review Board (ARB) or us to deal with 28 and once you offer it as a concession I don’t think it’s going to be that easy to take back. So I 29 would really give thought to doing that and I don’t know the concession of offering in lieu fees 30 for Density Bonus it seems to me, I don’t know maybe I’m mixing apples and oranges here, but 31 it just seems that would be important for us to do in terms of building our housing fund. 32 33 So and I guess in the ordinance I kind of read it over quickly this evening we are trying to get at 34 defining more clearly what these, the extent of what these concessions to go. So is it clear that 35 setback means all setbacks? Or is that negotiable or it’s not a concession if they don’t get them 36 all? 37 38 Mr. Wong: In regard, Chairman Martinez, each setback is considered one concession the way 39 this ordinance is prepared. So for 801 I understand they got three setbacks as one concession, 40 but this, the ordinance as written one setback is one concession. Although I will say the Council 41 has greater discretion to offer more flexibility in these concessions for developments that are 100 42 percent affordable. So. 43 44 Chair Martinez: Yes, Commissioner Alcheck. Comments? 45 46 Commissioner Alcheck: So I want to weigh in on the issue of requiring financial documentation 47 as evidence of the necessity of concessions. This report suggests that the Commission discussed 48 this idea and supports it and I want to highlight for the Council that since that discussion by the 49 9 Commission the makeup of this Commission has significantly changed. Only three of the 1 Commissioners from that Commission are currently Commissioners and I’m not sure there is 2 consensus anymore on whether or not we feel the financial information is helpful. And I won’t 3 speak for anyone else, but I myself do not believe the City should require developers to share 4 their financials for a number of reasons which I’m happy to share. I won’t at this time, but I am 5 happy to share them. And I strongly, strongly encourage the Council to approve this ordinance 6 without section 18.15.080 (A)(8). 7 8 And I want to highlight one other thing. I don’t believe the Planning Department believes that 9 this financial documentation is necessary. I think or at least it’s my impression, you can correct 10 me if I’m wrong that it was included here because a previous very different Commission 11 recommended it and you’re working off that recommendation. It’s not my impression that the 12 Planning Department feels that this information will help them significantly. So I want to 13 reiterate for the Council’s benefit that I am strongly opposed to this and I am that way for a 14 number of reasons and one of them is that it’s a slippery slope that I don’t believe this is 15 information that will help us. And that’s really my comment. 16 17 Chair Martinez: I’d like to open this for further discussion, but first I forgot we have one member 18 of the public that wishes to speak. So let’s open the public hearing. 19 20 Vice-Chair Michael: The speaker is Herb Borock. 21 22 Herb Borock: Thank you. I don’t think this proposed ordinance is ready to be voted to the 23 Council. Eight years ago was the first CMR about the amendments from SB 1818 and four years 24 ago this government code section was completely restated and amended. And for everyone to be 25 continuing discussing it as SB 1818 I have to say they don’t know what they’re talking about. 26 And to have one Commissioner say he hasn’t read the government code section when the version 27 that was adopted four years ago was attached to the staff report in October for you to read is a bit 28 confusing for me. 29 30 Some of the things the staff is offering I don’t think are legal such as being able to first require 31 the BMR units and then on top of it ask for concessions, such as asking for financial pro formas. 32 Those kinds of things look good to get approval but then they’re taken away by the courts. We 33 already have an ordinance the Pedestrian Transit Overlay District that says that is the way to 34 implement the Density Bonus in state law in the California Avenue area and there’s nothing in 35 here to reconcile those two. 36 37 In October you weren’t told about the condominium conversion, which is a separate section of 38 the code and that requires an action, a decision when a request is made within 90 days, but 39 there’s nothing here about what that process should be. I believe that should be before the 40 Commission and the Council. A lot of the proposed ordinance is rewriting things that are in the 41 code in Government Code Section 65915. But what happens when people rewrite things they try 42 and edit them and in some cases made them worse. For example, low income and lower income 43 can be rental units only. For sale units can only be moderate. Yet the definition in here reads as 44 if you can have for sale units that are low and lower income. You cannot do that in Density 45 Bonus law. 46 47 The issue of 2650 Birch and 195 Page Mill, I was at all the meetings and received a copy of the 48 Director’s decision. I don’t recall there being a transfer of a unit. Yet this is here sort of saying 49 10 you can do that. In fact you can’t because the definition of housing development in 65915 says it 1 has to be on contiguous sites. So you can’t put units someplace else. So that violates the law. 2 3 Similarly the Eden Housing project on Alma Street, at the time there was nothing in our law that 4 permitted a higher density that it put in. But if you calculated based on floor area and the size of 5 the units in South of Forest Avenue that project exceeded what the law allowed. This ordinance 6 gives that power, but you can only increase the density. You do not have the power to give more 7 incentives and so that is wrong as well. Thank you. 8 9 Chair Martinez: Thank you very much. Any further? Commissioner Keller. 10 11 Commissioner Keller: Yeah I was holding off further comments until we had the member or 12 members of the public speak. But I have a few comments. First I’d like to respond to the 13 comment from Commissioner Alcheck and that is that the way that government section, 14 government code, federal, state Government Section Code 65915 is that the purpose of 15 concessions is to make the housing more affordable. And therefore I would strongly recommend 16 keeping this section eight precisely because if somebody asks for a concession that’s not part of 17 what’s there then they have to explain why. Now if you want to eliminate section eight then 18 simply eliminate the ability to have concessions that are beyond what is in the menu. But if you 19 allow concessions that are not in the menu then they have to justify them and the purpose of the 20 ordinance from the state law is to make it affordable and therefore pro forma provides the ability 21 to do that. So that’s my understanding of why that is. 22 23 And I know that, couple things. First of all a number of the Commissioners have been invited to, 24 were, attended meetings put on by some organization that I know that Commissioner Tanaka 25 went to a meeting that I went to a few months ago where Commissioners and Council Members 26 and whatever are invited to attend, staff, on a countywide basis. And we were actually shown 27 how to read pro formas of housing and how to interpret them and such. So other cities may in 28 fact use them. So I’m going to put that aside as that. So if you have a catch all allowing other 29 concessions they have to justify them and explain why. 30 31 Ok. The first thing is in terms of let’s suppose you have a project in which they add five housing 32 units which are all affordable on a 100,000 square foot office building. How much concession 33 should they be entitled to get? So I think that if it’s legal, and I ask this of the City Attorney, is it 34 legal to only allow concessions on a project that is predominantly housing? And if the project is 35 not predominantly housing you don’t get a concession. So for example require that the portion 36 of development devoted to housing be at least 50 percent of the FAR of the floor area of the 37 entire project. Is that a requirement that we could have? 38 39 Ms. Silver: Commissioner Keller we’d have to research that a little bit further. The ordinance 40 that the state law really does not give much guidance on mixed use projects and unfortunately 41 there’s only like two published decisions on the statute. So we’ve struggled with how to deal 42 with mixed use projects and we’d have to think about that one a little bit more. 43 44 Commissioner Keller: So because for example what was also being discussed for the Lytton 45 Gateway project was a project in which there was a small amount of housing, one floor of 46 housing and a tremendous amount of concessions were being achieved for that. And so that was 47 a situation in which, yes? 48 49 11 Mr. Williams: So if I could just add what we’ve tried to, first of all I mean I think SB 1818 1 2 Commissioner Keller: Government Section Code 65915. 3 4 Mr. Williams: Yes. Does I think I read the intent of that as intending to apply to mixed use 5 projects. And so I, and also the fact that our Housing Element is highly reliant on mixed use 6 development in order to demonstrate that we’re compliant. So I think it would be kind of 7 counterproductive to somehow not apply it to mixed use projects. But the other thing is that 8 we’ve put the provision in here as far as the allowance for FAR is specifically limited on this 9 with that thought in mind on page 11 at the item V there. Up to 50 percent increase in the Floor 10 Area Ratio or up to the square footage of the restricted affordable units, whichever is less. So 11 what we’re saying is you don’t just get to do all kinds of extra commercial square footage just 12 because you gave us one more restricted affordable unit if that affordable unit is 1,300 square 13 feet then you get 1,300 square feet more of commercial. So we were very cognizant of that and 14 that’s why that provision is in there, to try to create some parity in those. 15 16 Commissioner Keller: Ok. 17 18 Chair Martinez: Commissioner, can I ask you what were you trying to achieve with your 19 suggestion? 20 21 Commissioner Keller: Well my suggestion is, first of all I’m not suggesting that we exclude 22 mixed use development. I’m just suggesting that we only allow mixed use developments in 23 which housing is a major component. So therefore if housing is let’s say 50 percent, 40 percent, 24 but some large percentage of the overall floor area then you get bonuses, but if housing is an 25 afterthought added onto a major office building then that’s not really a situation in which the 26 housing makes the project, more affordable housing makes the project that much more 27 unaffordable to the developer. 28 29 Chair Martinez: Commissioner the Gateway project was a PC though so the public benefits were 30 larger than just the housing being provided. It just it seems to me that you’re asking to put 31 additional constraints when we’re trying to build housing and we’re trying to make our effort to 32 the State seem more as if we’re serious behind it. I don’t really see the benefit in trying to 33 manipulate the development so it makes it less interesting for the applicant, the developer to 34 build his project because he has to provide more housing or is penalized for it. Why don’t we 35 just leave it alone? And we have the limits that the Planning Director has stated. 36 37 Commissioner Keller: Ok. May I continue? 38 39 Chair Martinez: Definitely. 40 41 Commissioner Keller: Thank you. Ok. In the cover material it basically says that, in the staff 42 report it limits the require, the limit on when a project can, when the restricted affordable units 43 no longer have to be restricted is 59 years. However on page 8 of the Draft Ordinance it says 59 44 years for some units and 30 years for other units. And I’m wondering why there’s a 30 year 45 there as opposed to 59? And secondly I’m wondering why it isn’t merely for the life of the 46 project. Why should we have to worry about it some years down the road? Why can’t it just be 47 as long as the project is there the units have to be affordable? Any thoughts? 48 49 12 Mr. Wong: Commissioner Keller I know the 30 year is straight from the Government Code 1 Section 65915 in that ownership units I believe are a minimum of 30 years. So (interrupted) 2 3 Commissioner Keller: So we can’t have a more severe requirement than the government code? 4 5 Mr. Wong: And I believe, no, we’ve made them for 59 years to be consistent with the City’s 6 BMR program. 7 8 Commissioner Keller: Ok, but it does say 30 years in the third line from the bottom of paragraph 9 B of 18.15.040. There’s one mention of 59 years and one mention of 30. Yeah I’m just 10 wondering if that has to be 30, but maybe you can think about that. 11 12 The next issue is on page nine. There’s a whole bunch of parking incentives which are by right. 13 Do those parking incentives apply only to the affordable units and our regular ordinance applies 14 to the regular units? The market rate units? Is that correct, my interpretation of that? 15 16 Ms. Silver: The by right would apply to the entire project. 17 18 Commissioner Keller: So in other words, if somebody has 20 percent affordable then let’s say 19 then they suddenly all of the development of the project, the remaining 80 percent is limited in 20 terms in of how much parking we can require? 21 22 Ms. Silver: Yes, that’s the state law. 23 24 Commissioner Keller: I see. Well I won’t mention any words I think about that, but anyway. 25 Because they’re not printable. But in any event at the bottom of that paragraph it says, “Provide 26 for tandem parking.” I would delete tandem parking. I don’t really see a reason for, if this 27 severely restricted to allow tandem parking in addition. 28 29 Chair Martinez: Do you have additional comments you want to (interrupted) 30 31 Commissioner Keller: Yeah, but I can do one; I can hold it and do another round if we have 32 another round. 33 34 Chair Martinez: Well how much more do you have? 35 36 Commissioner Keller: I have gone about a halfway through. 37 38 Chair Martinez: So you have another three minutes? 39 40 Commissioner Keller: I can go another three minutes, but I think it’s a little longer than that so 41 it’s your choice. 42 43 Chair Martinez: Ok. We’ll come back to you then. Commissioner Alcheck had some comments. 44 45 Commissioner Alcheck: I want to make a rebuttal on the financial issue. I don’t believe that the 46 ability to analyze a pro forma is relevant here. I have an MBA as well and I’ve spent many 47 nights with pro formas. I want to say that developments can take years. And the business of 48 development is risky for that very reason. And the success of a project and a development in this 49 13 City is as much a factor of fiscal components of that development as it is the time it comes 1 online. If it’s a good market, huge success. If it’s a bad market, it’s a bankruptcy. And if we 2 evaluate concessions based on how much profit a developer may make at the conclusion of a 3 specific project, we are allowing local government to reduce the upside potential and increase the 4 downside potential at the same time. It has, there is no benefit to a developer. 5 6 And I want to note that asking for a concession doesn’t guarantee receipt of that concession. 7 Each applicant that asks for a concession that’s not on the menu will have to make their case. If 8 they choose to voluntarily make that case with a pro forma, so be it. And if their case isn’t 9 strong enough without pro formas they’re denied. It’s not; you don’t ask for a concession and 10 get it. You have to make the case. And I think that we are capable of evaluating these 11 concessions without knowing how much money a developer anticipates making in a future that 12 nobody can guarantee. And that is, I mean that is the crux of the, my opposition to the analysis 13 of pro formas as a way of evaluating land use decisions. I think we need to evaluate whether we 14 want to allow these concessions because they make sense for us. They achieve a goal that we 15 have like increasing Below Market unit availability or the like. So I’m not going to make more 16 points on this outside of this comment. 17 18 Chair Martinez: Well stated Commissioner and I support your position. However I know from 19 recent events with the Speaker of the House you don’t call for a vote when you know you’re 20 going to lose. So I think the comments of Commissioner Alcheck will be heard by the Council 21 and we are going to allow it to sit as it is and with the recommendations that you’ve heard from 22 the various Commissioners today. Further comments? Commissioner Tanaka. 23 24 Commissioner Tanaka: Well one quick thing for staff is one of the members of the public made 25 some comments. I was wondering if maybe staff could quickly address those comments that we 26 heard? 27 28 Mr. Wong: I am not ready to address the Pedestrian Transit Oriented Development (PTOD) and 29 the condo conversion. I wasn’t… 30 31 Mr. Williams: The PTOD one I know we have in our Pedestrian Transit Oriented Development 32 zoning Mr. Borock is correct that we had included in there language because we developed that 33 zone very shortly after the state government code Density Bonus law was enacted and we tried to 34 envelop within that provisions that depending on how many BMR units you were providing that 35 you would get certain increases in height up to certain max. somewhat similar to what’s being 36 done here, however, then you’d be without this kind of an ordinance it became apparent that we 37 really couldn’t do that because that wasn’t in and of itself considered an implementing ordinance 38 for that code. It was just this one zoning district we had. So I think we had determined that we 39 really couldn’t apply that. 40 41 And so what I think we’re going to have to do is if this, if we pass this we’ll have to clean up that 42 ordinance and take that out and this will govern or modify it to be consistent with this or 43 something like that. So there is some inconsistency right now, but we’ll rectify that. This is a 44 broader based approach that we need to do citywide. So this is the way we should go at this 45 point and we’ll deal with the PTOD zoning at a later date. 46 47 14 Chair Martinez: And with other questions regarding state law. For example, for sale units only 1 applying to BMR applying to moderate income units if those are inconsistencies how do we 2 begin to correct that? 3 4 Mr. Williams: So you understand the question? We’re referring to ownership units that refer to 5 low and very low income. We don’t require that, but that somebody could do that and get 6 concession. 7 8 Mr. Wong: Oh absolutely. Right now the state law addresses ownership for moderate income. 9 That’s what the Government Section 65915 states, but yeah. If the developer chooses to do 10 lower affordability therefore he would be eligible for additional concessions or a higher 11 percentage of Density Bonus if that’s what the developer choses to do. 12 13 Chair Martinez: So there’s no inconsistency with the state law you’re saying? Yes? 14 15 Mr. Wong: If the developer chooses to do a deeper affordability I don’t think that that would be 16 an inconsistency with state law. 17 18 Chair Martinez: Ok, thank you. Commissioner Tanaka, I’m sorry I interrupted you. 19 20 Commissioner Tanaka: No problem. So I also saw that there was a concession for mobile home 21 parks. And I was wondering is that really part of the state law to actually have, you have to give 22 a concession for mobile home parks? 23 24 Mr. Wong: I’m sorry. Could you repeat the question again? 25 26 Commissioner Tanaka: Oh sorry. Ok. I noticed that there was a mobile home park concessions 27 and I was wondering is that really part of the state law to have the mobile home park concession? 28 29 Ms. Silver: Yes, it is. And that’s for the development of a new mobile home park and the state 30 law specifically provides incentives for the development of mobile home park and also for the 31 development of childcare facilities. And that’s part of state Density Bonus law and so it’s 32 incorporated into our local (interrupted) 33 34 Commissioner Tanaka: So there’s no choice basically. Ok. And I guess the other thing is what 35 has to be on the menu of concessions? I mean do we just, can we just put one thing or do we 36 have to have all the things that we have listed? What’s the requirement? 37 38 Mr. Wong: Commissioner Tanaka there is no requirement about what can or cannot be on the 39 menu of concessions. These concessions that were chosen by staff have just, were concessions 40 that were approved in the past or have been requested in the past. But it’s up to the Planning and 41 Transportation Commission to evaluate which are worthy if you will to stay on the menu or not. 42 43 Commissioner Tanaka: Because I’m actually with the Chair on this a bit in terms of quantifying 44 the concessions. And I think things like setback and other restrictions are kind of important and I 45 would almost want to see if this is state mandated that we have to have all of these kind of things 46 like mobile home park concessions. I would almost, or requirements. I would almost feel, sorry, 47 Density Bonus. I would almost feel like we should have just one item as a concession, an easy 48 15 one, and then everything else we should go through the PTC or ARB or the respective 1 (interrupted) 2 3 Mr. Williams: I just have to indicate that I think we have some discretion to implement this law, 4 but this is a state law that is intended to provide incentives to create housing. And I think that if 5 we come and we create one incentive and particularly if this one incentive that isn’t even 6 meaningful or something like that. I mean I’ll leave it to the City Attorney to judge whether that 7 will kind of jeopardy that puts us in, but it certainly doesn’t look good and I can tell you that 8 HCD when they’re reviewing our Housing Element is going to thumb their nose and say you’re 9 not, we’ve asked you to provide incentives and concessions for encouraging housing and they 10 are not going to be impressed by that kind of, if we’re that limited. 11 12 So I think what we’ve done is we’ve said there’s a fairly broad range of concessions here, but for 13 the most part in the areas where it really we’re talking about extensive development, FAR and 14 height, they are pretty limited and if you want to exceed those you’re going through the Council 15 and Planning Commission to do so. And that otherwise there are limits on most of these other 16 ones as to how much you can get. So it’s much, much more restrictive than what we’ve been 17 operating under the last six or seven years. But I understand it and using it to be so restrictive 18 that it doesn’t do what state law intended it to do as a Planner I don’t think that’s an appropriate 19 way to go unless the one concession that you’re granting is a really significant concession. If 20 you’re going to tell everyone they can have 25 percent more FAR kind of by right that might be 21 different. 22 23 Commissioner Tanaka: Well I guess I was just trying to think about what’s right for Palo Alto 24 and if those concessions are right for that development the various bodies would approve those 25 concessions, but I guess to have them automatic and not have any oversight to me is the 26 concerning part especially if they’re not a quantifiable concessions. So that’s more of a point, 27 that’s why I kind of was keying off of what the Chair was saying about that because actually I 28 agree. I think it makes sense. So that’s my main concern about that. I don’t know if it’s 29 possible for maybe for there to be some oversight about these concessions if they are not as 30 quantifiable. 31 32 Chair Martinez: Can I follow that up? It seems like from what we’ve seen there’s been a sense 33 of entitlement to these concessions. I know that it’s subject to ARB and to Planning staff’s 34 recommendations, but it just seems that developers from what I’ve seen feel that they can go 35 higher, they can go wider, they can go more FAR. It’s, that’s hard to sort of overcome when it’s 36 not good land use. And I think Commissioner Tanaka is really echoing my sentiments that you 37 know how do we sort of do this? And I respect what the Planning Director said, that this is 38 really an important perception that we want to give out that we’re looking for ways to increase 39 affordable housing and it may come to a few units that with insignificant impact because it is 40 hard to build things like that here. But on the one hand I don’t want to see us pushing the 41 requirement for pro formas and more documentation and like that, but on the other hand I want 42 the planning process to be on good land use not on what somebody feels they have a right to do. 43 So I don’t know how we strike a balance on that. 44 45 Ms. Silver: Chair Martinez? 46 47 Chair Martinez: Yes, City Attorney. 48 49 16 Ms. Silver: So the concessions, the menu of concessions start on page 10 of course and I’m sort 1 of struggling with this issue of the Commission thinking that they are sort of open ended and not 2 quantifiable. And we did have a fair amount of discussion on this and other jurisdictions do have 3 a little more quantification and in fact Santa Monica’s requirements were more quantifiable, but 4 we thought that it would be better to have some discretion. So the limitation that we put for 5 instance on the first three, the setback requirements is that they should comply, that the setback 6 variation should comply with design guidelines. Now it certainly is just as appropriate to modify 7 that with some other type of limitation and maybe even have a quantifiable measure, but it’s not 8 certainly open ended by any means. 9 10 And then going to the next set, the height limit we’ve talked about that is quantified very 11 expressly and as is I think the FAR. So the last three are certainly more open ended; they don’t 12 have any qualifiers. So it, maybe you can give us some guidance on how to better limit those, 13 but I think it would be helpful to review what we do have and perhaps suggest areas that you 14 think need improvement because there certainly was some effort put into trying to limit the 15 concessions in a way that did fit Palo Alto. 16 17 Mr. Williams: And we could do that in terms of saying like a percentage of no more than 25 18 percent reduction in setback or 50 percent reduction or same thing in daylight plane or open 19 space areas or things like that if that was preferred. 20 21 Commissioner Tanaka: So I (interrupted) 22 23 Chair Martinez: Commissioner Tanaka, go on. 24 25 Commissioner Tanaka: Sorry. I think that would certainly be better. I guess, I mean like I take 26 number four in the height limit issue. I mean and this is probably not possible, but for instance I 27 know the limit is 50 feet, but could you directly build something next to an R1 or in a R1 that 28 would be 50 feet? If you put a lot of BMR units in. Right? I guess I worry about that because I 29 think the Chair is right that we need to make sure that Palo Alto has the right land use. And I 30 especially don’t want the ones below which have no restrictions whatsoever. I think those, that 31 doesn’t feel right to not have those very quantifiable for some sort of like, doesn’t mean you like 32 with reduction of daylight plane requires some you could cast a huge shadow over your 33 neighbor’s property. I don’t know. I mean it doesn’t seem right. 34 35 And also I was maybe saying that either we have a lot of oversight over this to make sure that 36 something bad doesn’t happen, or we really reduce it so it, reduce it to the ones that are truly 37 quantifiable or something like that or maybe a mix of that. And so that we don’t end up with 38 something that we have no control over. 39 40 Mr. Williams: So that’s, I would just say if that is the sense of the Commission I would suggest 41 that if you want to do that and we, you would send it back to us and we would try to come back 42 to you with more quantifiable information. 43 44 Chair Martinez: Let me just follow up and then I’ll get to you Commissioner. I would suggest 45 kind of the opposite, that we adopt it just as it is as a pilot program for a year and just see what 46 comes. If we get no takers then it’s not doing what we’re trying to achieve and that’s to get more 47 BMR units. If it really becomes more problematic then we need to go back to the drawing board. 48 My only concern is that you say you can have up to 50 feet somebody will come in with a 50 49 17 foot project and we’re not finessing it. We’re sort of at the maximum at the get go. And maybe 1 that’s an unwarranted assumption given the lands that are available for housing development. So 2 maybe it’s a possibility that we just see if it works. There are certainly good ideas there and they 3 all make sense. It’s not like we’re thinking that this is some crazy thing that Planning wants to 4 do. I think it all is reasonable. It’s targeted towards our RHNA goals. You know we’re not 5 getting enough affordable housing. All the reasons for doing this and to comply to state law, 6 which is important. I think it’s worthwhile but we don’t know the outcome. And perhaps it’s as 7 easy as just giving it a try and coming back in a year and saying we have nothing to report. 8 Nobody is doing it or we’ll see another Lytton Gateway project where it’s not exactly how we 9 thought it would take shape. I don’t know. Is that a possibility for us, or is that not a good 10 planning strategy? 11 12 Mr. Williams: I mean it’s always good to review new ordinances and such when they go into 13 effect so I think that’s perfectly reasonable to specify that we review it in a year and see where 14 you are. 15 16 Chair Martinez: Vice-Chair Michael. 17 18 Vice-Chair Michael: So as always I’m impressed by the conscientious attention to detail of my 19 colleagues on the Commission pouring over this in great detail. And I’ve been thinking pretty 20 intently on each and every comment that everybody has made and I’m not persuaded that we 21 have any collective wisdom beyond there is a state law, this would implement on a local level 22 what’s required, it’s consistent with what were objectives in adopting the Housing Element. It’s 23 not been an area of heavy activity in the past nor is it really expected to be an area of heavy 24 activity going forward although it’s definitely the intention of the City to encourage the 25 development of Below Market Rate housing as part of achieving our overall objectives. 26 27 I would support the idea from Chair Martinez to move the approval of the ordinance as drafted. 28 Not on a trial basis but just as any ordinance and any ordinance that’s adopted is subject to 29 further review and amendment. I would say that the interest that sometimes comes up, I know I 30 have an interest in relationship to the new incentives and the PC project at Lytton Gateway came 31 up without having any financial information presented to the Commission I found it completely 32 nonsensical to have that discussion about what were the benefits and what was the value and why 33 and was it reasonable. Here I think the answer and advice from Deputy Assistant City Attorney 34 Silver about the very narrow application of the pro forma information only to the extent that 35 concession is sought beyond that which is an already sort of generous and comprehensive menu 36 of possibilities something is a very rational and reasonable way to provide an additional 37 incentive. If it’s not sought then there’s no reason for anybody to submit or disclose pro forma 38 information that they otherwise don’t want to disclose. So I think that very narrow and 39 reasonable part of the ordinance should definitely not be struck nor should it be taken as an 40 expression of our philosophy as a Commission regarding our appetite for digesting financial 41 information which varies very much by each Commissioner. But I think we’re ready to entertain 42 a Motion. 43 44 Chair Martinez: Not quite yet. First Commissioner Alcheck and then… 45 46 Commissioner Alcheck: I was going to ask the exact same question. I was going to suggest a 47 trial. 48 49 18 Chair Martinez: Ok. Yes, Commissioner Keller. You have three minutes. 1 2 Commissioner Keller: Sure. I have trouble reading the childcare facility. I don’t understand 3 what it means. It says, “Additional Density Bonus that is an amount of square feet of residential 4 space that is equal to or greater than the square footage of the childcare facility.” Looks like one 5 of these questions on a SAT test that I can’t figure out what they mean. Can you tell me what 6 that means? Could you give me an example of what that means? Sorry, page 12 of the 7 ordinance. 8 9 Mr. Wong: Yeah, Commissioner Keller if you provide 10,000 square feet of childcare in a 10 residential development you get an additional 10,000 square feet. 11 12 Commissioner Keller: Ok I’m not sure that’s what it reads because it says, “An additional 13 Density Bonus that is the amount of the square foot of the residential space that is equal to or 14 greater than the square footage of the childcare facility.” So you’re saying something about 15 residential space and you’re comparing that to the childcare facility and the way I read that is 16 that’s the part that’s the excess of the childcare facility? I think it’s, I think you need to clarify 17 what you mean. If you really mean that you’re adding to the amount that you add the square 18 footage that is the amount of the square footage of childcare facility then say that. If that’s what 19 you mean it’s too many words to say that and it’s pretty ambiguous from my point of view. 20 21 Chair Martinez: Ok. Point well taken so they’ll work on it. 22 23 Commissioner Keller: I have a few suggestions on how to, with respect to what the Chair said 24 about quantifying the kind of concessions. I have some suggestions along those lines. So for 25 concession one, which is reduce side yard setback, I would suggest that that be reduce side yard 26 setback on one side and I would exclude not only design, consistent with design guidelines but 27 also exclude special setbacks. Because sometimes you’re on a corner and there’s a special 28 setback on that side. For example, Alma Street or Charleston there are special setbacks and I 29 would not want to go inside that. Similarly for two and three I would exclude special setbacks 30 for all three of those. So you can’t achieve a concession that gets you closer to the street than 31 when they have, when we have one of those special setbacks for that street. Because those are 32 standard, I’m not sure whether those are considered design guidelines, but they’re standard. And 33 I think they’re called, aren’t they called special setbacks? Am I correct in that? 34 35 Mr. Williams: Yes they are called special setbacks. 36 37 Commissioner Keller: And I would not want people exceeding that. You know, limiting on that. 38 With respect to number four, concession four I believe you talked about restricted affordable 39 units as opposed to affordable unit. So that’s an additional word that you talked about adding. 40 With respect to five I don’t have any comment on that per se. With respect to six, reduction of 41 daylight plane requirement on one side as opposed to in all directions, but on one side. So each 42 daylight plane you do is its own concession. With respect to seven I’d leave that alone. With 43 respect to eight I’d separate private and public space. So a reduction of private space is one 44 concession with reduction in public open space is a separate concession. So if you split those out 45 those are two separate concessions. I would delete nine because it’s already by right. So there’s 46 no reason to have it as a concession here. 47 48 19 I would put two other concessions however. So one more concession is the public open space is 1 now nine and ten is exceeding the 35 foot height limit adjacent to residential. So that is a 2 separate concession because we have a citywide rule that says if you’re adjacent to residential, 3 neighborhood residential zone you can’t exceed the 35 height limit and that should be its own 4 separate concession. 5 6 Mr. Williams: You mean separate from the height concession? 7 8 Commissioner Keller: Yes. 9 10 Mr. Williams: So it’s a concession to exceed 35 feet but then it’s a concession to exceed it under 11 the height provision is a separate concession? 12 13 Commissioner Keller: That’s right because you’re exceeding two different rules. So the issue is 14 that that’s actually a separate provision on the code so you have to use up two concessions when 15 you’re adjacent to residential if you’re going to exceed the height limit there. Ok? So think 16 about that. 17 18 In addition this, these are by right concessions as I understand them with the exception of the 19 discretionary one where they, where there’s a dispute on whether they should have a pro forma. 20 However, if they’re going to use a discretionary process then they should use the discretionary 21 process not the by right process. Combining the two is problematic. So I would say that if you 22 used these, if you used this ordinance that this ordinance does not apply when use a PC, a PTOD, 23 or a variance or a Design Enhancement Exception (DEE). If you do any of those, which are 24 extra things you get then use those and not this. You don’t get to double dip. 25 26 Finally, what was mentioned by one member of the public is the issue of rental conversion to 27 condo. The problem is that we need to make sure that our rental conversion to condo ordinance 28 is consistent with this. And part of the consistency that needs to happen is that the BMR units 29 that are required in the conversion to condo have to take into account the ones that they achieve 30 for the, that they got from the concessions for the rental units. So in addition to the 15 percent 31 units that you have to have BMR for the conversion to condo you have to add to that all the units 32 they got, all the units that they offered for getting the concessions for the rental housing. So that 33 needs to be added to it. Ok? 34 35 I, the ordinance is I assume clear, but I’m not sure of this whether the ordinance is clear on 36 whether there are concessions for fewer than five units. It talks about the ordinance being 37 effective for more than five units. But it could probably say that it doesn’t, that no concessions 38 are allowed for under five units and it’s, I think that being explicit makes sense. 39 40 And I would remove tandem parking from 18.15.050 (A). I don’t see why we should provide by 41 right tandem parking. Essentially what that would do is it would provide tandem parking an 42 entire complex and tandem parking is problematic. And I would actually rather than passing the 43 ordinance as is I would actually prefer passing the ordinance on with these changes if people 44 would like to discuss them. 45 46 Chair Martinez: Let me as staff. Would you prefer that you come back with some revisions? 47 This is a lot of items. Or do you want us to try to hammer out a Motion with a lot of ugly 48 amendments to it? 49 20 1 Mr. Williams: No, I would say that if a majority of you feel like you want us to address those 2 amendments that we should just take in what’s been suggested and come back to you with 3 something that’s cleaner. 4 5 Chair Martinez: I don’t want to suggest though that everything that we said has to be revised. 6 7 Mr. Williams: Right. 8 9 Chair Martinez: For example there may be a good reason for including tandem parking. I don’t 10 know. Maybe tandem parking isn’t part of the parking cap it’s just tandem parking as it 11 normally is. So I would like to see you come back but on those items on this laundry list that 12 you don’t choose to incorporate just provide a reason why that you choose a different strategy on 13 that. 14 15 Commissioner Keller: Chair? 16 17 Chair Martinez: Yeah, Commissioner Keller. 18 19 Commissioner Keller: Thank you. There’s one other thing that I left off which was brought up 20 by several of the other Commissioners and I think useful in this. And that is that concessions 21 one, two, three, and five would not be eligible. Sorry, one, two, three, and four. Actually I’m 22 not sure exactly which ones of them would not be eligible, but would not be eligible to be 23 applied adjacent to R1, R2 or RMD. So in a situation where you have R1, R2 or RMD then you 24 can’t apply the daylight plane, you can’t apply the setback on the side that’s adjacent to that. 25 You can apply on the side that’s not adjacent to that, but to avoid adjacency issues on the side 26 that’s adjacent to R1, R2 or RMD you can’t do the setback or daylight plane or that kind of stuff. 27 So I’m not sure exactly which ones apply, but certainly we need to think about restricting it in 28 that way. Thank you. 29 30 Chair Martinez: Staff are we under a time constraint here? Does this have to get done by 31 February the 6th or some number? 32 33 Mr. Williams: No. 34 35 Chair Martinez: So, I know. I read 2005 and so we’re on schedule. Ok. Just so that we can 36 continue this. Commissioner Alcheck. 37 38 Commissioner Alcheck: I would like to, if it comes back and includes this pro forma piece, 39 which I’m encouraging it doesn’t I would like to know what the staff feels is the purpose and 40 whether or not the staff feels like that’s necessary for them to be, for this evaluation. Because I 41 don’t think that the report actually provides that explanation. So that’s my last comment. 42 43 Chair Martinez: Commissioner Tanaka. 44 45 Commissioner Tanaka: So I just want to comment on the concessions because I think it actually 46 makes sense for it to come back to us because it’s not urgent, it’s not frequently used, and in 47 while I in general I like the idea of trials if we have a big mistake I think it could also be a 48 problem. But can staff as they go through this try to quantify like reduced side yard setback? Is 49 21 that reduced mean get rid of it completely? Does it mean reduce it by one foot? I mean I guess 1 that’s the kind of thing that I would like to know. What does reduce mean? Reduce by how 2 much? Because if it’s just a foot it’s probably not a big deal, but if it’s the whole thing is gone 3 that could be a big deal. So maybe if that could be, anywhere you can if you have some sort of 4 quantification of that I think that would be a good idea. 5 6 And then one thing about height, I just feel that’s kind of a hot topic for the community and 7 maybe that’s kind of the height exception you really should hit the Planning Commission or City 8 Council. I don’t know if it should be by right. So that’s another thing. That’s my two cents. 9 I’m not sure other Commissioners agree with that, but I think height’s a really hot topic and the 10 other ones maybe are ok to have sort of quantification of, but height and automatic 50 foot seems 11 a bit much. That’s it. Thank you. 12 13 Chair Martinez: Seeing no other hands let’s end this item for tonight. Thank you very much. 14 Thank you (interrupted) 15 16 Mr. Williams: Did you close the public hearing? 17 18 Chair Martinez: Oh. I will. 19 20 Mr. Williams: I just want to make sure because we will have to notice it again as a public 21 hearing. 22 23 Chair Martinez: I’m sorry do (interrupted) 24 25 Mr. Williams: Should we close it or not? Does it matter? 26 27 Chair Martinez: Yes? 28 29 Ms. Silver: No, we should keep it open. 30 31 Mr. Williams: But if we don’t know what date it’s coming back then we have to notice it. 32 33 Chair Martinez: That’s a good idea. We’re going to do that. Commissioner Keller. 34 35 MOTION 36 37 Commissioner Keller: May I make a Motion to continue this item to a date uncertain giving staff 38 an opportunity to respond to our comments. 39 40 SECOND AND VOTE 41 42 Chair Martinez: Ok there’s a Motion and we have a second? Seconded by Commissioner 43 Tanaka. Those in favor, do you want to comment on that? No. Those in favor of the Motion 44 say aye (Aye). Motion passes unanimously with Commissioner Panelli absent and one empty 45 chair. I want to close the public hearing and thank you all for this. I think it will be better. 46 47 MOTION PASSED (5-0-1-1, Commissioner Panelli absent and one empty chair) 48 49 1 Planning and Transportation Commission 1 Verbatim Minutes 2 March 5, 2013 3 4 EXCERPT 5 6 Review and Recommendation to City Council to Adopt New Chapter 18.15 (Residential 7 Density Bonus) to Title 18 (Zoning) of the Palo Alto Municipal Code to Implement 8 Government Code Section 65915 (Continued from January 9, 2013) 9 10 Chair Martinez: We’re going to reconvene and start right up with Item Number 2, Review and 11 recommendation to City Council on the proposed Density Bonus Ordinance. We’ll start with a 12 staff report. 13 14 Tim Wong, Senior Planner, Housing: Good evening Commissioners, my name is Tim Wong and 15 I’m a Senior Planner. On January 9th the Planning Commission, the Planning and Transportation 16 Commission (PTC) first reviewed the initial draft Density Bonus Ordinance and there were a 17 number of comments made, but coming out of that meeting there were three main discussion 18 points. Number one main discussion point about the draft ordinance; the first point was about 19 requiring a pro forma. A second discussion point was quantification of concessions on the menu. 20 And lastly there was also some points made about jurisdiction oversight for these concessions. 21 22 And so staff went back and revised the draft Density Ordinance based on PTC feedback and in 23 regards to the requirement of pro forma, staff has revised that requirement to say that instead of 24 requiring or will require the submittal of a pro forma, staff has revised that language to say “may 25 require financial information.” Staff feels that that requirement should be retained since per the 26 Government code the only way to deny a concession is proof that it is not, that concession is not 27 needed to provide affordable units or lower the affordability. So, but instead of making it 28 mandatory staff has revised it to make it on the Director’s discretion. 29 30 Secondly the second item was quantification or quantifying the concessions. So staff has gone 31 back and quantified the more popular concessions, the setback, daylight plane, and previously 32 the height had already been quantified therefore it hadn’t been touched. Some of the less popular 33 concessions on the menu have not been quantified to hopefully make them more attractive for 34 potential developers in the future. 35 36 And lastly the last point was government or jurisdiction oversight to these concessions. In that 37 staff responds to that comment is that through the menu of concessions and quantifying some of 38 these concessions that is probably what the City can do in overseeing those concessions. The 39 purpose and intent of the government code is to kind of eliminate, not eliminate, limit City 40 oversight or jurisdiction oversight and staff feels that what is before you is probably what the 41 City can do while meeting the purpose and intent of the code. So that concludes staff’s 42 presentation. 43 44 Chair Martinez: Commissioners questions? Commissioner Alcheck? Oh, I don’t know, I should 45 ask that. Are there any members of the public who care to speak on this item? I see none. Ok. 46 Questions, comments from Commissioners. Oh I guess we’ll go with Commissioner Keller. 47 48 2 Commissioner Keller: Yeah, I suggested you formally open and close the public hearing just for 1 formality and then I’ll… 2 3 Chair Martinez: Someone might be rushing in at the last; I’m going to give them a shot at it. 4 5 Commissioner Keller: At least open it anyway. 6 7 Chair Martinez: Oh, ok. Let’s open the public hearing. 8 9 Commissioner Keller: I, based on the fact that we had an extensive discussion on this several, not 10 very, I guess several months ago, I have only one change to the recommendation that I would 11 like to see. And that is that I brought up the issue of special setbacks. And the narrative 12 basically said that special setbacks are setbacks and therefore they’re covered by what’s 13 described. That was not the intent of my suggestion. My suggestion was that special setbacks 14 may not be reduced by concession ever. And this allows setbacks to be reduced. So I was 15 suggesting that special setbacks be excluded from allowing for concessions. And the reason for 16 that is special setbacks are situations where this contextual thing going on in a neighborhood. So 17 for example, along Alma Street there’s a special 30 foot setback and that’s true along a number 18 of our major residential arterials. And I think that that should be respected regardless of the 19 development with the possible exception of Alma Village, which I didn’t agree with either. But 20 essentially those special setbacks should be respected so I would like to exclude them. 21 22 Chair Martinez: I have a question about that. Are the special setbacks somewhere codified that 23 we know what they are or is that just sort of a general term that we apply? 24 25 Amy French, Chief Planning Official: This is Amy French, Chief Planning Official. We have a 26 map that identifies the special setbacks. They were identified on… they’re larger in general than 27 the 20 foot front yard setbacks. These are arterial streets such as Middlefield, Embarcadero and 28 they’re identified through Title 19 of the Palo Alto Municipal Code in reference to the map that 29 was adopted. 30 31 Chair Martinez: Ok and to our City Attorney. Are we in compliance with the State mandate if 32 we adopt such restrictions? 33 34 Cara Silver, Sr. Assistant City Attorney: Thank you Chair. Cara Silver, Senior Assistant City 35 Attorney. What I would suggest if that’s the Commission’s intent, is to specify in the sort of 36 what we call the ministerial menu of concessions that are granted as a almost a matter of right 37 that the special, that those shall not include a waiver from the special setbacks. However, if we 38 were to outright prohibit any granting of some special setbacks even upon a financial finding that 39 the Density Bonus provision is designed to accommodate that could be legally problematic. 40 41 Chair Martinez: Commissioner Keller. 42 43 Commissioner Keller: I would certainly be supportive of the suggestion that Counsel has 44 recommended to us and that would implement what I would want. 45 46 Chair Martinez: Are you done? Commissioner Panelli, comments? Really? The other side? 47 Commissioner Alcheck. 48 49 3 Commissioner Alcheck: I’m prepared to support this. My concern and I mentioned it last time 1 was that we’re sort of setting the bar even higher and in doing so creating a bigger hurdle for 2 developers who may otherwise provide low income or affordable housing. And I guess my 3 request would be that if staff could alert us when an applicant successfully applies for this. That 4 would be of interest to me. Because it’s my understanding that this happens very infrequently 5 and so I’d just like to know if over the next year or so when those things happen because then we 6 can kind of keep track of whether or not this is accomplishing I think the lofty goal of 7 encouraging affordable housing units. But otherwise I support the Motion. I support the making 8 of a Motion. 9 10 Chair Martinez: Thank you. Commissioner Tanaka, comments? Commissioner King. 11 12 Commissioner King: Let’s see. I am walking into this sort of halfway through. I read the 13 minutes from last time and one of the things that was of interest to me were Commissioner 14 Keller’s comments about the time limit on these. And so I guess one question; what is for a 15 family of four what is the moderate income housing limit currently? Can somebody on staff 16 advise? 17 18 Mr. Wong: Commissioner King the median income for a family of four in Santa Clara County is 19 $101,300. So for a moderate income it’s about ten percent higher or $110,000-115,000 for a 20 family of four. 21 22 Commissioner King: Ok, thank you. And so my understanding is the State Density Bonus is a 23 mechanism for the State without funding affordable housing themselves to basically allow us, or 24 requires us to go above and beyond what we consider the reasonable entitlements for a property 25 effectively burdening the community, the neighbors, whomever, that we for whose protection we 26 set those entitlements and then that effective cost that is borne by the community and converted 27 into money for the developer as an incentive then lasts as long as the building is there. And so I 28 had asked staff and they were kind enough to respond today about that and it sounds like on the 29 low and very-low income units that there’s a 30 years and that as a minimum, but their response 30 was that we can’t go beyond that. But on the moderate income housing they’re using 59 years, 31 staff has proposed 59 years. 32 33 To me if our goal over time is to foster affordable housing and in this case moderate affordable 34 housing, moderate income affordable housing, as we run out of more projects over time or we 35 will truly be built out then these won’t get replaced. And so if the overarching goal for the 36 community is to have this amenity then it doesn’t seem logical to me to have a limit 59 years for 37 those, for that requirement. And so I guess my question is am I missing something? Why 38 wouldn’t we just make that in perpetuity or as long as the building exists? And it sounds like 39 from the response today that really we’re doing the 59 years for consistency and because, and I 40 quote, let’s see… consistency and then there was one… I think it basically was to paraphrase 41 because that’s how we’ve done it. And so oftentimes that is how things are retained and so I’d 42 like to bring up the question, why wouldn’t we push on that for, to match the length of the 43 building’s life? 44 45 Ms. Silver: Why don’t I take a stab at that and then Tim may want to add on. The way the 46 moderate income deed restriction works is that there is no requirement in terms of the term under 47 the State law. And so actually under, there’s no limitation. And so the City has some flexibility 48 in determining what the appropriate term for the affordability restriction should be. The way our 49 4 Below Market Rate (BMR) program is administered is that typically a deed restriction will be 1 placed on the first owner of the property and that deed restriction is typically 59 years. And then 2 when that person, if that person does not stay there for 59 years, which typically is the case the 3 new owner will come in and then a second deed restriction will be placed. And that deed 4 restriction will be 59 years according to our program guidelines. So in essence you have that 5 protection just in the way the program is administered. And I think for administrative ease at this 6 point unless there’s a need to vary from our existing procedures it’s easier at a staff level to be 7 able to administer the BMR program in a consistent fashion. 8 9 Commissioner King: Thank you. And so that’s for the ownership, the purchase BMR program. 10 Now do we not have any structures that serve the rental? Or am I missing something that that’s 11 not for moderate that we don’t offer that for moderate income rental? 12 13 Ms. Silver: We don’t typically in Palo Alto have a lot of moderate income rental properties. We 14 may have some and in that case that’s a good point that we could have a longer deed restriction 15 under State law that would be permissive to require that the property developer continue to offer 16 for rental longer than 59 years. Tim do you know if we have many moderate income units’ 17 rentals? 18 19 Mr. Wong: I do not believe we have any BMR units for moderate income, BMR rental units for 20 moderate income. Our BMR program for rentals is specifically for low income, very-low and 21 low. So we don’t have any moderate income rentals. 22 23 Commissioner King: Thank you. So I guess it begs the question if they don’t exist does it bother 24 even, bother talking about it I guess. Do we have a dinosaur rental program at all? I guess not. 25 Ok. Thank you. 26 27 Chair Martinez: Vice-Chair Michael. 28 29 Vice-Chair Michael: So thank you. So I appreciate all the work done by staff in putting this 30 together and I think it’s the right thing to do and the right way to do it; maybe unlike my feelings 31 on the last item. I think that the question about whether and when the staff would find it 32 appropriate to do some financial analysis in relationship to concessions probably doesn’t apply 33 here as much as it does maybe in the case of a Planned Community (PC) where there may be 34 some quantifiable impact on the infrastructure or community in some way that would bear upon 35 the approval process. So I think that having that be discretionary here is perfectly appropriate. 36 37 Also I really appreciate the work that you’ve done to provide a menu of options regarding the 38 concessions because I think that that encourages a open rational economic opportunity for 39 anybody who is considering doing a project. They can pick and choose, price that out, see if it’s 40 feasible and I hope that although we’ve been told that this is not likely to get heavy use that it 41 would be, that we would start to see some projects which would come under the Density Bonus 42 Ordinance and that would help the City meet its commitments regarding affordable housing and 43 the polices in the Housing Element that we’re about to finally adopt and our commitment under 44 the Regional Housing Needs Allocation (RHNA) which, all of which is very important. So I 45 think this is a step forward in that regard and I think it’s very close to being perfect and I think 46 it’s certainly good enough for our purposes and I support it. 47 48 Chair Martinez: Wait your turn young man. No, go ahead. Commissioner Panelli. 49 5 1 Commissioner Panelli: Ms. Silver you opened up a Pandora’s Box for me here because now I 2 really, I felt pretty good about where I was and now I need to understand something a bit better. 3 4 Chair Martinez: I hate it when she does that. 5 6 Commissioner Panelli: You said, if I were to understand correctly, that in the case of the, to 7 Commissioner King’s questions in the case of the moderate income housing those have deed 8 restrictions which typically last 59 years and if there’s a transfer of property, grantee, 9 grantor/grantee within that 59 year process a new 59 year period begins. Is that accurate? 10 11 Ms. Silver: Yes, that’s correct, and that’s only for ownership units, moderate income ownership 12 units. 13 14 Commissioner Panelli: And so what happens in the case of low and very-low income rental 15 properties that are held by whether it’s a profit or non-profit corporation? Those are the, that’s 16 the 30 year restriction. Correct? 17 18 Ms. Silver: Actually for the City’s affordable housing requirements we generally put a 59 year 19 deed restriction or 55. But the State Density Bonus Law provides that if a developer is willing to 20 put a 30 year deed restriction they are by law entitled to the protections of the Density Bonus 21 Law. 22 23 Commissioner Panelli: And at the end of that 30 years what happens? 24 25 Ms. Silver: It reverts to market rate unless there is some other deed restriction that applies to the 26 property. Typically developers use other funding which may have additional affordability 27 covenants that would operate to extend the term. 28 29 Commissioner Panelli: So this is a nuance I did not explicitly understand when I was reading the 30 material. We are effectively at risk of losing the affordable housing that we entitle every 30 31 years after it’s been entitled as such. And so we’re continuously losing; we give density bonuses 32 and concessions and then we effectively should just assume that we’re going to lose that 33 inventory and have to replenish it somehow. This seems like a really bad recipe. It seems like a 34 recipe for disaster. 35 36 Ms. Silver: That is the case for the small number of affordable units that are created through the 37 Density Bonus Program. State law provides that there is, that developers can just provide a 38 simple 30 year deed restriction. Now, you know, that also lines up with the age of housing stock. 39 Housing stock doesn’t last forever. It does typically turnover over a certain period, whether it’s 40 30 years or 50 years depends. And but that, yes, that is the shortfall of the Density Bonus Law. 41 42 Commissioner Panelli: Ok. Thank you. 43 44 Chair Martinez: It seems to me one of the reasons we would find this attractive is that it would 45 encourage developers to kind of take on more responsibility for lower income housing. I don’t 46 hear from Commissioner Alcheck that this is true. I heard that this would provide more 47 constraint. So is it anticipated, have we done any projections about what the outcome of 48 providing this Density Bonus Law would provide to Palo Alto? Tim? 49 6 1 Mr. Wong: I do not, we have not done any projections since it is an owner, it’s not a requirement 2 such as BMR. We can maybe project how many units and we can take 15 percent of those, but 3 for Density Bonus it really is an owner by owner type decision. So there’s no way to really 4 project how many potential density, affordable housing units we’d get through Density Bonus. 5 6 Chair Martinez: So in looking at our Regional Housing Mandate of 2,180 we couldn’t say that 7 two percent would come from something like this? We have no idea of; it’s a question, but no 8 idea of sort of the positive effects of having this Density Bonus Law? 9 10 Aaron Aknin, Assistant Director: I don’t think we could quantify an exact number of units. The 11 thing I would say, I mean I understand what Commissioner Alcheck is saying, but to the point 12 that I would disagree is that it does create some certainty both for the City in terms of developing 13 a menu of concessions and on the developer end to what the City’s expectations are, what we 14 will consider for these concessions. So I think it does help when they’re taking a look at land 15 and what they want to develop. 16 17 Chair Martinez: Correct me if I’m wrong, but hasn’t the only time this has been used is when 18 low income developers wanted to increase the number of housing units like the Eden project on 19 Alma or the one we heard last time from Palo Alto Housing Corp.? Are there others that 20 (interrupted) 21 22 Mr. Wong: Commissioner Martinez, Density Bonus, 195 Page Mill provided 17 units of 23 affordable housing for two concessions and also 2650. Same developer used Density Bonus for 24 concessions also. 25 26 Commissioner King: Sorry. What level was that? 27 28 Mr. Wong: They were rental, so they were at 60 percent of area median income. So they have 29 the 30 year restrictions on them. 30 31 Chair Martinez: So over the last year how many units do we count for that? 32 33 Mr. Wong: It would be 18 between those two developments in the past. 34 35 Chair Martinez: Well did we get a Density Bonus from the Maybell project? 36 37 Mr. Wong: Not really a Density Bonus. They’re asking for concessions, but they’re not asking 38 for additional density. 39 40 Chair Martinez: And what about the Eden housing project on Alma? They got concessions. Did 41 they get increased density? 42 43 Mr. Wong: I don’t think they got additional density. I know they got concessions. I’ll have to 44 double check, but I don’t believe they asked for density. 45 46 Chair Martinez: Ok so we can get, we can give concessions but not get additional housing units. 47 Is that how it’s going to work? 48 49 7 Mr. Wong: That is correct. The ordinance states that you don’t have to request Density Bonuses 1 to get concessions. You can just request for the concessions. 2 3 Chair Martinez: I see. And the, I like the menu of the specific concessions that are being 4 available, but the 50 foot height limit, how did we hit upon that? It sounds like an obvious 5 question, but I’d like to, I’m trying to trap you so you can respond. 6 7 Mr. Wong: Well in no way can it exceed the 50 foot, but residential I believe the maximum 8 height is 35, so it gives them a little additional height if they are to provide affordable units. 9 10 Chair Martinez: So if somebody’s proposing to do this on a mixed use development along El 11 Camino Real they would be limited to 50 foot? 12 13 Mr. Aknin: Correct. As it’s written out they’d be limited to 50 feet. 14 15 Chair Martinez: So as you’re aware the Architectural Review Board (ARB) has suggested that 16 there be some flexibility to the 50 foot height limit. So do we take that into account in this or is 17 that something that we consider separately? 18 19 Mr. Aknin: At this point I think that’s something that you would consider separately, once 20 there’s direction from Council related to the 50 foot height limit and we have a larger community 21 discussion related to that I think that’s the time that it would be appropriate to put it within this 22 discussion. 23 24 Chair Martinez: Ok so there’s a chance that we might come back and revise this? 25 26 Mr. Aknin: I think so. I mean not immediately, but when we have a community wide discussion 27 I think there could be multiple areas within our code that we’d have to take a look at. 28 29 Chair Martinez: Ok, great thank you. Commissioners anything else? Commissioner Keller? 30 31 Commissioner Keller: So a couple of things. First with respect to the affordability of moderate 32 income units does, if they were moderate income rental units does 18.15.040(b) indicate that 33 those units would be deed restricted for 59 years? Is my reading of that correct? That’s on Page 34 8 of the ordinance. 35 36 Ms. Silver: Yes. That’s correct. 37 38 Commissioner Keller: So even if people were to build a moderate income rental property it 39 would still have that deed restriction. Thank you. 40 41 The second issue is that the Density Bonus Law is unlikely to be used in Palo Alto for increasing 42 density and very likely to be used for concessions. 195 Page Mill and another as an example of 43 concessions. 101 Lytton, which is the project at Lytton and Alma originally had concessions as 44 the reason it was, because of the housing that was there that was later deleted, but somehow the 45 concessions stayed anyway. That project had concessions as well. And it’s likely that there will 46 be other projects that come along for which there are concessions. And right now those 47 concessions are by right and therefore essentially any developer can ask any concession at all 48 and there, the City has no, essentially has no way of restricting that. This would basically 49 8 indicate the menu of restrictions that we’re allowing without such a restriction the developer can 1 build things that are not as compatible with the community and the neighboring properties. And 2 so the concession law it basically is, the Density Bonus Law says that the City is supposed to 3 implement it, is supposed to enact and implement the ordinance. Is that correct? 4 5 Ms. Silver: Yes, that’s correct. 6 7 Commissioner Keller: Even though this law has been in existence for eight years or more we 8 have not yet done our duty and implemented such an ordinance so we’re now going ahead and 9 doing that. Is that understanding correct? 10 11 Ms. Silver: Yes, that is. 12 13 Commissioner Keller: Correct. Is there a minimum number of units that are required so if 14 somebody builds a four story building with 2 affordable units on the top floor is, what does that 15 trigger in terms of that? That’s 100 percent affordable, but what do they get for that? 16 17 Mr. Wong: Commissioner Keller, well first Density Bonus Ordinance kicks in when it’s five or 18 more units. So if they only build two units they would not be eligible for concessions or Density 19 Bonus. 20 21 Commissioner Keller: And State law does not require the issuance of bonuses if there are fewer 22 than four units, four units or fewer? 23 24 Mr. Wong: Yes. That was taken verbatim from the code. The five unit criteria threshold. 25 26 Commissioner Keller: Thank you. So I’m going to make hopefully a Friendly Amendment to 27 add in that special setback as (interrupted) 28 29 Chair Martinez: We don’t have a Motion yet. 30 31 Commissioner Keller: We do have a Motion. I thought there was a Motion by Commissioner 32 Alcheck with a Second by Commissioner Tanaka to move staff recommendation. That was not a 33 Motion? 34 35 Chair Martinez: Maybe I wasn’t here. 36 37 MOTION 38 39 Commissioner Keller: Ok, there’s no Motion. Then I’ll make a Motion. So I’ll move the staff 40 recommendation with, as stated with the addition that the special setback language be put in as I 41 discussed with the City Attorney. 42 43 SECOND 44 45 Chair Martinez: Ok. We have a Motion. Any second to the Motion? Yes, Commissioner 46 Alcheck. Care to speak to your Motion? 47 48 9 Commissioner Keller: I’ll just briefly say that this implements the requirement in State law that 1 the City have an implementing ordinance for the Density Bonus Law. And I think this gives a 2 reasonable set of concessions and also has a reasonable way of getting additional data from a 3 developer of low income housing who wishes to have a concession that’s not on the menu. 4 Thank you. 5 6 Chair Martinez: Commissioner Alcheck. 7 8 Commissioner Alcheck: I hope that this ordinance encourages the development of affordable 9 housing units to a greater extent than we’ve seen in the last eight years in this City. So we shall 10 see. 11 12 VOTE 13 14 Chair Martinez: Anyone else? Ok, let’s call for a vote on the Motion. Those in favor say aye 15 (Aye). Got to make sure I got it right this time. Motion passes unanimously. Thank you. Now 16 we will take our 10 minute break for changing of the guard. 17 18 MOTION PASSED (7-0) 19