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HomeMy WebLinkAbout2014-02-03 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers February 3, 2014 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 February 3, 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 Special Orders of the Day 6:00-6:15 PM 1. Introduction of Nuria Fernandez, General Manager, Santa Clara Valley Transportation Agency (VTA) 2. Proclamation of the Council Proclaiming the City of Palo Alto as Open [Data] by Default 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 6:15-6:25 PM Council Member Questions, Comments and Announcements 6:25-6:40 PM Members of the public may not speak to the item(s) 2 February 3, 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. Oral Communications 6:40-6:55 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. Consent Calendar 6:55-7:00 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 3. Finance Committee Recommendation that Council Adopt a Resolution Increasing the Palo Alto Clean Local Accessible Now (CLEAN) Program Cap to 3 Megawatts of Generating Capacity 4. Finance Committee Recommendation that the City Council Adopt a Resolution to 1) Terminate the City’s Natural Gas Direct Access Program by Repealing Gas Rate Schedule G-4; 2) Eliminate Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedules G-11 and G-12; and 3) Effect the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 5. Finance Committee Recommends Approval to Issue the Request for Proposals and Undertake a Procurement Process for Street Sweeping Contractor Services 6. Appeal of Director's Approval of a Sign Exception for a Wall sign at the Tesla Motors Dealership at 4180 El Camino Real 7. Approval of Amendment Number One with CoalFire Systems Inc., for Contract Number S14150215 in the Amount of $3700, and 20 Percent Contingency Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:00-8:00 PM 8. Our Palo Alto: A Community Conversation About Our City’s Future. Staff Requests Council Input and Endorsement of a Three-Part Strategy To Engage Residents in a Community Conversation About the Future Of Our City. The Strategy Would Include (a) A Series Of Conversations and Events Focused On Ideas, Dialogue and Building Community (b) Near Term Actions Aimed at Addressing Today’s Critical Issues; and (c) Community Engagement Effort Aimed at the Design Of Alternative Futures Through the Comprehensive Plan Update Planning Process 3 February 3, 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. 8:00-9:00 PM 9. Planned Community (PC) Zoning Time-Out & Reform. Staff Recommends Adoption of a Motion: (a) Expressing the Council’s Intent to Defer Requests for Rezoning to the Planned Community (PC) Zoning District Until the Process and Requirements Regulating the PC Zone in Chapter 18.38 of the Municipal Code are Revised, and (b) Directing Staff to Return to the Council with an Analysis of Potential Revisions and Alternatives to the PC Zone for Public Input and Discussion 9:00-10:00 PM 10. Public Hearing: Approval of the Record of Land Use Action for a Site and Design Review Application and Adoption of a Park Improvement Ordinance for the Palo Alto Municipal Golf Course Reconfiguration Project, Adoption of a Resolution Certifying the Final Environmental Impact Report and Adopting a Statement of Overriding Considerations for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project, and Review of the Status of the Palo Alto Municipal Golf Course Reconfiguration Project, Capital Improvement Program Project PG-13003 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. 4 February 3, 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 Standing Committee Agendas Finance Committee Meeting CANCELLATION Council Retreat, February 1, 2014 Library Bond Oversight Committee Meeting February 4, 2014 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report City of Palo Alto Utilities Quarterly Update for the First Quarter of Fiscal Year 2014 Public Letters to Council Set 1 City of Palo Alto (ID # 4319) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: Proclamation Open [Data] By Default Title: Proclamation of the Council Proclaiming the City of Palo Alto as Open [Data] by Default From: City Manager Lead Department: IT Department Attachments:  OpenData_Proclamation (DOCX) CITY OF PALO ALTO PROCLAMATION Open Data by Default WHEREAS, the City of Palo Alto (“City”) commits to improving the community by making government functions more transparent, participatory, and accountable; and, WHEREAS, Open Government includes removing barriers to access to government information; and, WHEREAS, the City commits to working to enable data captured and used by the City to be more easily accessible by people and machines, while at the same time protecting privacy and the rights of others; and, WHEREAS, the work of publishing public data for easier consumption by people and machines is known as Open Data, WHEREAS, an increasingly robust Open Data program will help foster public engagement, improve delivery of public services and create new opportunities for innovation; and, WHEREAS, the City of Palo Alto commits to work towards a future in which important government data and information will be Open Data by Default. NOW, THEREFORE, I, Nancy Shepherd, Mayor of the City of Palo Alto, on behalf of the City Council do hereby issue this proclamation in support of Open Data by Default. Presented: February 10, 2014 ___________________________ Nancy Shepherd Mayor City of Palo Alto (ID # 4378) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/3/2014 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Palo Alto CLEAN Program Update Title: Finance Committee Recommendation that Council Adopt a Resolution Increasing the Palo Alto Clean Local Accessible Now (CLEAN) Program Cap to 3 Megawatts of Generating Capacity From: City Manager Lead Department: Utilities Recommended Motion The Finance Committee and staff recommend that Council: 1. Adopt a resolution (Attachment A): a. Increasing the Palo Alto CLEAN program’s cap to 3 megawatts (MW) of generating capacity and continuing to offer the program at the current price of 16.5 cents per kilowatt-hour (₵/kWh) for a 20-year contract; and b. Amending the CLEAN Program’s Eligibility Rules and Requirements (as shown in Attachment B) to update the program cap to 3 MW, clarify that the program cap is a limit, and update the “pre-certification” price1; and 2. Direct staff to return to Council with a review of the program in one year or at the time the program capacity is filled, whichever comes first. Recommendations The Finance Committee and staff recommend that the City Council: 1. Approve the continuation of the Palo Alto CLEAN program with a price of 16.5 ¢/kWh for a 20-year contract, a program cap of 3 MW of generating capacity, and a review of 1 Pre-certification price is the price that the City would pay for the energy produced from the project while certification as an “Eligible Renewable Energy Resource” from the California Energy Commission is pending/in progress. The pre-certification price is based on an estimate of the long-term “brown market” price of energy. City of Palo Alto Page 2 the program in one year or at the time the program capacity is filled, whichever comes first; and 2. Approve changes to the Program Eligibility Rules and Requirements to clarify that the 3 MW cap is a limit and to update the “precertification” price. The Utilities Advisory Commission (UAC) recommends that the City Council continue the Palo Alto CLEAN program with a price of 16.5 ¢/kWh for a 20-year contract, but retain the program cap of 2 MW of generating capacity. The UAC also recommends a review of the program in one year or at the time the program capacity is filled, whichever comes first. Executive Summary Since December 2012, the Palo Alto CLEAN program has offered to pay 16.5 ¢/kWh for 20 years for the output from local solar photovoltaic (PV) systems. No applications for the CLEAN programs have been received to date and Council requested staff return after one year if the program cap of 2 MW was not reached. Staff believes that the price of 16.5 ¢/kWh is sufficient to attract participants in the program, but property owners must be educated about the program before deciding to participate, and this takes time. The UAC recommended continuing the program at the CLEAN price of 16.5 ¢/kWh with the existing 2 MW program cap. The Finance Committee also recommended continuing the price of 16.5 ¢/kWh, but recommended increasing the program cap to 3 MW. If 3 MW of local solar energy were contracted through the CLEAN program at 16.5 ¢/kWh, the total costs would be about $322,500 per year higher than buying renewable energy outside of Palo Alto. That would translate into an increased cost for a median residential customer using 410 kWh/month of about $1.50 per year. Background In March 2012 the Council adopted the Palo Alto CLEAN program with a price of 14 ¢/kWh for 20-year contracts with a 4 MW program cap. The Palo Alto CLEAN program was designed to complement the City of Palo Alto Utilities (CPAU’s) existing PV Partners solar rebate program, which was established in 1999. Palo Alto CLEAN provides an additional alternative for property owners by enabling them to build a new solar system and sell the energy to CPAU under a long- term, fixed-rate contract, rather than participate in the PV Partners program and use the energy on site. In December 2012, Council extended the Palo Alto CLEAN program, increased the CLEAN price to 16.5 ¢/kWh and decreased the program cap to 2 MW (Resolution 9308). At the same time, Council requested that staff return in a year, or when the 2 MW program cap was reached. City of Palo Alto Page 3 Discussion The report for the Finance Committee’s December 17, 2013 meeting (Attachment C) includes additional discussion of the program history and the costs of various pricing alternatives considered. The estimated cost of buying solar energy outside of the City and transporting it to the City is currently 9.9 ¢/kWh for a 20-year contract. The CLEAN price of 16.5 ¢/kWh costs more than the cost of remote solar energy delivered to the City, as shown in Table 1 below. The table shows the cost of CLEAN program compared to the cost of buying renewable energy outside of the City. In parentheses, the impact on rates of this excess cost is shown for both a 2 MW and a 3 MW CLEAN program cap. For example, for the 3 MW cap recommended, the program will cost $322,500 more than buying renewable energy outside the City, an amount that is equivalent to a 0.27% rate increase. Council has determined that the CLEAN program provides benefits to the City and its ratepayers from encouraging local solar system installations. Table 1: Annual Excess Cost* (and Rate Impact) of CLEAN Program Program Capacity = 2 MW Program Capacity = 3 MW At CLEAN Price ( 16.5 ¢/kWh) $215,000 (0.18%) $322,500 (0.27%)  The cost compared to the cost of buying renewable energy outside of Palo Alto Committee Review and Recommendation At its November 6, 2013 meeting, the UAC considered staff’s recommendation to continue the CLEAN program at the same price (16.5 ¢/kWh) and program cap (2 MW). The UAC voted unanimously (6-0 with Chair Cook absent) to support staff’s recommendation. The notes from the UAC’s November 6, 2013 meeting are provided as Attachment D. The Finance Committee considered the proposal at its December 17, 2013 meeting. The Finance Committee discussed the value to the City and its ratepayers of local solar installations. One factor that has not been included in the monetary value of local solar is the potential for resiliency for the distribution system in emergency situations. Such emergency value is possible if, in addition to the solar energy, energy storage is added in the future at these sites. Another value of local solar systems is the value of the shade provided, particularly when these systems are installed on parking structures or surface parking lots. City of Palo Alto Page 4 Chair Burt suggested that the 2 MW cap might be too low and he wouldn’t want to reject additional projects when that cap was reached. He suggested increasing the program cap to 3 MW. The other members of the Finance Committee agreed to this suggestion after staff indicated that there would be no problems with increasing the cap, but noted that the cost of the program would be increased as a result. The Finance Committee voted unanimously (4-0) to recommend that Council: 1. Approve the continuation of the Palo Alto CLEAN program with a price of 16.5 ¢/kWh for a 20-year contract, a program cap of 3 MW of generating capacity, and a review of the program in one year or at the time the program capacity is filled, whichever comes first; and 2. Approve changes to the Program Eligibility Rules and Requirements (as shown in Attachment B) to clarify that the 3 MW cap is a limit and to update the “precertification” price. The notes from the Finance Committee’s December 17, 2013 meeting are provided as Attachment E. Resource Impact Staff estimates the current cost of buying renewable energy outside of Palo Alto is 9.9 ¢/kWh (including transmission) for a 20-year contract. Purchasing the energy generated from 3 MW of local solar projects at 16.5 ¢/kWh is expected to cost about $322,500 per year more than buying the same energy outside of Palo Alto. This is equivalent to a 0.27% increase in the electric utility’s costs. If the program increased costs by $322,500 per year, staff has determined that the system average electric rate would have to increase by 0.03 ¢/kWh. This is equivalent to a bill impact of $1.50 per year for the median residential customer using 410 kWh/month, or $2.40 per year for a customer using 650 kWh/month. In addition to the energy costs described above, staff time is associated with marketing and project review. The project review can be absorbed with existing staff over the life of the program, and costs will be recovered through project review fees. The additional marketing will require about 0.1 FTE of staff time and may involve an additional budget for marketing materials, which would be requested through the annual budget process. The marketing work will be absorbed by existing staff, but will decrease time spent on other account management and efficiency program delivery activities. City of Palo Alto Page 5 Policy Implications The recommendation implements Long-term Electric Acquisition Plan (LEAP) Strategy #4, Local Generation, which is to “promote and facilitate the deployment of cost-effective local resources.” The program will facilitate the deployment of local resources, and the recommended price, 16.5 ¢/kWh, is set to encourage the development of efficient local solar projects. It also implements Climate Protection Plan Chapter 3 (Utilities), Goal 3, “Expand use of renewable energy installed or purchased directly by customers.” The program also implements Comprehensive Plan Goal N-9, “A clean, efficient, competitively-priced energy supply that makes use of cost-effective renewable resources” and Policy N-48, “Encourage the appropriate use of alternative energy technologies.” Environmental Review Adoption of this resolution is not subject to California Environmental Quality Act review under California Public Resources Code section 21080(b)(8), because the price adopted reflects the reasonable cost of the CLEAN Program’s operating expenses, including the cost of purchasing renewable energy from local solar generating systems and the value of local benefits to CPAU and its ratepayers. Attachments:  Attachment A: Resolution (PDF)  Attachment B: Revised Palo Alto CLEAN Program Eligibility Rules (PDF)  Attachment C: Finance Committee Staff Report ID 4272 Palo Alto CLEAN Program Update without its attachments (PDF)  Attachment D: Excerpted Final UAC Minutes of November 6, 2013 (PDF)  Attachment E: Excerpted Draft Finance Committee Minutes of 12-17-13 (PDF) *NOT YET APPROVED* 140114 dm 6052046 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Increasing the Palo Alto Clean Local Accessible Now (CLEAN) Program Cap to 3 Megawatts of Generating Capacity R E C I T A L S A. On March 5, 2012, the City approved the Palo Alto Clean Local Energy Accessible Now Program, a CLEAN program (or feed-in tariff). Under the Palo Alto CLEAN Program, participants who build a new solar generating system in Palo Alto may obtain a long-term, fixed-price contract with the City to sell the energy from the system to the City’s electric utility. B. The first program year of Palo Alto CLEAN commenced on April 2, 2012 and was originally set to terminate on December 31, 2012. C. On December 17, 2012, Council approved Resolution 9308, which continued Palo Alto CLEAN and established a maximum total Palo Alto CLEAN Program cost commitment of $16,700,000 over the life of the program. This amount was sufficient for a program cap of 2 megawatts (MW) of generating capacity. D. The City now wants to increase the program cap to 3 MW of generating capacity, while continuing to offer the program at the current price of 16.5 cents per Kilowatt-hour for a 20 year contract. The Council of the City of Palo Alto (“City”) RESOLVES as follows: SECTION 1. The Council adopts revised Program Eligibility Requirements for Palo Alto CLEAN, as shown in Exhibit A. SECTION 2. The Council authorizes the City Manager or his designee to sign contracts for the output of one or more solar energy generating facilities meeting the Program Eligibility Requirements described in Section 1. The total CLEAN Program cost commitment made by the City during the life of the program shall not exceed $20,000,000, which is sufficient for a program cap of 3 MW of generating capacity. SECTION 3. The Council finds that the City of Palo Alto Utilities’ (CPAU’s) purchase of energy from local renewable sources provides additional local benefits to CPAU when compared to energy purchased outside Palo Alto, which in turn become benefits to CPAU ratepayers and the local community. These benefits include a reduction in CPAU’s costs and energy losses associated with energy transmission and distribution, and a reduction in CPAU’s capacity requirements. When the City purchases energy from local sources, a portion of the City’s electric expenditures remain within the community, which provides revenue for local economic development. Locating generation near load centers can also reduce the need for new transmission lines, thus reducing the environmental impacts of the electric system and improving reliability in transmission-constrained regions like the Greater Bay Area. When solar *NOT YET APPROVED* 140114 dm 6052046 2 systems are installed on rooftops and parking facilities, the shade created, reduces the energy required for cooling, and creates value to vehicle owners. In addition, as new technology and energy storage systems are developed, the local solar generation, in combination with storage systems, has the potential to provide resiliency to the City’s electric distribution system. The Council therefore finds that offering the Palo Alto CLEAN Program to participants is a reasonable cost of providing electric service to CPAU’s electric customers. SECTION 4. The Council finds that the adoption of this resolution is not subject to California Environmental Quality Act review under California Public Resources Code section 21080(b)(8), because the rate adopted reflects the reasonable cost of the CLEAN Program’s operating expenses, including the cost of purchasing renewable energy from local solar generating systems, and the value of local benefits to CPAU and its ratepayers as described in SECTION 3 of this resolution. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _______________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective February 3, 2014 A. PARTICIPATION ELIGIBILITY REQUIREMENT: The Palo Alto Clean Local Energy Accessible Now Program (the “CLEAN Program”) is open to participation by any Eligible Renewable Energy Resource, as defined in Section D.4. B. TERRITORIALITY REQUIREMENT: In order to be eligible to participate in the CLEAN Program, an Eligible Renewable Energy Resource must be located in and generating electricity from within the utility service area of the City of Palo Alto. C. PRICES FOR CERTIFIED RENEWABLE POWER: The following purchase prices shall apply to the electricity produced by an Eligible Renewable Energy Resource participating in the Program, except as provided in Section D.5. Solar generation facilities: Contract Term Contract Price 20 years 16.5 ¢$0.165 / kWh D. ADDITIONAL RULES AND REQUIREMENTS: 1. The owner of the Eligible Renewable Energy Resource shall enter into a Eligible Renewable Energy Resource Power Purchase Agreement (“PPA”) with the City of Palo Alto. 2. The maximum capacity allowed under the last Eligible Renewable Energy Resource that is eligible for participation in the CLEAN Program is will be the Eligible Renewable Energy Resource that first causes the total capacity of Eligible Renewable Energy Resources receiving payments under the Program to exceed two three (23) MW (the “Program Capacity”, based on the generating facility’s California Energy Commission rating, CEC- AC). 3. An application for participation in the CLEAN Program to sell output to the City (the “Application”) may be submitted at any time. Applications will be considered in the order received. 4. Eligible Renewable Energy Resource means an electric generating facility that: (a) is defined and qualifies as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended; (b) uses a solar fuel source; and (c) meets the territoriality requirement set forth in Section B. PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective February 3, 2014 5. The California Energy Commission’s (“CEC”) certification of the Eligible Renewable Energy Resource shall be required within six (6) months of the commercial operation date of the electric generating facility; the facility’s owner shall provide written notice of the CEC’s certification to the City within ten (10) business days. If the City takes delivery of the facility’s electricity prior to the CEC’s certification, then, as the facility’s electricity cannot be considered in fulfillment of the City’s RPS requirements, the price that the City will pay for the facility’s electricity (the “Pre-Certification Price”) will be set at 65% of the applicable Contract Price.to $0.08 per kWh, the estimated 20-year levelized cost of brown power. Upon the CEC’s certification of the facility, the City will pay the applicable Contract Price for the facility’s electricity delivered on and after the date of the CEC’s certification. The City will “true-up”, as appropriate, the difference between the Contract Price and the Pre-Certification Price for any electricity received and paid for by the City, effective as of the date of certification of the Resource. 6. If an Eligible Renewable Energy Resource is authorized to participate in the CLEAN Program, then that Resource shall not be entitled to receive any rebate or other incentive from the City’s Photovoltaic (PV) Partners Program, Power from Local Ultra- Clean Generation Incentive (PLUG-In) Program, or other similar programs funded by the City’s ratepayers. To the extent any rebate or incentive is paid to the owner of the Resource, that rebate or incentive shall be disgorged and refunded to the City upon 30 days’ notice, if the Eligible Renewable Energy Resource continues to participate in the CLEAN Program. If a rebate or an incentive has been paid to the Eligible Renewable Energy Resource, then that Resource shall be ineligible to participate in the CLEAN Program. 7. All electricity generated by the Eligible Renewable Energy Resource shall be delivered only to the City. No portion of the electricity may be used to offset any load of the generating facility (other than incidental loads associated with operating the generating facility). 8. A metering and administration fee will be charged to each Eligible Renewable Energy Resource that participates in the CLEAN Program. See Utilities Rate Schedule E-15 (Electric Service Connection Fees). City of Palo Alto (ID # 4272) Finance Committee Staff Report Report Type: Action Items Meeting Date: 12/17/2013 City of Palo Alto Page 1 Summary Title: Palo Alto CLEAN Program Update Title: Utilities Advisory Commission Recommendation that Council Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Rate of 16.5 cents per Kilowatt-hour for a 20-Year Contract and a Program Cap of 2 Megawatts From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) request that the Finance Committee recommend that the City Council: 1. Approve the continuation of the Palo Alto CLEAN program with a price of 16.5 cents per kilowatt-hour (¢/kWh) for a 20-year contract, a program cap of 2 megawatts (MW) of generating capacity, and a review of the program in one year or at the time the program capacity is filled, whichever comes first; and 2. Approve changes to the Program Eligibility Rules and Requirements (as shown in Attachment A) to clarify that the 2 MW cap is a limit and to update the “pre- certification” price. Executive Summary The City Council adopted Palo Alto CLEAN (Clean Local Energy Accessible Now) program (also commonly referred to as a feed-in tariff, or FIT, program) in April 2012. The program was designed to complement the City of Palo Alto Utilities’ (CPAU’s) existing partners solar rebate program, which was established in 1999 to encourage installations of solar photovoltaic (PV) systems and which has one of the highest participation levels per customer in the country. Palo Alto CLEAN created an additional alternative for property owners by enabling them to build a new solar system on their property and sell the energy to CPAU under a long-term, fixed-rate contract rather than participate in the PV Partners program and use the energy on site. City of Palo Alto Page 2 Though solar developers expressed interest in Palo Alto CLEAN in 2012, the price (14 ¢/kWh for a 20 year contract) did not attract project developers. In December 2012, Council increased the CLEAN program price to 16.5 ¢/kWh for a 20 year contract with a program cap of 2 megawatts (MW). At that time, Council directed staff to return with a review of the program in one year, or at the time the program cap was reached, whichever occurred first. Although no applications have been received to date, there continues to be interest by developers in the CLEAN program. Staff recommends continuing Palo Alto CLEAN at the current price for another year, or until the 2 MW cap is reached. Staff believes that the 16.5 ¢/kWh price is sufficient to attract projects and that further education of property owners about the program will yield program participation. Although Palo Alto CLEAN is available to residential customers, staff expects PV Partners or solar system leasing arrangements (after PV Partners funding runs out) will continue to be their preferred program. At its November 6, 2013 meeting, the UAC unanimously supported staff’s recommendation to continue the Palo Alto CLEAN program at the current price. There was concern raised about the subsidy the program could require from electric ratepayers if the program attracts applicants, and commissioners voiced the hope that, if the 2 MW of program capacity is reached, the price can be reduced. Background CPAU has a long history of supporting solar power. It initiated the PV Partners program in 1999, and in 2007 the program was expanded to meet the requirements of the State’s Million Solar Roofs Bill (Senate Bill 1, 2006). Under the PV Partners program CPAU provides rebates to residential and commercial customers who install solar for their own use. The program has been successful at stimulating solar development, with more than 3.9 MW of local solar capacity installed by nearly 565 participants as of the end of September 2013. Palo Alto is one of the top ten utilities nationwide in PV installations per customer. Through the PV Partners program, CPAU already provides substantial financial support for local solar. The total CPAU SB1 program budget for 2008-2017 is $13 million and the total program goal is 6.6 MW. When this goal is achieved the energy generated by the program annually will be 11.2 GWh (1.1% of Palo Alto load). The average annual cost to ratepayers of these rebate payments is roughly $1.3 million per year plus the cost of administration and the lost distribution system revenue associated with net metering. The rate impact of this program is roughly 1-1.5% per year while rebates are being paid. Once all rebates have been paid the rate impact of lost revenue due to net metering will continue to be 0.3-0.5% per year. Due to SB1, PV Partners is now a state mandated program, and regardless of the rate impact, CPAU is required to offer it. City of Palo Alto Page 3 In March 2012 the City expanded its support for local distributed generation by launching Palo Alto CLEAN with a price of 14 ¢/kWh for a 20-year contract (Resolution 9236). The program expanded the options available to property owners by enabling them to sell energy directly to CPAU under a long term contract instead of using the energy on site. Initially Palo Alto CLEAN generated a high level of interest from solar developers who wanted to lease rooftops in Palo Alto in order to build a solar system and sell the energy to CPAU. However, it soon became apparent that the 14 ¢/kWh price was insufficient to enable third-party developers to earn their target returns while still offering attractive rooftop lease rates. In December 2012, Council extended the CLEAN program and increased the rate to 16.5 ¢/kWh for a 20-year contract (Staff Report 3316, Resolution 9308). Although the Palo Alto CLEAN program has no deadline for participation, Council directed staff to return to the Finance Committee after one year or when the program cap was reached, whichever occurred first. Interest from solar developers remains, but no applications have been received for the CLEAN program as of the end of November 2013. Although no applications were received, staff stepped up its marketing efforts in 2013. Program marketing activities included staff presentations to the local IEEE (Institute of Electrical and Electronics Engineers) chapter and VoteSolar (via webinar), meetings with local solar developers, commercial property owners and the CLEAN Coalition organization, the emailing of program updates to over 275 contacts on the distribution list, and working with Public Works, Real Estate and Office of Emergency Services staff to identify potential City-owned sites suitable for solar PV. The property owners who have investigated the program to-date either chose not to participate or chose to evaluate projects under the PV Partners program instead. Staff still regularly receives new inquiries about the CLEAN program from developers and property owners. Despite the lack of participation, there have been positive outcomes from the program offering. The program prompted developers to take a serious look at the cost of developing solar projects in Palo Alto, and some of them shared that information with CPAU staff. At the same time, the solar project permitting processes at the development center have been improved based on input gathered from solar developers. In addition, many public utilities across the country have called requesting information on Palo Alto’s model in order to develop a CLEAN program in their own service areas. Discussion The Palo Alto CLEAN program does not expire in December 2013, but Council requested that it be reviewed after one year or when the 2 MW cap was reached, whichever was first. When establishing the price of 16.5 ¢/kWh, Council reviewed the market value of the local solar energy and determined that there were additional financial and environmental benefits to increasing solar generation locally. In December 2012, when Council established the 16.5 City of Palo Alto Page 4 ¢/kWh price, staff estimated the cost of buying renewable energy outside of Palo Alto was 11.6 ¢/kWh (including transmission) for a 20-year contract. Therefore, purchasing the energy generated from 2 MW of local solar projects at 16.5 ¢/kWh was expected to cost about $160,000 per year more than buying the same energy outside of Palo Alto (and having it transported to Palo Alto). This was equivalent to a 0.1% increase in the electric utility’s costs. Council determined that this additional cost was acceptable as a means to encourage local solar installations and in light of additional benefits of encouraging local solar generation. Updated Value of Renewable Energy Since December 2012, the City has signed long-term Power Purchase Agreements (PPAs) to buy renewable energy from 3 solar energy projects in central California, totaling 80 MW at a cost of about 6.9 ¢/kWh. The cost to deliver that energy to Palo Alto, combined with the capacity related benefits that local solar would provide, is projected to be an additional 3.0 ¢/kWh, for a total value of local solar energy of 9.9 ¢/kWh. Using the cost of the three signed PPAs (plus transmission costs and capacity value) of 9.9 ¢/kWh, the cost of continuing the 16.5 ¢/kWh CLEAN price for 2 MW of solar PV projects is about $215,000 per year more than buying the same energy outside of Palo Alto. This is equivalent to a 0.18% increase in the electric utility’s costs. Alternatives Considered Since the estimated value of local solar energy decreased from last year’s estimate, the price for the Palo Alto CLEAN program should be re-evaluated. One alternative is to take into account the value that Council placed on local solar energy when it approved the 16.5 ¢/kWh price in December 2012. At that time, Council determined that an incremental price of 4.9 ¢/kWh over the cost of remote renewable energy (estimated at 11.6 ¢/kWh at that time) resulted in an acceptable overall cost increase, would improve the chances that the program would have participants, and covered the intangible value of having solar installations locally. However, since the cost of remote renewable energy has fallen, a reduced price may not attract many program participants. Another alternative is to set the price at 9.9 ¢/kWh, the expected value of local solar without consideration of the intangible financial benefits Council earlier identified. This would eliminate any financial impact of the program on electric ratepayers, but is expected to effectively eliminate the program, as it would not likely attract any participants. City of Palo Alto Page 5 While there are many different possibilities for pricing alternatives, given the reduction in the cost of remote, renewable energy, staff focused more closely on the three pricing alternatives described below: 1. Current program (UAC and Staff Recommendation): Extend the current program at the same price (16.5 ¢/kWh for a 20-year contract) with the current cap (2 MW). 2. Decrease Price: Decrease the price to 14.8 ¢/kWh such that the incremental cost over remote renewable energy is the same incremental cost that Council determined was acceptable when it approved the 16.5 ¢/kWh price in December 2012 ($160,000 per year) with a cap of 2 MW. 3. Cost-neutral program: Set the price at the same cost as buying renewable energy from a remote (outside Palo Alto) project and transporting it to Palo Alto (9.9 ¢/kWh for a 20- year contract), without accounting for any additional financial and intangible benefits of local solar. The three pricing alternatives are summarized in Table 1 below and the costs are compared to CPAU’s avoided cost of renewable energy. The annual costs are calculated based on a 2 MW program. TABLE 1: Annual Cost of Program Alternatives Pricing Alternative Energy Cost (₵/kWh) Annual Excess Cost* (Rate Impact) 1 – Continue Current Price 16.5 $215,000 (0.18%) 2 – Decrease Price 14.8 $160,000 (0.13%) 3 – Cost-Neutral Price 9.9 0 * The cost compared to the cost of buying renewable energy outside of Palo Alto. If the program increased costs by $215,000 per year, the system average electric rate would have to increase by 0.02 ¢/kWh. This is equivalent to a bill impact of $1.60 per year for a customer using 650 kWh/month. In addition to the costs described above, the program requires staff time for marketing and project review. The project review can be absorbed with existing staff over the life of the program, and costs will be recovered through project review fees. The marketing requires about 0.1 FTE of staff time and may involve an additional budget for marketing materials, which would be requested through the annual budget process. The marketing work is absorbed by City of Palo Alto Page 6 existing staff and decreases time spent on other customer account management activities and efficiency program delivery. Recommendation Staff recommends that the current price of 16.5 ¢/kWh continue for another year, or until the 2 MW cap is reached. There has been renewed interest by customers and solar developers and solar system costs have continued to decrease so it is anticipated that the price should be sufficient to attract some participation in 2014. Small changes to the Program Eligibility Rules and Requirements (as shown in Attachment A) are needed to clarify that the 2 MW cap is a limit and to update the “pre-certification” price, which is the price that would be paid if the facility did not obtain certification from the California Energy Commission as an Eligible Renewable Energy Resource. Commission Review and Recommendation The UAC considered staff’s recommendation at its November 6, 2013 meeting. While expressing overall support for the Palo Alto CLEAN program, commissioners voiced concerns about the extra cost paid by electric ratepayers to support the 16.5 ¢/kWh price. The commission recognized that the 2 MW cap limits that cost. Commissioners also stated their hope that the price can be reduced after the first 2 MW of capacity is taken. After its discussion, the UAC voted unanimously (6-0 with Chair Cook absent) to recommend that the City Council: 1. Continue the Palo Alto CLEAN program at the current price of 16.5 cents per kilowatt- hour (¢/kWh) for a 20 year contract with a program limit of 2 megawatts (MW). 2. Direct staff to return to the Council for direction after the 2 MW limit is reached or at the end of 2014, whichever comes first. The draft notes from the UAC’s November 6, 2013 are provided as Attachment B. Resource Impact Staff estimates the current cost of buying renewable energy outside of Palo Alto is 9.9 ¢/kWh (including transmission) for a 20-year contract. Purchasing the energy generated from 2 MW of local solar projects at 16.5 ¢/kWh is expected to cost about $215,000 per year more than buying the same energy outside of Palo Alto. This is equivalent to a 0.18% increase in the electric utility’s costs. While any rate impacts created by the program would be evaluated as City of Palo Alto Page 7 part of an electric cost of service study and/or revenue requirement analysis, if the program increased costs by $215,000 per year, the system average electric rate would have to increase by 0.02 ¢/kWh. This is equivalent to a bill impact of $1.60 per year for a customer using 650 kWh/month or $1.00 per year for the median residential customer using 410 kWh/month. In addition to the energy costs described above, staff time is associated with marketing and project review. The project review can be absorbed with existing staff over the life of the program, and costs will be recovered through project review fees. The additional marketing will require about 0.1 FTE of staff time and may involve an additional budget for marketing materials, which would be requested through the annual budget process. The marketing work will be absorbed by existing staff, but will decrease time spent on other account management and efficiency program delivery activities. Policy Impact The recommendation implements Long-term Electric Acquisition Plan (LEAP) Strategy #4, Local Generation, which is to “promote and facilitate the deployment of cost-effective local resources.” The program will facilitate the deployment of local resources, and the recommended price, 16.5 ¢/kWh, is set to encourage the development of efficient local solar projects. It also implements Climate Protection Plan Chapter 3 (Utilities), Goal 3, “Expand use of renewable energy installed or purchased directly by customers.” The program also implements Comprehensive Plan Goal N-9, “A clean, efficient, competitively-priced energy supply that makes use of cost-effective renewable resources” and Policy N-48, “Encourage the appropriate use of alternative energy technologies.” Environmental Review Adoption of this resolution is not subject to California Environmental Quality Act review under California Public Resources Code section 21080(b)(8), because the price adopted reflects the reasonable cost of the CLEAN Program’s operating expenses, including the cost of purchasing renewable energy from local solar generating systems and the value of local benefits to CPAU and its ratepayers. Attachments:  Attachment A: Revised Palo Alto CLEAN Program Eligibility Rules (PDF)  Attachment B: Excerpted Draft UAC Minutes of November 6, 2013 (PDF) EXCERPTED FINAL MINUTES OF THE NOVEMBER 6, 2013 UTILITIES ADVISORY COMMISSION MEETING ITEM 3: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that Council Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Rate of 16.5 cents per Kilowatt-hour for a 20-Year Contract and a Program Cap of 2 Megawatts Vice Chair Foster asked for public comment on this item. Craig Lewis, CLEAN Coalition, stated that the experience in CLEAN programs throughout the country is that it takes some time for projects to develop after introduction of the programs. He stated that the price should be sufficient to have program takers and he expects that this will occur next year. Lewis said that Palo Alto’s program is well structured and that the price is fair, but that property owners need to be educated and may not be motivated by making extra money from leasing their roofs. Similar programs elsewhere have been able to attract participants and been fully subscribed. Lewis stated that the CLEAN Coalition will help to find developers and property owners to take advantage of the program. He stated that he supports the staff recommendation to continue the program at the existing price. Commissioner Waldfogel asked Lewis what it will take to get developers to take up the program offering. Lewis responded that, fundamentally, it will take education with property owners. He has had meetings with about 15 property owners and they need to spend the time to understand how the program can work. He indicated that parking structures are prime candidates for using the CLEAN program and that PV systems provide other benefits such as shade for parked cars. Howard Lee, Palo Alto resident, stated that he agreed with Craig Lewis's recommendation to continue the CLEAN program. He stated that time is needed for property owners to get comfortable with the business model. This is a somewhat new idea for developers and extending the program for another year should yield some participation since opportunities will come, but take time to develop. Assistant Director Jane Ratchye provided a brief presentation summarizing the written report. She stated that when Council increased the price from 14 cents per kilowatt-hour (₵/kWh) to 16.5 ₵/kWh at the end of 2012, Council also directed staff to return when the 2 megawatt (MW) cap was reached or after one year. Staff is now returning after one year and has re- evaluated the price and recommends continuing with the 16.5 ₵/kWh and the 2 MW cap. Commissioner Melton noted that the City moved from cost-based to market-based pricing, but based on the input from the two speakers, there is professional opinion that the program will succeed in time and he supports the staff recommendation to continue the program at the same price and that there was no basis to lower the price. Commissioner Eglash said that the dilemma is not whether to continue the program, but at what price. He recalled that there was angst last year with whether and how much to pay more than renewable energy could be purchased on the market. He said that the question is how much the ratepayers should encourage local solar and noted that any amount over 9.9 ₵/kWh is a subsidy from ratepayers to property owners. Commissioner Eglash said that because of this subsidy, he struggles with this issue and, although he would love to see solar locally, these are long-term contracts that obligate the ratepayers to pay more for solar power. Commissioner Eglash continued that on one hand, there needs to be some consistency in the pricing. He indicated that the proposal is both too aggressive (with the price of 16.5 ₵/kWh) and too cautious (only allowing 2 MW). He asked whether offering a lower price for a longer time period or for a larger cap would be workable. He wondered if an alternative such as 15 ₵/kWh for 2 MW, then 12 ₵/kWh for 10 MW until 2017 could be considered. Setting pricing for a longer period could address the long-term predictability for property owners such that the higher price would be only available until end of 2014 and then would fall after that time. Ratchye indicated that the program proposal is not to end the program at the end of 2014, but to return at the end of one year or when the cap was reached to re-assess the price. She added that the City would like to get some uptake with the program and, if there is a run on the program because of the 16.5 ₵/kWh price, we can adjust the price after reaching the cap. Commissioner Eglash asked what would happen if the price was set to a very high number. Director Fong indicated that the Finance Committee set the 2 MW cap on total program size to cap the risk with the intent that staff would return with an updated and lower price once the 2 MW are fully subscribed. Commissioner Waldfogel asked how many projects would it take to use up the 2 MW cap. Utilities Marketing Engineer Lindsay Joye stated that the cap could be used up with just 2 to 3 large projects, but she has also heard from developers with smaller projects so there could be more. Commissioner Waldfogel asked Joye if she agreed with the speakers that they need more education before participating. Joye agreed with the comments and stated that it's not their primary business so property owners need time to evaluate the program. Commissioner Waldfogel said that, because of the subsidy, it would be awkward if one developer were to take half or two-thirds of the program capacity. Vice Chair Foster indicated that he supports the staff recommendation despite the small subsidy. He stated that the City has been subsidizing solar over the years through the rebate program (PV Partners). He added that lowering the price to 12 or 15₵/kWh would not be productive at this time, but that the hope is that the price could be lowered in the future after the first 2 MW is used up. Commissioner Hall said that he supports the recommendation, but would be uncomfortable if we extended the price after the 2 MW is filled since he would want to limit the subsidy. Commissioner Chang said she supports the recommendation, but recommends ratcheting down the price after reaching the 2 MW cap as she shares the concern regarding the subsidy. Commissioner Eglash stated that the price is aggressive and doesn't want to douse the enthusiasm before there are any takers. However, he stated that it needs to be clear that the price/subsidy will have to fall. He said that it should be clear that the 16.5 ₵/kWh is a limited time offer. Commissioner Waldfogel stated that if the City is willing to offer 16.5 ₵/kWh, it could be structured to have 18 ₵/kWh for 1 MW, then 15 ₵/kWh for the second MW. Commissioner Chang responded that the commission has heard that it's not a totally economic decision. Commissioner Eglash indicated that he was not eager to go to 18 ₵/kWh since he is still somewhat uncomfortable with the 16.5 ₵/kWh. ACTION: Commissioner Melton moved staff's recommendation. Vice Chair Foster seconded the motion. The motion carried unanimously (6-0) with Chair Cook absent. FINANCE COMMITTEE MINUTES Page 1 of 6 Regular Meeting December 17, 2013 The Finance Committee met on this date in the Council Chambers at 7:02 P.M., 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Shepherd, Schmid Absent: ORAL COMMUNICATIONS None 2. Utilities Advisory Commission Recommendation that Council Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Rate of 16.5 cents per Kilowatt hour for a 20-Year Contract and a Program Cap of 2 Megawatts. Jane Ratchye, Assistant Director of Utilities reported the Clean Local Energy Accessible Now (CLEAN) Program launched in April 2012 at a price of 14 cents per kilowatt hour (kWh) for a 20-year contract with a four megawatt (Mw) cap. When no one expressed interest in the CLEAN Program, the Council increased the price to 16.5 cents kWh. The increase required a subsidy from ratepayers; therefore, the Council lowered the cap to two Mw’s. The CLEAN Program continued with no contracts. The Council directed Staff to return in one year. The Council approved contracts for remote solar energy at the price of 6.9 cents kWh. Local solar energy had a value of approximately 9.9 cents kWh for a 20-year contract. In 2012, the value of local solar energy was approximately 11.6 cents kWh. Options were: 1) continue the CLEAN Program at a rate of 16.5 cents; 2) continue the subsidy and lower the rate to 14.8 cents; or 3) remove the subsidy and lower the rate to 9.9 cents. Staff recommended retaining a rate of 16.5 cents kWh and the two Mw cap for another year. The Utilities Advisory Commission (UAC) unanimously recommended continuation of 16.5 cents kWh for a 20-year contract and the two Mw cap. Vice Mayor Shepherd inquired whether continuing the CLEAN Program provided other benefits, like what would happen if prices continued to fall, and whether the Council considered boutique energy supply sources. MINUTES EXCERPT Page 2 of 6 Finance Committee Regular Meeting Minutes: 12/17/2013 Ms. Ratchye indicated that additional value was difficult to monetize. Staff wanted to gain the experience of having larger systems. Local solar energy sources and energy storage devices were future opportunities for a micro- grid concept. The subsidy was limited by the two Mw cap. Vice Mayor Shepherd noted the subsidy increased 65 percent and wanted to find other aspects of value. Valerie Fong, Utilities Director remarked that Staff wanted to gain experience working with the tariff and developers. The marketplace needed the experience as well. If lowering the price was logical, developers were going to discover alternative means in achieving a profit. Ms. Ratchye believed prices were at the lowest point, but they could drop slightly lower. Over the course of 20 years, prices had the possibility to increase substantially. Vice Mayor Shepherd wished to capture the experience and opportunity, rather than actual value. Chair Burt inquired about the possibility of locating solar panels atop City Hall that would provide an emergency power supply for emergency operations and the dispatch center. James Keene, City Manager reported discussions continued regarding use of solar energy as an emergency power source. Staff discussed resilient power sources with the new Chief Sustainability Officer. Ms. Fong noted the Public Works Department was reviewing the potential of solar energy for City facilities and working with developers regarding the same. Mr. Keene indicated Staff discussed the possibility of locating solar panels at the Airport with regulatory agencies. Chair Burt recalled that developers expressed interest in placing solar panels at the Airport. Those concepts were delayed because the City had not taken possession of the Airport. Mr. Keene felt the opportunity for future discussions and possibilities regarding the Airport remained viable. Chair Burt noted a growing movement around opportunities to monetize the value of shade. The value of resiliency was difficult to monetize. He MINUTES EXCERPT Page 3 of 6 Finance Committee Regular Meeting Minutes: 12/17/2013 requested an update regarding installation of solar panels atop City parking garages. Ms. Fong reported the Public Works Department was reviewing development of solar energy at City parking facilities. Chair Burt noted long-term parking passes for parking spaces located on the top level of parking garages were the last to sell. He understood the Transportation Department was reviewing the use of variable pricing for long-term parking. By having shade and rain protection on the top level, the value of those spaces increased. Ms. Fong understood City parking facilities would have a commercial arrangement under the CLEAN tariff. Chair Burt referenced anticipated multi-billion dollar upgrades needed for the main power grid that were potentially avoidable in a local grid system. That was a complex issue, and the City needed to understand the complexities as it moved toward more renewable sources. Advancements in the renewable generation in the last five to ten years were going to occur in storage in the next five to ten years. He asked if the CLEAN Program provided one-third the subsidy of the Net Metering Program in terms of distributed generated renewables. Ms. Ratchye indicated that figure was roughly correct. The combination of the Net Metering Program and rebates was significant, approximately $1.3 million annually. Chair Burt believed the decrease in the Federal renewable energy credit would be a key factor in the City's consideration of additional renewable Power Purchase Agreements. Vice Mayor Shepherd inquired whether the City could invest in solar fields. Ms. Fong reported the City was eligible for rebates. Ms. Ratchye explained that a solar system on City Hall would feed into the building's energy use. A parking lot used almost no energy. Vice Mayor Shepherd asked if energy from solar panels atop parking lots could be purchased in the same manner as other solar locations. Ms. Ratchye indicated the City could count that energy through the CLEAN Program as a renewable power source. MINUTES EXCERPT Page 4 of 6 Finance Committee Regular Meeting Minutes: 12/17/2013 Vice Mayor Shepherd inquired whether the City could build and own an energy field. Ms. Fong explained that renting space on City facilities provided rent revenues for the General Fund. If the Utilities Department decided to develop solar facilities on City facilities and to pay the City rent, then that would be expensive at this time. Vice Mayor Shepherd asked how developers could do the same thing at a lower cost. Ms. Fong stated it was not less expensive for developers. A private developer had different tax implications. She said the City would pay slightly more than the Utility's Department cost of power if it bid a project. Vice Mayor Shepherd asked if the main factor for the City not owning solar fields was the lack of tax credits for the City. Ms. Fong answered yes. Chair Burt recalled a discussion of solar co-op initiatives that captured tax credits and allowed residents to collectively participate in the CLEAN Program. He requested an update of such initiatives. Ms. Fong reported Staff would present a solar strategy to the Council soon. The solar strategy included a co-op initiative. Vice Mayor Shepherd inquired whether the City would be affected by the requirement to store energy by 2020. Ms. Ratchye stated Staff would present the Council with a request not to set a goal for storage. State law required that a governing board determine whether to set a goal or not. Council Member Schmid inquired whether the capacity limit would be two Mw per developer and four Mw for the CLEAN Program. Ms. Fong indicated the Council lowered the cap to two Mw in 2012. In terms of size, peak load was 180 Mw. Council Member Schmid felt the amount of the subsidy, $200,000, was adequate to obtain one percent of energy used. Chair Burt asked if the one percent applied to the four Mw cap or the two Mw cap. MINUTES EXCERPT Page 5 of 6 Finance Committee Regular Meeting Minutes: 12/17/2013 Council Member Schmid responded the two Mw cap. Ms. Ratchye reported the subsidy provided one percent of peak demand, but a much lower percentage of the annual energy. Council Member Schmid noted that solar energy was available only on sunny days. Ms. Fong indicated that was the reason solar energy accounted for much less than two percent of the total energy used. Council Member Berman referenced a UAC Commissioner's comment regarding averaging rates for first and second Mw hours to achieve a rate of 16.5 cents. He inquired whether a rate of 17 cents for the first Mw hour and 16 cents for the second Mw hour incentivized participation. Ms. Fong advised that the recommended rate was developed through analysis. The City was involved in negotiations with building owners. Chair Burt stated the City did not attempt to identify property owners who would be interested in leasing their property for solar fields. Solar developers were responsible for finding and negotiating leases for private locations. The City received two proposals that would take up the two Mw’s without proposals for private land. He was not interested in changing the rate, and inquired whether the Committee would agree to allow the cap to increase if participation increased. Council Member Schmid was intrigued with Chair Burt's question, especially if an offer could be monetized across households. One of the problems was that the rate was paid only to developers. Homeowners were able to sell solar power at 16 cents and buy solar power at 9 cents. Chair Burt did not believe increased usage obligated the City to a cap of three Mw. Council Member Schmid felt residents should be involved in the CLEAN Program. Chair Burt questioned whether the cap should be increased to three Mw. Vice Mayor Shepherd inquired whether increasing the cap would be an issue for Staff. Ms. Fong reported one benefit was Staff would not have to return to the Council to request an increase. The annual cost above the market was MINUTES EXCERPT Page 6 of 6 Finance Committee Regular Meeting Minutes: 12/17/2013 closer to $300,000 under full up-take, not $200,000. Staff did not have any particular issues with increasing the cap. Mr. Keene presumed the Council would automatically consider expanding the CLEAN Program when a certain threshold was reached. Ms. Fong asked if the direction to Staff would be to return when capacity reached three Mw or in one year, whichever came first. Council Member Schmid inquired whether a Motion would include mobilization of residential properties. Chair Burt recalled Ms. Fong indicated a solar co-op concept would be presented as part of solar strategy. Ms. Fong explained that the Council would have to adopt a policy and program before it could be implemented. Council Member Schmid preferred a cap increase to three Mw be proposed when a co-op initiative was presented. MOTION: Chair Burt moved, seconded by Vice Mayor Shepherd that the Finance Committee recommend to the City Council: 1. Approval of the continuation of the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program with a price of 16.5 cents per kilowatt-hour (¢/kWh) for a 20-year contract, a program cap of 3 megawatts (Mw) of generating capacity , and a review of the program in one year or at the time the program capacity is filled, whichever comes first; and 2. Approval of changes to the Program Eligibility Rules and Requirements (as shown in Attachment A) to clarify that the two megawatt cap is a limit and to update the “precertification” price. Council Member Schmid noted the Motion would increase the subsidy by more than $300,000. He inquired whether the current subsidy total was around $5 million. Ms. Ratchye reported the cost of purchases would count toward the Renewable Portfolio Standard of $5 million. Ms. Fong indicated the amount was below the cap. MOTION PASSED: 4-0 City of Palo Alto (ID # 4377) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: Changes to Large Customer Gas Rates Title: Finance Committee Recommendation that the City Council Adopt a Resolution to 1) Terminate the City’s Natural Gas Direct Access Program by Repealing Gas Rate Schedule G-4; 2) Eliminate Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedules G-11 and G-12; and 3) Effect the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 From: City Manager Lead Department: Utilities Recommendation Staff, the Utilities Advisory Commission (UAC), and the Finance Committee recommend that the City Council adopt a resolution (Attachment A) to: 1. Terminate the City’s gas direct access program by repealing gas rate schedule G-4 (Large Commercial Gas Transportation Service); 2. Eliminate fixed and custom gas rates for large commercial customers by repealing gas rate schedules G-11 (Large Commercial Fixed-term Commodity Gas Service), and G-12 (Large Commercial Custom Commodity Gas Service); and 3. Effect the changes by amending Utility Rules and Regulations 2 (Definitions and Abbreviations), 3 (Description of Utility Services), 5 (Service Contracts), and 13 (Shortage of Supply and Interruption of Utility Services), and amending gas rate schedules G-3 (Large Commercial Gas Service) and G-8 (Gas for Electric Generation Service). Executive Summary Both the commodity cost management of the City of Palo Alto Utilities’ (CPAU’s) gas portfolio and CPAU’s rate offerings to large commercial gas customers have evolved over the years depending on market needs and industry trends. In the era of deregulation, the City introduced gas “direct access”, whereby certain large commercial customers could elect to take transportation-only service under Rate Schedule G-4, City of Palo Alto Page 2 by purchasing gas from a third party on the open market, and having it delivered to CPAU. However, the technical challenges of implementing this rate rendered it cost-prohibitive, and no eligible large customer ever purchased gas from a third party supplier. Rate Schedules G-11 (Large Commercial Fixed-term Commodity Gas Service) and G-12 (Large Commercial Custom Commodity Gas Service) were designed to give large commercial gas customers the ability to directly hedge their gas costs, something the City was already doing for the small commercial and residential customers through the managed portfolio. Today, all of CPAU’s gas customers are served under a monthly market price-based pass-through rate, and no large commercial customers have elected service under G-11 or G-12 for the past 5 years. Given the impracticality of gas direct access and the lack of interest in the other commodity rates, staff recommends saving both staff time and market price subscription costs and terminating gas direct access by eliminating Rate Schedules G-4, G-11, and G-12. At the same time, certain changes are needed on Rate Schedules G-3 and G-8 to remove references to the direct access rates; no changes are being made to the other rates on those schedules. Discussion The staff report for the Finance Committee’s December 17, 2013 meeting (Attachment B, Staff Report #4289) contains a thorough discussion of the proposal and recommendation. Committee Review and Recommendation On November 6, 2013, the UAC voted unanimously (6-0) to recommend that Council approve staff’s recommendation with Chair Cook absent. The minutes from the UAC’s November 6, 2013 meeting are provided as Attachment I. On December 17, 2013, the Finance Committee considered staff’s proposal. After a brief discussion, Chair Burt summarized the proposal as retiring an inactive program. The Finance Committee voted unanimously (4-0) to recommend that Council approve staff’s recommendation. The minutes from the Finance Committee’s December 17, 2013 meeting are provided as Attachment J. Resource Impact Even if no customer elects G-11 or G-12, the estimated staff resources to continue to offer the rates is 0.1 FTE plus $1,500 per month that is spent on market volatility information used to calculate the volumetric risk premium for G-11. Staff time increases when customers elect G- 11 or G-12. If these rates were eliminated, these costs would be saved and staff resources could be re-assigned to other projects. City of Palo Alto Page 3 There is no immediate staff resource savings by eliminating G-4. Implementing G-4, however, would require a large amount of staff time that would be estimated and included in the set-up fee charged to the third party supplier. Policy Implications This recommendation sets no new Council policy and is consistent with the Council-approved Utilities Strategic Plan. Environmental Review Adoption of the recommended resolution does not meet the definition of a project, pursuant to Section 21065 of the California Environmental Quality Act. Attachments:  Attachment A: RESO Approving Termination of Gas Direct Access and Contract Rates and Modification to Utilities Rules and Regulation (PDF)  Attachment B: Finance Committee Staff Report ID 4289 Changes to Large Commercial Customer Gas Rates without its attachments (PDF)  Attachment C: Rule 2 Definitions effective 03-01-2014 (PDF)  Attachment D: Rule 03 effective 03-01-2014 (PDF)  Attachment E: Rule 05 effective 03-01-2014 (PDF)  Attachment F: Rule 13 effective 03-01-2014 (PDF)  Attachment G: Utility Rate Schedule G-3 effective 03-01-2014 (PDF)  Attachment H: Utility Rate Schedule G-8 effective 03-01-2014 (PDF)  Attachment I: Excerpted Final UAC Minutes of November 6, 2013 Meeting (PDF)  Attachment J: Excerpted Draft Finance Committee Minutes of 12-17-13 (PDF) ATTACHMENT A * NOT YET APPROVED * 140113 dm 6052045 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Terminating the City’s Natural Gas Direct Access Program by Repealing Utility Gas Rate Schedule G-4, Eliminating Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedules G-11 and G-12, and Effecting the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 R E C I T A L S A. In 1998, the City Council (“Council”) approved a direct access program, including the adoption of Gas Rate Schedule G-4 (Large Commercial Gas Transportation Service) enabling large commercial gas customers to purchase gas directly from third party suppliers (CMR 148:99), in response to energy market deregulation and in an effort to support customer choice. B. No customer has ever been served under the City of Palo Alto Utilities’ (CPAU’s) gas direct access program and Gas Rate Schedule G-4 for economic and practical reasons. C. Eliminating Gas Rate Schedule G-4 will not cause gas rates to change for any CPAU customers. D. In 2000, Council approved two rate schedules, G-11 (Large Commercial Fixed-term Commodity Gas Service) and G-12 (Large Commercial Custom Commodity Gas Service) (CMR 259:01), to offer large commercial customers additional choices in gas rate management. E. No customer has been served under G-11 since 2007, or G-12 since 2009, and customers have other alternatives for managing gas commodity costs. F. Eliminating Gas Rate Schedules G-11 and G-12 will not cause gas rates to change for any CPAU customers. G. Staff resources will be saved by eliminating Gas Rate Schedules G-4, G-11 and G-12. H. Modifications to four Utility Rules and Regulations and two additional gas rate schedules are needed as a result of the proposed rate eliminations, to ensure consistency with current rate offerings. // ATTACHMENT A * NOT YET APPROVED * 140113 dm 6052045 2 The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-4 (Large Commercial Gas Transportation Service) is hereby repealed effective as of March 1, 2014. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-11 (Large Commercial Fixed-Term Commodity Gas Service) is hereby repealed effective as of March 1, 2014. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-12 (Large Commercial Custom Commodity Gas Service) is hereby repealed effective as of March 1, 2014. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 2 (Definitions and Abbreviations) is hereby amended as attached and incorporated. Utility Rule and Regulation 2, as amended, shall become effective March 1, 2014. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 3 (Description of Utility Services) is hereby amended as attached and incorporated. Utility Rule and Regulation 3, as amended, shall become effective March 1, 2014. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 5 (Service Contracts) is hereby amended as attached and incorporated. Utility Rule and Regulation 5, as amended, shall become effective March 1, 2014. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and Regulation 13 (Shortage of Supply and Interruption of Utility Services) is hereby amended as attached and incorporated. Utility Rule and Regulation 13, as amended, shall become effective March 1, 2014. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended as attached and shall become effective March 1, 2014. ATTACHMENT A * NOT YET APPROVED * 140113 dm 6052045 3 SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-8 (Gas for Electric Generation Service) is hereby amended as attached and shall become effective March 1, 2014. SECTION 9. The Council hereby finds that the adoption of this resolution does not meet the definition of a project, pursuant to Section 21065 of the California Environmental Quality Act, thus no environmental review is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services City of Palo Alto (ID # 4289) Finance Committee Staff Report Report Type: Action Items Meeting Date: 12/17/2013 City of Palo Alto Page 1 Summary Title: Changes to Large Commercial Customer Gas Rates Title: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution to 1) Terminate the City’s Natural Gas Direct Access Program by Repealing Gas Rate Schedule G-4; 2) Eliminate Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedules G-11 and G-12; and 3) Effect the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee recommend that the City Council adopt a resolution (Attachment A) to: 1. Terminate the City’s gas direct access program by repealing gas rate schedule G-4 (Large Commercial Gas Transportation Service); 2. Eliminate fixed and custom gas rates for large commercial customers by repealing gas rate schedules G-11 (Large Commercial Fixed-term Commodity Gas Service), and G-12 (Large Commercial Custom Commodity Gas Service); and 3. Effect the changes by amending Utility Rules and Regulations 2 (Definitions and Abbreviations), 3 (Description of Utility Services), 5 (Service Contracts), and 13 (Shortage of Supply and Interruption of Utility Services), and amending gas rate schedules G-3 (Large Commercial Gas Service) and G-8 (Gas for Electric Generation Service). Executive Summary Both the commodity cost management of the City’s gas portfolio and the City’s rate offerings to large commercial gas customers have evolved over the years depending on market needs and industry trends. In the era of deregulation, the City introduced gas “direct access”, whereby certain large commercial customers could elect to take transportation-only service under Rate Schedule G-4, City of Palo Alto Page 2 by purchasing gas from a third party on the open market, and having it delivered to the City of Palo Alto Utilities (CPAU). However, the technical challenges of implementing this rate rendered it cost-prohibitive, and no eligible large customer ever purchased gas from a third party supplier. Rate Schedules G-11 (Large Commercial Fixed-term Commodity Gas Service) and G-12 (Large Commercial Custom Commodity Gas Service) were designed to give large commercial gas customers the ability to directly hedge their gas costs, something the City was already doing for the small commercial and residential customers through the managed portfolio. Today, all of the City’s gas customers are served under a monthly market price-based pass-through rate, and no large commercial customers have elected to fix the commodity rate for any portion of their gas needs for the past 5 years. Given the impracticality of gas direct access and the lack of interest in the other commodity rates, staff recommends saving both staff time and market price subscription costs by terminating gas direct access by eliminating Rate Schedules G-4, G-11, and G-12. At the same time, certain changes are needed on Rate Schedules G-3 and G-8 to remove references to the direct access rates; no changes are being made to the other rates on those schedules. Background The monthly market price pass-through rate for large natural gas customers (G-3) and the managed commodity portfolio rate for large natural gas customers (G-7) were both established by Resolution #7522 in 1995. The G-3 rate is still in effect today, and all large commercial gas customers are currently served under that rate. In 1998 Council approved a direct access program enabling large commercial gas customers to purchase gas directly from third party suppliers (CMR 148:99). The program was offered when the energy markets were being deregulated and customers were demanding a choice of suppliers. No customer has ever elected the direct access rate schedule, G-4, because there has never been an economic advantage to doing so. This is discussed further in a later section of this report. At this time, there is no regulatory requirement for municipal utilities to offer direct access. In 2000, Council approved two rate schedules, G-11 (Large Commercial Fixed-term Commodity Gas Service) and G-12 (Large Commercial Custom Commodity Gas Service) (CMR 259:01). The Fixed-term Rate, G-11, offers a fixed commodity rate for the customer’s total gas usage for a 12- or 24-month term. Later Council modified this rate to include a risk premium for the volume uncertainty risk assumed by the City, created by the possibility that customers could choose alternative suppliers at any time, while CPAU purchased gas under long term contracts. The custom rate option, G-12, allowed customers to be served under a custom commodity pricing structure. Both of these rates, G-11 and G-12, were selected by large gas commercial customers in the years that followed, although no customers are currently served under either rate. City of Palo Alto Page 3 As a result of the energy crisis and the resulting sky rocketing gas prices of 2000 and 2001 the City adopted a disciplined market price hedging strategy whereby blocks of gas were purchased at fixed or capped prices for delivery up to three years in the future. Since large gas customers had the option to switch to direct access, the City was exposed to the risk of them seeking an alternate supplier if the City purchased gas that was higher than the market price of gas, leaving the remaining customers to pay for the above market priced gas. To mitigate this risk, Council modified the rules in 2001 (CMR 259:01) such that customers electing the portfolio rate (G-7) gave up the option to elect direct access at a later time. Since no large customers elected the portfolio rate (G-7), in 2003 Council eliminated the G-7 rate (CMR 483:03). This action was taken because large commercial customers were able to manage their gas supply costs by electing to be served under rate schedules G-11 or G-12 instead of relying on the managed portfolio rate. The number of large natural gas customers eligible for G-3, G-11, and G-12 rates has varied over the years, but has been between 8 and 10. There are currently 10 eligible customers and all receive gas under the G-3 rate schedule. These customers made up about 20% of the City’s gas load in Fiscal Year 2012. Discussion Termination of Gas Direct Access via Elimination of G-4 (Large Commercial Gas Transportation Service) Elimination of the G-4 rate will not cause gas rates to change for any CPAU customers. Although the City has offered direct access to large commercial gas customers since 1998, this service has never been selected by a customer. The first reason is that the City’s competitive process for purchasing gas yields a market-based commodity rate for Palo Alto gas customers that is difficult to beat by outside suppliers. The City has contracts with multiple highly-rated counterparties resulting in healthy competition for the City’s business each time gas is purchased. The cost of gas commodity is passed on to Palo Alto customers through rates, leaving little to no room for third party suppliers to offer a lower price. Second, because of the City’s physical location on the PG&E pipeline system, the logistics of a customer in Palo Alto receiving gas from a third party are complicated and, therefore, cost- prohibitive. Palo Alto transports gas over PG&E’s backbone and local transmission pipelines. From PG&E’s perspective, Palo Alto is the shipper on the system and the party responsible for balancing the City’s entire demand with supply on a daily and monthly basis. Gas suppliers cost-effectively serve customers on the PG&E system by managing a large pool of demand, but because Palo Alto’s retail customers are not metered by PG&E and are not recognized by PG&E City of Palo Alto Page 4 as shippers, Palo Alto’s retail customers would need to be managed separately from the gas supplier’s pool. Suppliers would much rather sell gas to Palo Alto’s gas utility than manage serving individual customers within the City. Elimination of G-11 (Large Commercial Fixed-term Commodity Gas Service) and G-12 (Large Commercial Custom Commodity Gas Service) Eliminating the G-11 and G-12 rates will not cause gas rates to change for any CPAU customers. No customer has been served under G-11 since 2007. No customer has been served under G- 12 since 2009. Given the lack of interest in G-11 and G-12, it appears that large gas customers prefer a monthly market pass through price. If that changes in the future and large gas customers want to manage market price risk, they can utilize a third-party financial agreement to hedge against gas market price uncertainty. To do that, the customers could contact a natural gas supplier (or bank) and hedge their gas costs using futures contracts to swap the exposure to the market price index with fixed-price financial transactions.1 Eliminating G-11 and G-12, rates that no customer has selected in recent years, will save staff resources. Even with no customers served under these rates, staff time is required to develop indicative prices and the risk premium for the G-11 rate on a weekly basis, update the website with those indicative prices, forecast individual large customer gas usage, and manage more complicated models for tracking and managing credit risk for potential hedge positions related to these rates. In addition, keeping these rates active requires staff to wait to purchase the index-priced gas until just before the month begins in case a large customer elects to be served under G-11 or G-12. Absent those choices, staff can make longer-term index transactions, reducing administrative time. Summary of Rule Changes Modifications to four Utility Rules are needed as a result of the proposed rate eliminations. First, several definitions related to gas direct access will be deleted in Rule 2, “Definitions and Abbreviations”. Second, gas direct access will be struck from under “Types of Service” in Rule 3, “Description of Utility Services”. Third, also proposed to be stricken are several references to direct access in Rule 5, “Service Contracts” and contract pricing guidelines regarding custom commodity rates and fixed-term rates, both of which are irrelevant if the proposed rate eliminations are approved. Fourth, it is proposed to delete references to gas direct access in 1 As an example, assume that the customer who wishes to hedge gas costs purchases a gas futures contract for January 2015 for $0.50 per therm. When January 2015 arrives, the market price for gas is $1.00/therm. The customer pays $1.00 per therm to Palo Alto for physical gas and sells the futures contract for $1.00 per therm resulting in an effective gas price of $0.50 per therm (the original price of the futures contract). City of Palo Alto Page 5 Rule 13, “Shortage of Supply and Interruption of Utility Services.” There are a few other minor clean-ups that have also been included in the attached Rules, in redline form. Summary of Changes to Utility Rate Schedules Both gas rate schedules G-3 (Large Commercial Gas Service) and G-8 (Gas for Electric Generation Service) refer to gas direct access. In addition, gas rate schedule G-8 refers to G-11. CPAU will continue to offer gas rate schedules G-3 and G-8, but the proposal to eliminate gas direct access and Rate Schedule G-11 requires editing of gas rate schedules G-3 and G-8 to make them consistent with the decision to terminate the gas direct access program. Commission Review and Recommendation On November 6, 2013, the UAC unanimously (6-0) approved staff’s recommendation. Chair Cook was absent. Vice Chair Foster indicated that the recommended action made sense since no customers were on the rates to be eliminated, the proposed rule changes were for consistency and the result would be a streamlined process. Commissioner Hall stated that he supported the recommendation, but noted that the list of definitions (Rule and Regulation 2) did not include definitions for “gas transportation” or “gas distribution” and recommended including those to add clarity for readers of the rate schedules. Staff intends to review all definitions as part of an upcoming rules and regulations clean-up. Resource Impact Even if no customer elects G-11 or G-12, the estimated staff resources to continue to offer the rates is 0.1 FTE plus $1,500 per month that is spent on market volatility information used to calculate the volumetric risk premium for G-11. Staff time increases when customers elect G- 11 or G-12. If these rates were eliminated, these costs would be saved and staff resources could be re-assigned to other projects. There is no immediate staff resource savings by eliminating G-4. Implementing G-4, however, would require a large amount of staff time that would be estimated and included in the set-up fee charged to the third party supplier. Policy Implications This recommendation sets no new Council policy and is consistent with the Council-approved Utilities Strategic Plan. City of Palo Alto Page 6 Environmental Review Adoption of the recommended resolution does not meet the definition of a project, pursuant to Section 21065 of the California Environmental Quality Act. Attachments:  Attachment A: RESO Approving Termination of Gas Direct Access and Contract Rates and Modification to Utilities Rules and Regulation (PDF)  Attachment B: Rule 2 Definitions effective 01-01-2014 (PDF)  Attachment C: Rule 03 effective 01-01-2014 (PDF)  Attachment D: Rule 05 effective 01-01-2014 (PDF)  Attachment E: Rule 13 effective 01-01-2014 (PDF)  Attachment F: Utility Rate Schedule G-3 effective 01-01-2014 (PDF)  Attachment G: Utility Rate Schedule G-8 effective 01-01-2014 (PDF)  Attachment H: Excerpted Draft UAC Minutes of November 6, 2013 Meeting (PDF) DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 1 A. ABBREVIATIONS AMR - Automated Meter Reading AER - Advance Engineering Request Btu - British Thermal Unit ccf - Hundred Cubic Feet CEC - California Energy Commission CPAU - City of Palo Alto Utilities CPUC - California Public Utilities Commission. DA - Direct Access ERU - Equivalent Residential Unit ESP - Energy Service Provider FERC - Federal Energy Regulatory Commission GDA - Gas Direct Access GSP - Gas Service Provider GSPA - Gas Service Provider Agreement kVar - Kilovar kVarh - Kilovar-hours kW - Kilowatt kWh - Kilowatt-hour MW - Megawatt MMBtu - One million Btus. NEC - National Electric Code, Latest Version NRTL - Nationally Recognized Testing Laboratory PAMC - Palo Alto Municipal Code PSIG - Per square inch gauge PST - Pacific Standard Time RWQCP - Regional Water Quality Control Plant UUT - Utilities Users Tax B. GENERAL DEFINITIONS DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 2 Account The identification number in CPAU’s billing system for Utility Services. Agency Any local, county, state or federal governmental body or quasi-governmental body, including, without limitation, the CPUC, the FERC and any joint powers agency, but excluding the City and any board, commission or council of the City. Applicant An individual, corporation, partnership, Agency, or other legal entity or authorized agent of same, requesting CPAU to supply any or all of the following: 1. Electric Service 2. Water Service 3. Gas Service 4. Wastewater Collection 5. Refuse and Recycling Collection 6. Storm and Surface Water Drainage Service 7. Fiber Optics Service Or, an entity submitting an Application for Interconnection pursuant to Rule 27. Application (for Interconnection of Generating Facilities) An approved standard form (Load Sheet) submitted to CPAU for Interconnection of a Generating Facility. Bidweek Price Index The price reported in Natural Gas Intelligence “NGI’s Bidweek Survey”, California “PG&E Citygate” under the column “avg.” for the calendar month. Billing Period Also “service period” or “billing cycle”. The normal Billing Period for CPAU Customers is approximately 30 days, with variations occurring due to staff availability, holiday scheduling, field verification of Meter readings, or any other billing-related issues requiring additional investigation prior to issuance of the bill.. British Thermal Unit Also “Btu”. The standard sub-unit of measurement comprising a Therm of natural Gas. One (1) Therm DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 3 equals 100,000 Btu. Business Day Any day, except a Saturday, Sunday, or any day observed as a legal holiday by the City. Certification Test A test pursuant to Rule 27 that verifies conformance of certain equipment with approved performance standards in order to be classified as Certified Equipment. Certification Tests are performed by NRTLs. Certification; Certified; Certificate The documented results of a successful Certification Test. Certified Equipment Equipment that has passed all required Certification Tests. Charge Any assessment, cost, fee, surcharge or levy for Utility Service other than a Tax, including metered and unmetered Utility Service, capacity, connections, construction, penalties, and mandated or required Customer financial obligations for Service. Charter The Charter of the City of Palo Alto. City Attorney The individual designated as the City Attorney of the City under Section 2.08.120 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City Attorney. City’s Collector The Person(s) authorized under Section 5.20.040 of the Palo Alto Municipal Code to provide collection, removal and disposal of solid waste and Recyclable Materials pursuant to one or more written contracts with the City. City Manager The individual designated as the City Manager of the City under Section 2.08.140 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City Manager. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 4 City of Palo Alto, or City The government of the City of Palo Alto, a chartered City and a municipal corporation duly organized and validly existing under the Laws of the State of California, with a principal place of business located at 250 Hamilton Avenue, Palo Alto, County of Santa Clara. For the purposes of these Rules and Regulations, the term “City” may include services provided by both the City of Palo Alto Utilities Department and the City of Palo Alto Public Works Department. City of Palo Alto Public Works Department (Public Works) The City Department responsible for providing Refuse and Recycling, Wastewater Treatment and Storm and Surface Water Drainage Utility Services. Other Utility Services such as Water, Gas, Electric, Wastewater Collection, and Fiber Optics are provided by the City of Palo Alto Utilities Department. City of Palo Alto Utilities Department (CPAU) The City Department responsible for providing Water, Gas, Electric, Wastewater Collection and Fiber Optic Utility Services. Other Utility Services such as Refuse and Recycling, Wastewater Treatment and Storm and Surface Water Drainage are provided by the City of Palo Alto Public Works Department. Code The words "the Code" or "this Code" shall mean the Palo Alto Municipal Code. Commercial Service Commercial Utility Service is provided to businesses, non-profit organizations, public institutions, and industrial Customers. The term also applies to Utility Services through Master Meters serving multi- family Residential dwellings and common areas of multi-family facilities. Compostable Materials Organic materials designated by the City as acceptable for collection and processing. Cubic Foot of Gas (cf) The quantity of Gas that, at a temperature of sixty (60) degrees Fahrenheit and a pressure of 14.73 pounds per square inch absolute, occupies one cubic foot. Curtailment The act of reducing or interrupting the delivery of natural Gas. Customer The Person, corporation, Agency, or entity that receives or is entitled to receive Utility Service(s) from the City of Palo Alto, or in whose name Service is rendered for a particular Account as evidenced by the DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 5 signature on the Application, contract, or agreement for Service. In the absence of a signed instrument, a Customer shall be identified by the receipt of any payment of bills regularly issued in the name of the Person, corporation, or Agency regardless of the identity of the actual user of the Utility Service(s). Dark Fiber A Fiber Optic cable provided to end-users or resellers by CPAU without any of the light transmitters, receivers, or electronics required for telecommunications over the Fiber. Infrastructure for Fiber Optic activation is provided by the reseller or end-user. Dark Fiber Infrastructure Components of the CPAU Fiber Optic Distribution System required to provide Service to Customers (licensees), that are attached, owned, controlled or used by the City, located overhead or underground within the Public Right-of-Way, the Public Utility Easements and Leased Service Properties. Dedicated Distribution Transformer A Distribution Transformer that is dedicated to serving a single premise. Demand The highest rate of delivery of Electric energy, measured in Kilowatts (kW) or kilovolt amperes (kVA) occurring instantaneously or registered over a fixed time period (normally fifteen minutes unless otherwise specified within a monthly billing cycle). Demand Charge An electrical Charge or rate that is applied to a metered Demand reading expressed in Kilowatts to compute a Demand Charge component of a Customer’s Electric bill. Demarcation Point The Demarcation Point for a project shall be the Customer side of the panel onto which the CPAU Fiber terminates within the Customer Premises, unless otherwise specified in the Proposal for Dark Fiber Services. Direct Access (DA) The election by a Customer to procure its Gas Supply Services, from an Energy Service Provider, other than CPAU. In this situation, a Customer deals directly with an ESP for commodity supply, while distribution and applicable transmission services would continue to be provided by CPAU. Direct Access Service Request (DASR) DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 6 The form required to initiate Direct Access Service. Distribution Services Includes, but is not limited to, Utility Service provided by the Distribution System and other Services such as billing, meter reading, administration, marketing, and Customer Services. Does not include Services directly related to the Interconnection of a Generating Facility as per Rule 27. Distribution System The infrastructure owned and operated by CPAU which is capable of transmitting electrical power, other than Interconnection Facilities, or transporting Water, Wastewater, or Gas within the City of Palo Alto. The Electric Distribution System transmits power from the City’s Interconnection with PG&E to CPAU’s Meter located on the Customer’s Premises. The Gas Distribution System transports Gas from PG&E receiving stations to CPAU’s Meter located on the Customer Premises. The Water Distribution System transports Water from the San Francisco Water Department receiving stations and CPAU wells to the meter located on the Customer Premises. The Wastewater Collection System transports sewage from the Customer’s Premises to the Water Quality Control Plant. Distribution and Transmission Services Services provided by CPAU to effect the physical delivery of Energy Services provided by the Energy Services Provider from the Point of Receipt to the Direct Access Customer’s Service Address. Effluent Treated or untreated Wastewater flowing out of a Wastewater treatment facility, sewer, or industrial outfall. Electric, Electric Service Utility Service provided to residents and business owners in the City of Palo Alto consisting of generation, transmission, and distribution of electrical power for retail use. Electric Service is provided by the City of Palo Alto Utilities Department. Emergency An actual or imminent condition or situation, which jeopardizes CPAU’s Distribution System Integrity. Emergency Service Electric Service supplied to, or made available to, Load devices which are operated only in Emergency situations or in testing for same. Energy Services DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 7 Energy commodity and any applicable ancillary Services used to generate and transport such commodity from its origin to the City’s Point of Receipt. May also mean the sale of value added Services associated or related to the Provision and/or usage of energy commodity. Equivalent Residential Unit (ERU) This is the basic unit for computing storm and surface water drainage fees. All single-family Residential properties are billed the number of ERU’s specified in the table contained in Utility Rate Schedule D-1, according to parcel size. All other properties have ERU's computed to the nearest 1/10 ERU using this formula: No. Of ERU = Impervious Area (sq. ft.) / 2,500 sq. ft. Fiber Optic, Fiber Optic Service A solid core of optical transmission material. Fiber Optic Service that is provided by the City of Palo Alto Utilities Department is referred to as Dark Fiber. Fiber Optic Backbone The high-density portion of the Dark Fiber Infrastructure installed and owned by the City. Force Majeure The occurrence of any event that has, had or may have an adverse effect on the design, construction, installation, management, operation, testing, use or enjoyment of the City’s Utility Services, which is beyond the reasonable control of the parties and which event includes, but is not limited to, an Act of God, an irresistible superhuman cause, an act of a superior governmental authority, an act of a public enemy, a labor dispute or strike or a boycott which could not be reasonably contemplated by the City or Customer affected thereby, a defect in manufactured equipment (including, but not limited to, the Dark Fibers), fire, floods, earthquakes, or any other similar cause. Full Service; Fully Bundled Service Provision by CPAU of both Distribution and Transmission Services and Energy or Gas Commodity Services to its Customer(s). Function Some combination of hardware and software designed to provide specific features or capabilities. Its use, as in Protective Function, is intended to encompass a range of implementations from a single- purpose device to a section of software and specific pieces of hardware within a larger piece of equipment to a collection of devices and software. Gas Any combustible gGas or vapor, or combustible mixture of gaseous constituents used to produce heat by DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 8 burning. It shall include, but not be limited to, natural Gasgas, Gas gas manufactured from coal or oil, Gas gas obtained from biomass or from landfill, or a mixture of any or all of the above. Gas, Gas Service Utility Service provided to residents and business owners in the City of Palo Alto consisting of procurement, transmission, and distribution of Gas for retail use. Gas Service is provided by the City of Palo Alto Utilities Department. Gas Direct Access (GDA) The election by a Customer to procure its natural Gas, and related natural Gas Services, from a Gas Service Provider, other than CPAU. In this situation, a Customer obtains natural Gas commodity directly from a GSP, but local transmission of the natural Gas commodity is effectuated by CPAU in accordance with the terms of CPAU’s Natural Gas Service Agreement with PG&E. Also, Distribution Services would continue to be provided by CPAU. Gas Direct Access Service Request (GDASR) The form required to initiate Gas Direct Access Service. Gas Service Provider (GSP) The Person who procures, schedules, nominates and arranges transport of natural Gas to Gas Direct Access Customers, including its successors and assigns. Gas Service Provider Agreement (GSPA) The contract between CPAU and the Gas Direct Access Customer’s Gas Service Provider that establishes the terms and conditions under which Gas Services may be provided to the Gas Direct Access Customer. Generating Facility All Generators, electrical wires, equipment, and other facilities owned or provided by Producer for the purpose of producing Electric power. This includes a solar or wind turbine electrical generating facility that is the subject of a Net Energy Metering and Interconnection Agreement and Rule and Regulation 29. Generator A device converting mechanical, chemical or solar energy into electrical energy, including all of its protective and control Functions and structural appurtenances. One or more Generators comprise a Generating Facility. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 9 Gross Nameplate Rating; Gross Nameplate Capacity The total gross generating capacity of a Generator or Generating Facility as designated by the manufacturer(s) of the Generator(s). Initial Review The review by CPAU, following receipt of an Application, to determine the following: (a) whether the Generating Facility qualifies for Simplified Interconnection; or (b) if the Generating Facility can be made to qualify for Interconnection with a Supplemental Review determining any additional requirements. Inspector The authorized Inspector, agent, or representative of CPAU. Interconnection; Interconnected The physical connection of a Generating Facility in accordance with the requirements of the City’s Utilities Rules and Regulations so that Parallel Operation with CPAU’s Distribution System can occur (has occurred). Interconnection Agreement An agreement between CPAU and the Producer providing for the Interconnection of a Generating Facility that gives certain rights and obligations to effect or end Interconnection. For the purposes of the City’s Utilities Rules and Regulations, the Net Energy Metering and Interconnection Agreement, and the Power Purchase Agreements authorized by the City Council may be considered as Interconnection Agreements for purposes of defining such term. Interconnection Facilities The electrical wires, switches and related equipment that are required in addition to the facilities required to provide Electric Distribution Service to a Customer to allow Interconnection. Interconnection Facilities may be located on either side of the Point of Common Coupling as appropriate to their purpose and design. Interconnection Facilities may be integral to a Generating Facility or provided separately. Interconnection Study A study to establish the requirements for Interconnection of a Generating Facility with CPAU’s Distribution System. Internet Exchange Any Internet data center for telecommunications equipment and computer equipment for the purposes of DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 10 enabling traffic exchange and providing commercial-grade data center services. Interstate Transportation (or Transmission) Transportation of Gas on a pipeline system under the regulation of the FERC. Island; Islanding A condition on CPAU’s Electric Distribution System in which one or more Generating Facilities deliver power to Customers using a portion of CPAU’s Distribution System that is electrically isolated from the remainder of CPAU’s Distribution System. Junction A location on the Dark Fiber Infrastructure where equipment is installed for the purpose of connecting communication cables. Junction Site The area within the Transmission Pathway at which a Junction is located. Kilovar (kVar) A unit of reactive power equal to 1,000 reactive volt-amperes. Kilovar-hours (kVarh) The amount of reactive flow in one hour, at a constant rate of Kilovar. Kilowatt (kW) A unit of power equal to 1,000 watts. Kilowatt-hour (kWh) The amount of energy delivered in one hour, when delivery is at a constant rate of one Kilowatt; a standard unit of billing for electrical energy. Law Any administrative or judicial act, decision, bill, Certificate, Charter, Code, constitution, opinion, order, ordinance, policy, procedure, Rate, Regulation, resolution, Rule, Schedule, specification, statute, tariff, or other requirement of any district, local, municipal, county, joint powers, state, or federal Agency, or any other Agency having joint or several jurisdiction over the City of Palo Alto or City of Palo Alto Utilities or Public Works Customers, including, without limitation, any regulation or order of an official or quasi-official entity or body. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 11 Licensed Fibers One or more fibers comprising a part of the Dark Fiber Infrastructure that are dedicated to the exclusive use of the Customer under the Provisions of the Dark Fiber License Agreement, Proposal to Dark Fiber Services Agreement and the Utilities Rules and Regulations. Licensed Fibers Route A defined path of Licensed Fibers that is identified by specific End Points. Load(s) The Electric power Demand (kW) of the Customer at its Service Address within a measured period of time, normally 15 minutes, or the quantity of Gas required by a Customer at its Service Address, measured in MMBtu per Day. Main Wastewater Line Any Wastewater line not including a building connection (Service) sewer. Master-metering Where CPAU installs one Service and Meter to supply more than one residence, apartment dwelling unit, mobile home space, store, or office. Maximum Generation For a customer with a non-utility generator located on the customer’s side of the Point of Common Coupling, the Maximum Generation for that non-utility generator during any billing period is the maximum average generation in kilowatts taken during any 15-minute interval in that billing period provided that in case the generator output is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. Meter The instrument owned and maintained by CPAU that is used for measuring either the Electricity, Gas or Water delivered to the Customer. Metering The measurement of electrical power flow in kW and/or energy in kWh, and, if necessary, reactive power in kVar at a point, and its display to CPAU as required by Rule 27. Metering Equipment All equipment, hardware, software including Meter cabinets, conduit, etc., that are necessary for Metering. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 12 Meter Read The recording of usage data from Metering Equipment. Minimum Charge The least amount for which Service will be rendered in accordance with the Rate Schedule. Momentary Parallel Operation The Interconnection of a Generating Facility to the Distribution System for one second (60 cycles) or less. Nationally Recognized Testing Laboratory (NRTL) A laboratory accredited to perform the Certification Testing requirements under Rule 27. Net Energy Metering Net Energy Metering means measuring the difference between the electricity supplied through CPAU’s Electric utility Distribution System and the electricity generated by the customer-generator’s facility and delivered to CPAU’s Electric utility Distribution System over a specified twelve-month period. Net Generation Metering Metering of the net electrical power of energy output in kW or energy in kWh, from a given Generating Facility. This may also be the measurement of the difference between the total electrical energy produced by a Generator and the electrical energy consumed by the auxiliary equipment necessary to operate the Generator. Net Nameplate Rating The Gross Nameplate Rating minus the consumption of electrical power of a Generator or Generating Facility as designated by the manufacturer(s) of the Generator(s). Non-Islanding Designed to detect and disconnect from an Unintended Island with matched Load and generation. Reliance solely on under/over voltage and frequency trip is not considered sufficient to qualify as Non- Islanding. Occupied Domestic Dwelling Any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities, which is occupied by a Person or Persons. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 13 Parallel Operation The simultaneous operation of a Generator with power delivered or received by CPAU while Interconnected. For the purpose of this Rule, Parallel Operation includes only those Generating Facilities that are Interconnected with CPAU’s Distribution System for more than 60 cycles (one second). Performance Test, Performance Tested After the completion of any Fiber Interconnection work, the City will conduct a Performance Test of each Fiber constituting a part of the proposed leased fibers to determine its compliance with the Performance Specifications. Performance Specifications These specifications will include, but not be limited to, criteria relating to end-to-end optical time domain reflectometer data plots that identify the light optical transmission losses in each direction along the leased fibers whenever the testing is possible, measured in decibels at a wavelength of 1310 or 1550 nanometers for singlemode Fiber, as a Function of distance, measured in kilometers. Person Any individual, for profit corporation, nonprofit corporation, limited liability company, partnership, limited liability partnership, joint venture, business, family or testamentary trust, sole proprietorship, or other form of business association. PG&E Citygate The PG&E Citygate is the point at which PG&E’s backbone transmission system connects to PG&E’s local transmission system. Point of Common Coupling (PCC) The transfer point for electricity between the electrical conductors of CPAU and the electrical conductors of the Producer. Point of Common Coupling Metering Metering located at the Point of Common Coupling. This is the same Metering as Net Generation Metering for Generating Facilities with no host load. Point of Delivery (POD) DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 14 Unless otherwise specified, the following definitions apply: For Electric, that location where the Service lateral conductors connect to the Customer’s Service entrance equipment; for overhead Services, the POD is at the weather-head connection; for under-ground Services, the POD is located at the terminals ahead of or at the Meter; for multiple Meter arrangements with connections in a gutter, the POD is at the Meter terminals (supply-side); for multiple Meter arrangements in a switchboard, the POD is typically at the connectors in the utility entrance section; for Natural Gas, the POD is the point(s) on the Distribution System where the City delivers natural Gas that it has transported to the Customer. Point of Interconnection The electrical transfer point between a Generating Facility and the Distribution System. This may or may not be coincident with the Point of Common Coupling. Point of Receipt The designated location at which CPAU receives Gas supplied by a GSP on behalf of a GDA Customer. The Point of Receipt for Gas will be designated in the GSPA. Point of Service (POS) Where CPAU connects the Electric Service lateral to its Distribution System. For Fiber Optics Service, this is where CPAU connects the Fiber Service to the backbone. This point is usually a box located in or near the street or sidewalk and can be in the Public Right-of-Way. This point is at a mutually agreed upon location established at the time of installation. Pole Line Overhead wires and overhead structures, including poles, towers, support wires, conductors, guys, studs, platforms, cross arms braces, transformers, insulators, cutouts, switches, communication circuits, appliances attachments, and appurtenances, located above ground and used or useful in supplying Electric, communication, or similar or associated Service. Power Factor The percent of total power delivery (kVA) which does useful work. For billing purposes, average Power Factor is calculated from a trigonometric function of the ratio of reactive kilovolt-ampere-hours to the Kilowatt-hours consumed during the billing month. Power Factor is a ratio that reflects the reactive power used by a Customer. CPAU maintains an overall system Power Factor above 95% to reduce distribution system losses caused by low Power Factor. Power Factor Adjustment CPAU must install additional equipment to correct for Customers that maintain a low Power Factor, and may make a Power Factor Adjustment to a Customer’s bill to account for those costs and the additional DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 15 energy costs and losses incurred by CPAU due to the Customer’s low Power Factor. Premises All structures, apparatus, or portion thereof occupied or operated by an individual(s), a family, or a business enterprise, and situated on an integral parcel of land undivided by a public street, highway, or railway. Primary Service CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level equal to or greater than 1000 volts. Producer The entity that executes an Interconnection Agreement with CPAU. The Producer may or may not own or operate the Generating Facility, but is responsible for the rights and obligations related to the Interconnection Agreement. Proposal for Dark Fiber Services A project-specific Service agreement that acts as a supplemental document for the Dark Fiber License Agreement. This Service agreement shall include the proposed Interconnection fees, applicable Fiber licensing fees, term of the Service, and summary of licensed Fiber elements. Protective Function(s) The equipment, hardware and/or software in a Generating Facility (whether discrete or integrated with other Functions) whose purpose is to protect against Unsafe Operating Conditions. Provision Any agreement, circumstance, clause, condition, covenant, fact, objective, qualification, restriction, recital, reservation, representation, term, warranty, or other stipulation in a contract or in Law that defines or otherwise controls, establishes, or limits the performance required or permitted by any party. Prudent Utility Practices The methods, protocols, and procedures that are currently used or employed by utilities to design, engineer, select, construct, operate and maintain facilities in a dependable, reliable, safe, efficient and economic manner. Public Right-of-Way The areas owned, occupied or used by the City for the purposes of furnishing retail and/or wholesale Electricity, Gas, Water, Wastewater, Storm and Surface Water Drainage, Refuse and recycling or DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 16 communications commodity and/or distribution Service, and the means of public transportation, to the general public, including but not limited to, the public alleys, avenues, boulevards, courts, curbs, gutters, lanes, places, roads, sidewalks, sidewalk planter areas, streets, and ways. Public Utility Easements The areas occupied or used by the City for the purpose of providing Utility Service to the general public, and all related Services offered by the City’s Utilities Department and/or Public Works Department, the rights of which were acquired by easements appurtenant or in gross, or are other interests or estates in real property, or are the highest use permitted to be granted by the nature of the City’s interest in and to the affected real property. This term incorporates all public Service easements for Utility Services that have been recorded by the City with the Recorder of the County of Santa Clara, California. Public Works Department See City of Palo Alto Public Works Department. Rate Schedule One or more Council-adopted documents setting forth the Charges and conditions for a particular class or type of Utility Service. A Rate Schedule includes wording such as Schedule number, title, class of Service, applicability, territory, rates, conditions, and references to Rules. Recyclable Materials Materials designated by the City as acceptable for recycling collection and processing. Reserved Capacity For a customer with one or more non-utility generators located on the customer’s side of the Point of Common Coupling, the Reserved Capacity for each billing period is the lesser of 1) the sum of the Maximum Generation for that period for all non-utility generation sources; or 2) the maximum average customer demand in kilowatts taken during any 15-minute interval in the billing period provided that in case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. Residential Service Utility Service provided to separately metered single family or multi-family, domestic dwelling. Rules and Regulations See Utilities Rules and Regulations Scheduling Coordinator An entity providing the coordination of power schedules and nominations to effect transportation and DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 17 distribution of Gas, Electric power and energy. Secondary Service CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level less than 1000 volts. Service(s) Utility Services offered by the City of Palo Alto include Electric, Fiber Optics, Gas, Water, Wastewater Collection services provided by the Utilities Department (CPAU); and Refuse and Recycling, Wastewater Treatment, and Storm and Surface Water Drainage Services provided by the Public Works Department. Service Address The official physical address of the building or facility assigned by CPAU’s Planning Department, at which Customer receives Utility Services. Service Charge A fixed monthly Charge applicable on certain Rate Schedules that does not vary with consumption. The Charge is intended to recover a portion of certain fixed costs. Service Drop The overhead Electric Service conductors from the last pole or other aerial support to and including the splices, if any, connecting to the service entrance conductors at the building or other structure. Or, in the case of Fiber Optic Drops, the overhead Fiber Optics cable from the last pole or other aerial support to the building or other structure to and including the termination box. Services or Service Lines Facilities of CPAU, excluding transformers and Meters, between CPAU’s infrastructure and the Point of Delivery to the Customer. Service Territory The geographic boundaries within the City of Palo Alto limits served by the physical Distribution System of the CPAU. Short Circuit (Current) Contribution Ratio (SCCR) The ratio of the Generating Facility’s short circuit contribution to the short circuit contribution provided through CPAU’s Distribution System for a three-phase fault at the high voltage side of the distribution transformer connecting the Generating Facility to CPAU’s system. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 18 Simplified Interconnection An Interconnection conforming to the minimum requirements as determined under Rule 27, Section I. Single Line Diagram; Single Line Drawing A schematic drawing, showing the major Electric switchgear, Protective Function devices, wires, Generators, transformers and other devices, providing sufficient detail to communicate to a qualified engineer the essential design and safety of the system being considered. Special Facilities See CPAU’s Rule and Regulation 20 governing Special Facilities. Splice A point where two separate sections of Fiber are physically connected. Standard Refuse Container A Standard Refuse Container shall have the meaning described in the Palo Alto Municipal Code. A Standard Container shall also include a wheeled container with a capacity of not to exceed 32 gallons. Standby Service Back-up Energy Services provided by CPAU. Storm and Surface Water Drainage Utility Service provided to residents and business owners in the City of Palo Alto. Storm and Surface Water Drainage Service is provided by the City of Palo Alto Public Works Department. Supplemental Review A process wherein CPAU further reviews an Application that fails one or more of the Initial Review Process screens. The Supplemental Review may result in one of the following: (a) approval of Interconnection; (b) approval of Interconnection with additional requirements; or (c) cost and schedule for an Interconnection Study. System Integrity The condition under which a Distribution System is deemed safe and can reliably perform its intended Functions in accordance with the safety and reliability rules of CPAU. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 19 Tax Any assessment, Charge, imposition, license, or levy (including any Utility Users Tax) and imposed by any Agency, including the City. Telemetering The electrical or electronic transmittal of Metering data in real-time to CPAU. Temporary Service Service requested for limited period of time or of indeterminate duration such as, but not limited to, Service to provide power for construction, seasonal sales lots (Christmas trees), carnivals, rock crushers or paving plants. Temporary Service does not include Emergency, breakdown, or Standby Service. Therm A Therm is a unit of heat energy equal to 100,000 British Thermal Units (Btu). It is approximately the energy equivalent of burning 100 cubic feet (often referred to as 1 ccf) of natural Gas. Since Meters measure volume and not energy content, a Therm factor is used to convert the volume of Gas used to its heat equivalent, and thus calculate the actual energy use. The Therm factor is usually in the units therms/ccf. It will vary with the mix of hydrocarbons in the natural Gas. Natural Gas with a higher than average concentration of ethane, propane or butane will have a higher Therm factor. Impurities, such as carbon dioxide or nitrogen lower the Therm factor. Transfer Trip A Protective Function that trips a Generating Facility remotely by means of an automated communications link controlled by CPAU. Transmission Pathway Those areas of the Public Right-of-Way, the Public Utility Easements and the Leased Service Properties in which the Dark Fiber Infrastructure is located. Trap Any approved equipment or appliance for sealing an outlet from a house-connection sewer to prevent the escape of sewer Gas from a main line through a building connection (service) sewer. Underground Utility District An area in the City within which poles, overhead electric or telecommunication wires, and associated overhead structures are prohibited or as otherwise defined in Section 12.04.050 of the PAMC. DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 20 Unintended Island The creation of an Island, usually following a loss of a portion of CPAU’s Distribution System, without the approval of CPAU. Unsafe Operating Conditions Conditions that, if left uncorrected, could result in harm to personnel, damage to equipment, loss of System Integrity or operation outside pre-established parameters required by the Interconnection Agreement. Utilities Department See City of Palo Alto Utilities Department. Utilities Director The individual designated as the Director of Utilities Department under Section 2.08.200 of Chapter 2.08 of Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the director of utilities. Utility(ies) Rules and Regulations, Rules and Regulations The compendium of Utilities Rules and Regulations prepared by the City’s Utilities and Public Works Departments and adopted by ordinance or resolution of the Council pursuant to Chapter 12.20 of the Palo Alto Municipal Code, as amended from time to time. Utility(ies) Service(s), Service(s) Electric, Ffiber optics, Wwater, Ggas, Wwastewater collection services provided by the City of Palo Alto Utilities Department (CPAU) and Refuse and Recycling, Wastewater Treatment and Storm and Surface Water Drainage services provided by the City of Palo Alto Public Works Department. Utilities User Tax (UUT) City of Palo Alto Tax imposed on Utility Charges to a Water, Gas, and/or Electric Service user. This may include Charges made for Electricity, Gas, and Water and Charges for Service including Customer Charges, Service Charges, Standby Charges, Charges for Temporary Services, Demand Charges, and annual and monthly Charges, as described in Chapter 2.35 of the Palo Alto Municipal Code. Wastewater Utility Service provided to residents and business owners in the City of Palo Alto. Wastewater Utility Services include collection and treatment of Wastewater. Wastewater Collection Service is provided by the City of Palo Alto Utilities Department, and Wastewater Treatment Service is provided by the City of DEFINITIONS AND ABBREVIATIONS RULE AND REGULATION 2 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 32-15-20143 Sheet No 21 Palo Alto Public Works Department. Water Utility Service provided to residents and business owners in the City of Palo Alto for retail use. Water Service is provided by the City of Palo Alto Utilities Department. Water Column (WC) Pressure unit based on the difference in inches between the heights of water columns as measured in a manometer. 6” WC = 0.217 psi; 7” WC = 0.25 psi. Yard Trimmings Yard Trimmings means those materials defined in Section 5.20.010 of the Palo Alto Municipal Code. (END) DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 1 A. GENERAL Rule and Regulation 3 describes Services that are offered within the jurisdictional boundaries of the City of Palo Alto. For Rules specific to each type of Service, please refer to the following Rules and Regulations: Rule and Regulation 20 – Special Electric Utility Regulations Rule and Regulation 21 – Special Water Utility Regulations Rule and Regulation 22 – Special Gas Utility Regulations Rule and Regulation 23 – Special Wastewater Utility Regulations Rule and Regulation 24 – Special Refuse and Recycling Utility Regulations Rule and Regulation 25 – Special Storm and Surface Water Drainage Utility Regulations Rule and Regulation 26 – Special Fiber Optics Utility Regulations B. ELECTRIC SERVICE 1. BASIS OF SERVICE a. Unless otherwise provided in a Rate Schedule or contract, CPAU’s Electric rates are based upon the furnishing of Electric Service to Customer Premises at a single Point of Delivery at a single voltage and phase classification. Unless specified otherwise, each Point of Delivery shall be metered and billed separately under the appropriate Rate Schedule. Any additional Service supplied to the same Customer at other Points of Delivery or at a different voltage or phase classification shall be separately metered and billed. b. The type of distribution Service (voltage, Secondary, Primary) available at any particular location may be determined by inquiry to a CPAU Engineering representative. c. If the Customer, for his or her convenience, requests Secondary or Primary Services at an alternate Point of Delivery other than the normal Point of Delivery as determined by CPAU, the Customer is responsible for all cost of providing Secondary or Primary Services at such alternate location. d. CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 2 e. See Rule and Regulation 20. "Special Electric Utility Regulations" regarding special Service requirements. 2. LOCATION OF POINT OF SERVICE a. SECONDARY SERVICE 1. OVERHEAD SERVICE AT SECONDARY VOLTAGES The Point of Service for Overhead Service at secondary voltages will normally be located at a power pole on the perimeter of the parcel to be served, which is, in CPAU’s judgment, most conveniently located and in compliance with CPAU standards and specifications and applicable building and electrical codes. 2. UNDERGROUND SERVICE AT SECONDARY VOLTAGE The Point of Service for Underground Service at secondary voltages will normally be located at the Secondary connectors of the transformer serving the Customer’s Load, or in the Secondary hand hole, if available. b. PRIMARY SERVICE The Point of Service for Primary Service will normally be at the point near the property line of the premises to be served which is, in CPAU’s judgment, most conveniently located with respect to CPAU’s transmission or distribution facilities. c. EXCEPTIONS If several buildings are occupied and used by one Customer in a single business or other activity, CPAU may, at its discretion, furnish Service for the entire group of buildings through one Service connection at one Point of Service. 3. EQUIPMENT REQUIREMENTS All new equipment in underground areas required to provide electric service to a Customer shall be pad-mounted. In addition, any three-Phase electric service connection DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 3 and any electric service connection rated at 400 Amps or greater which is located either in an underground or overhead area must be served from a pad-mounted transformer. The Utilities Director, or his/her designee, may authorize: 1) an exception to the above provisions when, in his/her opinion, a pad-mounted equipment installation in any particular instance would not be feasible or practical or 2) installation of electric service equipment in locations with limited access by utility equipment. Such installations will be considered “Special Facilities” as defined in Rule and Regulation 20, and the Applicant will be responsible for the costs described in that rule and outlined in the Service Contract as described in Rule and Regulation 5. If the Applicant wants a Point of Delivery other than at the location determined by CPAU, CPAU will work with the Applicant to assist in the selection of the alternate Point of Delivery location for the electric service equipment within the boundaries of the Applicant’s property. When the Applicant chooses a Point of Delivery location other than the location which has been determined by CPAU, the Applicant must acknowledge that such an alternate Point of Delivery location will cause CPAU personnel to incur delays when performing repairs or service restoration during emergencies. In addition to being responsible to pay for the initial cost of installation of such electric service equipment in an alternate location, the Applicant shall also be responsible to pay for any future additional labor, equipment, and material costs incurred by CPAU necessary to facilitate replacement, removal, or relocation of any electric service equipment which has been installed in an alternate Point of Delivery location at the Applicant’s request. Any installation intended to assist in “screening” of electric service equipment by landscaping or structures must be constructed in a manner which meets all of CPAU’s clearance standards. The plans for such screening must be approved by the City of Palo Alto and CPAU prior to beginning work on the screening installation. The Applicant shall provide a Public Utility Easement in recordable form for installation of such facilities within the boundaries of the property. All pad-mounted equipment will be subject to CPAU’s aesthetic guidelines. 4. EMERGENCY AND STANDBY SERVICES CPAU may provide back up Emergency, and other Standby Service to Customers as Special Facilities. See Rule and Regulation 20 "Special Electric Utility Regulations" regarding special Service requirements. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 4 5. SERVICE DELIVERY VOLTAGE The following are the standard Service voltages normally available. Not all standard Service voltages are available at each Point of Delivery. These Service voltages are available in locations that already have this Service voltage and have sufficient capacity, as determined by CPAU, to serve the new Load. Any equipment installed on 120/240, 3 wire or 240/120, 4-wire Services shall have the capability of converting to a 120/208, 3 wire or 208 Y/120, 4-Wire Service. a. DISTRIBUTION OF VOLTAGE Alternating-current Service will be regularly supplied at a nominal frequency of approximately 60-Hertz (cycles per second). Single-Phase Three-Phase Three-Phase Secondary Secondary Primary 120/240, 3 -wire 240/120, 4-wire* 12,470, 3-wire 120/208, 3-wire 240, 3-wire* 208 Y/120, 4-wire 480 Y/277, 4-wire *Only available in special conditions as determined by the Electric Engineering Manager. b. All voltages referred to in this Rule and appearing in some Rate Schedules are nominal Service voltages at the Point of Delivery. CPAU’s facilities are designed and operated to provide sustained Service voltage at the Point of Delivery, but the voltage at a particular Point of Delivery will vary within satisfactory operating range limits. c. In areas where a certain standard Secondary voltage is being delivered to one or more Customers, CPAU may require an Applicant for new Service in such areas to receive the same standard voltage supplied to existing Customers. d. CPAU may change the voltage at which Service is delivered, including converting existing 4160 volt Primary Service to 12,470 volt Service. If CPAU notifies the DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 5 Customer that a Service voltage change is necessary, the Customer will be required to provide Service equipment capable of accepting the new voltage and meeting other CPAU requirements. Costs to provide suitable Customer’s Service entrance equipment and any other associated equipment to receive Service at the new voltage shall be borne by the Customer. 6. VOLTAGE AND FREQUENCY CONTROL a. Under normal Load conditions, CPAU’s distribution circuits will be operated so as to maintain Service voltage levels to Customers within plus or minus 5 percent of the nominal Service voltage at the Point of Delivery. Subject to the limitations above, CPAU will maintain the voltage balance between phases as close as practicable to 2.5% maximum deviation from the average voltage between the three phases. b. Voltages may be outside the limits specified above when the variations: 1. arise from Service interruptions; 2. arise from temporary separation of parts of the system from the main system; 3. are minor momentary fluctuations and transient voltage excursions of short duration which may occur in the normal operation of CPAU system; 4. are beyond CPAU’s control. c. Due to conditions beyond the control of CPAU, the Customer, or both, there will be infrequent and limited periods when voltages will occur outside of the nominal Service voltage ranges. Utilization equipment may not operate satisfactorily under these conditions, and protective devices in the equipment may operate to protect the equipment. d. Where the operation of the Customer’s equipment requires stable voltage regulation or other stringent voltage control beyond that supplied by CPAU in the normal operation of its system, the Customer, at its own expense, is responsible for installing, owning, operating, and maintaining any special or auxiliary equipment on the Load side of the Service delivery point as deemed necessary by the Customer. e. The Customer shall be responsible for designing and operating its Service DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 6 facilities between the Point of Delivery and the utilization equipment to maintain proper utilization voltage at the line terminals of the utilization equipment. f. The Customer shall not impose a Load on CPAU’s system that will cause the voltage limits in this section to be exceeded for an adjacent Service delivery point. g. When there is reasonable indication of a problem, CPAU shall test for excessive fluctuations at its own expense. Voltage checks requested by the Customer more than once in any twelve month period shall be paid by the Customer, unless CPAU determines that excessive voltage fluctuation exists. h. CPAU may institute measures to prevent the continuous operation of equipment detrimental to Service to other Customers or may discontinue Electric Service to the offending Customer. (See Rule and Regulation 20, Special Electric Utility Regulations). i. Customers are responsible for protecting their connected Loads, audio, video, and electronic equipment, including computers, from sudden voltage or frequency fluctuations outside nominal Service and frequency ranges. Such protection may include, but is not limited to, surge protectors. 7. GENERAL LOAD LIMITATIONS a. SINGLE-PHASE SERVICE 1. Single-phase Service normally will be 3-wire, 120/240 volts (or 3-wire, 120/208 volts at certain locations as now or hereafter established by CPAU) where the size of any single motor does not exceed 7-1/2 horsepower (10 horsepower at the option of CPAU). For any single-phase Service, the maximum Service size shall be 400 ampere. If the Load exceeds the capability of a 400 ampere single phase Service the Service shall be three-phase. 2. In locations where CPAU maintains a 120/208 volt secondary system, 3- wire single-phase Service normally shall be limited to that which can be supplied by a main switch or Service entrance rating of 200 amperes. Single-phase Loads in these locations in excess of that which can be supplied by a 200 ampere main switch or Service entrance rating normally DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 7 will be supplied with a 208Y/120 volt, three-phase, 4-wire Service. b. THREE-PHASE SERVICE (480 VOLTS OR LESS) Minimum Load Maximum Demand Normal Voltage Requirements Load Permitted 240/120 5 hp, 3-phase connected 400 Amperes 240 5 hp, 3-phase connected 400 Amperes 208Y/120 Demand Load 75 kVA 500 kVA 480Y/277 Demand Load 112 kVA 2,500 kVA (See Note 1) Note 1. Applicants or existing Customers with a planned or existing single or multiple building development having a maximum Demand in excess of 2500 kVA, as determined by CPAU, will be required to take delivery at the available primary voltage and are required to provide their own primary switchgear and transformer(s). Determination of maximum Demand and Service voltage will be made by CPAU and the decision of the Electric Engineering Manager will be final. 1. Where three-phase Service is supplied, CPAU reserves the right to use single-phase transformers, connected open-delta or closed-delta, or three- phase transformers. 2. Three-phase Service will be supplied on request for installations aggregating less than the minimum listed above, but not less than 3 horsepower (hp), three-phase Service, where existing transformer capacity is available. If three-phase Service is not readily available, or for Service to Loads less than 3 hp, Service shall be provided in accordance with CPAU’s applicable Rule 20 on Special Power Service requirements. 3. Residential customers requesting three-phase service shall be responsible for all labor and material costs required to provide service, including the cost of the transformer. These installations are not considered “Special Facilities” as described in Rule and Regulation 20. 4. An Applicant or existing Customer requiring Service with a maximum Demand in excess of 1000 kVA, as determined by CPAU, shall be served by a padmount transformer. No submersible or vault-installed transformers in excess of 1000 kVA will be installed by CPAU. Where an DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 8 existing underground Service must be upgraded beyond 1000 kVA, the Customer shall be required to provide adequate space for installation of the padmount transformer. In the event the Customer is unable to provide adequate space for the padmount transformer, then the Customer shall make arrangements at his or her expense to receive Service at primary voltage. c. THREE-PHASE SERVICE (OVER 2,000 VOLTS) The following three-phase primary voltage may be available as an isolated Service for a single Applicant; and where that Applicant’s Demand Load justifies such voltage. The determination will be made by CPAU. Minimum Demand Maximum Demand Normal Voltage Bank Installed Load Permitted 4,160 500 kVA 3,600 kVA 12,470 1,000 kVA 11,000 kVA Note: 4,160 volt Services will not be furnished for new Services. 8. TEMPORARY SERVICE Temporary Service is Electric Service which, in CPAU’s opinion, is of an indefinite duration at the same location, or for operations of a speculative character or of questionable permanency, or any other Service which is estimated to last less than one year. CPAU will furnish Temporary Service if the furnishing of such Service will not create undue hardship for CPAU, or its Customers, and the following conditions are met: a. The Applicant for such Temporary Service shall apply for Service on an Application form provided by CPAU Engineering and shall pay to CPAU in advance the cost of installing and removing any facilities necessary in connection with the furnishing of such Service by CPAU. b. Each Applicant for Temporary Service shall prepay a Temporary Service Fee in accordance with Electric Service Connection Fees Rate Schedule E-15. c. Nothing in this Rule and Regulation shall be construed as limiting or in any way affecting the right of CPAU to collect from the Customer an additional sum of money by reason of the Temporary Service furnished or to be furnished or DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 9 removed hereunder. d. If the Temporary Service connection time exceeds one-year, the Applicant shall apply for an extension of the Temporary Service. The Director of Utilities or his/her designee will determine if the Service should be reclassified as a permanent Service. 9. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. C. FIBER OPTIC SERVICE Fiber Optic Service includes the custom construction and licensing of single mode Fiber routes between points within the City of Palo Alto. It is the Customer’s responsibility to establish all electronic devices and networks required to pass data over their licensed CPAU Dark Fiber routes. 1. LICENSING SERVICES All Dark Fiber routes are licensed in accordance with the currently approved Dark Fiber Rate Schedules, and in compliance with the Utilities Rules and Regulations. See Rule and Regulation 26, “Special Fiber Optic Utility Regulation,” regarding special Service requirements. All CPAU fibers terminate within the jurisdictional boundaries of the City of Palo Alto. 2. OTHER SERVICES CPAU offers custom Dark Fiber construction and ancillary Services such as Fiber Optic cable splicing, engineering feasibility studies, and when specifically requested by the Customer, multimode Fiber cable installations. 3. QUALITY Dark Fiber routes in the City of Palo Alto comprised of single mode Fiber comply with generally accepted industrial standards and specifications. All construction is done using DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 10 industry accepted techniques and procedures. All constructed routes are Performance Tested to assure the industry quality standards are met. D. WATER SERVICE 1. SOURCE OF SUPPLY CPAU’s primary source of Water is the Hetch Hetchy aqueduct system, managed by the San Francisco Public Utilities Commission (SFPUC). CPAU wells also provide Emergency supply. See Rule and Regulation 21, “Special Water Utility Regulation” regarding special Service requirements. 2. QUALITY Hardness generally varies between 1 and 4 grains per gallon depending on the source. An analysis of the mineral content of the Water is available upon request from CPAU Engineering. 3. PRESSURE Water pressure varies from 30 to 125 pounds per square inch. CPAU maintains an average of 50 pounds per square inch, with the maximum and minimum pressures being experienced at the lower and higher elevations of the Distribution System. CPAU assumes no responsibility for loss or damage due to lack of Water pressure but agrees to furnish such pressures as are available in its general Distribution System. If low Water pressure occurs due to additional on-site development, it shall be the responsibility of the property owner to replace the existing Water Service with a new Water Service designed for the current site. All costs of the required new Service upgrade shall be borne by the property owner. 4. TREATMENT CPAU currently does not treat Water supplied by the SFPUC. The pH of the Water supplied is adjusted by the SFPUC to reduce its corrosive action. 5. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 11 E. GAS 1. TYPES OF SERVICES CPAU offers two general types of Gas Service:provides Full Service and Gas Direct Access Service. Full Service includes Gas supply, transportation, and Distribution Services. Gas Direct Access Service is an unbundled Service where CPAU provides Distribution Services and outside Gas Service Providers supply Gas-commodity and transport. In order to initiate Gas Direct Access Service, Customers must complete a Gas Direct Access Service Request form. Gas Service Providers will be required to execute a Gas Service Provider Agreement (GSPA). Operational requirements as well as delivery specifications, administrative fees, security deposits, Metering requirements and other requirements will be addressed in the GSPA. 2. KIND AND HEATING VALUE CPAU purchases natural Gas from several/various natural Gas suppliers. The heating value of natural Gas supplied varies depending upon the Gas fields being drawn upon. At times of insufficient supply, some artificial Gas may be supplied or mixed with the natural Gas. The average monthly heating value in British Thermal Units (Btu)-dry basis per cubic foot of the natural Gas served may vary within the limits of 750 to 1150 Btu. This average heating value is converted to a Therm factor for use as one of the factors used in calculating a composite multiplier for billing purposes. The Therm factor will be based upon the heat factor used by CPAU’s supplier of natural Gas for the preceding month. Gas is supplied by CPAU either at standard “low pressure” or at “medium pressure”. Low pressure Service is available at all points where Gas is supplied. Where available from existing high pressure mains, at the option of CPAU, high pressure Service may be supplied. However, CPAU reserves the right to lower the pressure or to discontinue the delivery of Gas at high pressure. The standard pressure for low pressure is seven inches of Water Column (WC), which is approximately 1/4 pound per square inch (psi) above atmospheric pressure. In limited circumstances, increased pressure may be provided for domestic use at 14” Water Column. This increased pressure will only be provided for domestic use if the houseline size required is greater than 2” diameter, or CPAU determines, based upon satisfactory information from the manufacturer, provided by the Customer, that an appliance to be DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 12 located in the residence requires increased pressure at the inlet that cannot be obtained by resizing or relocating the houseline. Increased pressure may be provided for commercial uses only if the use of the houseline size required is greater than 4” diameter, or evidence as described above establishes that equipment on the site requires increased pressure at the inlet that cannot be obtained by resizing or relocating the houseline. For commercial uses, the available pressures are 7” WC, 14” WC (approximately 1/2 psi), 1 psi, 2 psi and 5 psi. All increased pressure above 7”WC requires review and approval of the Engineering Manager, a plumbing permit and testing of the existing Gas piping with a building Inspector present in accordance with the latest adopted version of the California Plumbing Code See Rule and Regulation 22, “Special Gas Utility Regulations” regarding special Service requirements. 3. DETERMINATION OF THERMS TO BE BILLED The unit of measure for billing is the Therm which is defined as the quantity of Gas having a heating value of 100,000 Btu. Gas Meters measure volume of Gas in ccf at ambient temperature and pressure conditions. Therms are derived from the metered data by subtracting the Meter reading for the previous reading cycle from the current reading. The difference (uncorrected ccf) is multiplied by the pressure factor required to convert the measured consumption volume to a standard volume (at standard temperature and pressure conditions). This standard volume, in pressure-corrected ccf, is then multiplied by the Therm factor (a variable determined by periodic analysis of CPAU’s Gas supply) to produce the final number of Therms billed. The composite correction factor (the product of the Therm factor and the pressure correction factor) is shown on bills under the heading “multiplier.” 4. SERVICE DOWNSTREAM OF METER CPAU assumes no duty or liability for inspecting, validating or approving the safe operating condition of the Customer’s Service, appliances, or equipment downstream of the Utility Meter. F. WASTEWATER COLLECTION AND TREATMENT DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 13 1. COLLECTION CPAU operates and maintains a Wastewater Collection System separate from the storm and surface Water Collection System. A connection to the Wastewater Collection System is required for all water users where wastewater service is available. For the disposal of Wastewater from basements and floors below ground level, it will be necessary for the Customer to provide pumps or ejectors for satisfactory drainage, as approved by the Water-Gas-Wastewater Engineering Manager. If the elevation of the basement floor is above the rim elevation of the next upstream manhole, Applicant shall provide a survey by a licensed Civil Engineer indicating the elevations of the basement floor and the rim elevation of the next upstream manhole. Submission of this survey and approval by the Engineering Manager is required for exemption from the pump/ejector requirement. 2. REGULATION Chapter 16.09 of the Municipal Code regulates the discharge into the Wastewater Collection System of substances other than domestic Wastewater. See Rule and Regulation 23, “Special Wastewater Utility Regulations” regarding special Service requirements. 3. TREATMENT The collection system transports the Wastewater to the Palo Alto Regional Water Quality Control Plant for treatment. At this tertiary treatment plant, the City of Palo Alto processes the Wastewater from Mountain View, Los Altos, Los Alto Hills, Stanford University, and East Palo Alto Sanitary District, as well as its own. The treatment is performed in accordance with the National Pollution Discharge Elimination Permit issued by the San Francisco Bay Area Regional Water Quality Control Board before the treated water is discharged into the San Francisco Bay Estuary. 4. LIMITATION OF SERVICE CPAU reserves the right to limit the size of connection and the quantity of wastes disposed and to prohibit the use of the sewer for disposal of toxic or hazardous wastes detrimental to the Wastewater system or treatment plant. G. REFUSE AND RECYCLING COLLECTION 1. REGULATION DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 14 All solid waste and Recyclable Materials are governed by Chapter 5.20 of the Palo Alto Municipal Code, regulations promulgated by the City Manager pursuant to Chapter 5.20, these Rules and Regulations and the contract between the City and the City’s Collector. See Rule and Regulation 24, “Special Refuse and Recycling Regulations” regarding special Service requirements. 2. REFUSE COLLECTION The City’s Collector provides collection of solid waste, Recyclable Materials, compostables and Yard Trimmings. A minimum of one collection per week of solid waste is required of all occupied Premises. An occupied premise is one to which Water, Gas and/or Electric Service is rendered. The automatic solid waste Service level is one Standard Container for Residential Customers and two Standard Containers for Commercial Customers. The minimum Service for Residential Premises is one twenty gallon can or wheeled cart provided by the City’s Collector. The City’s Collector will provide wheeled carts at Customer’s request for curbside solid waste collection, which are subject to the same rate structure and volume capacity as the Standard Container. Customers opting for a wheeled cart must use one provided by the City’s Collector-to ensure compatibility with collection vehicles. Contents of wheeled carts shall not exceed a weight of 200 pounds. Each Customer shall receive collection Service on a City specified day of each week. Solid waste in excess of the Service level subscribed by the Customer will be removed by the City’s Collector, for an additional Charge, upon Customer request or notification. Customers exceeding their subscribed Service level repeatedly are required to subscribe to additional collection Service at the City-established rates. H. STORM AND SURFACE WATER DRAINAGE 1. RESPONSIBILITY AND PURPOSE The City of Palo Alto Public Works Department is responsible for all Drainage Facilities in the street and public right of way that collect storm and surface Water and convey it to the major channels and creeks within the jurisdictional boundaries of the City of Palo Alto. Examples include curbs and gutters, catch basins, pipelines, culverts, street, DESCRIPTION OF UTILITY SERVICES RULE AND REGULATION 3 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Sheet No 15 channels and pumping stations. The purpose of the Storm and Surface Water control facilities is to improve the quality of control, or protect life or property from any storm, flood or surplus waters. See Rule and Regulation 25, “Special Storm and Surface Water Drainage Regulations,” regarding special Service requirements. 2. STORM DRAINAGE FEE A Storm Drainage fee shall be payable to the City monthly by the owner or occupier of each and every developed parcel in accordance with Rule and Regulation 25. (END) SERVICE CONTRACTS RULE AND REGULATION 5 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Original Sheet No 1 A. TYPES OF SERVICE CONTRACTS For all Utility Services provided, the City may require a written agreement for new or existing Customers. Contracts may apply to standard, custom, or special Service offerings. The following is an illustrative list of special Services that may be the subject(s) of a contract. Additional Services may require contracts not listed here, at the discretion of the Director of Utilities. 1. Line Extensions 2. Temporary Service 3. Special Facilities 4. Utility Service to special districts and institutions 5. Work performed for other agencies at their expense 6. Transporting Gas to Customers on behalf of Gas Service Providers (GSP) 76. Transmission service 87. Special Metering and/or Billing Services 89. Special Energy Services 910. Long-term Service agreements greater than 3 years 1011. Loans and leases to finance efficiency improvements at a Customer’s site 112 Loans and leases to improve power quality or reliability at a Customers’ site 123. Standby Service 134. Purchase, lease, installation, connection or maintenance of on-site or distributed generation 145. All Fiber Optic Services 156. Reserve Electric Capacity B. CONTRACT APPLICATION PROCEDURES 1. Customers shall complete and execute applicable form(s) or letter(s), as necessary. 2. Depending on the type of Service contract and at the request of CPAU, Customers shall request consideration for a special contractual agreement in writing to the Director of Utilities and/or the Director of Public Works specifying their objectives, including the desired terms and conditions of the contract. 3. Customers shall pay all applicable fees and deposits in accordance with the terms of the contract. 4. Customers shall comply with the City’s insurance requirements. C. CONTRACT PRICING GUIDELINES For Electricity and Gas contracts, only the commodity portion of the rate will be established by contract under custom commodity rates and fixed-term commodity rates. All other Rate Schedule components and other non-bypassable Charges may be changed by Council action at SERVICE CONTRACTS RULE AND REGULATION 5 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 35-13-20143 Original Sheet No 2 any time. (END) SHORTAGE OF SUPPLY AND INTERRUPTION OF UTILITY SERVICES RULE AND REGULATION 13 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 36-1-20140 Sheet No. 1 A. GENERAL CPAU will make reasonable efforts to deliver continuous and sufficient Utility Service to its Customers, but CPAU does not guarantee the continuity or sufficiency of supply. CPAU will not be liable for Service interruption, shortage or insufficiency of Utility supply, or any loss or damage occasioned thereby. B. INTERRUPTION OF UTILITY SERVICE 1. When interruptions occur, CPAU will endeavor to reestablish Service with the shortest possible delay consistent with the safety of its Customers, staff and the general public. 2. CPAU will have the right to suspend Service temporarily for the purpose of making repairs or improvements to the system. When CPAU finds it necessary to schedule an interruption to its Service, it will, where feasible, notify all Customers to be affected of the approximate time and the anticipated duration of the interruption. CPAU will endeavor to schedule interruptions at hours that will be least inconvenient to the Customers and consistent with economical Utility operations. C. SHORTAGE OF ELECTRICITY SUPPLY During times of threatened or actual shortage of supply, CPAU will apportion the available supply among its Customers based on operating conditions, public health and safety. The Director of Utilities is authorized to adjust Emergency Load shedding plans to reflect changes in personnel, Distribution Systems, Utility Services, or other factors, when, in the opinion of the Director of Utilities such adjustments will lead to better protection of the public health and general welfare. D. OVERSUPPLY OR POWER SURGES ON THE ELECTRIC DISTRIBUTION SYSTEM Power surges may occur due to conditions beyond the control of CPAU or its Customers. CPAU will make reasonable efforts to minimize power surges occurring on the CPAU Distribution System, but CPAU does not guarantee that power surges will not occur. CPAU recommends that Customers protect their connected Loads and equipment from power surges. CPAU shall not be liable for any loss or damage occasioned by power surges. SHORTAGE OF SUPPLY AND INTERRUPTION OF UTILITY SERVICES RULE AND REGULATION 13 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 36-1-20140 Sheet No. 2 E. FIBER OPTIC SERVICE INTERRUPTION CPAU will make reasonable efforts to deliver continuous Fiber Optic Service to its Customers, but it will not guarantee uninterrupted Service. CPAU will not be liable for interruption of Service or any loss or damage occasioned thereby. For interruptions over 72 hours, CPAU will pro-rate the monthly license fee based on a pro-ration of the time down. F. SHORTAGE OF GAS SERVICE CPAU may reduce, interrupt, or allocate Gas supply Services for operational reasons in the event of projected or actual supply or capacity shortages. CPAU will exercise good faith efforts to furnish and deliver continuous Service and a sufficient quantity of Gas to Customers, but CPAU does not guarantee continuity of Service or sufficiency of quantity. CPAU shall not be liable for any interruption, shortage, or insufficient supply, or any loss or damage of any kind or character caused by such, if caused by Force Majeure or any other cause beyond CPAU’s reasonable control. CPAU shall be the sole judge of whether it is operationally able to receive and/or deliver Gas on its Distribution System. CPAU shall not be liable to the Customer for damages, or otherwise, as the result of any interruption, reduction, or allocation of Gas transportation capacity or delivery Service. CPAU may, in the exercise of reasonable judgment, reduce receipts or deliveries of Gas in order to test, alter, modify, enlarge, or repair any part of the Distribution System or any facility or property related to the operation of the Distribution System. In all such cases, CPAU shall give the Customers reasonable notice as circumstances will permit, and CPAU shall complete such repairs or improvements as soon as practicable and with minimal inconvenience to Customers. In the event of localized constraints, Customers in unconstrained areas may continue to receive Service; provided, however that CPAU may take whatever steps it determines are operationally necessary in the event a constraint on the Distribution System threatens Service to Customers. Reductions and/or interruptions of Gas Service to Gas Direct Access Customers is addressed in the Gas Service Provider Agreement. SHORTAGE OF SUPPLY AND INTERRUPTION OF UTILITY SERVICES RULE AND REGULATION 13 CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 36-1-20140 Sheet No. 3 G. GAS CURTAILMENT PRIORITIES In the event of a projected or actual supply Curtailment, Customers will be curtailed in the following order of precedence: 1. Large Commercial Accounts 2. Small Commercial Accounts 3. Residential Accounts H. WATER SHORTAGE EMERGENCY RESPONSE During times of threatened or actual shortage of supply, CPAU will activate the Water Shortage Contingency Plan, incorporated into the City of Palo Alto’s Emergency Response Plan. These plans are consistent with both county and state Emergency planning procedures. During a short-term Water shortage Emergency, the City Water shortage response team is activated. Members include water, fire, planning, health, Emergency Services, public affairs, parks and recreations, and the City Manager’s Office. This team has identified specific water-critical Customers such as hospitals, nursing facilities, and schools. An organizational structure is in place to deliver potable Water to distribution sites, activate Water purification equipment, employ standby generators and auxiliary pumps and use Emergency Water conveyance and supply storage facilities. During long-term water shortages due to drought, the Utilities Department will implement a four- stage reduction strategy. Reduction targets will be set for all Customer classes depending on the severity and duration of the shortage. Reduction targets will be established by Council to provide a minimum of 50% of normal supply during a severe or extended Water shortage. (END) LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-1 Effective 1321x-1x1-20143 dated 71-1-20123 Sheet No G-3-1 A. APPLICABILITY: This schedule applies to large commercial Customers who use at least 250,000 therms per year at one site and to City-owned generation facilities. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Service Charge: $361.18 Per Therm Supply Charges: 1. Commodity (Monthly Market Based) .................................................... $0.10-$2.00 2. Administrative .............................................................................................$0.0074 3. Transportation ...............................................................................................$0.0435 Distribution Charge: .............................................................................................................$0.5562 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s meter. The Commodity charge will fall within the minimum/maximum range set forth in Section C. 2. Request for Service A qualifying Customer may request service under this schedule for more than one account or meter if the accounts are located on one site. A site consists of one or more contiguous parcels of land with no intervening public right-of- ways (e.g. streets). LARGE COMMERCIAL GAS SERVICE UTILITY RATE SCHEDULE G-3 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No G-3-2 Effective 1321x-1x1-20143 dated 71-1-20123 Sheet No G-3-2 3. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable City of Palo Alto full-service rate schedule. Customers served under this rate schedule may elect Gas Direct Access at any time. {End} GAS FOR ELECTRIC GENERATION SERVICE UTILITY RATE SCHEDULE G-8 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 113x-11x-2008143 Supercedes Sheet No. G-COG-1 dated 11-1-2008 Sheet No G-8-1 A. APPLICABILITY: This schedule applies to customerCustomer-owned power generating facilities who have retained gas direct access eligibility. Gas supplied under this schedule is only available for the electric generation portion of the customerCustomer’s load purchases. B. TERRITORY: This schedule applies anywhere the City of Palo Alto provides natural gas service. C. UNBUNDLED RATES: Per Service Monthly Customer Charge: $345.00 Per Therm Charges (To be added to Customer Charge Per Therm Supply Charge: Commodity Charge ............................................................................................ $0.10-$2.00 Administrative Fee ....................................................................................................$0.0227 PG&E Local Transportation .....................................................................................$0.0212 Distribution Charge: Palo Alto Local Distribution .....................................................................................$0.1870 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customerCustomer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at PG&E Citygate, accounting for delivery losses to the Customer’s meter. The Commodity charge will fall within the minimum/maximum range set forth in Section C. (A) Commodity Charges The Commodity Charge for qualifying customers under this schedule may be GAS FOR ELECTRIC GENERATION SERVICE UTILITY RATE SCHEDULE G-8 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 113x-11x-2008143 Supercedes Sheet No. G-COG-2 dated 11-1-2008 Sheet No G-8-2 determined based on one of two methods: a. Weighted-Average Commodity Rate (available to all customers): i. The Commodity Charge will be equal to the City's weighted average cost of gas calculated at the PG&E City Gate for gas purchased by the City at first of the month and daily market prices for that month. ii. The commodity charge will fall within the minimum/maximum range set forth in Section C, and include the cost of transporting the gas to the PG&E City Gate. iii. Election of this commodity charge basis does not have a term, and constitutes the default billing basis for delivery should the customer not elect or renew a Fixed-Term Commodity Rate, as specified below; b. Fixed-Term Commodity Rate (available to customers with generation loads over 250,000 therms annually) i. The Commodity Charge and the term of said charge will be set at the time when the customer signs a letter acknowledging the term and price agreed upon with CPAU. The Commodity Charge shall be based upon the customer class average load shape, a risk premium, and market prices: The Commodity Charge will fall within the range set in Section C of this Schedule and will be for gas delivered to PG&E City Gate. ii. The Commodity Charge shall be fixed for a 12 or 24-month term. iii. Qualifying customers who choose to be charged under this commodity charge basis are required to sign a letter with CPAU committing to a price and term and to adhere to rules and regulations set forth in CPAU Rule and Regulation No. 5 (Contracts). The letter shall indicate the estimated gas consumption over the term of the contract rate. This consumption shall be served solely by CPAU. iv. Should the customer elect a Fixed-Term Commodity option, the customer must remain on the term rate for the term indicated on the Confirmation Schedule, providing the customer continues to receive GAS FOR ELECTRIC GENERATION SERVICE UTILITY RATE SCHEDULE G-8 CITY OF PALO ALTO UTILITIES Issued by the City Council Effective 113x-11x-2008143 Supercedes Sheet No. G-COG-3 dated 11-1-2008 Sheet No G-8-3 distribution services from the City. The confirmation Schedule shall indicate the Customer's approximate gas usage (load) over the term of the contract. This load shall be served solely by CPAU. (B) The other components of the rate: Administrative Fees, Transportation Charges, Distribution Charges and Monthly Customer Charges may be modified periodically with the Council's approval. a. The Administrative Fee is equal to the allocable administrative and overhead costs incurred by the City in providing the gas service. b. PG&E Local transportation charge is equal to the cost of transporting gas from PG&E City Gate to the Palo Alto City Gate. 2. Special Conditions Service under this schedule is subject to discontinuance in whole or in part, for operational reasons, or if the City experiences supply or capacity shortages. The City will exercise reasonable diligence and care to furnish and deliver continuous service and a sufficient quantity of gas to customers, but does not guarantee continuity of service or sufficiency of quantity. The City shall not be liable for any damage caused by interruption of service , if the interruption of service is caused by Force Majeure an act of God, Fire, Strikes, riots, war, or any other cause that is beyond the City’s control. {End} EXCERPTED FINAL MINUTES OF THE NOVEMBER 6, 2013 UTILITIES ADVISORY COMMISSION MEETING ITEM 2: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution to 1) Terminate the City’s Natural Gas Direct Access Program by Repealing Gas Rate Schedule G-4; 2) Eliminate Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedule G-11 and G-12; and 3) Effect the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 Vice Chair Foster indicated that the recommended action made sense since no customers were on the rates to be eliminated, the proposed rule changes were for consistency and the result would be a streamlined process. ACTION: Vice Chair Foster moved the staff recommendation and Commissioner Chang seconded the motion. The motion carried unanimously (6-0) with Chair Cook absent. Commissioner Hall stated that he supported the recommendation, but noted that the long definitions section (Rule and Regulation 2) did not include definitions for gas transportation or gas distribution and recommended including those to add clarity for readers. Director Fong indicated that these definitions can be added either as this report goes forward or when we do a larger clean-up of the rules and regulations. FINANCE COMMITTEE MINUTES Page 1 of 2 Regular Meeting December 17, 2013 The Finance Committee met on this date in the Council Chambers at 7:02 P.M., 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Burt (Chair), Shepherd, Schmid Absent: ORAL COMMUNICATIONS None 3. Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution to: 1) Terminate the City’s Natural Gas Direct Access Program by Repealing Gas Rate Schedule G-4; 2) Eliminate Fixed and Custom Gas Commodity Rates for Large Commercial Customers by Repealing Gas Rate Schedules G-11 and G-12; and 3) Effect the Changes by Amending Gas Rate Schedules G-3 and G-8 and Utility Rules and Regulations 2, 3, 5 and 13 Karla Dailey, Senior Resource Planner provided a history of market conditions that resulted in the development of G-3, G-4, G-7, G-11, and G- 12 rates. In 2007 the G-7 rate was eliminated. No customers utilized the G-4 rate because the City offered competitive prices for natural gas and utilization of a third party was difficult. There was no regulatory requirement for the City to provide a G-4 rate. Since 2007, no customers utilized the G-11 rate. Since 2009, no customers utilized the G-12 rate. Eliminating these rates would save 0.1 percent of work of a Full-Time Employee through streamlining work activities, and $1,500 monthly through cancellation of a subscription to a market service. In November 2013, the Utilities Advisory Commission (UAC) voted unanimously to support the Staff recommendation. MOTION: Vice Mayor Shepherd moved, seconded by Chair Burt to recommend to the City Council adoption of the Resolution to: 1. Terminate the City’s Gas Direct Access Program by repealing Gas Rate Schedule G-4 (Large Commercial Gas Transportation Service); 2. Eliminate fixed and custom gas rates for large commercial customers MINUTES EXCERPT Page 2 of 2 Finance Committee Regular Meeting Minutes: 12/17/2013 by repealing Gas Rate Schedules G-11 (Large Commercial Fixed-term Commodity Gas Service), and G-12 (Large Commercial Custom Commodity Gas Service); and 3. Effect the charges by amending Utility Rules and Regulations 2 (Definitions and Abbreviations), 3 (Description of Utility Services), 5 (Service Contracts), and 13 (Shortage of Supply and Interruption of Utility Services), and amending Gas Rate Schedules G-3 (Large Commercial Gas Service) and G-8 (Gas for Electric Generation Service). Chair Burt believed the Motion was to retire inactive rates. Council Member Schmid asked if the rates could be eliminated because the G-3 rate was working well. Ms. Dailey answered yes. All customers utilized a G-3 rate. Council Member Schmid inquired whether consumers were surprised by the amounts of their bills under the G-3 rate. Ms. Dailey was not aware of any complaints. Gas prices were low. Council Member Schmid noted consumers would see a difference between summer and winter gas bills. Valerie Fong, Utilities Director reiterated that Staff had not received complaints. Ms. Dailey indicated gas bills typically increased in the winter because of increased usage. Council Member Schmid felt the G-4 rate was developed because of deregulation and was no longer needed. MOTION PASSED: 4-0 City of Palo Alto (ID # 4337) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: From Finance: Request for Proposals for Street Sweeping Services Title: Finance Committee Recommends Approval to Issue the Request for Proposals and Undertake a Procurement Process for Street Sweeping Contractor Services From: City Manager Lead Department: Public Works Recommendation Staff and the Finance Committee recommend that the City Council direct staff to issue the attached Request for Proposals (Attachment A) and undertake a procurement process for street sweeping contractor services in accordance with Finance Committee direction. Executive Summary Staff is recommending an Efficiency and Cost Savings Plan for the Street Sweeping Program as a follow-up to ongoing discussions with the Finance Committee regarding the fiscal health of the Refuse Enterprise Fund. The proposed plan consists of two parts: first, it would contract out non-specialized components of the City’s Street Sweeping Program; and second, it would reduce the frequency of sweeping in non-retail areas from weekly to once every-other-week during the non-leaf season. If the expected cost savings are confirmed through the Request for Proposals (RFP) process, then these savings would help replenish the Refuse Fund Reserves and mitigate future Refuse Rate increases for the City’s residential and commercial customers. Staff presented this plan to the Finance Committee on December 3, 2013. The Finance Committee unanimously approved the plan and directed staff to bring a recommendation for issuance of an RFP to Council for City of Palo Alto Page 2 approval on the consent calendar. Committee Review and Recommendations On December 3, 2013, staff presented the Efficiency and Cost Savings Plan to the Finance Committee (Attachment B, Finance Committee Staff Report ID# 4128). The Finance Committee unanimously approved the plan. Members of the Committee directed staff to add the option of phased-in implementation into the RFP in order to mitigate any potential layoffs of current employees. The Finance Committee also directed that when proposals are evaluated, consideration should be given to those contractors who would be willing to hire any displaced City employees. The Finance Committee directed staff to obtain Council approval on the issuance of the RFP. See December 3, 2013 Finance Committee Minutes (Attachment C). Next Steps If approved by Council, staff will issue the attached RFP and will undertake a procurement process that would confirm or adjust the cost estimates and savings assumed in the Efficiency and Cost Savings Plan. Following receipt and analysis of the proposals, staff would then return to the Finance Committee to present their findings and identify the proposed budget impacts as well as to evaluate whether the phasing option should be selected. The Finance Committee would then make recommendations before staff would take a contract (or contracts) to Council for approval along with a list of other recommended operational or budget related actions. Such contract(s) would commence, at the earliest, during the first quarter of FY 2015. Attachments:  Attachment A - Sweeper RFP (DOC)  Attachment B - Finance Committee Report and Pilot Program Report (PDF)  Attachment C - 12/03/13 Finance Committee Minutes (DOCX) Public Works Department Public Services Division REQUEST FOR PROPOSAL (RFP) NUMBER 152971 FOR PROFESSIONAL SERVICES Street Sweeping Pre-proposal Meeting: 1:00 P.M. February 25, 2014 RFP submittal deadline: 3:00 P.M. TUESDAY, March 18, 2014 Contract Administrator: John Montenaro john.montenaro@cityofpaloalto.org CITY OF PALO ALTO PURCHASING/CONTRACT ADMINISTRATION 250 HAMILTON AVENUE PALO ALTO, CA 94301 (650) 329-2271 1 REQUEST FOR PROPOSAL (RFP) NO. 152971 FOR PROFESSIONAL SERVICES TITLE: Street Sweeping 1. INTRODUCTION The City of Palo Alto is seeking proposals from qualified firms to provide professional services for Street Sweeping services to be performed in the City of Palo Alto. The required services and performance conditions are described in the Scope of Work (or Services). 2. ATTACHMENTS The attachments below are included with this Request for Proposals (RFP) for your review and submittal (see asterisk): Attachment A – Proposer’s Information Form* Attachment B – Scope of Work/Services Attachment C – Sample Agreement for Professional Services Attachment D – Sample Table, Qualifications of Firm Relative to City’s Needs Attachment E – Cost Proposal Format Attachment F – Insurance Requirement The items identified with an asterisk (*) shall be filled out, signed by the appropriate representative of the company and returned with submittal. 3. INSTRUCTIONS TO PROPOSERS 3.1 Pre-proposal Conference A pre-proposal conference will be held Tuesday, February 25th, 2014 at 1:00 P.M. in the Public Works Conference Room, 3201 E. Bayshore Rd., Palo Alto, CA. Prospective Proposers may contact Todd Seeley, Project Manager, at (650) 496-5945 for directions on how to access the building. All prospective Proposers are required to attend. 3.2 Examination of Proposal Documents The submission of a proposal shall be deemed a representation and certification by the Proposer that they: 3.2.1 Have carefully read and fully understand the information that was provided by the City to serve as the basis for submission of this proposal. 2 3.2.2 Have the capability to successfully undertake and complete the responsibilities and obligations of the proposal being submitted. 3.2.3 Represent that all information contained in the proposal is true and correct. 3.2.4 Did not, in any way, collude, conspire to agree, directly or indirectly, with any person, firm, corporation or other Proposer in regard to the amount, terms or conditions of this proposal. 3.2.5 Acknowledge that the City has the right to make any inquiry it deems appropriate to substantiate or supplement information supplied by Proposer, and Proposer hereby grants the City permission to make these inquiries, and to provide any and all related documentation in a timely manner. No request for modification of the proposal shall be considered after its submission on grounds that Proposer was not fully informed to any fact or condition. 3.3 Addenda/Clarifications Should discrepancies or omissions be found in this RFP or should there be a need to clarify this RFP, questions or comments regarding this RFP must be put in writing and received by the City no later than 1:00 p.m., Wednesday (the one before the proposal deadline), March 5, 2014. Correspondence shall be addressed to John Montenaro, Contract Administrator, City of Palo Alto, 250 Hamilton Avenue, Palo Alto, CA 94301 or e-mailed to john.montenaro@cityofpaloalto.org. Responses from the City will be communicated in writing to all recipients of this RFP. Inquiries received after the date and time stated will not be accepted and will be returned to senders without response. All addenda shall become a part of this RFP and shall be acknowledged on the Proposer’s Form. The City shall not be responsible for nor be bound by any oral instructions, interpretations or explanations issued by the City or its representatives. 3.6 Submission of Proposals All proposals shall be submitted to: City of Palo Alto Purchasing and Contract Administration 250 Hamilton Avenue, Mail Stop MB Palo Alto, CA 94301 Proposals must be delivered no later than 3:00 p.m. on Tuesday, March 18, 2014. All proposals received after that time will be returned to the Proposer unopened. 3 The Proposer shall submit three (3) copies of its proposal in a sealed envelope, addressed as noted above, bearing the Proposer’s name and address clearly marked, “RFP NO. 152971 FOR PROFESSIONAL SERVICES: STREET SWEEPING.” The use of double-sided paper with a minimum 30% post-consumer recycled content is strongly encouraged. Please do not submit proposals in plastic binders. 3.6 Withdrawal of Proposals A Proposer may withdraw its proposal at any time before the expiration of the time for submission of proposals as provided in the RFP by delivering a written request for withdrawal signed by, or on behalf of, the Proposer. 3.6 Rights of the City of Palo Alto This RFP does not commit the City to enter into a contract, nor does it obligate the City to pay for any costs incurred in preparation and submission of proposals or in anticipation of a contract. The City reserves the right to:  Make the selection based on its sole discretion;  Reject any and all proposals;  Issue subsequent Requests for Proposals;  Postpone opening for its own convenience;  Remedy technical errors in the Request for Proposals process;  Approve or disapprove the use of particular subconsultants;  Negotiate with any, all or none of the Proposers;  Accept other than the lowest offer;  Waive informalities and irregularities in the Proposals and/or  Enter into an agreement with another Proposer in the event the originally selected Proposer defaults or fails to execute an agreement with the City. An agreement shall not be binding or valid with the City unless and until it is executed by authorized representatives of the City and of the Proposer. 4. PROPOSED TENTATIVE TIMELINE The tentative RFP timeline is as follows RFP Issued February 4, 2014 Pre-Proposal Meeting February 25, 2014 Deadline for questions, clarifications March 4, 2014 Answers provided to questions March 11, 2014 Proposals Due March 18, 2014 Finalist Identified March 25, 2014 4 Consultant Interviews April 16, 2014 Consultant selection and contract preparation April 30, 2014 Finance Committee Evaluation May 19, 2014 Contract awarded (City Council) July 31, 2014 Work commences September 1, 2014 5. INFORMATION TO BE SUBMITTED (to be submitted in this order only) These instructions outline the guidelines governing the format and content of the proposal and the approach to be used in its development and presentation. The intent of the RFP is to encourage responses that clearly communicate the Proposer’s understanding of the City’s requirements and its approach to successfully provide the products and/or services on time and within budget. Only that information which is essential to an understanding and evaluation of the proposal should be submitted. Items not specifically and explicitly related to the RFP and proposal, e.g. brochures, marketing material, etc. will not be considered in the evaluation. All proposals shall address the following items in the order listed below and shall be numbered 1 through 8 in the proposal document. 5.1 Chapter 1 – Proposal Summary This Chapter shall discuss the highlights, key features and distinguishing points of the Proposal. A separate sheet shall include a list of individuals and contacts for this Proposal and how to communicate with them. Limit this Chapter to a total of three (3) pages including the separate sheet. 5.2 Chapter 2 – Profile on the Proposing Firm(s) This Chapter shall include a brief description of the Prime Proposer’s firm size as well as the proposed local organization structure. Include a discussion of the Prime Proposer firm’s financial stability, capacity and resources. Include all other firms participating in the Proposal, including similar information about the firms. Additionally, this section shall include a listing of any lawsuit or litigation and the result of that action resulting form (a) any public project undertaken by the Proposer or by its subcontractors where litigation is still pending or has occurred within the last five years or (b) any type of project where claims or settlements were paid by the consultant or its insurers within the last five years. 5.3 Chapter 3 – Qualifications of the Firm 5 This Chapter shall include a brief description of the Proposer’s and sub-Proposer’s qualifications and previous experience on similar or related projects. Provide in a table format (see Sample Table, Attachment D) descriptions of pertinent project experience with other public municipalities and private sector that includes a summary of the work performed, the total project cost, the percentage of work the firm was responsible for, the period over which the work was completed, and the name, title, and phone number of client’s to be contacted for references. Give a brief statement of the firm’s adherence to the schedule and budget for the project. This chapter shall include information regarding any relationships with firms and/or individuals who may submit proposals in response to the RFPs being developed. 5.4 Chapter 4 – Work Plan or Proposal This Chapter shall present a well-conceived service plan. Include a full description of major tasks and subtasks. This section of the proposal shall establish that the Proposer understands the City’s objectives and work requirements and Proposer’s ability to satisfy those objectives and requirements. Succinctly describe the proposed approach for addressing the required services and the firm’s ability to meet the City’s schedule, outlining the approach that would be undertaken in providing the requested services. 5.5 Chapter 5 – Proposed Innovations The Proposer may also suggest technical or procedural innovations that have been used successfully on other engagements and which may provide the City with better service delivery. In this Chapter discuss any ideas, innovative approaches, or specific new concepts included in the Proposal that would provide benefit to the City. 5.6 Chapter 6 – Project Staffing This Chapter shall discuss how the Proposer would propose to staff this project. Key project team members shall be identified by name, title and specific responsibilities on the project. An organizational chart for the project team and resumes for key Proposer personnel shall be included. Key personnel will be an important factor considered by the review committee. Changes in key personnel may be cause for rejection of the proposal. Proposer should state their willingness to hire any displaced City staff, and if so, provide information as to how many affected employees Proposer would hire, the proposed pay rate, and a brief summary of the benefits. 5.7 Chapter 7 – Proposal Exceptions 6 This Chapter shall discuss any exceptions or requested changes that Proposer has to the City’s RFP conditions, requirements and sample contract. If there are no exceptions noted, it is assumed the Proposer will accept all conditions and requirements identified in the Attachment C – “Sample Agreement for Services.” Items not excepted will not be open to later negotiation. 5.8 Chapter 8 – Proposal Costs Sheet and Rates (Optional to provide in separate sealed envelope) The fee information is relevant to a determination of whether the fee is fair and reasonable in light of the services to be provided. Provision of this information assists the City in determining the firm’s understanding of the project, and provides staff with tools to negotiate the cost, provide in a table (See Table, Attachment E). Consultant shall provide the following information  Direct labor rates for proposed staff;  Overhead rate and breakdown of overhead elements;  Subconsultant billing rates and mark-up percentage for ODC’s (other direct costs); and identify all reimbursable expenses.  Most recent complete financial instrument that would establish Proposer’s ability to complete the obligations of the contract resulting from this solicitation. (optional) This Chapter shall include the proposed costs to provide the services desired. Include any other cost and price information, plus a not-to-exceed amount, that would be contained in a potential agreement with the City. The hourly rates may be used for pricing the cost of additional services outlined in the Scope of Work. PLEASE NOTE: The City of Palo Alto does not pay for services before it receives them. Therefore, do not propose contract terms that call for upfront payments or deposits. 6. CONTRACT TYPE AND METHOD OF PAYMENT It is anticipated that the agreement resulting from this solicitation, if awarded, will be a not-to-exceed budget per task form of contract. A Sample Agreement of Services is provided as Attachment C. The method of payment to the successful Proposer shall be on a per task basis with a maximum “not to exceed” fee as set by the Proposer in the proposal or as negotiated between the Proposer and the City as being the maximum cost to perform all work. This figure shall include direct costs and overhead, such as, but limited to, transportation, communications, subsistence 7 and materials and any subcontracted items of work. Progress payments will be based on a percentage of project completed. Proposers shall be prepared to accept the terms and conditions of the Agreement, including Insurance Requirements in Attachment F. If a Proposer desires to take exception to the Agreement, Proposer shall provide the following information in Chapter 7 of their submittal package. Please include the following:  Proposer shall clearly identify each proposed change to the Agreement, including all relevant Attachments.  Proposer shall furnish the reasons for, as well as specific recommendations, for alternative language. The above factors will be taken into account in evaluating proposals. Proposals that take substantial exceptions to the proposed Agreement may be determined by the City, at its sole discretion, to be unacceptable and no longer considered for award. Insurance Requirements The selected Proposer(s), at Proposer’s sole cost and expense and for the full term of the Agreement or any extension thereof, shall obtain and maintain, at a minimum, all of the insurance requirements outlined in Attachment F. All policies, endorsements, certificates and/or binders shall be subject to the approval of the Risk Manager of the City of Palo Alto as to form and content. These requirements are subject to amendment or waiver if so approved in writing by the Risk Manager. The selected Proposer agrees to provide the City with a copy of said policies, certificates and/or endorsement upon award of contract. 7. REVIEW AND SELECTION PROCESS City staff will evaluate the proposals provided based on the following criteria: 7.1 Quality and completeness of proposal; 7.2 Quality, performance and effectiveness of the solution, goods and/or services to be provided by the Proposer; 7.3 Proposers experience, including the experience of staff to be assigned to the project, the engagements of similar scope and complexity; 7.4 Cost to the city; 7.5 Proposer’s financial stability; 7.6 Proposer’s ability to perform the work within the time specified; 7.7 Proposer’s prior record of performance with city or others; 7.8 Proposer’s ability to provide future maintenance, repairs parts and/or services; and 8 7.9 Proposer’s compliance with applicable laws, regulations, policies (including city council policies), guidelines and orders governing prior or existing contracts performed by the contractor. 7.10 Proposer’s willingness and ability to hire any potentially displaced City worker’s that would be laid off as a result of contracting out Street Sweeping Operations. The selection committee will make a recommendation to the awarding authority. The acceptance of the proposal will be evidenced by written Notice of Award from the City’s Purchasing/Contract Administration Division to the successful Proposer. 8. ORAL INTERVIEWS Proposers may be required to participate in an oral interview. The oral interview will be a panel comprised of members of the selection committee. Proposers may only ask questions that are intended to clarify the questions that they are being asked to respond. Each Proposer’s time slot for oral interviews will be determined randomly. Proposers who are selected shall make every effort to attend. If representatives of the City experience difficulty on the part of any Proposer in scheduling a time for the oral interview, it may result in disqualification from further consideration. 9. PUBLIC NATURE OF MATERIALS Responses to this RFP become the exclusive property of the City of Palo Alto. At such time as the Administrative Services Department recommends to form to the City Manager or to the City Council, as applicable, all proposals received in response to this RFP becomes a matter of public record and shall be regarded as public records, with the exception of those elements in each proposal which are defined by the Proposer as business or trade secrets and plainly marked as “Confidential,” “Trade Secret,” or “Proprietary”. The City shall not in any way be liable or responsible for the disclosure of any such proposal or portions thereof, if they are not plainly marked as “Confidential,” “Trade Secret,” or “Proprietary” or if disclosure is required under the Public Records Act. Any proposal which contains language purporting to render all or significant portions of the proposal “Confidential,” “Trade Secret,” or “Proprietary” shall be regarded as non-responsive. Although the California Public Records Act recognizes that certain confidential trade secret information may be protected from disclosure, the City of Palo Alto may not accept or approve that the information that a Proposer submits is a trade secret. If a request is made for information marked “Confidential,” “Trade Secret,” or “Proprietary,” the City shall provide the Proposer who submitted the information with 9 reasonable notice to allow the Proposer to seek protection from disclosure by a court of competent jurisdiction. 10. COLLUSION By submitting a proposal, each Proposer represents and warrants that its proposal is genuine and not a sham or collusive or made in the interest of or on behalf of any person not named therein; that the Proposer has not directly induced or solicited any other person to submit a sham proposal or any other person to refrain from submitting a proposal; and that the Proposer has not in any manner sought collusion to secure any improper advantage over any other person submitting a proposal. 11. DISQUALIFICATION Factors such as, but not limited to, any of the following may be considered just cause to disqualify a proposal without further consideration: 11.1 Evidence of collusion, directly or indirectly, among Proposers in regard to the amount, terms or conditions of this proposal; 11.2 Any attempt to improperly influence any member of the evaluation team; 11.3 Existence of any lawsuit, unresolved contractual claim or dispute between Proposer and the City; 11.4 Evidence of incorrect information submitted as part of the proposal; 11.5 Evidence of Proposer’s inability to successfully complete the responsibilities and obligation of the proposal; and 11.6 Proposer’s default under any previous agreement with the City, which results in termination of the Agreement. 12. NON-CONFORMING PROPOSAL A proposal shall be prepared and submitted in accordance with the provisions of these RFP instructions and specifications. Any alteration, omission, addition, variance, or limitation of, from or to a proposal may be sufficient grounds for non- acceptance of the proposal, at the sole discretion of the City. 13. GRATUITIES No person shall offer, give or agree to give any City employee any gratuity, discount or offer of employment in connection with the award of contract by the city. No city employee shall solicit, demand, accept or agree to accept from any other person a gratuity, discount or offer of employment in connection with a city contract. 10 14. FIRMS OR PERSONS NOT ELIGIBLE TO SUBMIT A PROPOSAL In order to avoid any conflict of interest or perception of a conflict or interest, Proposer(s) selected to provide professional services under this RFP will be subject to the following requirements: 14.1 The Proposer(s) who works on the procurement will be precluded from submitting proposals or bids as a prime contractor or subcontractor in the ultimate procurement. 14.2 The Proposer(s) may not have interest in any potential Proposer for the ultimate procurement. ~ End of Section ~ 11 Attachment B SCOPE OF SERVICES TO BE PERFORMED DEFINITIONS AND TERMS City - City of Palo Alto, California. Contract Documents - The Proposal, the Specifications and Plans, the Bond for Faithful Performance and any addenda or changes to the foregoing documents agreed to by the City and the Contractor. Contractor - The person, corporation or partnership performing street sweeping services under contract with the City. Curb Mile - Curb mile shall be defined as the distance the sweeping machine travels with an effective sweeping width of eight (8) feet from the curb face along an improved street. Leaf Season - The four months of the year when leaf fall is the heaviest. This period typically runs from October 15th until February 15th. This timeframe is subject to change, and will be communicated to the contractor by the Director of Public Works or his/her designee. Non-Leaf Season – The eight months of the year where leaf fall is not expected to be heavy. This period typically runs from February 16th through October 14th. This timeframe is subject to change, and will be communicated to the contractor by the Director of Public Works or his/her designee. Street Debris - All loose, inert, dry waste material including refuse, dirt, rocks, sticks, sand, glass, metal fragments, cans, bottles, leaves and typical street litter. Street debris does not include waste materials in the catch basins of storm sewers. Sweeping Path - Specified paved surface distance from curb line or pavement edge in which Scheduled Service is to be performed. Scheduled Service - Sweeping frequency as defined in the contract documents which must be performed on the schedule set forth in the contract documents. Unscheduled Service - That service which can be requested by the City to be performed outside the bounds of the scheduled service which can be anticipated a minimum of twenty-four (24) hours in advance Emergency Service - That service which can be requested by the City to be performed outside the bounds of the scheduled service within two (2) hours of being notified to provide such service. 12 Background The City is seeking street sweeping contractor services to sweep the City’s residential and light commercial streets at the frequencies described below. Contractor shall also collect and transport the sweeping debris and material to the Sunnyvale Materials Recovery and Transfer Station (SMaRT) where the City will pay the disposal fees. Contractor shall also provide additional services as requested by the City that includes: 1) Emergency responses; 2) other unscheduled services; and 3) additional debris management and transportation services. Parking lots, garages, bike paths are not included in this RFP. The work is currently being completed by in-house staff and equipment. A map detailing the sweeping operations in the City is located online for reference. It is available here: http://www.cityofpaloalto.org/civicax/filebank/documents/38367 This RFP requests an optional phasing plan for the first year of the agreement to accommodate existing City staff that may be displaced by contracting out this work. The City, at its sole discretion, will consider whether phasing will be required or not for the first year of this agreement. Phasing would be expected to reduce the number of curb miles by approximately 2500 curb miles per City employee, or up to 50% of the total value of the first year of the contract. Phasing implementation would be valid for the first year of the contract only. After the first year, Contractor will assume all responsibilities covered in this RFP. Debris Management would be performed by the Contractor during this one year period. CONTRACTOR QUALIFICATIONS The Contractor bidding on this project must have at least five years of experience providing street sweeping services, preferably for a City comparable to Palo Alto in size. All employees of Contractor shall be properly licensed to operate assigned equipment used for sweeping the City, as determined by local, state, and federal regulations. TASKS The work under this contract shall consist of the items described in this RFP, including all of the supervision, vehicles, fuel, labor, materials, tools, equipment, daily/monthly reports and all other items necessary to complete said work in accordance with the contract documents. Task 1 – STREET SWEEPING SERVICES Types of Sweeping Services: Scheduled Service - The Contractor will furnish scheduled sweeping service for those streets designated by the City at the time of the execution of the contract. All designated streets require sweeping along the curb and gutter, and some streets also require sweeping along the median curb. After the execution of the contract, the City, at its sole discretion, may add or delete other streets or portions of streets at the agreed contract rate. 13 Frequency of Service - Residential and Light Commercial areas as shown on the attached map shall be swept once a week during the leaf season, as defined by the City, and bi-weekly during the rest of the year. University Avenue and California Avenue Routes (BA) shall be swept three times a week (Monday, Wednesday, and Friday) year round. In the event one of these days falls on a holiday, frequency shall be twice a week, as determined by the City. Center medians that exist in any given route will be swept in conjunction with regular sweeping. The Breakdown of Route’s are as follows: Monday – BA, B9, B5B, B5A, B1, B3 Tuesday – D1, D2 RES, D2 IND, A6, A3, B2 Wednesday – BA, D3, A1, A2, A5 Thursday – A5 IND, B8 IND, B8 RES, A7, B7, B6 Friday – BA, A4, B4 The City may reorganize the daily breakdown of routes at its sole discretion. In the event of any changes being made to the routine sweeping service, a two (2) week notice will be provided to the Contractor. Curb Mileage - The following table illustrates the current sweeping inventory and frequency: Category Curb Miles Frequency Average Miles/Month Miles/ Year Residential/ Leaf Season 345.11 Weekly 1380.44 5,521.76 Residential/Non-Leaf Season 345.11 Bi-Weekly 690.22 5,521.76 Light Commercial/ Leaf Season 47.69 Weekly 190.76 763.04 Light Commercial/ Non-Leaf Season 47.69 Bi-Weekly 95.38 763.04 Downtown University Ave and Cal Ave 23.92 3/Week 310.96 3,731.52 El Camino Real* 18.68 Weekly 80.95 971.36 Total 17,272.48 *Contractor shall be required to obtain an encroachment permit for sweeping on El Camino Real. This permit is available from CalTrans, and all costs associated with the encroachment permit 14 will be assumed by the Contractor. The cost of the encroachment permit is approximately $164 renewable on an annual basis. Permits can be obtained by calling CalTrans at (510) 286-4401. Actual total will be reduced by holidays, weather, and any other reasons the Contractor does not provide scheduled service. Days and Hours of Operation - Scheduled service shall be Monday through Friday only. Sweeping of residential areas shall not start before 7:00 a.m. or continue after 4:30 p.m. on the same day. Light commercial areas shall be swept between 3:30 a.m. and 12:00 noon on the same day. Sweeping shall be scheduled to maximize the area of street being swept by minimizing interference by parked vehicles. Sweeping shall be scheduled and done in such a way as to minimize noise complaints in residential areas. Downtown University and California Avenue (Route BA) sweeping shall be three times a week on Monday, Wednesday, and Friday between 10:00 p.m. and 7:00 a.m. The Public Works Director, or his designee, may require revisions in the hours and/or manner of operation as necessary to maximize sweeping coverage, to minimize noise complaints, or to coincide with City staff working hours. University Avenue Sweeping – Sweeping of University Ave. (Route BA) – Contractor shall coordinate with a Palo Alto employee who will assist with the sweeping. The employee will use a backpack leaf blower to push debris directly into the path of the sweeper. Sweeping of this area typically occurs three (3) times a week, and shall commence at approximately 3:45 A.M. Contact information for the Palo Alto employee(s) responsible for these duties will be furnished to the contractor for coordination purposes. Additions and Deletions -The City of Palo Alto reserves the right to add or delete curb miles and to increase or reduce the sweeping frequency called for in these specifications. The amount bid per curb mile will be used to calculate the amount paid to the Contractor for additions or deletions of curb miles. Holidays - There will be no sweeping on the following observed holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving, and Christmas. When routes are not swept due to a holiday, the Contractor shall make-up the missed routes on the following business day by sweeping the routes missed due to the holiday, along with the regularly scheduled routes. Vehicles - It is understood that if vehicles are parked on the streets when services are being performed by the Contractor, then Contractor's operations will be impeded and Contractor will be required to bypass said parked vehicles. In such events, the rates charged by Contractor shall not be reduced. Trees – If trees along the sweeping route impede the Contractor’s ability to effectively sweep curbed area, Contractor shall note the location of tree on the “Daily Report of Street Sweeper” form. This information shall be reported to the City by the Contractor within 24 hours. If a downed tree or limb from a tree is observed in the street, Contractor shall immediately notify the Palo Alto Tree Section at (650) 496-5953. 15 Level of Cleanliness - Level of cleanliness shall be defined as the absence of "street debris" in the streets and gutters upon the completion of the sweeping operation. Payment will be for one pass only, and no separate payment will be made for a second pass needed to remove street debris. However, if Contractor does not pick up the debris in one pass, then the Contractor shall make two or more passes if necessary to remove the street debris. Weather - In the event of heavy rain or other severe weather conditions, the scheduled sweeping service may be suspended. The decision to sweep will be made by the City after consultation with the Contractor. Contractor shall contact the City to determine if sweeping has been suspended. Water – Contractor shall furnish all water necessary for street sweeping. Water may be obtained from any City fire hydrant. The Contractor shall obtain a fire hydrant meter permit (renewable every three months). A deposit fee is required for the fire hydrant meter. Contact the City’s Utilities Department Business Office, Customer Service Department, at (650) 329-2161 for instructions. The Contractor shall be responsible for paying all of the water bills used for street sweeping operations for the entire contract period. The Contractor shall not use residential or business water services for any purpose. Dust Control - The proper volume and pressure of water will be supplied by the sweeper and shall be in good working condition at all times to adequately control dust during the sweeping operation. Traffic Counters - The Contractor is cautioned that at various times and locations, the City will temporarily install portable traffic counters which utilize a hose placed in the roadway. When an area with a counter is swept, care should be taken to avoid the counter hose. Any damage made by Contractor’s vehicles to traffic counters shall be immediately reported to the City. Speed - The Contractor shall operate the sweepers between four and six miles per hour when sweeping, unless it can be proven, to the satisfaction of City, the sweeper can operate at a higher speed and still operate efficiently. Call Backs - Whenever, in the opinion of the City, a section of street is inadequately swept, the Contractor shall, within 24 hours after notification, re-sweep the section in question and may, at the discretion of the Public Works Director, or his designee, forfeit as a penalty Fifty Dollars ($50.00) for each time a street is inadequately swept. No additional payment will be made for call-back sweeping. EQUIPMENT Equipment - The equipment used to complete the sweeping required by this contract is subject to the approval of the City, and Contractor must be in possession of equipment capable of being able to remove a variety of material that can be found on streets (e.g. leaves, glass, gravel, dirt, mud, etc.). 16 Placarding – All sweepers operating in Palo Alto shall have magnetic placards attached to both the driver and passenger doors of the sweeper identifying the vehicle as being a contractor for the City of Palo Alto. The City will provide one (1) set of placard for each sweeper designated as being a primary sweeper. Two spare sets of placards will be provided to the contractor for use on spare sweepers in the event of a breakdown. These signs will be furnished by the City, and shall be returned upon request. A penalty of Fifty Dollars ($50.00) shall be imposed for each lost or misplaced placard. Proof of Ownership - The Contractor must have proof of ownership or a signed lease for the duration of the contract for each sweeping machine used in the performance of this contract. Registration - Sweeping machines must be properly registered and insured in accordance with California State Motor Vehicle Laws. Safety Regulations - Sweeping machines must conform to all federal, state and local safety regulations and be properly licensed through the State of California. Condition of Equipment - All sweeping machines must not be over seven (7) years old at the time of bid and for the duration of the contract. Machines must be in good working condition capable of removing dirt, rocks, glass, mud, cans, sticks, leaves, litter and debris throughout the life of the contract. The outside body must be free from dents and large scratches, and paint must be well maintained. Machines must be equipped with dual gutter brooms not shorter than seven (7) inches, which shall be operating during all sweeping operations, and a main broom not shorter than eight (8) inches capable of sweeping at minimum an eight (8)-foot path, or vacuum sweep if approved by the Public Works Director, or his designee. The use of a steel plate on the sweeper wheel to prevent tire scuffing against the curb will not be permitted. Maintenance of Equipment - All required maintenance, parts and fuel are part of the contract and furnished by the Contractor, and all major mechanical problems must be corrected at the Contractor's yard. A sufficient supply of spare brooms and other parts must be kept on hand to ensure the timely and continuous fulfillment of this contract. All Contactor vehicles shall be outfitted with spill kits, in order to minimize any damage caused by potential spills. At a minimum, these kits will include absorbent material, and towels for cleaning up spills on City streets. Breakdown of Equipment - At all times the Contractor shall properly maintain a fleet of sweeping machines, both as to condition and appearance, for the use on the work under this contract. Contractor shall have multiple spare sweepers on hand in the event of a breakdown by the primary sweeper. In case of breakdown by the main sweeper, immediate service within one hour by a second sweeper is required to complete the daily schedule. If down for more than one 17 hour, a penalty will be assessed at the rate of Fifty Dollars ($50.00) per hour for each hour above and beyond one hour. Storage of Equipment - The Contractor must provide his own storage for equipment such as sweeping machines, brooms, tires, gas, oil and other required parts and materials. The City will not provide storage for any Contractor equipment. Communications and Reports Office - The Contractor shall maintain an office or such other facility through which he/she can be contacted and from which he/she can maintain radio or pager contact with sweeping vehicles. It shall be equipped with sufficient telephones and shall have a responsible person in charge from 7:30 a.m. to 4:00 p.m., Monday through Friday. The Contractor shall also provide a 24-hour emergency contact telephone number. Complaints - Complaints regarding the street sweeping operations, which the City considers justifiable and the responsibility of the Contractor, will be referred to the Contractor for immediate attention. Within two (2) days, the Contractor shall submit to the Public Works Director, or his designee, a report of the action taken to address or reconcile each complaint. Reports - Contractor shall submit a monthly report to the City calculating the volume (cubic yards) collected each month from the residential and commercial routes, the types of sweepers used to complete daily routes (i.e. regenerative air or mechanical broom), a report by day of tonnages deposited at the SMaRT Station, and a report stating the number of curb miles completed each month. Reports to the City shall be submitted within 10 days from the beginning of each month for the previous month collected. Forms for reporting will be provided by the City of Palo Alto. TASK 2 – DEBRIS MANAGEMENT Method – Contractor shall propose a viable plan for removing all street sweeping debris from the city by 5:00 P.M. each day that sweeping occurs in the City. This could be accomplished through the use of roll-off dumpsters, dumping in the field, or any other method deemed acceptable by the City. During the non-leaf season, the City will provide up to six (6) locations throughout the City for the Contractor to deposit debris. During the leaf season, an additional six (6) locations will be provided to the Contractor by the City. The locations provided by the City are the only acceptable locations to deposit debris. Should the Contractor deposit debris at a location not provided by the City, a penalty of Five Hundred Dollars ($500.00) shall be assessed. The City will also assess a Five Hundred Dollar ($500.00) penalty for each location in which debris is left on City streets overnight. The Contractor shall also provide a sweeping machine to clean up any dump location used within one hour of the debris being removed from the City. Should the dump location not be cleaned by the end of the day, a penalty of One Hundred Dollars ($100.00) shall be assessed. 18 Disposal – Contractor shall be responsible for hauling all debris collected to the SMaRT Station, 301 Carl Rd., Sunnyvale, CA. This includes all debris removed from the streets by the Contractor or by City Sweepers (during the first year of the contract). Contractor shall assume all responsibility for transporting material to the SMaRT Station, and all disposal fees will be assumed by the City. Additional Removal – On a periodic basis, Contractor shall remove debris from the Palo Alto MSC, 3201 E. Bayshore Rd., which is associated with in-house operations. There may be other locations where debris removal will occur, and Contractor shall be provided these locations when the need exists for debris removal. The method for this removal shall be up to the Contractor, but shall be completed within three (3) business days of notification by the City. Services provided under this section shall be billed per ton, with all costs for dumping at the SMaRT Station assumed by the City. TASK 3 – ADDITIONAL SERVICES – AS NEEDED T&M Unscheduled Service - The Contractor shall provide, if required by the City, unscheduled sweeping of any street or streets or portions of streets. The City will give Contractor a minimum twenty-four (24) hour notice for unscheduled sweeping. Contractor shall include in their proposal the possibility of an additional 500 hours per year of contingency sweeping to deal with problematic areas throughout the City. Contractor shall satisfactorily complete any contingency sweeping within two (2) business days after notification from the City. These sweeping services shall be billed at an hourly rate. These services will be used only when necessary, so it is possible that not all of the additional hours will be used during a year. The City will only pay for total hours swept, and will not pay for any unused contingency hours. Emergency Service - The Contractor shall also respond to emergency calls for service at any and all times day or night every day during the term of this contract within two (2) hours of being notified to provide such service. Emergency service events generally include traffic accident cleanup of debris on the roadways, storm debris clean up, and mud/debris on the roadway as a result of water main breaks. For emergency service, Contractor shall bill the City on an hourly basis, with an emergency mobilization charge added per occurrence. Attachment E SAMPLE COST PROPOSAL FORMAT – RFP (The City is looking for a submittal in this format – content should match cost for scope of services required) Scope Labor Categories (e.g., Consultant, Sr. Consultant, etc.) Est. Quantity Unit Rate Extended Task 1 Routine Street Sweeping 17,272 Curb Miles $ $ $ $ $ $ TOTAL NOT TO EXCEED, TASK 1 $ $ Debris Removal 2,500 $ $ $ $ TOTAL NOT TO EXCEED, TASK 2 $ $ Unscheduled Service – T&M 500 Hrs. Annually $ $ Emergency Service 100 Hrs. Annually $ $ Emergency Mobilization Per Occurrence $ TOTAL NOT TO EXCEED, TASK 3 $ $ TOTAL NOT TO EXCEED (TASKS 1 – 3) $ $ City of Palo Alto (ID # 4128) Finance Committee Staff Report Report Type: Action Items Meeting Date: 12/3/2013 City of Palo Alto Page 1 Summary Title: Cost Saving Plan Modifications to the City's Street Sweeping Program Title: Cost Saving Plan That Would Reduce the Frequency to Every Other Week for Street Sweeping in Residential/Light Commercial Areas and Contracting Out the Palo Alto Street Sweeping Program From: City Manager Lead Department: Public Works Recommendation Staff recommends that the Finance Committee: 1) Approve staff’s recommended street sweeping cost savings plan described below; and 2) Direct staff to develop a Request for Proposals (RFP) and undertake a procurement process that would confirm or adjust the cost estimates and savings assumed in the plan. Following receipt and analysis of proposals, staff would take any appropriate contract (or contracts) to Council for approval along with a list of other recommended operational or budget related actions. Executive Summary Staff is recommending a cost savings plan for the Street Sweeping Program as a follow-up to ongoing discussions with the Finance Committee. The proposed cost savings plan consists of two parts. First, it would contract out non-specialized components of the City’s Street Sweeping Program. Second, it would reduce the frequency of sweeping in non-retail areas from weekly to once every-other-week during the non-leaf season. The cost savings would help replenish the Refuse Fund Reserves and mitigate future Refuse Rate increases for our residential and commercial customers. City of Palo Alto Page 2 As the first step, staff would develop a Request for Proposals (RFP) and undertake a procurement process that would confirm or adjust the cost estimates for private sector sweeping and savings assumed in this report’s preliminary analysis. Following receipt and analysis of proposals, staff would take any appropriate contract (or contracts) to Council for approval along with a list of other recommended operational or budget related actions. Such contracts would commence at the earliest beginning FY 2015. Background Within the last few years, due to increased operational costs, legacy costs and long term liabilities, the City’s Refuse Fund has operated with a negative rate stabilization reserve. During the FY 2013 Budget process, as part of a continuing effort to lower costs, the Finance Committee requested that staff investigate strategies that could reduce costs in the street sweeping program. This program was a key area to consider cost savings, given that it constituted approximately $2.2M of the $30M Refuse Budget and utilized approximately one-half of the full- time staff positions in the Refuse Fund Budget. In late 2012, staff analyzed the City’s street sweeping program costs and surveyed several neighboring cities for relevant comparison information. The purpose of the analysis was to evaluate whether the City’s street sweeping program’s costs were in-line with other cities’ costs and to evaluate whether there were any opportunities for modifying the City’s program to achieve savings. Staff also solicited contractor costs by contacting street sweeping contractors who supplied conceptual costs for the proposed work. Staff then analyzed options based on service level assumptions and scenarios that assumed contracting out part or all of the street sweeping operations. The options all deal with the main portion of the street sweeping program that involves large street sweepers working on regular routes. Staff targeted this element of the program because this type of service is competitively provided by the private sector. The other elements of the overall sweeping program are a collection of smaller programs such as the cleaning of bike paths, dead ends, parking lots, sidewalks etc. that are usually not provided by the private sector. Further, staff believes that keeping a small in-house street sweeper contingent will provide the highest service level for Palo Alto residents. Staff concluded that significant savings could be realized if the City contracted out the main street sweeping operation and reduced the frequency of sweeping during non–leaf City of Palo Alto Page 3 season (typically March – October) to every other week in residential/light commercial areas. In addition, staff also calculated the future long term pension/health care costs for the street sweeper operator staff as approximately $330,000 per year (for only the five City Street Sweeper Operators involved in the main street sweeping operations). Public Works staff presented the information to the Finance Committee in March 2013 (Staff Report ID #3483). https://www.cityofpaloalto.org/civicax/filebank/documents/33508. At the Finance Committee meeting in March 2013, staff discussed reducing the frequency of street sweeping to every other week in residential/light commercial areas during the non-leaf season and/or contracting out the main street sweeping operation. The Finance Committee stated an interest in staff evaluating contracting options that would go beyond the scenarios discussed by staff at the March meeting. The Finance Committee gave approval for staff’s next steps which were to finalize the cost analysis and to run a pilot project that reduced frequency to every other week in limited areas of the City during late spring through the end of summer to determine the environmental impacts and to gauge public reaction. This pilot has now been completed and the results are reported below and in Attachment A. Discussion The every other week sweeping pilot has been completed and has demonstrated that the City can reduce the frequency of sweeping in the residential/light- commercial areas to every other week during non-leaf season without adverse impacts to the public or the environment (see Attachment A for pilot study data and conclusions). In addition, in accordance with the Finance Committee’s requests, staff has performed further analysis of the City’s program and has concluded that the main street sweeping and debris management operations can be contracted out providing significant savings to the City. Staff has developed a preliminary cost savings plan and analysis as described below. Recommended Street Sweeping Preliminary Cost Savings Plan – The concepts of this plan are described in the table below. In summary, the City would contract out the entire street sweeping and debris management operation except smaller programs such as the cleaning of bike paths, dead ends, parking lots, sidewalks etc. The City would also reduce the frequency of sweeping in residential/light commercial areas during the non-leaf season. The Downtown/California Avenue areas would continue to be swept three times per week by the contractor. City of Palo Alto Page 4 Parking lots would continue to be swept weekly by City Staff. Cost Savings Plan Concepts 1 Continue sweeping Downtown/California Avenue three (3) times per week. Contract out this work. 2 Continue weekly cleaning of parking lots, bike paths, dead-ends and downtown sidewalks. Continue using in-house staff and existing contracts to complete this work. 3 Reduce sweeping frequency to every other week during non-leaf season (except for Downtown/California Avenue areas). 4 Contract out the main street sweeping operation (i.e. all street sweeping performed by the large sweepers). 5 Contract out materials management (i.e. hauling leaf litter/debris to SMaRT). 6 Discontinue City Staff sweeping El Camino Real for CalTrans. Work towards amending/modifying CalTrans agreement. 7 Manage emergency responses with both in-house and contractor resources (traffic accidents, water main leaks, large rain events etc.). Comparison - Staffing and Equipment Cost Savings Plan Staff Current Program Contracted Program Staffing Reduction Lead Heavy Equipment Operator 1 0 -1 FTE Heavy Equipment Operator 1 0 -1 FTE Street Sweeper Operators 7 2 -5 FTE Street Maintenance Assistants 2 2 0 Total Staff 11 4 -7 FTE Equipment Current Program Contracted Program Equipment Reduction City of Palo Alto Page 5 Large Street Sweepers 7 2 -5 large sweepers Parking Lot Sweeper 1 1 0 Large Leaf Trucks (for picking up and hauling debris) 2 0 -2 large trucks Green Machines (small sweepers used to clean sidewalks and bike paths) 3 3 0 Small Dump Truck 1 1 0 Total Equipment 14 7 -7 This cost savings plan is being recommended because it will implement the most cost effective solution to the refuse rate payers through a competitive procurement process. Proposal pricing will be compared to the City’s operational costs and the most advantageous proposal will be recommended for approval to the City Council. The City would keep a core workgroup of City employees that would continue sweeping sidewalks and parking lots and could respond to emergency response events if a contractor could not respond in a timely manner. Also, removal of the seven pieces of equipment from the City’s fleet would take the pressure off of the City’s Equipment Management Operations. Street Sweepers and the leaf trucks have intensive maintenance requirements because of the complexities of these vehicles. Also, it should be noted that the manager responsible for overseeing the street sweeping program would still be needed to manage the street sweeping contractor as well as continuing to supervise the Downtown Streets Team, manage the traffic control maintenance crew, manage graffiti abatement, and field calls from residents and downtown businesses. If this cost savings plan is approved and if the preliminary cost savings are confirmed through the competitive procurement process, then the Public Works Department would need to: City of Palo Alto Page 6  Restructure the sweeper program with remaining staff in an organization structure that would make sense. Potential budget/personnel changes would need to be implemented;  Signage – Staff would need to develop a new signage plan;  Staff would need to determine the best mix of resources (both contractor and City) to respond to emergency responses. Staff is expecting to recommend retaining 3 sweepers and 2 street sweeper operators for routine work (not related to main street sweeping) and also for emergency response work – traffic accidents, water main breaks, storm debris removal etc.;  Staff will include performance requirements into a contract with a sweeping contractor including meeting storm water quality best management practices; and  Staff would need to be cross-trained to back up the more limited sweeping operations. In addition, it should be noted that the City is a permit holder for stormwater discharge along with 75 other Bay Area municipalities in the Municipal Regional Stormwater Permit. This permit requires a long-term trash management plan be submitted by February 1, 2014. Street sweeping is an effective trash control measure that can reduce 80 to 99 percent of trash on the streets. Street sweeping reduces sediments that may contain pollutants such as heavy metals and removes leaves, which can have water quality impacts. Street sweeping also impacts frequency of catch basin clean outs needed. Changes in the street sweeping program will be coordinated with the development of the long-term trash management plan to ensure continued compliance with the requirements of the City’s permit. Recommended Next Steps If the Finance Committee agrees with this staff recommendation, then the next steps would include staff developing a RFP and begin undertaking a procurement process for contracting services. Following receipt and analysis of proposals, staff will take any appropriate contract (or contracts) to Council for approval along with a list of other recommended operational or budget related actions. Such contracts would commence on or about August 31, 2014 and could be later, depending on Council action. Because this proposal involves contracting out work that has traditionally been performed by SEIU bargaining unit members, the City will be required to meet City of Palo Alto Page 7 and confer with SEIU to discuss alternatives and the impact of contracting out. Staff has provided a copy of this report to SEIU representatives and plans to provide the opportunity to meet prior to the receipt of proposals and/or after the completion of the proposal evaluation process so that the City can consider any potential alternatives proposed by SEIU. Finally, it is important to note that staff’s recommendation is conceptual in nature and that some or all of this plan implementation is contingent on the contractor pricing as well as operational factors such as proper emergency response coverage and ensuring that a contractor can perform the work in accordance with the high standards that is being completed now as well as storm water permit considerations. Policy Implications Approval of this RFP process does not represent any change to the existing policy. Resource Impact Potential cost savings will fluctuate based on pricing data received as a result of the RFP. Based on current information available, the estimated cost savings for contracting out the modified program are approximately $295,000 compared to in-house resources. Given the current program configuration, the total estimated program costs savings would be approximately $413,000. This amount reflects the reduction of seven staff positions and the reduction of seven equipment replacement and maintenance charges. Annual Cost Comparisons (Main sweeping operation and debris hauling) Item In-House Contracted Potential Savings Current Program Costs (Weekly sweeping with in-house resources) $1,074,000 Not proposed N/A Modified Program Costs (Every other week sweeping in residential/light commercial areas during the non-leaf season) $956,000 $661,000 $295,000 City of Palo Alto Page 8 Potential Savings from Current Program Costs for implementing both the modified program and contracting out $413,000 Annual costs represent preliminary estimates and may change. Savings related to staffing reductions are based on FY 2015 Forecast salaries and benefits. Estimates for equipment charges may change as fleet allocations are being developed as part of the FY 2015 budget process. Not reflected in the table above, nor quantified yet are savings to the Refuse Fund due to a reduction in General Fund cost plan charges, potential changes to salary and benefits costs resulting from ongoing labor negotiations, and future long term pension/health care costs. In addition, impacts to the Vehicle Replacement and Maintenance Fund will be analyzed further. The City would also realize an estimated one-time salvage value of approximately $400,000 for the affected equipment. Timeline If approved, the next steps would be:  Develop a request for proposals - December 31, 2013  Proposals received and evaluated - March, 2014  Council Approval - May, 2014  Implementation - August 31, 2014 Environmental Review The recommended action does not constitute a project under the California Environmental Quality Act (CEQA). Attachments:  Attachment A - Pilot Summary (DOCX) 4128 – Attachment A Every-Other-Week Street Sweeping Pilot Project Report City of Palo Alto, October 7, 2013 PURPOSE The City conducted a Pilot project to test the feasibility of every-other-week street sweeping service during the non-leaf season months of March thru September. The pilot program was implemented to evaluate whether the City can save costs by reducing sweeping frequency without significantly impacting residents or the environment. DESCRIPTION The pilot project was approved by the Finance Committee on March 19th, 2013, and was conducted from May 13, through the end of September 2013. Weekly sweeping service returned October 1st and is scheduled to continue during the leaf season months roughly (mid-October through mid-February). Pilot areas were chosen from current street sweeping routes with a mix of residential and light commercial zones. The Pilot areas were spread out evenly throughout Palo Alto in order to get a better understanding of the impacts of the service changes. All selected areas had standard Palo Alto tree growth including deciduous trees that drop their leaves during the non-leaf season. Operational needs were also considered when selecting areas, which allowed all sweeping staff to participate in the Pilot equally. Additionally, areas with scheduled posted street sweeping signage were not included so as not to disrupt the scheduled parking enforcement. A total of 25% of all street sweeping routes were chosen for the Pilot Program The downtown areas of University and California Avenue and their surrounding streets were not included in this pilot project because they are not being considered for street sweeping reductions in the future. RESULTS Because of the reduced sweeping during the Pilot program, City Operations used approximately 18% less fuel sweeping streets than during the same time period in 2012. Staff were also able to spend 800 hours performing “other than sweeping” tasks. In the 4.5 months of every-other-week sweeping, Staff received a total of 20 calls from residents in regards to the Pilot Program, 5 of the calls were received prior to the Pilot beginning with concerns that the reduced frequency of sweeping wouldn’t work. Of the 15 remaining calls (during the pilot), only 5 residents said that there were too many leaves in the street in front of their home and the 10 remaining calls were from residents voicing their opinion that bi-weekly sweeping was a bad idea in general and that it would lead to too many leaves in the street and possible flooding. CONCLUSION While every-other-week sweeping does allow for debris to collect for a longer period of time in the streets (compared to weekly sweeping), the street sweeping staff were still able to complete their routes without having to work longer hours or make extra passes. Staff did not observe extra debris in the catch basins. Staff did not receive any calls that necessitated extra or “make- up” sweeping. In conclusion, the Pilot program did not have a significant environmental impact 4128 – Attachment A in the areas where the Pilot was implemented and Staff believes that the Pilot program was successful in that it shows us no reasons for concern when decreasing the sweeping frequency from once every week to once every two weeks during the non-leaf season. Street Sweeping Pilot Project Calendar Pilot participants’ streets were swept every-other-week. Below is the calendar that was provided to help residents remember their street sweeping day. Indicates Street Sweeping Week For All Pilot Neighborhood Routes May S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 June S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 July S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 August S M T W T F S 1 2 3 4 5 6 7 8 9 10 4128 – Attachment A 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 September S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Every-Other-Week Street Sweeping Pilot Routes Map FINANCE COMMITTEE WORKING MINUTES Page 1 of 28 Regular Meeting Tuesday, December 3, 2013 The Finance Committee met on this date in the Council Conference Room at 7:03 P.M. Present: Berman, Burt (Chair), Schmid, Shepherd Absent: ORAL COMMUNICATIONS None AGENDA ITEMS MOTION: Council Member Schmid moved, seconded by Vice Mayor Shepherd to hear Agenda Item 2 before Agenda Item 1. MOTION PASSED: 4-0 1. (Former Agenda Item Number 2) Cost Saving Plan That Would Reduce the Frequency to Every Other Week for Street Sweeping in Residential/Light Commercial Areas and Contracting Out the Palo Alto Street Sweeping Program. Mike Sartor, Director of Public Works, said on March 19, 2013 during the Finance Committee (Committee) meeting the Pilot Program was approved for the residential and light commercial areas for a once per week sweeping for the summer schedule. Staff performed research with neighboring cities to verify if the proposed program was in line with other cities. Ron Arp, Solid Waste Program Manager, provided a brief presentation highlighting the Pilot Program results, the potential cost savings, and the next steps for moving forward with the Committee’s approval. He clarified Staff was not requesting the approval of outsourcing, the release of Staff positions, or any budgetary changes at the present time. Staff was recommending the approval of the next steps for the proposed Program which included going out to bid. The current annual cost for the Program was $2.3 million which was budgeted through the Refuse Fund. The goal of the proposed Program was to reduce overall costs and replenish the Refuse Fund Reserves. The Pilot Program began in mid-May and ran through the WORKING MINUTES Page 2 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 end of September where there were no more than five complaints received from residents. The Administrative Services Department conducted a survey of nine surrounding cities and determined Palo Alto performed a higher level of sweeping in general and in excess during non-leaf season. The survey showed the same areas in other cities were swept on a bi-weekly basis and some on a monthly basis including other Tree Cities. The frequency would not be reduced on the bicycle paths, parking lots, sidewalks, or full commercial areas. If the proposed plan was accepted the consequence would result in seven Full Time Equivalent (FTE) positions being eliminated as would seven heavy pieces of equipment. If the proposed plan was approved the schedule would begin with the Request for Proposal (RFP) process, Council approval in spring and implementation by August 2014. Herb Borock noted the role of a Standing Committee was to advise Council; although, Staff was requesting the Committee approve the proposed plan without Council consideration. The Committee should be making a recommendation to the full Council in a Motion. He discussed the increased rates with a reduction in services. Vice Mayor Shepherd asked if the services remained in-house with reduced frequencies would the cost savings remain the same. Mr. Arp stated the savings would drop from $1,074,000 to $956,000 with nothing more than the reduced schedule. Vice Mayor Shepherd asked why Staff was requesting the Committee approve the action without it being vetted by Council. Mr. Sartor noted Staff could take a recommendation from the Committee to the Council for approval prior to conducting an RFP. Vice Mayor Shepherd requested clarification as to why that recommendation was not presented to the Committee. Mr. Sartor felt the confusion was in the Committee requesting Staff complete the Pilot Program and return with a recommendation during a prior meeting in March of 2013. Vice Mayor Shepherd inquired about the impact of the $10 monthly service fee on street sweeping if the program was approved. Mr. Arp clarified the street sweeping fee was $6.66 and the remaining $3.34 was for Household Hazardous Waste. Prior to any alteration of the fee schedule Staff would need to confirm the savings and review the rate structure. A main goal of Staff was to maintain a sustainable rate structure. WORKING MINUTES Page 3 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 There was not a foreseeable rate reduction because the Rate Stabilization Reserve remained in the negative by $2 million plus; although, it would alleviate future increases. Vice Mayor Shepherd understood the fees needed to be matched by a service. Mr. Arp noted there was going to be an Allocation Study performed once the Program was approved. Vice Mayor Shepherd agreed there were not a lot of residential complaints regarding the reduction in street sweeping during the Pilot and asked the regular complaint number. Steve Banks, Maintenance Operator Manager, said during regular service times there were calls every other day regarding excess leaves. Vice Mayor Shepherd asked whether the calls received during the Pilot Program were in excess of the regular calls. Mr. Banks said the number of calls received was typical for the season. Vice Mayor Shepherd was unaware the City contracted with the California Department of Transportation (Caltrans) for sweeping El Camino Real and asked how the residents were billed for their service. Mr. Arp mentioned he was not familiar with the history of the agreement; although, the Refuse Fund paid for the services and Caltrans reimbursed the Fund. Lalo Perez, Director of Administrative Services and Chief Financial Officer, confirmed the Caltrans agreement was a long-term agreement similar to the one with Santa Clara County (County) for the sweeping of Oregon Expressway. Vice Mayor Shepherd asked if the cost savings calculated the continued benefits packages for the Staff that may be let go during the process of the Program. Mr. Perez said based on the current data Staff estimated a savings of $300,000 in future benefits cost. Vice Mayor Shepherd asked for a future consideration and calculation of a reduction in greenhouse gas as it was valued and measured. WORKING MINUTES Page 4 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Council Member Schmid understood the value of surveying other cities for comparisons; although, Palo Alto was unique in its value of trees and their canopy. He asked how that uniqueness stood against the other cities' need for street sweeping. Mr. Arp agreed Palo Alto had predominately more foliage than standard cities. Three of the cities surveyed were Menlo Park, Mountain View, and Redwood City which were also Arborist Certified Tree Cities. Staff would take a higher level of consideration of Palo Alto’s canopy if the Program was approved. Mr. Sartor noted the current schedule was for weekly street sweeping which was a higher volume than any of the previously mentioned cities. Council Member Schmid said if the Program was approved and began in August 2014, the reduction in street sweeping would not occur until September 2015. Mr. Sartor acknowledged the possibility of beginning the every other week sweeping in summer of 2014 without effecting Staff. Council Member Schmid asked when the summer schedule would end. Mr. Arp clarified non-leaf season ran through to mid-late October. Council Member Schmid had concern with the storm drains having built up with excess debris not being swept frequently. Mr. Sartor confirmed the street crews routinely mobilized and cleaned the catch basins before each rainy season. Council Member Schmid understood annually that was accomplished but his concern was between the two-week period how much could accumulate to cause drainage issues. Mr. Arp agreed part of the storm water compliance permit and the Regional Board had determined the residential areas were a low priority because the areas did not generate much litter. Council Member Schmid asked how that process affected El Camino Real. He believed the Water District enforced a new catch basin process. Mr. Arp clarified Staff was not proposing any cuts in frequency to El Camino Real. WORKING MINUTES Page 5 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Council Member Schmid recalled the reason behind the City taking over the El Camino Real corridor from Caltrans was because of the complaints. He asked if there was a possibility of Caltrans resuming the sweeping function with the proposed contracting out. Mr. Sartor said yes, the City would negotiate with Caltrans. If Staff was not satisfied with their services there would be a weekly compliance, then the City would contract out the service and continue to seek reimbursement from Caltrans. Council Member Schmid asked for Staff’s process on locating the appropriate contractor. Mr. Arp stated the importance of best practices and measures of control to be implemented in the contract in order to ensure accuracy and a level of appropriate service from any of the contractors chosen. Council Member Schmid said the emphasis was on language in the contract for the RFP process up-front. Mr. Arp felt it was important to have the terms in the contract and contact the other cities to see what measures worked for them. Council Member Schmid mentioned the Parks Department had a number of contracts for the Golf Course and the City Parks that have worked out well. Mr. Sartor agreed the Parks Department had contracts for landscaping and maintenance, roadway maintenance and the Golf Course had contracts to maintain the course grounds. Part of the discussion with the proposed contractors would be to have a strong performance standard. Council Member Schmid clarified during the first six to nine months of the contract there would be an assigned Staff member to review the work and quality. Mr. Sartor stated yes, and noted there was a project manager in place on Mr. Banks' team who would be assigned the task of Request for Quotes (RFQ) and to design the standards. Mr. Perez confirmed there would be non-payment clauses in the contracts surrounding non-satisfactory workmanship and services. Council Member Berman wanted to re-emphasize the high quality of service required be in the contract. WORKING MINUTES Page 6 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Chair Burt asked for clarification on whether the Committee recommendation in March went to Council. Mr. Sartor stated no, the recommendation was for Staff to begin a Pilot Program to modify the sweeping frequency. Mr. Perez recalled during the rate increase period a number of years past the recommendation from Committee was to locate further cost reductions. The Committee's recommendation went to and was approved by the City Council; therefore, he felt the proposed Program was part of the direction as a whole. Chair Burt believed the items needed to be vetted through Council and recommended as a Consent Item. He asked for the anticipated dates at which the frequency of sweeping would change during the calendar year. Mr. Arp stated typically the dates ranged from March 1st through November 1st. The dates could change depending on the intensity of the weather; an early storm could cause early leaf release. Chair Burt agreed March was reasonable, but November was too late. He encouraged Staff to reexamine the end date. Mr. Arp concurred flexibility would be built into the RFP. Chair Burt asked what a normal complaint number was opposed to the five received during the Pilot Program. He suggested including a comparison number in the Staff Report to the Council. He asked if there was consideration of a fair wage during the process of going out for bid on outsourcing. Mr. Perez said he did not recall having done so in the past. Chair Burt said it was a consideration to make as the long-term pension costs continued to rise. He felt Palo Alto should be indifferent to whether the recurring saving were of a significant detriment to the workers. The policy decision needed was whether it was fair and appropriate. He suggested the Committee make a recommendation to the Council by way of the Policy and Services Committee. Mr. Keene clarified the Committee was not making a decision but referring a recommendation to the Council for consideration. Chair Burt read the Staff Report as altering the street sweeping as every other week but not during leafy seasons. He wanted to emphasize that WORKING MINUTES Page 7 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 timing in order to avoid misunderstanding of the Program. He asked if the current seven employees were full-time employees. Mr. Sartor said they were full-time employees; although, currently only six positions were filled. Chair Burt asked if the Pilot Program was achievable because the City did not fill the vacant position. Mr. Banks clarified during the Pilot Program one Staff member was freed up each day to handle the catch-up duties. Chair Burt wanted to confirm Staff had discussed bumping rights and other policies with the Human Resources Department for the employees who may be negatively affected. He asked the percentage of the General Fund savings from the last organizational restructuring. Mr. Perez stated 70 positions or 14 percent. Chair Burt noted that was accomplished with only a few layoffs in one year, which he felt was important to mention. He inquired about efforts to place employees in other positions in the City. Mr. Sartor reiterated the Program would not become effective before the end of summer 2015. Of the seven employees affected, one was promoted into another position outside the sweeping crew, and one or two were close to retirement. Staff would search for other positions within the City for the remaining employees. Chair Burt inquired whether Staff considered implementing the Program in stages if new positions could not be found for affected employees. Mr. Sartor indicated a phased approach would cause some efficiency issues in that part of the Program which would be performed by contractors and part by Staff. The ideal approach would be to find other positions within the City. Mr. Keene reported Staff's intent was to find places if possible. If positions within the City could not be found, then Staff could have some flexibility to implement the Program in stages. Mr. Perez suggested an RFP could contain language regarding a full implementation or a phased implementation and request a cost based on the two options. Chair Burt was interested in an RFP exploring both alternatives. WORKING MINUTES Page 8 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Keene felt bringing the issue forward early allowed Staff and the Council maximum time to resolve employee issues. There was a policy question regarding referral of the issue to the Council. Moving Staff into other positions as soon as possible would be advantageous, and receiving a final decision from the Council would be important to transitioning Staff. Council Member Berman felt it was important for the Council to establish a policy regarding living wages or at least discuss the issue. The Council wished to ensure its actions had a minimal impact on current employees. MOTION: Vice Mayor Shepherd moved, seconded by Council Member Berman to have the Finance Committee recommend to Council: 1) the approval of Staff’s recommended Street Sweeping Cost Savings Plan; 2) direct Staff to develop a Request for Proposal and undertake a procurement process that would confirm or adjust the cost estimates and savings assumed in the plan; and 3) prior to the Request for Proposal, agendize this item under the Consent Calendar to be heard before Council. Vice Mayor Shepherd believed the community wanted the City to have efficiency and outsourcing. Outsourcing landscaping services at the Golf Course provided a better experience for golfers. She wished to ensure Staff followed the procedures to meet and confer with labor groups. Outsourcing street sweeping was a good step forward in attempting to respond to the community and to manage costs. Council Member Schmid reiterated that the Program was initiated by the Committee. AMENDMENT: Chair Burt moved, seconded by Council Member XXX to have the Request for Proposal include as an option phased implementation to provide for greater assurance that there not be layoffs as a result of the Street Sweeping Cost Savings Plan. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Vice Mayor Shepherd recalled the Council committed to inquiring whether an independent contractor would hire City Staff as employees. Chair Burt did not believe that requirement was needed if Staff successfully moved to other positions within the City. Vice Mayor Shepherd inquired whether Chair Burt did not wish to include that option. WORKING MINUTES Page 9 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Chair Burt did not wish to include that option at the current time. He preferred not to lay off employees. If there was a problem with transitioning employees, the Committee could review the matter. Vice Mayor Shepherd asked if Chair Burt's proposal was to have an RFP return to the Committee or to the Council. Chair Burt inquired whether Staff's intention was for the RFP to be routed to the Committee before the Council once Staff had a contract proposal. Mr. Perez reported typically Staff would not return to the Committee. Other RFPs for contracting services included language requesting contractors hire employees who could not be placed in other positions within the City. Contractors did not have to accept that. Vice Mayor Shepherd noted in the past some City workers were employed by contractors. Mr. Keene stated that RFP criteria could be utilized to evaluate contractors. Staff could consider contractors who did or did not wish to comply with that option. Chair Burt explained if full implementation of the Program occurred with no layoffs, there would not be an issue. If full implementation resulted in layoffs, the Committee should consider a phased implementation in order to avoid layoffs. That should be vetted first through the Committee and then the Council. Vice Mayor Shepherd wanted an RFP to parallel prior actions to have that option for Staff to resolve. Chair Burt requested Vice Mayor Shepherd clarify "option for Staff to resolve." Vice Mayor Shepherd explained the RFP would be similar to the prior RFP for landscaping with a consideration that Staff could be hired by the contractor. Chair Burt asked how that resolved the issue he raised. Vice Mayor Shepherd indicated Chair Burt wanted to ensure there were no layoffs. Chair Burt inquired how her proposed language would do that. Vice Mayor Shepherd stated it was an extra ability to resolve the problem. The goal was to ensure employees had a job. Her proposal provided WORKING MINUTES Page 10 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 employees with flexibility to move to another position within the City or to move to a position with a contractor. She would allow that language to be incorporated into the Motion with permission of the seconder. Chair Burt agreed Staff could include that language in the RFP, but he wanted an option that would avoid layoffs. Avoiding layoffs through a single implementation would be better. If a phased implementation was needed to avoid layoffs, he wanted the Committee to consider it. The Committee's role was to vet items and then make a recommendation to the Council. If the Committee's recommendation was unanimous, then it would be placed on the Council's Consent Calendar. Mr. Perez envisioned Staff would issue an RFP with the discussed language and receive responses. Given the size of the agreement, the Council would have to approve it. To expedite the process, Staff recommended bids, criteria, and recommendations be presented directly to the Council. The RFP language stated that any and all bids could be rejected. Chair Burt reported analysis by the HR Department regarding the ability to place Staff in other positions would be needed in order for the Committee to make a decision. Mr. Perez agreed at that point the Committee would have a clear picture of the process. The Council could determine whether to have a full or phased implementation. Chair Burt would accept a contract being presented directly to the Council with Committee consensus. AMENDMENT: Chair Burt moved, seconded by Council Member Berman to: 1) utilize the option of phased implementation for the Request for Proposal; 2) have the Request for Proposal include a clause requirement whereby the contractor would agree to hire any prospectively laid-off employees; and 3) have the contract go directly to Council when it comes back. Vice Mayor Shepherd noted the Motion was to approve the Staff recommendation. Chair Burt clarified that he proposed an Amendment to the Motion. Vice Mayor Shepherd would accept the Amendment as long as the RFP language was similar to language utilized previously. Council Member Schmid inquired about the length of a phased implementation. WORKING MINUTES Page 11 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Chair Burt assumed a phased implementation would require one additional year cycle; however, the Amendment did not specify a time period. Vice Mayor Shepherd understood a phased approach would be an option in the RFP. Council Member Schmid would support the option of a phased implementation and a one-year implementation period. Mr. Keene indicated Staff and the Committee would know the number of employees at risk for layoff once an RFP was presented to the Council. The Council would have flexibility as to how to proceed. Chair Burt felt a complex RFP should return to the Committee for review prior to Council discussion. Mr. Perez noted the Committee would discuss the RFP during the Budget process as it would have a primary impact to the General Fund. Chair Burt inquired whether the RFP would return to the Committee in the Budget cycle rather than separate from the Budget. Mr. Perez understood the Motion would be presented to the Council in January 2014; therefore, the RFP could be included in the Budget cycle. Chair Burt preferred the Committee review the RFP in an attempt to avoid a long Council discussion. Council Member Berman inquired whether Staff's concern was timing. Mr. Perez indicated the concern was the timing sequence. Staff could return to the Committee if the Committee wished. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER to direct Staff to return to the Finance Committee for vetting of the Request for Proposal prior to the recommendation of full Council. Vice Mayor Shepherd understood that the Committee would vet the RFP and ensure it followed the Motion. Chair Burt added that the Committee would make a recommendation to the Council. MOTION AS AMENDED PASSED: 4-0 WORKING MINUTES Page 12 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 MOTION: Chair Burt moved, seconded by Council Member Berman that the Finance Committee recommend that the Council refer to the Policy and Services Committee for consideration of a policy on what would constitute fair wage and benefit levels for new outsourcing of services formerly done by City Staff. Chair Burt deliberately did not attempt to prescribe boundaries for the Policy and Services Committee. Council Member Berman hoped it was clear that the Committee did not want to lay off employees. The Council should discuss whether fair wages for contracted service providers were a City value. That would provide an honest analysis and comparison of the real savings. Council Member Schmid inquired whether "fair wages" should be a capitalized term. Chair Burt intended for fair wages to be lower case. He did not attempt to provide a term of art with defined boundaries. Council Member Schmid recalled the State fair wage law had specific numbers. Chair Burt was willing to consider changes in wording. Council Member Schmid noted Council Member Berman used the term "living wage." Chair Burt felt that was also a term of art in certain jurisdictions. Council Member Berman suggested use of "an appropriate wage to be determined by the Policy and Services Committee." Chair Burt agreed with that language. Mr. Keene reported the State provided a standard for living wages. Individual cities established their own living wages. The Council would have discretion. Council Member Schmid expressed concern with the use of "fair wages," which was a statewide issue. Perhaps the term "living wage" was better because it could be set locally. Mr. Keene noted a different wage typically was established if benefits were provided. WORKING MINUTES Page 13 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Chair Burt would accept the term "living wage" in lower case. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to accept the words “living wage” in lower case letters instead of “fair wage”. Vice Mayor Shepherd requested the item be agendized for a future Committee meeting to discuss the Motion, because fair living wage was an emerging conversation in other cities. She was unsure whether the Committee could independently place items on the Agenda. Chair Burt did not believe the Committee should hold a policy discussion. The Motion could recommend the Council assign the item to the appropriate Standing Committee. Vice Mayor Shepherd believed the conversation should include more than just outsourcing. Chair Burt was not sure that pertained to the current discussion. When the Council discussed the Committee's recommendation, Vice Mayor Shepherd should inquire if the Council wished to expand the discussion. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to recommend that the Council assign this for consideration to the appropriate Standing Committee. Vice Mayor Shepherd inquired whether the Motion related only to outsourcing City services. Chair Burt indicated she could raise expanding the discussion when the recommendation was presented to the Council. MOTION AS AMENDED PASSED: 4-0 2. (Former Agenda Item Number 1) First Quarter Fiscal Year 2014 Financial Results. David Ramberg, Assistant Director of Administrative Services, reported Staff was presenting an informational report which did not require Council action. Previously Staff presented to the Finance Committee (Committee) the Fiscal Year (FY) 2013 Year End Report. Staff did not expect the First Quarter Report to be a precursor for the remainder of the year. Trends reported at the end of FY 2013 continued into FY 2014, and some trends were incorporated into the Adopted Budget for FY 2014. Revenues continued to grow and expenses remained within Budget. Staff continued to monitor WORKING MINUTES Page 14 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 trends for possible mid-year Budget requests and changes. Staff provided information regarding new pension accounting for FY 2015. Laura Kuryk, Accounting Manager, indicated all tax revenue categories continued to increase. Sales tax revenue totaled 23 percent of the full-year Budget and was slightly ahead of Budget. Transient Occupancy Tax (TOT) receipts of $1.9 million were aligned with the full-year Budget. Documentary Transfer Tax receipts increased 27 percent over FY 2013 and were slightly ahead of the full-year Budget. Charges for services revenue decreased from the prior year and currently stood at 13 percent of the full- year Budget. The decline could be attributed to a decreased volume of high dollar plan check fees, a decrease in golf-related fees, a decrease in permits and licenses revenue, and a decrease in external street cut fees. Overall revenue reached 17 percent of the Adopted Budget amount. General Fund actual expenses for the First Quarter tracked at 23 percent of Budget, excluding encumbrances. At a department level, each department was tracking slightly below Budget. Police and Fire Department overtime expenses increased significantly over the prior year and tracked at 36 percent and 50 percent respectively of full-year Budget. Police Department overtime was driven by one-time special events, deployment at Cubberley Community Center, substantial training events, injuries, and other leave time. The Police Department expected overtime to return to lower levels. Fire Department overtime costs resulted from eight Staff on workers' compensation, three open positions, succession planning and career development, staffing of seasonal Fire Station Number 8, and a mutual aid response to the Rim Fire. The Fire Department closely tracked and monitored overtime. Fire Department overtime began decreasing in November 2013. All Enterprise Funds had a positive net income for the First Quarter. The Water Fund implemented a seven percent rate increase effective July 1, 2013 and recognized reduced water purchase costs. The Electric Fund increased its commercial revenues and connection charges, partially offset by an increase in market purchases of power. Council Member Schmid noted the number of rounds played at the Golf Course continued to decrease, leading to an unexpected charge to the General Fund of approximately $250,000. Ms. Kuryk stated the amount could be $250,000 below Budget. Staff would propose some mid-year Budget adjustments. Council Member Schmid was surprised by the increase in documentary transfer taxes. He inquired whether the documentary transfer tax was an indication of development activity. WORKING MINUTES Page 15 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Ms. Kuryk stated the documentary transfer tax was driven by real estate transactions. Joe Saccio, Assistant Director of Administrative Services, reported the value of transactions exceeded the prior year period by almost 53 percent. The number of transactions increased by approximately 9.4 percent compared to the same period. Council Member Schmid inquired about the percentage of residential transactions as opposed to large commercial transactions. Mr. Saccio remarked that Staff was obtaining property tax reports that would determine the proportion of transactions. To date most transactions were residential. Council Member Schmid was surprised the charges for service amounts decreased when substantial activity occurred. Lalo Perez, Director of Administrative Services and Chief Financial Officer, added that permits were obtained for significant projects in the prior fiscal year. Council Member Schmid asked which revenue sources paid for the Development Center. Mr. Perez inquired whether Council Member Schmid was reviewing Attachment A. Council Member Schmid was reviewing highlights for the year on page 2. Ms. Kuryk reported charges for services included zoning plan fees and check plan fees. New construction permits were included in permits and licenses. Council Member Schmid stated the Development Center received revenues from several categories. Mr. Perez indicated Staff was working to segregate Development Center costs and revenues. Mr. Saccio commented the City received documentary transfer taxes directly from Santa Clara County (County). Those taxes were not received by the Planning Department. Council Member Schmid noted the Library had a 10 percent increase in expenses while two libraries were closed. WORKING MINUTES Page 16 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Ms. Kuryk explained the increase resulted primarily from purchase of materials. While expenses increased in the First Quarter, they remained at 20 percent of the full-year Budget. Council Member Schmid understood the Library received a foundation grant. Mr. Perez concurred that donations funded a portion of the collection. Council Member Schmid inquired whether rate decreases would be considered as Enterprise Funds were doing well. Mr. Perez reported the Utilities Department Staff was reviewing rates for FY 2015 and would present information internally prior to presenting information to the Council. He did not believe Staff expected rate increases in electric and gas. Vice Mayor Shepherd noted TOT increased 57 percent and inquired whether a new hotel had opened. Ms. Kuryk indicated the increase partially resulted from FY 2013 TOT receipts being low due to the timing of receipts. Chair Burt inquired whether the receipts for the First Quarter of FY 2013 were low due to timing. Ms. Kuryk answered yes. Vice Mayor Shepherd asked which figure would be most accurate. Ms. Kuryk explained the FY 2014 amount would better represent the true number. Vice Mayor Shepherd asked if receipts for the first half of FY 2014 would be more accurate. Ms. Kuryk responded yes. Vice Mayor Shepherd inquired whether any new hotels had opened. Mr. Saccio replied no. The occupancy rate for the First Quarter of FY 2014 was 85 percent; whereas, the occupancy rate for all of FY 2013 was 80 percent. Room rates also increased in FY 2014. Vice Mayor Shepherd noted the deficit for the Golf Course could reach $250,000 and requested the Committee review Golf Course revenue and expenditures as a separate item. WORKING MINUTES Page 17 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Perez concurred with Staff providing the Committee with a status update, because several factors impacted the Golf Course. Vice Mayor Shepherd inquired whether information should be presented to the Council rather than the Committee. Mr. Perez could present information to the Council if the Committee directed. Vice Mayor Shepherd felt the Council would want to know the status of Golf Course revenue and expenses. She inquired about the amounts budgeted for overtime. Mr. Perez reported Staff did budget for overtime. The informational report compared the two quarters of FY 2013 and FY 2014. Unexpected special circumstances increased overtime in FY 2014. Ms. Kuryk indicated the full-year Budget for Police overtime was $1.5 million and for Fire was $1.4 million. The Police Department utilized 36 percent of its Budget and the Fire Department utilized 50 percent of its Budget as of the end of the First Quarter. Vice Mayor Shepherd inquired whether some overtime funds would be reimbursed by Mountain View for Police and by the State for Fire. Ms. Kuryk responded yes. Vice Mayor Shepherd asked if seasonal expenses were captured in the Budget Adjustment. Ms. Kuryk explained the budgeted amount for Police and Fire would be included in the Adjusted Budget amount. From the Adopted Budget to the Adjusted Budget, there was no adjustment for overtime. Vice Mayor Shepherd was attempting to determine if Staff budgeted correctly for overtime. Council Member Schmid inquired whether eight firemen were on compensatory leave. Ms. Kuryk replied yes, eight Staff were on workers' compensation. Council Member Schmid asked if an incident occurred that resulted in eight Staff being placed on workers' compensation. Ms. Kuryk would have to provide that information at a later time. WORKING MINUTES Page 18 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Chair Burt inquired about the number of Staff out for workers' compensation in FY 2013. Ms. Kuryk did not know that number. Chair Burt wished to know the number of Staff on workers' compensation to determine whether that was a factor in the increase of overtime. He inquired whether Station 8 was also staffed through overtime in FY 2013. Mr. Perez answered yes. Staff would provide more information. Chair Burt stated Staff should cite factors that actually constituted the increase in overtime. The only real explanation for the increase in Fire overtime was the mutual aid response to the Rim Fire. Ms. Kuryk added that succession planning and professional development were also factors for Fire Department overtime. Mr. Perez explained that the Fire Department was going through staffing changes and did not provide specific information for inclusion in the report. Chair Burt asked when that information would be provided to the Committee. Mr. Ramberg reported the information typically would be provided in the Second Quarter financial report. If the Committee wished to see it before that time, then Staff would provide it prior to the report on the Second Quarter. Chair Burt recalled the Committee worked to understand and accurately project overtime costs. He preferred to have the information prior to the Second Quarter report in order to understand whether overtime costs would continue to increase. Mr. Perez could agendize the Fire Department to present information to the Committee on December 17, 2013. Chair Burt suggested the item could be fairly short as the focus was only one issue. Mr. Perez could submit a written report if the Committee preferred. Council Member Schmid would like an informational report if the explanation was straightforward. If the Committee needed to review the issue, then the item should be agendized. WORKING MINUTES Page 19 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Perez would confer with the Fire Chief and contact the Chair if there was an issue. Chair Burt felt an informational report would be sufficient if the overtime increase could be explained by anomalous circumstances. Otherwise, the item should be agendized. He recalled that Staff projected water fee increases, and asked if funds would mitigate increases rather than being decreases. Mr. Perez explained that it was extremely difficult to gauge the need for rate increases or decreases from First Quarter information. Chair Burt requested a supplemental report regarding the amount of decline in expenses that was accompanied by a decline in revenue for charges for services and permits and licenses. Mr. Perez reported Staff was working on that. It was a challenge due to resources. Revenue was received in one fiscal year, while work was completed in the following fiscal year. Staff was attempting to determine the amount of work that would continue in the following fiscal year. Chair Burt suggested that revenue was based on accrued charges and expenses were on a cash basis. Mr. Perez indicated Staff was working to identify the amount of revenue that belonged in the following fiscal year because the work was performed in the following fiscal year. Chair Burt stated if Staff could provide an average correlation between income and expenses in those categories, then the Committee could understand that a decline in revenue was not accompanied by a downward trend in expenses. Mr. Perez's goal was to provide additional information. Staff was working to segregate all information into pinpoint data sets in order to provide them to the Committee. The challenge was a lack of resources in the Development Center. Chair Burt inquired whether the City would collect permit and construction fees as Stanford Hospital redevelopments occurred. Mr. Perez could not answer that. Chair Burt recalled that a spike would occur in the periods when redevelopment occurred. WORKING MINUTES Page 20 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Perez could report on that at the next meeting. Mr. Ramberg reported Staff would populate a monthly column of actual figures in the Open Budget application for the first time in a few months. Staff hoped that would lead to collection of seasonal information. Chair Burt related environmental and budget issues surrounding the San Francisquito Creek Flood Protection Project which impacted the Golf Course. Council Member Schmid reported the Parks and Recreation Commission learned the number of rounds played at the Golf Course decreased because of word-of-mouth information that the Golf Course was closed. Chair Burt understood Staff would communicate to Golf Course customers that the course was open for play. Council Member Schmid added that discounts were offered. Vice Mayor Shepherd inquired whether the Committee should provide a Motion directing Staff to present Golf Course information to the Council. Mr. Perez would provide the information to the Council without a Motion. Vice Mayor Shepherd inquired whether a Motion was needed on the current Agenda Item. Mr. Perez responded no. 3. CalPERS Annual Valuation Reports for the City’s Miscellaneous and Safety Pension Plans as of June 30, 2012. Lalo Perez, Director of Administrative Services and Chief Financial Officer, reported Staff wished to answer questions regarding pensions in light of the many concerns. The attachments to the report were prepared by the California Public Employees' Retirement System (CalPERS). Vice Mayor Shepherd liked the calculation of the number of employees in each pension tier and movement among tiers. The information was well articulated and simple to read. Mr. Perez would add the salary proportion as well, because CalPERS calculated the City's rate based on that information. Approximately 20 percent of the City's workforce were located in the second and third tiers. Walter Rossmann, Office of Management and Budget Director, explained that CalPERS made substantial changes which impacted the rates. In 2010 the WORKING MINUTES Page 21 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Council approved implementation of Tier 2, which contained 190 Miscellaneous Employees. Tier 3 contained 28 Miscellaneous Employees and 2 Public Safety Employees. Remaining employees were contained in Tier 1. CalPERS changed the interest earnings assumption from 7.75 percent to 7.5 percent. Staff did not believe CalPERS would reduce the rate further for the next valuation. CalPERS changed the amortization period to 30 years, which would be beneficial to members and member agencies. The smoothing period changed from 15 years to 5 years, such that market losses and gains would be recognized over a five-year period versus a 15-year period. In addition assumption changes would be recognized over five years. Staff expected changes to mortality assumptions would impact the City's rates by 3 percent. CalPERS would implement those changes in 2015-2016 by 0.6 percent and increase it within five years to 3 percentage points. Assumptions would then remain constant for 20 years and then decrease. Currently the valuation assumed a 7.5 percent interest earning rate. A decrease or increase in the rate assumption by 1 percent provided a significant impact to total rates the employer would pay. An increase of 1 percent would result in the City's pension contribution rate for Miscellaneous Employees to increase from 26 percent to 37.9 percent. A decrease of the rate assumption by 1 percent would result in the City's pension contribution rate to decrease by 11 percentage points to 15.3 percent. Such a interest earning rate assumption change would primarily impact the unfunded liability portion of the pension contribution rate. The current rates are based on the June 30, 2011 valuation. The 2014-2015 and 2015-2016 rates are based on the June 30, 2012 valuation. The increase for Miscellaneous Employees is 1.5 percentage points from 2014-2015 to 2015-2016. The increase for Public Safety Employees is 2.6 percentage points for the same period. Staff contacted CalPERS regarding the increase for Public Safety Employees. CalPERS explained that the City's lower payroll amount for Public Safety Employees was responsible for the higher increase. With a higher payroll amount for the 2013 valuation, the increase should not be as much for the following year. In 2007-2008, the rates for Miscellaneous Employees were approximately 17 percent. According to CalPERS projections, the amount would almost double to 33.4 percent over ten years. Over ten years, the rate for Public Safety Employees was expected to more than double 23.94 percent to 52.20 percent. The rates did not include any assumption changes regarding mortality or Tier 3. The Public Employees’ Pension Reform Act (PEPRA) would have a positive impact on rates to some degree. Staff expected pension costs to increase over the next several years. Vice Mayor Shepherd inquired about the table for Employer's PERS Rates. WORKING MINUTES Page 22 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Rossmann indicated the table showed the rates and the change in rates from year to year. Vice Mayor Shepherd noted rates increased to 52 percent. Mr. Rossmann stated the rate for Public Safety Employees increased to 52 percent. Vice Mayor Shepherd asked how the City's contribution, currently at 33 percent, would increase. Mr. Rossmann explained that an actuary determined rates by assuming projected payroll increases. The benefit for Public Safety Employees was much richer than for Miscellaneous Employees, because Public Safety Employees retired earlier with a higher rate. Those factors increased the rate over the next few years. Vice Mayor Shepherd inquired whether the City's rate would reach 100 percent at the end of an additional 17 years. Mr. Rossmann answered no given today’s assumptions. CalPERS stopped projecting rates at the 2019-2020 valuation due to the initial five-year period to increase rates. The rate would remain flat thereafter, according to the CalPERS valuation method. Mr. Perez added that it did not account for savings from the second and third tiers. The return for the closing year was zero percent, which also impacted the rate. Vice Mayor Shepherd did not understand how that information impacted the City's contribution rate. Mr. Rossmann reported the City's rate funded benefits for retired and active employees. Vice Mayor Shepherd inquired whether the defined benefit increased because of the investment prospectus. Employees set aside funds for their pensions, and the City also set aside an amount for pensions. She did not understand how the City's rate could increase so drastically. Mr. Rossmann reported CalPERS changed the actuarial assumptions and the five-year phase-in period. Those changes were an attempt to stabilize rates; however, the rates appeared to increase. CalPERS needed sufficient funds to pay benefits earned by employees and retirees. CalPERS drafted the plan to obtain needed funds over a 30-year period. Previously, the period for obtaining funds was open ended. WORKING MINUTES Page 23 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Vice Mayor Shepherd stated the effect was the 30-year cap for amortization. If the amortization was not capped, then contributions would be fluid and erratic. She inquired whether the report was informational only and whether the Finance Committee (Committee) would receive the City's actuarial report prepared by Bartell and Associates, LLC (Bartell) Mr. Perez indicated Staff had not requested Bartell perform an in-depth analysis. Staff requested Bartell perform a projection of the potential savings from the second and third tiers. Vice Mayor Shepherd recalled that an amortization was one variable the Council could change in order to change the City's payment. The 30-year cap changed the experience. Mr. Perez felt CalPERS' changes were the right thing to do; although, they would be detrimental to the City. Adjusting those variables addressed the unfunded portion in a responsible manner. Vice Mayor Shepherd believed the City would have to utilize more disposable income on funding pensions when the exact amount would never be known. She asked if the City had to utilize CalPERS' variables or could it leave the amortization period open-ended. Mr. Perez indicated the City was required to pay the next fiscal year rate. The City did have options when addressing future years. Because of CalPers poor investment performance for the Fiscal Year 2012, the unfunded portion increased. Vice Mayor Shepherd asked if investments for the prior year were zero. Mr. Perez stated the rate of return was zero percent. Vice Mayor Shepherd inquired whether he meant the rate of return for the prior year. Mr. Perez clarified the rate of return was zero percent for the valuation of Fiscal Year 2012. Vice Mayor Shepherd felt 2012 should have shown an increase. Mr. Perez reported the rate of return was 12 percent for the period ending June 30, 2013 Vice Mayor Shepherd wished to review CalPERS schedule of rate of return. She had no confidence in CalPERS variables. WORKING MINUTES Page 24 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Rossmann commented that the 12 percent earnings effective in the prior fiscal year was incorporated in the valuation. CalPERS moved toward a closed amortization period because of the generational transfer. Council Member Berman inquired whether the table and chart on Packet Page 27 incorporated the 12.5 percent gains from fiscal year 2013. Mr. Rossmann answered yes. Council Member Berman anticipated the graph would change in the following year based on the mortality rate and the additional pension tiers. Incorporation of the additional tiers could offset the negative impact to the City. Mr. Rossmann added that gains and losses would also impact the City's rate. Council Member Berman asked who created the Employer's PERS Rates table. Mr. Rossmann stated CalPERS provided the table. Council Member Berman felt the table was misleading. The change row should be the percentage change from the previous year rather than the percentage change of the overall salaries for employees. Mr. Rossmann explained it was a percentage point change versus a percentage change. Council Member Berman remarked that the percentage point change was not clearly indicated. Mr. Rossmann will clarify the table in the future. Council Member Berman inquired whether people were expected to live shorter lives after 2041. Mr. Rossmann replied no. The five-year smoothing period was operationalized over 30 years. Any increases would be smoothed over 30 years. Council Member Berman believed the changes were responsible even though they would be detrimental to the City over the short term. Chair Burt was pleased that mortality assumptions improved. The report did not provide anticipated dollar impacts. WORKING MINUTES Page 25 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Rossmann noted financial impacts would be provided in the Long Range Financial Forecast. Chair Burt inquired whether Staff had a sense of the amount that Tiers 2 and 3 would offset other changes. Over time, Tiers 2 and 3 would have a greater impact. Mr. Perez reported CalPERS provided an estimate; however, Bartell agreed with Staff that utilizing the City's data to make projections would be more accurate. PEPRA stated that employees in Tier 3 would pay 50 percent of the normal costs up to the equivalent of other work groups. As the City transitioned to PEPRA, employees would pay 50 percent of that number. The City would not see an immediate impact. Chair Burt inquired about the impact to the City if Tiers 2 and 3 had not been implemented. Mr. Perez was unsure whether Bartell could provide that information; however, Staff would provide some information early in 2014. Council Member Schmid noted classic employees were placed in Tier 2 on both charts on Packet Page 26, and requested a definition of classic employee. Mr. Rossmann explained that a classic employee was one who had been employed previously with a public agency and who moved into Tier 2 rather than Tier 3. Council Member Schmid asked if new employees would increasingly move into Tier 3 in the future. Mr. Rossmann replied yes. Mr. Perez clarified that a classic employee had to be employed by another CalPERS agency within six months of leaving a CalPERS agency. If a classic employee was not hired by another CalPERS agency within six months, then the classic employee became a new PEPRA employee and moved into Tier 3. Council Member Schmid asked if the "new" employee would begin in Tier 3. Mr. Perez responded yes. Vice Mayor Shepherd asked what would happen if a Palo Alto employee moved to another agency and returned to Palo Alto two years later. WORKING MINUTES Page 26 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Perez explained that if the employee did not retire and did not work for another CalPERS agency, then the employee would move into Tier 3. Vice Mayor Shepherd asked if the employee would move into Tier 3 even though he was returning to the City where he was previously in Tier 1. Mr. Perez clarified that a returning employee would remain in Tier 1. Council Member Schmid believed unfunded accrued liabilities were the important element for the City. He asked how the City's rate was billed for an employee who left the City's employ. Mr. Perez indicated CalPERS tracked active, transferred, terminated, and retired employees. Council Member Schmid was concerned regarding the three categories of transferred, terminated, and retired employees. He asked how CalPERS treated those three categories when it changed the actuarial demographic assumptions. Mr. Perez reported those assumptions changed for everybody in the groups. The biggest concern for the City was a transferred member who moved to another agency and earned a higher wage. Council Member Schmid stated the City's rate could be influenced by a number of people in that category. Mr. Perez added that CalPERS made certain assumptions for that scenario, but the amount would not be exact. Council Member Schmid remarked that the City paid for the five years a 50- year-old employee worked for the City while the previous agency paid for the employee's first 20 years. Mr. Perez concurred that not all of Palo Alto's retirees worked their entire careers at Palo Alto. Council Member Schmid asked if Staff had a sense of the pension cost when they hired employees. Mr. Perez responded yes; however, that was not something Staff considered closely when reviewing job applications. Council Member Schmid referenced Packet Pages 57 and 61 regarding a contrast between the actuarial value and market value of assets. The market value was much lower than the actuarial value. As CalPERS moved WORKING MINUTES Page 27 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 to a five-year average, he assumed CalPERS would move the actuarial value closer to the market value. Mr. Rossmann answered yes. The 15-year smoothing period protected the actuarial value of assets. With a concern for accounting transparency, a greater discrepancy would not have occurred if pension plans had not changed their assumptions. Council Member Schmid expressed concern because CalPERS rates tended to swing widely with poor five-year periods. He inquired whether the City would be charged a higher rate if the value of assets declined. Mr. Perez explained that the unfunded liability increased because the market value of assets decreased. CalPERS would focus on a market basis. Council Member Schmid believed that would be to the City's disadvantage if CalPERS had wide swings in its portfolio. Mr. Perez concurred. It would be to the City's advantage if CalPERS exceeded the target. Council Member Schmid asked if CalPERS would decrease the City's rate in the years CalPERS exceeded the target. Mr. Perez replied yes. He asked CalPERS about the rate of return needed not to have a rate increase. CalPERS indicated a rate of 18 percent was needed in that case. Council Member Schmid noted CalPERS changed the rate of return to 7.5 percent and the City's actuary felt it should be 7.25 percent. He inquired whether CalPERS made any changes when it reviewed its investment portfolio. Mr. Perez understood the majority of comments at the CalPERS Board Study Session tended towards not making a change. The Board would vote in February; however, it did not appear the Board would make changes. The Board felt the mortality and smoothing changes were significant; therefore, there may not be a need to decrease the rate of return assumption. Council Member Schmid asked if Staff knew the actual CalPERS investments. Mr. Rossmann reported investment information was available on the CalPERS website. Council Member Schmid indicated the website did not state which equities CalPERS invested in. WORKING MINUTES Page 28 of 28 Finance Committee Meeting Working Minutes: 12/3/2013 Mr. Rossmann did not believe CalPERS would indicate specific investments. Council Member Schmid commented that traditionally CalPERS investments performed a bit better than the S&P 500 but recently had not performed as well. He wondered if CalPERS changed its strategy to incorporate less risk. Mr. Rossmann stated that the CalPERS Board chose two portfolio make-ups, both of which assumed the interest earning rate would be 7.75 percent, at the recent Study Session. The Board requested CalPERS staff to provide more detail about the make-ups. Council Member Schmid inquired whether not knowing the element of risk was good for people in the program. CalPERS did not seem to share that information. Mr. Perez suggested the City send a letter to CalPERS or an individual to comment at a Board meeting. Chair Burt did not wish to spend too much time analyzing the risk portfolio of CalPERS. If the Committee wanted to influence greater transparency, then he suggested the City attempt to gain support through the League of Cities. Council Member Schmid noted the City had $500 million in assets with CalPERS, and CalPERS had shown some tendencies toward risk. Gathering data about risk would be helpful. Chair Burt recommended the Committee become more informed and then discuss whether to collaborate with others to influence outcomes. FUTURE MEETINGS AND AGENDAS Lalo Perez, Director of Administrative Services and Chief Financial Officer, would present EMT fees, the CLEAN Program, and the Natural Gas Direct Access Program at the next meeting. In addition, Staff would present additional details regarding Fire Department overtime. Council Member Schmid inquired about the first Agenda Item. Mr. Perez explained the item was emergency response fees. The City performed a Cost of Service Study, and Staff wished to provide options for cost recovery. ADJOURNMENT: The meeting was adjourned at 10:00 P.M. City of Palo Alto (ID # 4419) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: Appeal of Tesla Sign Exception Title: Appeal of Director's Approval of a Sign Exception for a Wall sign at the Tesla Motors Dealership at 4180 El Camino Real From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that City Council deny the appeal by approving the consent calendar item, thereby upholding the Director’s decision to approve the Architectural Review/Sign Exception application subject to the conditions in the Record of Land Use Action (RLUA, Attachment A). Executive Summary The Council is tasked with final action on an appealed Director’s approval of a Sign Exception and Architectural Review application for the Tesla automobile dealership located at 4180 El Camino Real. The project includes a freestanding sign and a wall sign. These signs would be in addition to two (2) previously approved wall signs. The proposed project requires a sign exception for two reasons: 1) the combination of three walls signs and one freestanding sign is above the allowed combination of signs per Palo Alto Municipal Code (PAMC) Section 16.20.170, and 2) the proposed wall sign when added to the approved wall sign on the same facade would total 141 square feet, over the allowed 100 square feet. The Architectural Review Board (ARB) recommended approval of the freestanding sign and third wall sign on December 19, 2013, with a 3-1-1 vote. The appellant objects to the size of the proposed wall sign; the appellant did not object to the proposed freestanding sign. While the appellant is not appealing the first sign exemption (number of signs), in accordance with staff’s practice, the entire Architectural Review permit is brought to the Council for review. The staff report focuses on the single issue involved in the appeal – the size of the sign. Background City of Palo Alto Page 2 On December 23, 2013, after review and recommendation by the Architectural Review Board (ARB), the Director conditionally approved a Sign Exception and Architectural Review application (13PLN-00422) for two signs at the existing Tesla automobile dealership. On January 6, 2014, the Director extended the appeal period to January 10, 2014 in order to give neighbors additional time to review the project. On January 10, 2014, Joseph Hirsch, on behalf of Palo Altans for Sensible Zoning, submitted an appeal (Attachment B). Council Review Authority Pursuant to the Palo Alto Municipal Code (PAMC) Chapter 18.77.070, once the Director’s decision is made and an appeal is filed, the project is sent to Council on the consent calendar. In the case of Architectural Review applications, a minimum of three (3) council member votes are required to remove the project from the consent calendar. If the item is not removed from the consent calendar, the Director’s decision stands and no hearing is held. If the appeal is removed from the consent calendar, the City Council has two options: 1) it can review the appeal based solely on the evidence presented at the ARB hearing or 2) it can review the appeal “de novo” and allow more evidence to be submitted before or at the Council hearing. If the Council elects to hear the appeal based on the ARB record only, it can hear the matter this evening. If the Council elects to hear the appeal “de novo”, staff suggests continuing the item to allow for additional noticing. Architectural Review Board Recommendation and Director’s Approval At their December 19, 2013 hearing, the ARB formally recommended that the Planning Director approve the proposed sign exception with the clarification that the red background of the proposed wall sign need not be counted towards the total sign area. The ARB rightfully stated that the red background could have been painted on the building and therefore would not be counted towards the sign area. The ARB’s recommendation considered the size of the proposed wall sign to be the logo area, 32 square feet which, when added to the existing, installed sign on this façade would have equaled 57 square feet, well under the maximum allowed 100 square feet of sign area on one building wall, and not needing a sign exception for sign area. This recommendation by the ARB was made without consultation on the definition of ‘sign area’ contained in the Sign Code. Upon further review of the Sign Code, specifically PAMC Section 16.20.010, the Director determined that the sign area must include the red background of the proposed wall sign, given it meets the definition of “sign structure”. The Director’s approval (Attachment C), signed on December 23, 2014, therefore allows a sign exception for:  One wall sign area in excess of the allowed 100 square feet, and City of Palo Alto Page 3  A combination of three walls signs and one freestanding sign Discussion Joseph Hirsch, representing Palo Altans for Sensible Zoning, appealed the Director’s approval of a Sign Exception and Architectural Review for one freestanding sign and one additional wall sign along the El Camino Real elevations of the Tesla automobile dealership. The appellant is challenging the approval because he would like to see “the Sign Code strictly enforces in this instance, as there are no exceptional or extraordinary circumstances or conditions, or hardship that prevent the applicant from complying with the Sign Code, while retaining adequate signage for its business”. On October 3, 2013, approval was granted for the installation of two (2) exterior wall signs on the upper walls of the existing showroom building (App# 13PLN-00353) for the Tesla Motors automobile dealership. The two currently proposed signs could not be approved at that time as they would have exceeded the Sign Code limitation. The applicant then applied for this sign exception for consideration by the ARB. The Applicant’s project description is provided as Attachment D and summarized as follows: 1. Installation of (1) new Tesla Motors freestanding sign. The proposed sign would be built on an existing concrete slab location within the front setback of the property. The aluminum framed sign would be “neon red”, 8 feet 6 inches in height and 4 feett wide with an overall area of 40.63 square feet. The sign would have both the “Tesla” lettering and logo constructed of one inch thick white acrylic and would be internally illuminated with energy‐efficient LEDs. The sign itself would be 11 feet tall from grade and would have a total area of 70 square feet. 2. Installation of (1) new Tesla Motors Wall Sign. This red aluminum wall sign would have a one (1) inch deep white push thru acrylic logo. The logo would be internally illuminated with energy‐efficient white LEDs. The logo would be approximately 5 foot 8 inches by 5 foot 8 inches in size, while the red aluminum background would wrap around the wall and have a height of 15 feet 10 inches and a width of 7 foot 4 inches and be mounted to the existing building façade. The overall sign is 116 square feet. Applications for the location and construction of signs are typically classified as minor architectural review projects and reviewed at a staff level. However, requests for Sign Exceptions are required to be reviewed by the ARB, per PAMC Section 16.20.040 and can be appealed to the City Council. City of Palo Alto Page 4 The proposed project requires a sign exception for two reasons: 1) the combination of three walls signs and one freestanding sign is above the allowed combination of signs per Section 16.20.170 of the Sign Code, and 2) the proposed wall sign when added to the approved wall sign on the same facade would total 141 square feet, over the allowed 100 square feet. Sign Exception/ARB Findings In order for the Director to approve a sign exception, the following findings, set forth in PAMC 16.20.040, must be made: (1) There are exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district; (2) The granting of the application is necessary for the preservation and enjoyment of a substantial property right of the applicant and to prevent unreasonable property loss or unnecessary hardships; and (3) The granting of the application will not be detrimental or injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, general welfare or convenience. The appellant claims the Director cannot make the necessary findings for the proposed wall sign’s size as required by the Sign Code, which is further described below with responses. The RLUA (Attachment A) and Director’s approval letter (Attachment C) contain the requisite findings, tailored to this application. Appellant’s Comment: Our objection is to the excessively large Wall Sign facing traffic proceeding northbound direction past the dealership. In the December 19th meeting, the ARB made a determination in which the Wall Sign proposal of 116 square feet was arbitrarily reduced to 32 square feet, by not counting sign the board [red portion] but only the graphic portion [logo] as signage. This is in violation of the Palo Alto Sign Code under Section 16.20.010: "Sign area means and is determined as follows: [A] Where the lettered name or illustrated" [logo] "material of a sign is placed upon a sign board" [red background here] "or other sign structure having a continuous or essentially continuous surface or face (whether plane, curved, angulated or otherwise) the exposed surface or face area of such sign board or sign structure shall be the sign area." City of Palo Alto Page 5 This is a clear definition in the Sign Code that neither City staff nor ARB members referred to in reviewing this Wall Sign. Again, the ARB determined that a 116 square foot sign was square feet [no longer requiring an exception] and forwarded this on to the Planning Director with its recommendation for approval. On further review by the Planning Director it was determined that an Exception was required for the allowed Wall Sign and issued the approval letter on December 23, 2013. Staff Response: As noted above, after the Director had the benefit of reviewing the Sign Code sign area definition, she determined that a sign exception for sign area was required and therefore the project was approved based upon the original findings prepared by staff. Appellant’s Comment: We believe that the Planning Director's approval is in violation of the Sign Code. By approving the Wall Sign at 116 square feet and adding that square footage to the existing 25 square feet signage on the same wall, the Planning Director is, in essence, approving 141 square feet of signage on a single wall. This is in violation of the Sign Code under Section 16.20.130 [d] Wall Signs, which states: “Number. Subject to the provisions of Section 16.20.170, there may be any number of such signs for each building face, but in no case shall the total wall sign area for each face exceed that shown in Table 3.0 (Emphasis added) [100 square feet maximum is allowed for all signage on this wall per Table 3]. Staff Response: The appellant states that the request should be denied because it does not comply with the sign ordinance. However, the Sign Exception process is set forth in the Municipal Code (Chapter 16.20.040) to allow exceptions to the standard sign regulations, if the appropriate findings can be made. The RLUA contains the applicable Architectural Review and Sign Code findings in the affirmative as shown in Attachment A. Secondly, while the proposed sign is larger than the appellant would like, a sign exception and Architectural Review approvals have been granted for similar signs on the adjacent auto dealership property to the south, 4190 El Camino Real. In 2011, the Director approved the Fisker/McLaren automobile dealership Architectural Review and sign exception application, City of Palo Alto Page 6 allowing two additional wall signs for a total of four (4) wall signs and one freestanding sign along that dealership’s El Camino Real frontage. Appellant’s Comment: The staff prepared the following items for consideration before recommending approval of this Wall Sign for a Sign Exception. 1. Location of the property along a major thoroughfare/State Route 2. Location of the property in a commercial area 3. Good sign proportions of 1:2. Reducing the sign to less than 5 feet wide would have created a thin unbalanced element 4. The unique building design which limits the tenant's ability to take advantage of the 80 square feet of signage allowed along the front facade facing El Camino Real We object to these reasons for this Sign Exception, particularly item #4, as we believe that the Sign Code does not provide for applicants or others to allow signage square footage from one wall to be transferred to another wall for purposes of additional signage calculations. This limit is for a good reason, in that it insures compatibility and balance of wall signage for an overall successful signage program. Staff Response: As the appellant stated, the above items were taken into consideration when developing the required findings. While item #4 was noted in the ARB staff report, this rationale was not used to make the required findings. However, staff does maintain that the building configuration creates a unique condition that would limit the applicant’s ability to take advantage of the front wall sign where 80 square feet of sign area would be allowed. As shown in the attached photo, the granting of a sign exception has been requested to improve the visibility and viability of the automobile dealership, allowing motorists traveling in both directions on El Camino Real to easily locate the business, while maintaining mature street trees. Appellant’s Comment: The applicant could have presented signage of less than 75 square feet, which would not have required an exception to the Sign Code. Such a sign would be fully visible City of Palo Alto Page 7 to all when traveling in the northbound direction past the dealership (as is the logo with name Freestanding Sign). For example, a Sign Code-complying wall sign could have the same width, but be on the order of 10 feet (not 15 feet, 10 inches) high. Such a sign would be above any vehicle parked in front of the sign, whereas in contrast, the lower portion of the proposed Wall Sign would be visually obscured by any such vehicle thus reducing its effective size. All that would be deleted is 46sf of red background, hardly of any significant advertising significance. We ask that Council reverse the decisions of the ARB and the Planning Director and deny the approval for a Sign Exception and have the applicant return to the ARB with a presentation for a wall sign that fully complies with the Sign Code. Bottom line, we are asking that the Sign Code be strictly enforced in this instance, as there are no exceptional or extraordinary circumstances or conditions, for hardships, that prevent the applicant from complying with the Sign Code, while retaining adequate signage for its business. Staff Response: The height of the wall sign for which a Sign Exception is requested would have to be reduced by over 2.5 feet (i.e. 41 sf) in order to meet the maximum sign area allowed for one building wall. While it was the ARB’s opinion that the large red background of the sign could have just as easily been a building feature and therefore should not be counted towards the sign area (i.e. 32 sf sign), the Director reviewed the Code and considers the background material for the logo to be part of the sign. In the final approval this red background was counted as part of the sign area. Secondly, this project includes a Sign Exception for the proposed number of signs beyond the two allowed wall signs. Both the Director and the ARB agree that the installed wall signs approved in October 2013 are at a height best seen by automobile occupants, whereas the additional proposed wall sign and freestanding sign are lower to the ground and would be better seen by pedestrians and bicycle travelers. For all of the above reasons, the Director chose to approve the proposed sign exception on December 23, 2013. The number of signs will help facilitate better visibility for this uniquely situated and oddly- shaped building, allowing motorists traveling in both directions on El Camino Real to easily locate the business. The applicant is proposing a location determined to be the most visible for motorists and pedestrians traveling northbound on El Camino Real. Approval of the proposed signs would allow the tenants to benefit from having highly visible identification signs comparable to that of the neighboring automobile dealership. City of Palo Alto Page 8 The sign provides visual interest at a prominent location and serves to break up what would otherwise be a substantial building mass. The Director’s approval allows only the “push- through” logo portion of the sign to be illuminated. Unlike typical cabinet signs, the red background is required to be constructed of an opaque material to prevent light from showing through. The sign was carefully reviewed by the ARB and staff to ensure a high quality design befitting of this community. The wall could have been painted red, in lieu of the use of the cabinet material as background for the logo, creating the same effect but resulting in smaller sign area (only the logo). However, the applicant was not in favor of this alternative and the ARB did not feel it was the best treatment for this wall of the building. Resource Impacts The decision by Council to uphold the Director’s decision would not result in any cost and/or revenue impacts to the City. The appeal process and development review costs are recovered through permit fees. Policy Implications The proposed use is consistent with the Comprehensive Plan in that the proposed signage is for an automobile dealership use that is consistent with the site’s Service Commercial land use designation. The Architectural Review process ensures a quality of design that would comply with Comprehensive Plan policies. The project, as conditioned, is in general conformance with the Comprehensive Plan and supported Policy L-50. Policy L-50 encourages high quality signage design that is attractive, appropriate for the location and balances visibility needs with aesthetic needs. Environmental Review The project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) per Section 15303 (New Construction or Conversion of Small Structures) of the CEQA Guidelines. Courtesy Copies: Angela Wisco, Tesla Motors, 3500 Deer Creek Road, Palo Alto, CA 94304, awisco@teslamotors.com Attachments: City of Palo Alto Page 9  Attachment A: Record of Land Use Action (DOC)  Attachment B : Tesla sign exception appeal (PDF)  Attachment C: Architectural Review Board Approval Letter (PDF)  Attachment D: Project Location Map (PDF)  Attachment E: December 19, 2013 ARB Excerpt Minutes (DOC) 1 Attachment A APPROVAL NO. 2014-02 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 4180 EL CAMINO REAL (TESLA MOTORS DEALERSHIP): SIGN EXCEPTION AND ARCHITECTURAL REVIEW 13PLN-00422 (TESLA MOTORS, APPLICANT) On February 3, 2014, the Council approved an Architectural Review Application to allow installation of one 116 sq. ft. internally illuminated wall sign and one 40.63 sq. ft. internally illuminated freestanding sign for an existing commercial building, 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: B. On December 19, 2013, following the ARB’s recommendation for approval, the Director of Planning and Community Environment (Director) approved the request for a Sign Exception and Architectural Review permit to allow installation of one 116 sq. ft. internally illuminated wall sign and one 40.63 sq. ft. internally illuminated freestanding sign for an existing commercial building in the Service Commercial (CS(AD)) Zoning District located at 4180 El Camino Real(“The Project”). Notices of the Director’s decision were mailed out to notify neighbors of the decision. C. Within the prescribed extended timeframe, an appeal of the Director’s decision was filed by Palo Alto resident Joseph Hirsch. SECTION 2. Environmental Review. The project is exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15303. SECTION 3. Sign Exception Findings: The following findings have been made to support the sign exception request for one additional wall sign and one freestanding sign for the Tesla Motors Automobile, as modified by the ARB approval conditions. The specific exceptions that has been requested is for the following standards: Requested Sign Exceptions:  Allow a wall sign area in excess of allowed 100 square feet  Allow the combination of three walls signs and one freestanding sign 2 (1) There are exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district in that the building is located directly adjacent to the public sidewalk along a busy roadway. The proposed signage will provide additional appropriately scaled and designed signage for a large site and allow customers to easily identify the entry along this busy roadway. (2) The granting of the application is necessary for the preservation and enjoyment of a substantial property right of the applicant and to prevent unreasonable property loss or unnecessary hardships in that the visibility of signage is important for a retail business to be easily identifiable and to attract customers. Because the building is located directly adjacent to the public sidewalk, along a very busy roadway, there is limited visibility for typical signs. The proposed signs have been carefully designed for compatibility with the buildings and were reviewed and found consistent with the Architectural Review findings as required by the Municipal Code. (3) The granting of the application will not be detrimental or injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, general welfare or convenience in that the placement and appearance of the proposed signs do not pose safety hazards nor do they detract from the subject building or surrounding properties. The signs will not be detrimental to public health, safety, general welfare or convenience. They will be securely placed in a location that will not result in conflicts with pedestrians, drivers, occupants, visitors or employees. SECTION 4. Architectural Review Findings: The design and architecture of the proposed improvements, as conditioned, complies with the Findings for Architectural Review as required in Chapter 18.76 of the PAMC. (1) The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan. This finding can be made in the affirmative in that the project incorporates quality design that conforms to Comprehensive Plan policies that encourage high quality signage that is attractive, appropriate for the location and balances visibility needs with aesthetic needs. 3 (2) The design is compatible with the immediate environment of the site. This finding can be made in the affirmative in that the proposed sign designs are appropriate for the automobile dealership setting near a busy intersection on a major thoroughfare. The project is generally consistent with the 1979 El Camino Real Design Guidelines and the 2002 South El Camino Real Design Guidelines, which address development of sites on El Camino Real. (3) The design is appropriate to the function of the project. This finding can be made in the affirmative in that the signs are not excessive for the intended use. (4) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. This finding is not applicable to this project. (5) The design promotes harmonious transitions in scale and character in areas between different designated land uses. This finding is not applicable to this project. (6) The design is compatible with approved improvements both on and off the site. This finding can be made in the affirmative in that the project, with its scale and design, is compatible with the existing building and the built environment on surrounding commercial sites. (7) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community. This finding is not applicable to this project. (8) The amount and arrangement of open space are appropriate to the design and the function of the structures. This finding is not applicable to this project. (9) Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project’s design concept. This finding is not applicable to this project. (10) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. The proposed signage will ensure visibility of the business which will service to provide safe and convenient circulation for employees and customers. (11) Natural features are appropriately preserved and integrated 4 with the project. This finding is not applicable to this project. (12) The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function. This finding can be made in the affirmative, see Findings 2, 3, and 4 above. (13) The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment. This finding is not applicable to this project. (14) Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant to reduce consumption of water in its installation and maintenance. This finding is not applicable to this project. (15) The project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. This finding is not applicable to this project. The scope of the project is small and there is limited opportunity to incorporate green building design into the sign installations. (16) The design is consistent and compatible with the purpose of architectural review as set forth in subsection 18.76.020(a). This finding can be made in the affirmative in that the project design promotes visual environments that are of high aesthetic quality and variety. SECTION 5. Sign Exception and Architectural Review Permit Granted. Sign Exception and Architectural Review Approval is hereby granted for the Project by the City Council pursuant to Chapter 18.77 of the Palo Alto Municipal Code SECTION 6. Plan Approval. The plans submitted for Building Permit shall be in Substantial conformance with those plans received on October 10, 2013, except as modified to incorporate the conditions of approval in Section 7. SECTION 7: Conditions of Approval. Planning Division 5 1. The project shall be in substantial conformance with the approved plans and related documents received October 10, 2013, except as modified to incorporate these conditions of approval. 2. The Conditions of Approval document shall be printed on all plans submitted for building permits related to this project. 3. The wall sign shall have a maximum height of 15 feet 10 inches and a width of 7 foot 4 inches, be mounted to the existing building façade, and have a maximum overall sign area of 116 square feet. 4. The freestanding sign shall be a maximum height of 8 foot 6 inches and a width of 4 foot wide with an overall square footage of 40.63 square feet. 5. Both signs shall be internally illuminated with energy‐efficient white LEDs. Only the white acrylic portions of the signs shall be illuminated. The red background of the signs shall be solid aluminum and therefore non-illuminated. 6. For any future changes to the sign content, an Architectural Review application must be filed for review and approval. 7. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. 6 SECTION 7. 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. SECTION 8. Indemnity. 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 its actual attorney’s 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. SECTION 9. Term of Approval. Sign Exception and Architectural Review Approval. The approval shall be valid for one year from the original date of approval, pursuant to Palo Alto Municipal Code Section 18.77.090. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney CITY OF PALO ALTO I .. 'CO P t, i (J ,\ iJ [), yl ~,t7 OffIce oftha City CtBlk I Received ~. JAN 1 tll'n~4 lnl\ JCu!R!\'S OFFll;E". APPEAL FROM THE DECISION OF DIRECTOR OF PlANNIN'G , ANDCOMMllNII'LENIlIRONMEm' • D&fjal'l<l'enl of P);:mlmg-----~I~l,JM') ~oPa~!~1s ~ifi~a~decisions on Architectural Review Board and Home Improvement Exception lic~t~~~~~~:~,:;~;o;~::nl hearing), this appeal form shall be oompleted and submitted by appellant \Whin fourteen days from date of lhe Directors decillion IIppeels of final decisions on Individual Review applications (rendered after public healing) must be submitted within ten days of the Directo(s decision. Complete form, the current fee and a letter stating reasons for the appeal shall be submitted to front desk staff of the Planning Division, 5~ Roor, Cily Hall, 250 Hamllon Avenue, except for 980 Fridays when Cily Hall is clased, when Ihosa items shall be submiUed to Planning staff at the Development Center, 265 Hamilton Avenue (glass storefront across from City Hall on the corner of Bryant and Hamilton). 'DirectorofPlanning includes his designees, which are Planning Managers or the Chief Planning Official IIppeslllpplicalion No. ,,~PtN-66422 jo N: -0 I. Receipt No._ .......• -::-;;; __ ---,-~ Palo Altans for Senslble lomng Phone(650 493-9169 Name of IIppeliant ____ .,..----::-~________ } Address c/o 4149 Georgia Avenue Palo Alto, CA 94306 Street Cily ZIP LOCATION OF PROPERTY SUBJECTTO APPEAL: Street Address 4180 El Cami no Real Tesla Motors, Inc. Name of Property Owner (if other lIran appellant) _-:--:::---:_ .... .--,,;-:;:-::-.,.... __ . _______ _ 3500 Deer Creek Road Palo Alto, CA 94303 Properly Owne(sAddress ______ .",--,-_________ -= ......... _.~ .... . Sheet City ZIP The decision of the Director or Planning and Community Environment dated pecember 23 2O . .::1.::.3~_ 13PLN-00422 by David McVey of Tesla Motors OBO PETER Mullen whereby the apj;lica!ion ~_~ __ _ (tle number) (original project applicant) was approved • is hereby appealed for the reasons stated in Ihe attached letter (in dlJplicate) (approvedidenied) Dille: Janua ry 10. 2~~re of Appellan!_:--."..:;4.~'t:t.~~~~~=__=;;;_,,='" Jo PlANNING COMMISSION RECOMMENDATION TO THE CITY COUNCIL (TO BE FI.LEO OUT BY STAFF}. Approved Remarks and/or Conditions: CITY COUNCIL DECISION (TO BE FILLED OUT BY STAFFt. IIpproved Remarks and/or Conditions: SUSMITT AL REQUIREMENTS SATISFIED 1. 2. Letter slaD09 reasons for appeal _ __~ Fee (currenUy $406.00) Denied -- Receivedby: ______________ _ Receivedby:_ ... ___________ _ ReGf~i)(f0d j,~N 1 d);"i! Date: January 10, 2014 DepartmsPi of P"<~nnltlg ___ ---.op=-:c=:o:--;;-;;:=-;~~=~;_::=~=_-----------~&IrlC300mmullily 'ii1nvlronmenl To: Palo Alto City Council Members Subject: 4180 EI Camino Real Tesla Motors Sign Exception [13PLN-00422] We hereby appeal the ARB recommendation of approval and the Planning Director's < approval for an Exception to the Palo Alto Sign Code of a proposed wall sign (Wall Sign) at the Tesla Motors dealership at 4180 EI Camino Real. On December 19, 2013, Tesla Motors requested a Sign Exception for one Freestanding Sign and one Wall Sign before the Architectural Review Board. An exception was allowed for the Freestanding Sign (logo with the name Tesla on a red background), notwithstanding that the Freestanding Sign was installed before the ARB hearing and remains installed as of this date, even though the applicant has no final approval that permits its installation. The existing TESLA wall sign in combination with (a) a red logo wall sign next to the TESLA wall sign and (b) the Freestanding Sign provide more than ample signage for the Tesla Motors dealership for traffic proceeding in the southbound direction past the dealership. The red logo with name Freestanding Sign is also highly visible to traffic proceeding in the northbound direction. Our objection is to the excessively large Wall Sign facing traffic proceeding in the northbound direction past the dealership. In the December 19th meeting, the ARB made a determination in which the Wall Sign proposal of 116 square feet was arbitrarily reduced to 32 square feet, by not counting the sign board [red portion] but only the graphic portion [logo] as signage. This is in violation of the Palo Alto Sign Code under Section 16.20.010: ·Sign area means and is determined as follows: [A] Where the lettered name or illustrated" [logo] "material of a sign is placed upon a sign board" [red background here] "or other sign structure having a continuous or essentially continuous surface or face (whether plane, curved, angulated or otherwise) the exposed surface or face area of such sign board or sign structure shall be the sign area." This is a clear definition In the Sign Code that neither City staff nor ARB members referred to in reviewing this Wall Sign. Again, the ARB determined that a 116 square foot sign was 32 square feet [no longer requiring an exception] and forwarded this on to the Planning Director with its recommendation for approval. On further review by the Planning Director it was determined that an Exception was required for the allowed Wall Sign and issued the approvallettar on December 23,2013. We believe that the Planning Director's approval is in violation ofthe Sign Code. By approving the Wall Sign at 116 square feet and adding that square footage to the existing 25 square feet signage on the same wall, the Planning Director is, in essence, approving 141 square feet of signage on a single wall. 1 This is in violation of the Sign Code under Section 16.20.130 [d] Wall Signs, which states: "Number. Subject to the provisions of Section 16.20.170, there may be any number of such signs for each building face, but in no case shall the total wall sign area for each face exceed that shown in Table 3." (Emphasis added) [100 square feet maximum is allowed for all signage on this wall per Table 3]. The staff prepared the following items for consideration before recommending approval of this Wall Sign for a Sign Exception. 1. Location of the property along a major thoroughfare/State Route 2. Location ofthe property in a commercial area 3. Good sign proportions of 1 :2. Reducing the sign to less than 5 feet wide would have created a thin unbalanced element 4. The unique building design which limits the tenant's ability to take advantage of the 80 square feet of signage allowed along the front facade facing EI Camino Real We object to these reasons for this Sign Exception, particularly item #4, as we believe that the Sign Code does not provide for applicants or others to allow signage square footage from one wall to be transferred to another wall for purposes of additional sign age calculations. This limit Is for a good reason, in that it insures compatibility and balance of wall slgnage for an overall successful slgnage program. This applicant has had the opportunity from the beginning of the design process to have their sign professionals create signage that Is in full compliance with the Sign Code. Simply stated, there are no exceptional or extraordinary circumstances or conditions, or hardships, that would have prevented the applicant from having adequate slgnage for its business while COmplying with the Sign Code. The existing TESLA wall sign on the same wall (where it can readily be seen when going in the northbound direction) is considered 'primary signaga', in that it identifies the business name. It is 25 square feet. The applicant presented the Wall Sign of 116 square feet, knowing that it exceeded what is allowable under Table 3 and requested an exception. The Wall Sign [with logo only] Is considered 'secondary signage'. The applicant could have presented signage of less than 75 square feet, which would not have required an exception to the Sign Code. Such a sign would be fully visible to all when traveling in the northbound direction past the dealership (as is the logo with name Freestanding Sign). For example, a Sign Code-complying wall sign could have the same Width, but be on the order of 10 feet (not 15 feet, 10 Inches) high. Such a sign would be above any vehicle parked in front of the sign, whereas in contrast, the lower portion of the proposed Wall Sign would be visually obscured by any such vehicle thus reducing its effective size. All that would be deleted is 46sf of red background, hardly of any Significant advertising Significance. We ask that Council reverse the decisions of the ARB and the Planning Director and deny the approval for a Sign Exception and have the applicant return to the ARB with a presentation for a wall sign that fully complies with the Sign Code. 2 ~~~~~~IBottmrrllne, we are asKlnjJlfiiif1lie1)igil Code be strictly enforcel'lln this instance, as there are no exceptional or extraordinary circumstances or conditions, pr hardships, that prevent the applicant from complying with the Sign Code, while retaining adequate signage for Its business. . Sincerely oe Hirsch ~ ~~~ 'f6mDuBois Concerned Residents 3 Bottom line, we are asking that the Sign Code be strictly enforced in this instance, as there ~~~~~iir~no~xceptiona~{)FextFaoFdinary-GirGumstanGes-or--Gonditions,or-hardships,tllat-prevent-t ~~~­ the applicant from complying with the Sign Code, while retaining adequate signage for its business. 3 RE: City of Palo Alto -Tesla Sign Exception process http://webmail.c.earthlink.netlwam/printable.jsp?msgid=53 887 &x= ... RE: City of Palo Alto -Tesla Sign Exception process ;f, 7';' ~ 7D From: "Gerhardt, Jodie" <Jodie.Gerhardt@CityofPaloAlto.org> To: brian susan anuskewicz Cc: "jihirschpa@earthlink.net" <jihirschpa@earthlink.net>, Tom DuBois <tom.dubois@gmail.com>, "Gitelman, Hillary" <Hillary. Gitelman@CityofPaloAlto.org> Subject: RE: City of Palo Alto -Tesla Sign Exception process , Date: Jan 6, 2014 1 :04 PM Attachments: 4180 ECR -signed approvalletter.pdfTESLA Palo Alto CA 09-18-13 plan set.pdf Clean false false false EN-US X-NONE X-NONE Mr. Anuskewicz and all, Attached is the requested approval letter for the sign exception at 4180 EI Camino Real. Based upon the attached staff report and findings ( http://www.cityofpaloalto.org/civicax/(ilebank /blobclload.aspx?BlobID=38230 ) the subject sign exception was recommended for approval at the ARB's December 19, 2013 public hearing. The Director approved the proposed sign exception on December 23, 2013. This approval letter was mailed to all neighbors within 1200 feet of the subject site. However, given the holidays I was not able to email the letter to you as the City promised. The Director has therefore chosen to extend the appeal period to 5:00pm on Friday, January 10th• Unless an appeal is filed in accordance with Code Section 18.77.070, this project approval will be effective on January 11, 2014. If you would like to file a formal appeal, fill out the attached form ( http:Uwww.citvofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=6490 ) and submitted it to the Planning Department located on the 5th floor of City Hall at 250 Hamilton Avenue. As always, please let me know if you have any additional questions. Sincerely, Jodie Gerhardt, AICP Senior Planner for City of Palo Alto Phone: 650-329-2575 E-mail: jodie.gerhardt@cityofpaloalto.org Parcel Report are now available online and in real timel!l Please visit the following webpage - http://www.cityofpaloalto.org/gov/depts/pln/parcel.asp For information on pending Planning applications, please visit the City's webpage - htlp:llwww.citvofpaloalto.org/planningprojects From: brian susan anuskewlcz [mailto:basdesigns@icloud.comj Sent: Sunday, January 05,20143:44 PM To: Gitelman, Hillary; Gerhardt, Jodie December 23,2013 David McVey 3500 Deer Creek Road Palo Alto, CA 94034 ) ) G~ of Palo Alto Department of Planning and Community Environment -------------'----------------------------------------------- Subject: 4180 El Camino Real (Tesla Motors); 13PLN-00422 Dear Mr. McVey: On December 19,2013, the Architectural Review Board recommended approval of the application referenced above and as fjrrther described below the Director of Planning and Community Environment approved the project on December 23,2013. The approval will become effective 14 days frQm,!he,,::p{).st~at:k~~te of this letter, unless an appeal is filed in accordance with Title 18 of the Palo AI19 ,¥t1hi~!PAl,@O'Clei; ':Pheap,pr~y~l~was based on the findings in Attachment A and B, and is subject to st~fr"-r~G0nttfiended o&>nditiol)s;, of appro\"ta1"ae:'q"additional conditions as noted in AttachmenrC. "" ' 4180 El Camino Real (13PLN-00422): R~('l~~,st;by ~avid .Mc~ey~,9.J,.,Iesla:M~l.~fs,o~.g~b.al(:i?fP6ter Mullen for a sign exception to allow the .~J1s~~nation o'~gJl~;'.fr~~stahdi!Jl~ si~,.,_~(!:':9nef~alrs~gp.along the EI . Camino Real elevations( s) of the new 1;~sl~{Mqtors Autoijlobile':Qealershlp. ~nvlr'orirnet1t&l As:~e,ssmel1t;" - Exempt per Section 15303. Zoning: ~'S,~tS~~¥i~:~; Co~~rcl~}:/' : "'\\"f': "'."" Unless an appeal is filed, this projeGf;p7~~J!\ Shal1~~ife~tive for one year f!'o~,January 7, 20 14: ~\vhi«~ time construction of the project shalf have Corl1l1}~ri.ce,l Application for extensi~n may be made p;i~r,,~td" the' expiration on January 7, 2015. ~~,itime::p,e~odfor a,:project may be extend~ oilcefor an additional yeru: by tl1e : Director of Planning and shall be.91ien:J9 appear at t~at time. In the event the b.uilding permit is not secut~d f~r the project within the time limits~p~ci:(ted a~pve, th~ Architectural Review.Bo~d approval shall expire and;·be of no furtherforce or effect. ShoulQ¥pu &~M~;cafiy tque~tions regarding this ~ a~tibn, please do not hesitate t6 call the project planner, lodie Gerhardt, AICP at (~50) 329-2575. .' , Hi~ ". ..... Direct r of Planning and Community'pl1yironment", Attachments: A: ARB Findings B: Sign Exception Findings C: Conditions of Approval ," .,: . ,'.,' ," cc: Peter Mullen, 1117 S. Bernardo Avenue, Sttimyvtde,.CA9,4987 Printed with soy-based inks on 1000/0 recycled paper processed without chlorine 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 6503292441 6503292154 ) ATTACHMENT A DRAFT FINDINGS FOR APPROVAL ARCHITECTURAL REVIEW BOARD STANDARDS FOR REVIEW 4180 El Camino Real [13PLN-00422] ~ ...... ~--IhaJiesign_aruLarchitecture_of_the_pr.opos.elLproj.e~ct,_asc.onditioned,_~Qmplitlswithth--.eJjndings_ ~ __ ~ ____ . __ for Architectural Review as required in P AMC Chapter 18.76. (1) The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan. This finding can be made in the affirmative in that the project incorporates quality design that conforms to Comprehensive Plan policies that encourage high quality signage that is attractive, appropriate for the location and balances visibility needs with aesthetic needs. (2) The design is compatible with the immediate environment of the site. This finding can be made in the affirmative in that the proposed sign designs are appropriate for the automobile dealership setting near a busy intersection on a major thoroughfare. 'The project is generally consistent with the 1979 El Camino Real DesignO:uidelines and the 2002 South El Camino Real Design Guidelines, which address development of sites on El Camino Real. (3) The design is appropriate to the/unction of the project. 'This finding'can be made;itith~ affirmative in that the signs are not excessive for the intended use. (4) In areas considered by the board as having a unified desig~ character'·or.,hl'sioriccU character, the design is compatible with such character. This t1ndi~g 'is • nbt 'appltdible to this project. . '. ;:'. ,-.. : ! (5) The design promotes harmonious transitions in scale and character .in areas between different designated land uses. This finding is not applicable to this project. (6) The design is compatible with approved improvements both on and off the site. ' This finding can be made in the affirmative in that the project, with its scale and design, is compatible with the existing building and the built envirOninent on ,surrounding commercial sites. (7) The planning and siting of the various functions and buildings on the Site;.create ,an internal sense of order and provide a desirable environment for occupants, visitors and the general community. This finding is not applicable to this project. (8) The amount and arrangement of open space are appropriate to: the design 'and (he function of the structures. This finding is not applicable to this project.·,· ' (9) Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project's design concept. This finding is not applicable to this project. Page 1 of2 ) y ATTACHMENT A (10) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. The proposed signage will ensure visibility of the business which will service to provide safe and convenient circulation for employees and customers. (11) Natural features are appropriately preserved and integrated with the project. This ___ ~fm=d=i=n,g is not a1212licable to this 12roject. ________________________________ _ (12) The materials, textures, colors and details of construction and plant material are appropriate expression to the design and function. This fmding can be made in the affirmative, see Findings 2, 3, and 4 above. -(13) The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment. This finding is not applicable to this project. (14) Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tentito be ;drC!ugh,t-.r~sistant to reduce consumption of water in its installation and maintenance~ . This finding. ,isIlot applicable to this project. . (15) The project exhibits green ·building and sustainable design ·that is energy effiCient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. This finding is not applicable to this project. The scope of the project is small and there is limited opportunity to .incorporate green building design into the sign installations. .. (16) The design is consistent and compatible with the purpose of architectural review as set forth in subsection 18. 76.020(a). This finding can be made in the affirmative jn that the project design promotes visual environments that are of high aesthetic quality aIld variety. Page 2 of2 ) DRAFT FINDINGS FOR APPROVAL SIGN CODE EXCEPTION 4180 El Camino Real [13PLN-00422] A. tACHMENT B The following findings have been made to support the sign exception request for one additional wall sign and one freestanding sign for the new Tesla Motors Automobile Dealership, as modified by the ARB approval conditions. The specific exceptions that have been requested are for the following standards: Requested Sign Exceptions: .• Allow a wall sign area in excess of allowed 100 square feet • Allow the combination of three walls signs and one freestanding sign (1) There are· exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district in that the building is located directly adjacent to the public sidewalk along a busy roadway. The proposed signage will provide additional appropriately scaled and designed signage for a large site and allow customers to easily identify the entry along this busy roadway. (2) The granting of the application is necessary for the preservation and enjoyment of a substantial property right of the applicant and to prevent unreasonable property loss or unnecessary hardships in that the visibility of signage is important for a ret~il business to be easily identifiable and to attract customers. Because the building is located directly adjacent to the public sidewalk, along a very busy roadway, there is limited visibility for typical signs. The proposed signs have been carefully designed for compatibility with the buildings and were reviewed and found consistent with the Architectural Review findings as required by the Municipal Code. (3) The granting of the application will not be detrimental or injurious to property or ~. improvements in the vicinity and will not be detrimental to the public health, safety, general welfare or convenience in that the placement and appearance of the proposed signs do not pose safety hazards nor do they detract from the subject building or surrounding properties. The signs will not be detrimental to public health, safety,· general welfare or convenience. They will be securely placed in a location that will not result in (j conflicts with pedestrians, drivers, occupants, visitors or employees. ) DRAFT CONDITIONS OF APPRO'/AL 4180 EI Canlino Real [13PLN-00422] P-L---A-N-NING&~COMMB-NI-T~Y-E-NVIReN-M-E-N'I'-- ) ATTACHMENT C On December 19, 2013 the Architectural Review Board (ARB) recommended approval of the application referenced above, and the Director of Planning and Community Environment (Director) approved the project on December 23, 2013. Project Planner: Jodie Gerhardt, AICP Planning Division 1. The project shall be in substantial conformance with the approved plans and related documents received October 10, 2013, except as modified to incorporate these conditions of approval. 2. The Conditions of Approval document shall be printed on all plans submitted for bUilding permits related to this project. 3. The wall sign shall have a maximum height of 15 feet 10 inches and a width of 7 f.oot 4 inches, be mounted to the· existing building fa~ade, and have a maxif!1um overal1\ sigl1 area of 116 square feet. 4. The freestanding sign shall be a maximum height of 8 foot 6 inches and a width of 4 foot wide with an overall square footage of 40.Q3 square feet. 5. Both signs shall be internally ilhuninated with energy-efficient white LEDs. Only the white acrylic portions of the signs shall be illuminated. The red background of the signs shall be solid aluminum and therefore non-illuminated. 6. For any future changes to the sign content, an Architectural Review application must be filed for review and approval. 7. The project approval shall be valid for a period of one year from the original date of approval. In the event a building permit(s), if applicable, is not secured for the project within the time limit specified above, the ARB approval shall expire and be of no further force or effect. Application for extension of this entitlement may be made prior to the one year expiration. Page 1 of 1 ) 37-25-033 137-25-013 137-25-006 137-25-132 137-25-094 137.0' 46.2' 137.0' 46.2' 137.0' 46.2' 137.0' 46.2' 137.0' 46.3' 137.0' 46.3' 137.0' 46.2' 46.2' 119.0' 119.0' 46.2'0' 119.0' 60.0' 46.2' 125.0' 46.2' 125.0' 46.2' 125.0' 46.2' 125.0' 60.0'125.0' 60.0' 125.0' 46.2' 125.0' 125.0' 46.3' 125.0' 46.3' 46.2' 125.0' 46.2' 125.0' 48.5' 99.2' 48.5' 99.2' 38.5' 84.2' 38.5' 84.1' 38.5' 84.1' 38.5' 84.2' 42.2' 110.1' 42.2' 110.2' 42.2' 38.5' 84.2' 38.5' 84.2' 38.5' 84.2' 48.5' 99.1' 48.5' 99.1' 46.2' 119.0' 46.2' 119.1' 52.0' 77.0' 15.0' 48.5'22.0' 48.5' 15.0' 77.0' 46.3' 119.0' 46.2' 119.0'4192 550 544 540 541 549 538 531 535 539 4175 4 2 0 0 532 530 4190 4180 4170 4156 4158 4160 4159 419 4191 4155 41574153 4173 527 536 529 531 4193 4198 4100 IRVEN COURT E L C A M I N O R E A L E L C A M I N O R E A L MAYBELL AVENUE INTERDALE WY This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Historic Site Special Setback Near Creek (SCVWD) Curb Edge Sidewalk Tree (TR) abc Known Structures Underlying Lot Line abc Easement abc Lot Dimensions Water Feature Railroad 0' 96' 4180 El Camino Real CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2014 City of Palo Alto jgerhar, 2014-01-16 15:50:09Parcel Report (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) City of Palo Alto Page 1 1 =================MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 26====================== 2 Thursday, December 19, 2013 3 REGULAR MEETING - 8:30 AM 4 City Council Chambers, Civic Center, 1st Floor 5 250 Hamilton Avenue 6 Palo Alto, CA 94301 7 ROLL CALL: 8 Board members: Staff Liaison: 9 Lee Lippert (Chair) Russ Reich, Senior Planner 10 Randy Popp (Vice Chair) 11 Alexander Lew Staff: 12 Clare Malone Prichard Diana Tamale, Administrative Associate 13 Robert Gooyer Amy French, Chief Planning Official 14 Jodie Gerhardt, Senior Planner 15 Clare Campbell, Planner 16 Margaret Netto, Contract Planner 17 18 PROCEDURES FOR PUBLIC HEARINGS 19 Please be advised the normal order of public hearings of agenda items is as follows: 20  Announce agenda item 21  Open public hearing 22  Staff recommendation 23  Applicant presentation – Ten (10) minutes limitation or at the discretion of the Board. 24  Public comment – Five (5) minutes limitation per speaker or limitation to three (3) 25 minutes depending on large number of speakers per item. 26  Architectural Review Board questions of the applicant/staff, and comments 27  Applicant closing comments - Three (3) minutes 28  Close public hearing 29  Motions/recommendations by the Board 30  Final vote 31 32 ORAL COMMUNICATIONS. Members of the public may speak to any item not on the 33 agenda with a limitation of three (3) minutes per speaker. Those who desire to speak must 34 complete a speaker request card available from the secretary of the Board. The Architectural 35 Review Board reserves the right to limit the oral communications period to 15 minutes. 36 37 APPROVAL OF MINUTES. 38 None. 39 40 Attachment E ARCHITECTURAL REVIEW BOARD AGENDA City of Palo Alto Page 2 AGENDA CHANGES, ADDITIONS AND DELETIONS. The agenda may have additional 1 items added to it up until 72 hours prior to meeting time. 2 3 CONTINUED BUSINESS: 4 5 Major Review: 6 7 1. 2209-2215 El Camino Real [13PLN-00396]: Request by Karen Kim on behalf Tai Ning 8 Trading & Innovations Co. for Major Architectural Review of a new 8,560 sq. ft. three story, 9 mixed use development on a 5,392 square foot lot to replace 3,803 sq. ft. of floor area in 10 restaurant and retail use. Zone District: CC(2). Environmental Assessment: Exempt from the 11 provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 12 15332. The plans for this project have been modified to the extent that this description is 13 no longer accurate. A new notice will be published for an ARB hearing in January 2014. 14 15 NEW BUSINESS: 16 17 Minor Reviews: 18 19 2. 103 El Camino Real (El Camino Park) [13PLN-00434]: Request by City of Palo Alto Public 20 Works Engineering for Architectural Review of El Camino Park improvements that include a 21 synthetic soccer/lacrosse play field, natural turf softball/lacrosse play field, new restrooms, and 22 an enlarged parking lot. Zone District: Public Facility. Environmental Assessment: An 23 Environmental Impact Report was adopted March 5, 2007 in accordance with the California 24 Environmental Quality Act (CEQA). 25 26 3. 4180 El Camino Real [13PLN-00422]: Request by David McVey of Tesla Motors on behalf of 27 Peter Mullen for Architectural Review of and Sign Exception for one freestanding sign and one 28 wall sign. Zone District: CS. Environmental Assessment: Exempt from CEQA. 29 30 Chair Lippert: Item Number Three, 4180 El Camino Real, request by David McVey of Tesla Motors on 31 behalf of Peter Mullen for Architectural Review of and Signage Exception of what? That’s not good 32 grammar there. And Sign Exception for one freestanding sign and one wall sign. Zone District: CS. 33 Environmental Assessment: Exempt from California Environmental Quality Act (CEQA). And the 34 staff planner is Ms. Gerhardt. So if you’d like to introduce the project? 35 36 Jodie Gerhardt, Senior Planner: Yes, thank you Chair. The Tesla Motors automobile dealership is 37 located on the South side of El Camino Real between Maybell Avenue and Arastradero on a site of 38 approximately 1.41 acres. Prior to this hearing in October of this year staff approved the installation of 39 City of Palo Alto Page 3 two wall signs on the upper walls of the existing showroom building. The current proposal is for one 1 freestanding sign and one additional wall sign. The proposed freestanding sign if looked at individually 2 would comply with the sign code whereas the wall sign would be over the maximum allowed sign area 3 allowed for this frontage. And the signs together in combination are over the allowance in the sign 4 code. Therefore the proposed project does require approval of the Sign Exception and staff would 5 appreciate any refinements the Architectural Review Board (ARB) thinks would improve the proposed 6 project. Thank you. 7 8 Chair Lippert: Great, thank you. And the applicant you will have ten minutes, but I don’t think you 9 need to use it all if you wouldn’t, if you’d try to abbreviate things it would be great. 10 11 Kristy Ortens, Tesla Motors: Kristy Ortens with Tesla Motors and as you are aware we did open up this 12 showroom on El Camino and we’re very excited to be in town next to our headquarters. And so I’m 13 just going to walk through a little bit of what it is we’re proposing and why we’re proposing it. Let’s 14 see… I won’t go too much into who we are. I imagine most of you know that we are an electric vehicle 15 company and one of the reasons why we’re asking for additional signage is because our only form of 16 marketing is our car and is our showrooms. So to us it’s very important to get our brand out there and 17 in order to do that we found we needed to add some additional signage to this building. As stated we 18 are asking for an additional wall sign and we’re asking for a freestanding sign, a monument sign so that 19 you can see that on El Camino. 20 21 Quickly this is our building on El Camino and right now we have signage on the north and on the south 22 side. We opted not to put any signage on the front. We didn’t find that that was of much use to us 23 because you can’t really see it when you’re on the road. Currently on the south side all we have is a 24 [wordwark] with the word Tesla. This is what we got approved and we would like to add a little bit 25 City of Palo Alto Page 4 more to the side of the building so that when you’re coming down the highway you would see our red 1 logo. So the entire signage exceeds the code requirements, but if you were to take just the logo itself it 2 does comply within the code. I mean for us we kind of took a look at the red part of it as an extension 3 of the building and then the logo as the signage, but if you take a look at the entire thing as signage we 4 do exceed the code. And then on the north side we also have a [wordmark] with a smaller Tesla logo 5 and we would like to add a monument sign mostly for directional use. There’s a lot of driveways on 6 this, I mean along El Camino and for us this really is where the customer is supposed to be coming in, 7 coming in dropping off their car for service or parking to come into our showroom. So for us it’s very 8 important for us to have this monument sign so that the customers understand where to come in and out 9 of the building. And that in short is what we’re asking for. 10 11 Chair Lippert: Well we’ll have some questions for you. This is the time for the public hearing. 12 Members of the public who wish to speak to this item may do so at this time. Are there any members 13 of the public who wish to speak? 14 15 Jennifer Landesman: Should I go now? 16 17 Chair Lippert: Let me… ok. Jennifer Landesman? 18 19 Ms. Landesman: Yes. Thank you. 20 21 Chair Lippert: If you kindly introduce yourself you’ll have five, three minutes. 22 23 Ms. Landesman: Sure. Jennifer Landesman, I’m a resident of Palo Alto and I want to ask you to please 24 forgive me. I don’t have all the details about everything. Last meeting I was here to oppose an 25 City of Palo Alto Page 5 exception for a building height and when I’d read about it, it said it was going to go over by ten and 1 when I was here it was just three. So it sounded like whatever I was saying was really ridiculous, it’s 2 just not a big deal. It’s a little bit here, a little bit there and there are wonderful reasons for every 3 exception. 4 5 So I just want you to know there are two areas which are not impacted by your decisions, Stanford is 6 protected. So anybody visiting Stanford will always be in Stanford and there are no signs or big 7 buildings that will in theory destroy it someday. And the other place that’s not impacted are our homes. 8 So I can still enjoy my trees and my garden and Palo Alto. Visually your decisions are impacting a 9 very small area, which is El Camino downtown. And I have heard there’s nothing there and yeah, that 10 nothing has actually been Palo Alto for 50 years and look what it has brought about. So whenever 11 you’re doing exceptions for signs for example that whole area is going to be a bunch of signs 12 eventually I imagine the way it’s going. And nobody’s going to be able to stand out anyway. So every 13 sign is going to have to be bigger, everything’s going to have to stand out. 14 15 So last time I was here to ask you to consider Palo Alto’s scale; what is the scale? And what are the 16 reasons for making all of these exceptions? There’s always a good reason. I asked the City it must be 17 difficult for you because the City proposes things to you and there’s nothing, no reason to reject it and 18 the City must be accepting the reasons for the people who ask and so maybe we should ask them please 19 don’t ask for exceptions. But I ask once again for you to consider the issue of exceptions and what is 20 the Palo Alto scale, what is necessary, what isn’t. Thank you. 21 22 Chair Lippert: Thank you Ms. Landesman and there are no stupid questions or comments from 23 members of the public. We appreciate your participation. Ok with that any other members of the 24 public? Ok, what I will do is I will keep the public hearing open while we have our own questions. 25 City of Palo Alto Page 6 We’ll each get five minutes apiece to ask questions and then we’ll follow that up with our comments 1 and hopefully a Motion. And I will begin with Board Member Lew. 2 3 Board Member Lew: So I do have a question for staff. So when I went out to the site I saw that the 4 signs are there already. And so I was wondering if we decide to do, if the Board decides to make some 5 changes what happens to the signs that are currently installed? 6 7 Ms. Gerhardt: When I drove by the property I did see that the freestanding sign has already been 8 installed. I don’t believe the wall sign has been installed, but of course if a different freestanding sign 9 was approved then those changes would need to be made. 10 11 Board Member Lew: And then does, on the wall sign on the, what is it? On the south, facing the south, 12 is, does the staff feel that that is, that just the logo part is considered, could be considered the sign and 13 then the rest of it is? I mean like if they were to paint the wall red that wouldn’t necessarily be counted 14 as the sign. Is the staff agreeable to that interpretation or not? 15 16 Ms. Gerhardt: At the moment in the staff report we did count all of the area the red and the logo as the 17 sign. The red background is a little bit of a grey area though as far as how it should be counted. 18 19 Board Member Lew: Ok, thank you. And then I think I just had a comment is that the, I think we’ve 20 seen this with other projects on El Camino is that because of the site sight angles that the merchants 21 really do want visibility from the north and the south and that’s why they want to put things on the side 22 of the building and they don’t really care about the front. And our sign guidelines don’t really 23 completely factor that in, right? I mean it’s just sort of, it’s just not really that, it’s not particularly well 24 addressed in the El Camino Design Guidelines. The guidelines just say that the signs have to be 25 City of Palo Alto Page 7 smaller than allowed elsewhere. So I think it’s kind of it’s just something that I think our Sign Code is 1 just is not really addressing the needs for El Camino very well. So I could support an exception for that 2 on this particular site. 3 4 I think also the other factor is that the it’s just like the color. So I think in the design guidelines it says 5 like if there are three or more colors on the building then it may not be compatible and in this case the 6 building is all very neutral and it’s just limited spots of color. And so I think I could support that 7 because the buildings are neutral. And I think that’s all I have. Thank you. 8 9 Chair Lippert: Board Member Malone Prichard. 10 11 Board Member Malone Prichard: I have no questions. 12 13 Chair Lippert: Vice-Chair Popp. 14 15 MOTION 16 17 Vice-Chair Popp: Great, so I… thank you. I see two very specific issues that we’re faced with here 18 today. One is the area of the sign the other is the combination of the signs. That’s really the root of 19 this. And I would say very clearly that you have made a terrible mistake in how you have presented 20 this to us. The sign itself is roughly five and a half feet by five and a half feet on this building and 21 you’ve got a red panel. And that does not constitute the sign; it’s just a red panel. And if you had 22 come forward with just that version of it there wouldn’t be a discussion about that being an exception 23 and I’m willing to promote that for you today from here in the public hearing to say that your sign is 24 really five and a half feet by five and a half feet on the building and there really is no exception 25 City of Palo Alto Page 8 necessary. And I’d like to suggest that we take that piece of it off the table because it really in the spirit 1 of our code, which is the way I try and read it all the time not the every letter of the language, but the 2 spirit of our code, that’s what we’re getting at. We want to control how much signage there is, not 3 whether somebody paints a building or not. 4 5 The combination of signs in this particular case because your building is so unusually shaped really 6 makes sense to me that you’re doing this the way you’re doing it. We want you to be successful on El 7 Camino and we want to promote the right kind of signage in our guidelines to allow for retail uses to be 8 successful. And so I think your move here to combine a couple of signs on one side of the building and 9 not utilize another side of the building makes a lot of sense. And so for that reason I really would 10 support this and I’m ready to make a Motion that we approve this project based on the findings that 11 we’ve got with a modification that we rewrite the description of this project such that the sign itself is 12 what is being promoted and that there is a red panel that it’s on versus it being 141 square feet of 13 signage and that the exception for a combination of signs be approved as its proposed. 14 15 Chair Lippert: Do I have a second on that? 16 17 SECOND 18 19 Board Member Malone Prichard: Second. 20 21 Chair Lippert: Ok. Do you want to speak further to your Motion Board Member Popp, Vice-Chair 22 Popp? 23 24 Vice-Chair Popp: No, you know I’m always appreciative of the staff and all of the work that they do 25 City of Palo Alto Page 9 and I think that we have really an excellent group of people supporting us in this and any opportunity 1 that you have going forward to help applicants with interpretation in this way I think would be 2 appreciated and I think you’ve done a fine job here and every little bit of this helps us get further along. 3 4 Chair Lippert: Board Member Malone Prichard do you wish to speak to your second? 5 6 Board Member Malone Prichard: No, I believe Board, Vice-Chair Popp conveyed my opinion as well. 7 8 Chair Lippert: Board Member Gooyer do you have any follow-up comments or questions? 9 10 Board Member Gooyer: No. Basically I was going to say the same thing. The sign is actually the 11 emblem if you want to call it that and you could paint the building red, a stripe on it, and it would be 12 the same thing. The only thing we do if we are going to change that we have to obviously make sure 13 that it is just paint and not all of a sudden that we find that that whole red panel is lit from behind or 14 something like that because then it begins to change. I’m just throwing that in is that having the red as 15 a background is one thing. As soon as it becomes lit, which I’m not saying you’re going to do, I’m just 16 saying that we have to be careful as to classifying it as just a solid panel that the sign rests on. 17 18 Vice-Chair Popp: I believe in looking at the details on Sheet 6 that what we’re looking at is an 19 aluminum base (interrupted) 20 21 Board Member Gooyer: Oh, I agree. I’m just saying if we’re talking about changing [unintelligible-22 talking over each other] the, I agree it’s a sheet metal or (interrupted) 23 24 Ms. Ortens: It’s an aluminum panel and then (interrupted) 25 City of Palo Alto Page 10 1 Board Member Gooyer: A metal panel and then the sign on top of it. I agree. 2 3 Ms. Ortens: Correct. 4 5 Board Member Gooyer: In that respect (interrupted) 6 7 Chair Lippert: We can’t have simultaneous talking so let Board Member Gooyer finish and I’ll ask you 8 if you have any further comments. 9 10 Board Member Gooyer: Like I said, I understand what it’s from. It’s the high gloss sheet metal or a 11 metal sign and then the emblem on it. I just brought that up as a, if we’re talking about changing 12 description or whatever that we be very careful. But again, I have no problem with the way it is like 13 this. 14 15 Chair Lippert: Ok, I’d like to speak to the member of the public Jennifer Landesman. I just want you to 16 understand something here. In looking at this application and the signage what our Board has reviewed 17 and found is that or what is being proposed is that we don’t actually, we’re not going beyond what the 18 signage ordinance is, is the way it’s been rewritten here. So there is no exception here. But in addition 19 to that in looking at (interrupted) 20 21 Amy French, Chief Planning Official: I have to correct that. 22 23 Chair Lippert: I’m sorry. 24 25 City of Palo Alto Page 11 Ms. French: There still is an exception for the combination of signs (interrupted) 1 2 Chair Lippert: [Unintelligible] 3 4 Ms. French: The fact of a freestanding sign is still requiring a (interrupted) 5 6 Chair Lippert: But not the size? 7 8 Ms. French: No. 9 10 Chair Lippert: Yeah, the size issue has gone away. But to understand also El Camino Real is a how 11 should we say? It’s a zone where we’re looking at the development of commercial uses here and this 12 particular corner happens to be a substantial distance away from any residential properties that might be 13 otherwise impacted by the exception here. So I appreciate what you’ve brought forward here 14 [Unintelligible – talking off microphone] well let me finish what I’m saying here. So I appreciate what 15 you’re saying here and if it was further up the street perhaps in one of the strip shopping centers tight 16 up against Barron Park or against the Southgate Neighborhood even further north it might be 17 problematic because the distances there are much more constrained. The lots are much more narrow. 18 This is virtually on a corner, an intersection and frankly the vitality of our community is served well by 19 having active busy prosperous merchants versus an abandoned auto showroom, which is what we were 20 faced with as soon as three years ago and if you look at the adjacent towns they are struggling as they 21 are losing their automobile usages. So I’m in agreement with what Board Member, I’m sorry, Vice-22 Chair Popp has said. With that I will give you one minute to, since I haven’t closed the public hearing, 23 I will give you one minute to address our comments and then I will ask the, I’ll close the public hearing 24 and ask the applicant to just close up, have some finishing remarks. 25 City of Palo Alto Page 12 1 Ms. Landesman: Thank you. I appreciate this because it gives me an opportunity to clarify that I’m not 2 concerned about my neighborhood or my block. I happen to live on Fife Avenue. I don’t even have 3 traffic. I’m not concerned about the areas that are not impacted. I’m concerned about what happens 4 when people come back to Palo Alto after having lived here before, having been away maybe gone to 5 school here or visitors who come to Palo Alto and all they see is El Camino and downtown. And I 6 completely understand the reasons and the case for making it vital, but I think we can also at some 7 point sacrifice a little bit to sort of preserve something of what Palo Alto has been in the past and can 8 be in the future. Nobody else is able to actually turn this sort of losing battle around and maybe Palo 9 Alto can so that we don’t have sign after sign and everything in the name of commercial vitality. It is 10 because of the visitors that I’m concerned about that when they’re driving they’re not seeing signs 11 everywhere. Thank you. 12 13 Chair Lippert: Thank you. I appreciate your clarification. With that what I will do is I will close the 14 Public Hearing. I’m going to give the applicant three minutes to wrap up and make any final comments 15 since we’ve changed the report here a little bit if you have anything that you want to address or say. 16 17 Ms. Ortens: I just, I wanted to thank you for recommending the logo signs being the signage. To us 18 that is our sign, but because we were putting in metal panel it was the grey area so we just wanted to 19 make sure that we brought up every situation to you and got your approval on the entire package 20 instead of trying to come with you just saying, “This is it,” and then having you think that it was the 21 entire panel that was our signage. As for the illumination I just wanted to clarify that you are correct. 22 It’s an aluminum panel and the, only the acrylic T is what is going to be lit. So when you’re driving by 23 at night that’s the image that you’re going to see. And then I just wanted to thank everybody for their 24 time and their consideration of our signage. 25 City of Palo Alto Page 13 1 Chair Lippert: Ok. So we have a Motion and a second. Any other discussion? Board Member Lew. 2 3 Board Member Lew: Just one quick comment is that I think in Palo Alto I think that staff has been very 4 good about with various applicants at trying to do halo lit or push through lettered signs. If you go to 5 other communities on El Camino, say like Sunnyvale, every single store has an illuminated box sign in 6 various colors and I think Palo Alto’s really done a better job than our, many of our neighbors at trying 7 to promote a high quality area that’s compatible with the residential neighbors. 8 9 VOTE 10 11 Chair Lippert: Thank you very much. Any other discussion? Ok. With that we have a Motion and a 12 second and we’re amending the report and conditions that the size and square footage of the signage is 13 not an exception, only the number of signs. Ok, with that all those in favor say aye (Aye). Opposed? 14 Ok, that goes 5-0-0. Great. Thank you very much. And we will take a five minute break and then we 15 will have two preliminary reviews and a study session. 16 17 MOTION PASSED (5-0-0) 18 19 THE BOARD TOOK A BREAK 20 21 Preliminary Reviews 22 23 4. 3877 El Camino Real [13PLN-00439]: Request by EID Architects on behalf of Zijin, Inc. for 24 Preliminary Architectural Review of a new three story, mixed use building with 4,365 sq. ft. of 25 commercial office/retail area and 21,663 sq. ft. of area for 17 housing units over one level of 26 semi depressed podium parking replacing the existing 6,000 sq. ft. single-story restaurant 27 building and surface parking lot. Zone district: Service Commercial (CS) and RM-30. 28 City of Palo Alto Page 14 1 5. 636 Middlefield Road [13PLN-00410]: Request by Steve Smith for Preliminary Architectural 2 Review of the construction of three detached residential units, demolition of two existing 3 residential units, and retention of an existing structure occupied continuously by legal non-4 conforming office use. Zone District: RM-15. 5 6 STUDY SESSION: 7 8 6. 1213 Newell Road [Main Library]: Request by City of Palo Alto Pubic Works Engineering for 9 Study Session review of an exterior signage program for the Main Library facility. Zone 10 District: Public Facility. 11 12 BOARD MEMBER BUSINESS AND ANNOUNCEMENTS. 13 Discussion of Retreat Topics and Date 14 15 REPORTS FROM OFFICIALS. 16 17 Subcommittee Members: Alex Lew and Randy Popp 18 SUBCOMMITTEE: 19 20 7. 611 Cowper Street [13PLN-00259]: Request by The Hayes Group for sub-committee review of 21 the rear stair tower redesign, associated with conditions of approval for a previously approved 22 mixed, use project (a 34,703 square foot, four-story building comprised of three floors commercial 23 area and one floor for a residential unit with below grade parking facilities). Zone District: CD-24 C(P). 25 26 8. 4190 El Camino Real [13PLN-00338]: Request by Kevin Stong for sub-committee review of rear 27 wall/fencing, colors and materials, photometric study, landscaping details, parking calculations, and 28 removal of any extraneous trailers, associated with conditions of approval for a previously approved 29 project (a 3,024 sq. ft. service building for McLaren/Volvo). Zone District: Service Commercial 30 Auto Dealership ((CS)(AD)). 31 32 STAFF ARCHITECTURAL REVIEW: 33 Project Description: Removal and replacement of two of the existing six panel antennas and 34 installation 35 Applicant: Jerome Wade 36 Address: 2425 Embarcadero Way [13PLN-00420] 37 Approval Date: 12/2/13 38 Request for hearing deadline: 12/16/13 39 40 Project Description: New illuminated wall sign to identify the building 41 Applicant: Plican Signs 42 Address: 250 Cambridge Avenue [13PLN-00432] 43 Approval Date: 12/3/13 44 Request for hearing deadline: 12/16/13 45 46 Project Description: Installation of two roof-top mounted “donor” antennas in the Research Park 47 Applicant: Charnel James 48 Address: 3412 Hillview Avenue [13PLN-00405] 49 City of Palo Alto Page 15 Approval Date: 12/3/13 1 Request for hearing deadline: 12/16/13 2 3 Project Description: Two (2) square foot illuminated sign 4 Applicant: Carol Sedensky 5 Address: 180 El Camino Real (Flemings) [13PLN-00504] 6 Approval Date: 12/4/13 7 Request for hearing deadline: 12/17/13 8 9 10 11 Project Description: Two small additions to the existing community room for the relocation of the 12 resident mailboxes 13 Applicant: Debbie Hill 14 Address: 650 San Antonio Road [13PLN-00379] 15 Approval Date: 12/11/13 16 Request for hearing deadline: 12/24/13 17 18 ADA. The City of Palo Alto does not discriminate against individuals with disabilities. To request accommodations to 19 access City facilities, services or programs, to participate at public meetings, or to learn more about the City’s compliance 20 with the Americans with Disabilities Act of 1990 (ADA), please contact the City’s ADA Coordinator at 650.329.2550 (voice) 21 or by e-mailing ada@cityofpaloalto.org. 22 23 Posting of agenda. This agenda is posted in accordance with government code section 54954.2(a) or section 24 54956.Recordings. A videotape of the proceedings can be obtained/reviewed by contacting the City Clerk’s Office at (650) 25 329-2571. 26 27 Materials related to an item on this agenda submitted to the Architectural Review Board after 28 distribution of the agenda packet are available for public inspection in the Planning and Community 29 Environment Department at 250 Hamilton Avenue, 5th floor, Palo Alto, CA. 94301 during normal 30 business hours. 31 32 33 City of Palo Alto (ID # 4410) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: Approval of Additional Scope and Contingency Title: Approval of Amendment Number One with CoalFire Systems Inc., for Contract Number S14150215 in the Amount of $3700, and 20 Percent Contingency From: City Manager Lead Department: IT Department Recommended Motion Staff recommends that Council approve and authorize the City Manager or his designee to execute Amendment One (attached) to CoalFire Systems, Inc. contract S14150215 in the amount of $3700 for additional work required. (This brings the total contract amount to $204,148). Staff also recommends that Council approve and authorize the City Manager or his designee to execute a 20% contingency in the amount of $40,090 for the CoalFire Systems, Inc. contract S14150215 to fund additional unforeseen scope changes. Executive Summary The City of Palo Alto signed a contract with CoalFire Systems Inc., to conduct comprehensive risk assessments of critical IT infrastructure and services, and to provide detailed reports and remediation guidance that is prioritized based on the City’s ability and resources to address security gaps and vulnerabilities. A 20% contingency fund was not initially established for the ISRA project. An unforeseen and required project scope change occurred to support the Public Safety MAV WiFi technical risk assessment with an estimated additional cost to the project of $3,700. Contingency Fund: City of Palo Alto Page 2 1. Enables the City to react any other unforeseen events that impacts the project 2. Will only be used in case of need to offset the risks of unforeseen circumstances, with the project sponsor’s authorization 3. Fund the Public Safety MAV WiFi technical risk assessment. Background Under the leadership of the Chief Information Officer (CIO), the City of Palo Alto is executing its 3-year technology strategy (July 2012 – June 2015). A priority and core component of the IT strategy is to ensure that the City addresses gaps in information security and ensures a long- term, appropriately secure information environment. In addition to hiring the first-ever information security manager, the City is pursuing several essential projects to meet our information security needs. The work proposed in this CMR is a major step towards executing on our technology strategy and further protecting the City and its information assets. The Information Security Steering Committee (ISSC) of the City of Palo Alto has approved an initiative to implement ISO 27001 (Information Security Management System) framework of the City, requiring to conduct a formal ISRA in conjunction with ISO 31000 (Risk Management Principles and Guidelines) and ISO 31010 (Risk Management and Risk Assessment Techniques). CoalFire Systems Inc, was chosen by the City and approved by Council on 11/12/2013 to conduct the Information Security Risks Assessment. Justification: o The contingency amount allows the City to respond to unforeseen, yet low likelihood, risk assessment needs that emerge during the project. o Amendment One: The risk assessment of the Public Safety MAV system will identify security vulnerabilities and provide guided remediation to:  Protect the on-premise MAV server and the associated private WiFi network  Promote availability of WiFi communication between Public Safety vehicles and MAV on-premise system.  Secure transfer of data between Public Safety vehicles and the MAV system.  Meet and maintain security compliance  Establish confidentiality of the MAV system Cost Implications The Information Security Risk Assessment project is funded out of the IT Disaster Recovery Plan CIP (TE-01012). The project has sufficient available resources to accommodate the changes City of Palo Alto Page 3 recommended in this report. Attachments:  City of Palo Alto Coalfire Amendment 1 Final 12262013 - Coalfire Signed (PDF) City of Palo Alto (ID # 4353) City Council Staff Report Report Type: Action Items Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: "Our Palo Alto" Title: Our Palo Alto: A Community Conversation About Our City’s Future. Staff Requests Council Input and Endorsement of a Three-Part Strategy To Engage Residents in a Community Conversation About the Future Of Our City. The Strategy Would Include (a) A Series Of Conversations and Events Focused On Ideas, Dialogue and Building Community (b) Near Term Actions Aimed at Addressing Today’s Critical Issues; and (c) Community Engagement Effort Aimed at the Design Of Alternative Futures Through the Comprehensive Plan Update Planning Process From: City Manager Lead Department: Planning and Community Environment Recommended Motion Staff recommends that Council consider the following motion: Motion to endorse “Our Palo Alto: A Community Conversation about our City’s Future” as a conceptual framework for ideas, actions, and design during the next year, and requesting that staff (a) convene a series of topical conversations and events throughout the year aimed at building community by broadening civic engagement about issues and ideas that are important to our City; (b) return to the Council with specific recommendations regarding near-term actions to address critical issues such as traffic and parking; and (c) return to Council with a specific schedule and scope of work to create a blueprint for the future of land use and development in our City by re-framing the ongoing update to the Comprehensive Plan to include broad community engagement, discussion and analysis of alternative futures, cumulative impacts, and mitigation strategies. Recommendation Staff recommends that Council endorse the “Our Palo Alto” conceptual framework and provide staff direction regarding its component parts, including ongoing conversations and events about ideas that affect our City, a series of near-term actions aimed at addressing today’s critical issues such as traffic and parking, and a re-framing of ongoing efforts to amend the Comprehensive Plan to include broad community engagement, a program-level environmental City of Palo Alto Page 2 impact report (EIR), and a specific schedule with a completion date of December 31, 2015. As described below, component parts of the Our Palo Alto initiative can be categorized under three headings: ideas, actions, and design. Executive Summary On December 2, 2013, the City Council held a study session regarding the future of our City and asked staff to return to Council with specific recommendations for Council consideration and adoption. Tonight’s action item would respond by creating a conceptual framework for ideas, actions, and planning efforts throughout the year. This Our Palo Alto conceptual framework and its component parts -- categorized as ideas, action, and design -- are illustrated in the attached summary handout. (Attachment A – Summary Diagram) In the “Ideas” portion of the Our Palo Alto initiative, the City and its representatives will be convening meetings, events, and conversations about issues and ideas that are important to the future of our City. An initial schedule of meetings and events will be developed within the next 30 days and will grow and change over the course of 2014. Meetings could include talks by inspiring thinkers or workshops about specific planning issues. Events could include tours of some Palo Alto places that will contribute to our future either through innovation and change or through their preservation. All will be designed to incorporate or inspire conversations about our City that could happen in, living rooms, meeting halls, parks or on the streets and sidewalks of Palo Alto. The goal of these meetings, events, and conversations will be to nurture and expand civic participation and build community by a full spectrum of the community, including residents of all ages, homeowners and renters, business leaders and employees, non-profit and faith-based organizations, and a wide range of other stakeholders. Along the way, this effort will also increase City staff’s communication and listening skills, increase the organization’s fluency with online communication tools such as Open City Hall, and enhance trust in City government. This effort will extend beyond the Planning Department to include staff support across the City, form Libraries to Community Services, from Police and Fire, to the City Manager’s Office. The “Action” portion of the Our Palo Alto initiative will unfold in specific recommendations for City Council direction and action that will be brought to the City Council over the next 60 days. These will include: o Planned Community (PC) zoning “time out” and direction to analyze potential alternatives and reforms; City of Palo Alto Page 3 o Parking related actions, including actions that will lead to increased parking supplies, to the design and implementation of residential permit parking, and to more efficient use of available parking supplies through the collection and dissemination of “real time” data, use of attendants or valets, and more; o Transportation Demand Management (TDM) actions, including actions leading to establishment of a Transportation Management Authority that will be responsible for expanding and coordinating transit incentives, and actions to expand Palo Alto’s shuttle service to dramatically increase ridership; o Bike Plan implementation actions, including design and environmental review of 18 critical links in the City’s bicycle network, allowing for their construction as City and grant funding becomes available; o Housing-related actions responding to State mandates and planning for ways to address the need for housing affordable to all income levels; 2014 will also include design and density-related actions such as construction of the California Avenue Streetscape project and changes to zoning rules to increase sidewalk widths along El Camino Real and decrease densities (FAR) for Commercial Neighborhood (CN) sites in the City’s housing inventory that are zoned for 20 dwelling units per acre. The Council is expected to adopt an Infrastructure Funding Plan to address issues identified by the Infrastructure Blue Ribbon Commission. The “Design” portion of the Our Palo Alto initiative will focus on the City’s Comprehensive Plan, which is its blueprint or design for the future, and similar long-range planning efforts. Within the next 60 days, staff will be bringing the City Council a request to adopt a new schedule and strategy for the Comprehensive Plan. The Comprehensive Plan is the City’s governing document when it comes to land use and development, and during the economic downturn, the City undertook a long process to develop revisions with only two new pieces, one focused on East Meadow Circle, and one focused on California Avenue. With the economic recovery, renewed development pressures, and concerns about land use, traffic, and other quality of life issues, the time is ripe to reframe this effort as a broader community dialogue about alternative futures for our City, using revisions suggested by the Planning and Transportation Commission (PTC) as a starting place. City of Palo Alto Page 4 Staff will be requesting Council adoption of a new strategy and schedule that proposes:  Expanded Community Engagement with meetings, an online forum, email communications, and formal hearings  Extended “scoping” and exploration of alternative futures  Consolidation of planning efforts and review related to California Avenue, 27 University, and the Downtown Cap  Baseline data reports and dissemination  Draft Environmental Impact Report with mitigation strategies for incorporation into the preferred alternative  Final Environmental Impact Report and dissemination of a “users guide” to the Comprehensive Plan, including interactive maps and a process for future plan amendments  Completion and adoption of a Comprehensive Plan Update by the end of 2015. Investments in this process will also be investments in the community conversation envisioned in the Ideas portion of Our Palo Alto, and provide context for the Action portion. It will also ensure appropriate coordination and compatibility with other long range planning efforts like an update to the City’s Climate Action Plan, and plans related to the urban forest and parks and open space. Background On December 2, 2013 the City Council held a study session to initiate a conversation about the City’s shared vision for the future and how to get there. Staff recommended that Council discuss the initiation of an expanded public dialogue regarding the future of the city, including ongoing efforts to update the City’s Comprehensive Plan, re-examination of Planned Community (PC) district zoning, and other land use and development issues. The need for the discussion was born out of concerns of the pace of development within the city and how the Council should plan for and manage growth. The renewed economy within Silicon Valley has generated significant contemporary challenges and concerns that affect the City of Palo Alto. Staff prepared a report which provided a background of the 1998-2010 Comprehensive Plan and articulated the changes we’ve experienced over the past fifteen years and the challenges those changes have produced. (Attachment B – December 2, 2013 Staff Report.) Specifically, the renewed pace of commercial and residential development, increases in automobile traffic and decreases in parking supply, and the number of concurrent planning and land use studies have resulted in many people City of Palo Alto Page 5 feeling that the City has no coherent vision or narrative that connects current development with the various planning efforts underway. At the December 2nd meeting, the Council heard from approximately thirty members of the public who expressed their individual opinions and concerns regarding current conditions and the future of the city. The issues identified included the pace of growth, automobile parking and traffic congestion, and general quality of life issues. Some argued that the root of the issue is related to two conflicting visions for Palo Alto: one of Palo Alto as medium-density, residentially oriented town, the second one of Palo Alto as the professional and financial center of the peninsula (Attachment C - December 2, 2013 Meeting Minutes). Others called for a transparent land use planning process that is consistent with and honors the Comprehensive Plan and the Zoning Ordinance. The study session served as an opportunity to air various perspectives but was remarkable for the common interests expressed. Speakers all valued the City and its quality of life, and saw value in planning for and managing growth. In addition, there were requests for accurate baseline data, community engagement efforts, for an honest two-way dialogue between the Council and all members of the public and a transparent planning process. While no formal action was taken by the Council, Staff agreed to bring action items back to the City Council for direction related to the issues discussed. Tonight’s agenda item is the first of these items. Discussion “Our Palo Alto” is an organizing principle that will accommodate a wide range of events, actions and planning efforts in the next couple of years. The schedule and timeline for many of these will be developed within the next couple of months, but will be subject to change based on community interest as the overarching conversation about our City’s future continues. The Comprehensive Plan update is the element of this initiative that probably requires the most explanation, because many people in the community may not be aware of the Plan’s scope, and may be wondering why staff is proposing to deviate from the process established over the last seven or eight years. The 1998-2010 Palo Alto Comprehensive Plan is the City’s guiding planning document, setting forth the community’s vision when it comes to land use and related issues like transportation, the natural environment, community services, and business and economics. City of Palo Alto Page 6 The City Council allocated funding for an update to the Comprehensive Plan in 2007 and a consultant team was selected in 2008. The amendment was intended to reflect the changes occurring in Palo Alto since early 2000. A work program outlining City Council’s direction was adopted and City Staff began working with the Planning and Transportation Commission (PTC) from late 2008 through 2009 to review the existing elements, preparing background reports and updating baseline growth projections. As a part of the Comprehensive Plan amendment process, Council directed staff to initiate work on two concept area plans: California Avenue/Fry’s Area Concept Plan and the East Meadow Circle/Fabian Way Concept Area Plan. After initial review of existing Comprehensive Plan policies and programs, PTC and staff commenced on Phase II of the review process, which focused on each Comprehensive Plan element and continued work on the two concept area plans, including community input at workshops and commission meetings. The City Council-approved work plan to update the Comprehensive Plan has progressed steadily. From 2010 to present, City staff and PTC sub-committees have met to review each element of the Comp Plan. The PTC’s Comp Plan subcommittee process has identified revisions necessary to create a clearer, cohesive and less redundant policy document. The original work program to update the structure, vision, goals and program statements developed into an effort that involved rearranging chapters and elements and changing the format of the existing plan. New policies and programs have been proposed to clarify existing policies and programs and to accommodate new State requirements. The PTC has reviewed the Land Use Element, Transportation Element, Community Services and Facilities Element, Natural Environment Element, and Business Element. The PTC Sub-committee work is continuing on the Governance element. Staff anticipates reviewing the Governance Element in February of 2014. The California Avenue/Fry’s Area Concept Plan also awaits final PTC review in February 2014. With the current economic recovery, renewed development pressures and concerns about land use, traffic, and other quality of life issues, staff believes that the time is ripe to reframe this effort as a community dialog about alternative futures for our City. Using the work of the PTC as a foundation, staff suggests that now may be the appropriate time to initiate a renewed community engagement effort around the Comprehensive Plan amendment. A community engagement exercise would examine goals and priorities related to community character, land development, traffic and parking, and the preservation and conservation of valuable resources, and could be conducted concurrently with a comprehensive cumulative impacts analysis in the form of a program-level Environmental Impact Report (EIR). A more detailed recommendation regarding this strategy and schedule will be brought to the City Council within the next 30 days, and is envisioned with the following components: City of Palo Alto Page 7 1. Expanded community engagement- this component would complement the City’s efforts to broaden civic engagement by encouraging the public to participate in community forums, surveys, workshops and meetings on the Comprehensive Plan amendment. Possible topics for discussion include the development of a new Comprehensive Plan vision statement, the identification of areas of the city for preservation and those appropriate for future growth, and the identification of infrastructure investments consistent with the City’s goals. 2. Extended “scoping” and exploration of alternative futures- This component would extend the traditional EIR scoping period in order to capture comments and direction obtained throughout the expanded community engagement exercise. The purpose of the extended scope would be to compile community comments and develop alternative land use and growth futures that would be analyzed in detail. 3. Baseline data and reports- Council is aware of the community’s need for accurate data that quantifies existing conditions and prior growth in order to understand how the city may look if current policies, programs and regulations remain unchanged. City staff would produce relevant data sets and reports so that the public may form their own independent conclusions regarding existing conditions. 4. Consolidation of concurrent planning efforts- Planning staff is currently working on a number of studies like the Downtown Cap Study that have a direct relationship to the Comprehensive Plan amendment, and other ideas, like an outreach effort related to the 27 University site have been talked about but never started. For efficiency and clarity, Staff will recommend that these efforts be consolidated with the Comprehensive Plan amendment. 5. Draft Environmental Impact Report & Draft Comprehensive Plan- Following a four to five month community engagement and scoping process, the staff and consultants would prepare a Draft EIR for public review. The program level Draft EIR will evaluate potential direct, indirect and cumulative environmental impacts associated with the implementation of the Comprehensive Plan goals, policies and programs. Traffic impact reports, noise and air quality modeling, and a climate change analysis will be a part of the Draft EIR. It will also discuss the alternative futures developed as part of the community engagement exercises and propose mitigation measures that will offset, minimize, or otherwise avoid significant environmental impacts. The Draft EIR will be subject to an extended public review period during which the City will solicit extensive public input on the environmental analysis and draft goals, policies, and programs. 6. Final Environmental Impact Report & Final Comprehensive Plan- The Final EIR will respond to substantive comments on the Draft EIR and the Final Comprehensive Plan proposed for adoption will be the “preferred alternative” that is selected based on public input on the Draft, as well as goals, policies and programs that have been updated to reflect required mitigation strategies and public input. 7. Comprehensive Plan Dissemination and “Users Guide”- Once the Plan Amendment is adopted, Staff will produce a final version for dissemination, with an interactive version City of Palo Alto Page 8 for the City’s website and a “user’s guide” explaining how the plan should be used and how it can be amended in the future. Resource Impact Resources to conduct the tasks outlined in “Our Palo Alto: A Community Conversation about our Shared Future” will vary depening upon the scope of the exercise. Resources to review and reform the PC zoning process will depend on the Council’s desired approach and schedule. The City Manager intends to restructure existing staffing to ensure an extensive community engagement initiative. This will include additional resource investments. The need for more planning capacity and staff will be a subject of the upcoming budget review and City Manager recommendations on the Budget. Future agenda items will outline alternative approaches and resources in detail, following Council’s study session. Policy Implications The tasks envisioned in the “Our Palo Alto: A Community Conversation about our City’s Future” effort and the cumulative impacts analysis (in the form of a program-level EIR) is anticipated to result in an updated Comprehensive Plan with broad community support. At the same time, reforms to the PC zoning process can improve the public’s perception of City government by focusing on ways to improve transparency and predictability, and updating the City’s Housing Element can ensure continued compliance with State housing laws. All three efforts, as well as ongoing initiatives related to traffic and parking, can honor the policies and programs of the existing Comprehensive Plan, including Program G-2: Periodically assess the need for citizen input on various policy issues and appoint advisory bodies and ad hoc committees as needed, and Policy G-11: Encourage the development of new planning processes that emphasizes a collaborative exchange of ideas. Retain City Council authority over decision-making in these processes. Environmental Review The action to endorse “Our Palo Alto: A Community Conversation about our City’s Future” is not a project under the California Environmental Quality Act. The future actions that would be taken, including adoption of a Comprehensive Plan amendment, are not exempt from CEQA and environmental analysis consistent with the provisions of CEQA would be conducted and presented as part of a recommendation for a future action. Attachments:  Attachment A: Summary Diagram (PDF)  Attachment B: December 2, 2013 City Council Staff Report (PDF)  Attachment C: Excerpt Minutes of the December 2, 2013 City Council Meeting (PDF) A Series of Conversations and Events A Community Conversation About Our City’s FutureIDEAS ACTION DESIGN Beyond City Hall Dialogues and conversations across our community Actions to Address Today’s Critical Issues: A Blueprint for the Future: Creating connections Neighborhood gatherings Planning workshops House parties Picnic in the park Social media Walking/bike tours Enact PC Zoning Reform Conduct & Evaluate Attendant Parking Trial Establish Satellite Parking & Shuttle to Downtown Downtown Garage Design Initiate Urban Lane Transit Center Planning Parking Management Programs Expanded Shuttle Service TDM Programs, including TMA Implementation Phase I Housing Element Update Bike Plan Implementation Cal Ave Streetscape Completion Traffic Signalization & Garage Technologies to Enable “Real Time” Data The City’s Comprehensive Plan: Updated to plan for tomorrow. • Identify and prioritize existing challenges and opportunities • Baseline data report • Design and test alternative futures • Pace and location of growth • Transportation, land use & design • The natural environment • Community services, business & the economy • Cumulative impacts & feasible mitigation • Informed decision-making • Adopted Plan into action Complimentary Planning Efforts: Climate Action; Parks & Open Space Online forum Design competitions City of Palo Alto (ID # 4294) City Council Staff Report Report Type: Study Session Meeting Date: 12/2/2013 City of Palo Alto Page 1 Summary Title: Initiate Community Conversation on Planning and Transportation Matters Title: Initiating a Community Conversation on the Future of the City Including the Comprehensive Plan, Planned Community Zoning, Parking and Traffic Strategies and Related Matters From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council conduct a study session to discuss initiation of an expanded public dialog regarding the future of the city, including ongoing efforts to update the City’s Comprehensive Plan, re-examination of Planned Community (PC) district zoning, and other land use and development issues. Executive Summary On November 12, 2013, Mayor Scharff and City Manager Keene removed two large development projects from the Council’s agenda and scheduled this initial study session on the future of the City. This study session provides an opportunity for public input and Councilmember questions and comments regarding land use and development issues in the City. Possible issues for discussion include:  How should we initiate and engage in a robust public dialog about the future of the City, especially as it relates to existing commercial corridors and Pedestrian and Transit Oriented Development (PTOD) districts?  How should this dialog relate to ongoing efforts to update the City’s Comprehensive Plan and projects such as the Downtown Cap study, 27 University outreach, etc.?  How should we re-examine the Planned Community (PC) process and address the community’s concerns about the exchange of new development entitlements for public benefits? City of Palo Alto Page 2  How should we ensure transparency, consistency, and predictability for development applications that conform with current zoning?  Which traffic and parking solutions can be implemented in the short term, and how will the cumulative impacts analysis associated with the Comprehensive Plan Update inform decision making in the long term?  Are there other questions related to zoning and land use that should be considered separately or in tandem with the Comprehensive Plan update? At the closure of the study session, staff will attempt to summarize direction from the Council. One or more action items will be brought back to the Council for formal direction early in the 2014. Background Palo Alto will be a vital, attractive place to live, work, and visit. The elements that make Palo Alto a great community – its neighborhoods, shopping and employment centers, civic uses, open spaces, and natural resources – will be strengthened and enhanced. The diverse range of housing and work environments will be sustained and expanded to create more choices for all income levels. All Palo Alto neighborhoods will be improved, each to have public gathering spaces, essential services and pedestrian amenities, to encourage less reliance on the automobile. Vision Statement from the Palo Alto 1998-2010 Comprehensive Plan The Comprehensive Plan is the City’s guiding planning document, setting forth the community’s vision when it comes to land use and related issues. Each time an individual project or rezoning is considered, that decision is required to be consistent with the policy framework of the Plan. This does not mean that every decision is required to be consistent with every policy and program of the Plan, but each must be consistent on balance with the Plan as a whole, and with any mandatory policies of the Plan. Palo Alto’s current comprehensive plan was adopted in 1998 and has served this community well. It envisions a city of neighborhoods and a vision for the future that is expressed through the major themes of the document:  Building Community and Neighborhoods;  Maintaining and Enhancing Community Character; City of Palo Alto Page 3  Reducing Reliance on the Automobile;  Meeting Housing Supply Challenges;  Protecting and Repairing Natural Features;  Meeting Residential and Commercial Needs, and  Providing Responsive Governance and Regional Leadership The Comprehensive Plan articulates key values, expressed through policies and action items including such things as a limit on non-residential growth in the Downtown area (Program L-8) and throughout the City (Policy L-8), promoting decisions that encourage walking, bicycling and public transit use (Policy T-1), development of strategies to increase housing density and diversity in appropriate locations (Policy H-2) and encouraging new businesses that meet the City’s business and economic goals (Policy B-9). In general, the Comprehensive Plan establishes a land use regime that is protective of low- density residential neighborhoods (typically zoned R-1, R-2, and RMD) and open space areas. It is supportive of commercial enterprises, but effectively targets growth and change to fully- developed commercial areas such as Downtown, the California Avenue area, Stanford Shopping Center and the Research Park, El Camino Real and interstitial areas comprising approximately 5% of the City. The Comprehensive Plan also recognizes the challenges in providing diverse and high-quality housing opportunities. Again, it is protective of existing residential neighborhoods, but supportive of higher density in appropriate locations. The City has a long history of support for affordable housing, including the adoption of an inclusionary housing ordinance in the mid- 1970s, the establishment of affordable housing impact fees, and support for local, state and federal programs that help to preserve and enhance the City’s affordable housing supply. The initial Housing Element adopted with the Comprehensive Plan and the revised Housing Elements that have been adopted in conformance with State requirements since that time have all contained policies and programs that address the housing challenges the City continues to experience. City of Palo Alto Page 4 Palo Alto 1998-2010 Comprehensive Plan, Land Use Map (as amended through 2013). Single- family neighborhoods are shown in yellow; open space and public uses are green. The Comprehensive Plan Amendment Unfortunately (since the plan is such a good one), the future that the Comprehensive Plan envisioned was 2010, and in 2006, the Council directed staff and the PTC to begin work on an update. City Council initiated the Comprehensive Plan amendment project in 2006. Funding for the project was allocated in 2007 and a consultant team was selected in 2008. The amendment was intended not to overhaul the Comprehensive Plan and the Council adopted work program reflects the primary purposes of the amendment which includes:  Extending the horizon year of the Plan to 2020 (this was later extended to 2025),  Updating baseline data and growth projections,  Modifying the vision statements, policies and programs as needed to address the focus of the Comp Plan Amendment,  Ensuring the retention of sufficient land for neighborhood-serving retail uses and commercial growth, City of Palo Alto Page 5  Preparing concept plans for East Meadow Circle area and California Avenue area and identify appropriate land use and zoning changes,  Adequately mitigating impacts of increased housing on community services such as parks, libraries and schools; and  Addressing the City's commitment to climate protection and sustainability. City Staff worked with the PTC between 2008 and 2010 to review the existing elements, background reports on baseline growth topics, and information regarding the two concept area plans. In 2010, the PTC and Council held a joint study session to address the Comp Plan amendment work plan, including the recommended approach to the Housing Element update. In addition, the Council provided direction regarding updated growth projections, updates to the Comp Plan structure, vision, goals, policies and program statements, and additional work regarding review of the South El Camino Real Design Guidelines and LEED for neighborhood Development (LEED-ND). From 2010 to present, City staff and PTC sub-committees have met to review each element of the Comp Plan. The Comp Plan subcommittee process has been effective in identifying necessary changes to the Comp Plan including creating a clearer, cohesive and less redundant policy document. The original work program to update the structure, vision, goals and program statements has developed into a more robust update as a result of the subcommittee process. This involved rearranging chapters and elements and substantially changing the format of the existing plan. New policies and programs are included to clarify existing policies and programs and to accommodate new State requirements. As of November 2013, the PTC has reviewed and recommended inclusion of the following draft elements into the Comp Plan amendment:  Housing  Land Use  Transportation  Community Services & Facilities  Natural Environment Work continues on the Business & Economics and Governance elements. It is expected that all elements will have been reviewed by the PTC prior to the end of Q1 2014. Please see Attachment A for more information regarding the ongoing Comprehensive Plan amendment process. City of Palo Alto Page 6 Community Changes Since the Comprehensive Plan was Adopted It’s obvious to most people that the economic, social, and environmental landscape has changed significantly since the Comprehensive Plan was adopted in 1998. The City has experienced boom and bust cycles in the economy, affecting employment, housing demand, and office development. The City has been relatively well-positioned to adapt to these cycles and although we’ve had to cope with lean budget years and reductions in city services, the strength of our commercial sectors, residential property values, and school district achievements have brought us through difficult times. As a result, the City overall enjoys a high- level of resident, visitor and business community satisfaction. Despite emergent concerns about traffic and parking (issues Palo Alto shares with other cities across the Bay Area), citizens continue to rank Palo Alto very high in the annual City Survey conducted by the National Research Service. Recently, Palo Alto was named #1 on the Top 100 Best Places to Live by Livability.com, a national website that ranks quality of life amenities of America’s small and mid-sized cities. It certainly could be argued that the changes Palo Alto has experienced over the past 15 years have contributed to the success and the challenges our city continues to experience. The following charts illustrate some of the change we’ve experienced: City of Palo Alto Page 7 City of Palo Alto Households and Housing Units 30,000 Jobs within City of Palo Alto 100000 'XJOO() """" 70000 60000 5OOJ() 40000 =xl 70000 10000 0 7000 7005 2010 2011 Horizon Years 30,000 28,000 .~ 26,ODO c " ~ ] 24,ODO ~ c • • ~ ] 22,ODO ~ 5 '" 20,000 100000 90000 80000 70000 60000 50000 4OOlO 3IJOOO 20000 10000 0 City of Palo Alto Hou seholds and Housing Units 28,2 26,49 2374 24,700 23,102 20,546 -+-Housffiolds I 1970 1980 1990 2000 2010 Decennial Census Years Jobs within City of Palo Alto 2000 2005 2010 2011 Horizon Years City of Palo Alto Page 8 Source: City of Palo Alto Traffic Counts for 1999 and 2013 City of Palo Alto Page 9 Source: Caltrans Annual Traffic Counts City of Palo Alto Page 10 Recent Development and Community Concerns Palo Alto has successfully navigated out of the “Great Recession” and is now facing new challenges and concerns regarding the pace of development, although development over the last 15 years has not exceeded the two non-residential development limits adopted as part of the 1998 Comprehensive Plan, as shown below. Also, most of the pending development applications that can be characterized as “major” proposals, in the sense that they would add 10,000 gross square feet or more, conform to the zoning regulations that were established to implement the Comprehensive Plan. City of Palo Alto Page 11 1989 – 2013 Non-Residential Development within the 1989 Land Use Study Areas Total Development Potential – Growth Monitoring 3,257,900 sq. ft. Net Non-Residential Square Feet Gained thru August 2013 1,570,033 sq. ft. Remaining Square feet in Growth Monitoring 1,687,867 sq. ft. City of Palo Alto Page 12 Commercial Downtown Zone District Non-Residential Growth Cap Commercial Downtown Zoning Districts Growth Cap 350,000 sq. ft. Net Non-Residential Square Feet Gained thru August 2013 256,939 sq. ft. Remaining Square feet in Growth Monitoring 93,061 sq. ft. City of Palo Alto Page 13 In-process Major Development Projects as of November 12, 2013 Address Project Description Status PC? 640 WAVERLEY Prelim ARB mixed-use building with two dwelling units and commercial area of 10,463 sf (demo existing one story). Zoning issues under review no 500 UNIVERSITY AV New three-story building (26,806 sf replacing 15,899 sf) with ground floor retail, two floors of office and two levels below grade parking. First and second ARB Prelim completed, ARB 12/5/13 no 2500 EL CAMINO REAL New four-story mixed use project with 70 residential units (one, two and three bedroom units) of BMR rental housing and approximately 7,300 square feet of commercial space. ARB Prelim completed; formal app received 11/7 no 261 HAMILTON Addition to University Arts Building 6,900 sf; generating 15K TDRs without parking exceptions. Formal application submitted no 636 MIDDLEFIELD Prelim ARB for three residential units. ARB Prelim to be scheduled no 777 WELCH Prelim ARB for 22,820 sf of new construction (demo 3,048 sf). ARB Prelim scheduled 11/21/13 no 429 UNIVERSITY Prelim ARB for one dwelling unit and 16,500 sf commercial (existing 6,600 sf). ARB Prelim 11/7/13 no 180 EL CAMINO REAL Prelim ARB for 133,580 sf retail and renovation (replacing same sf). ARB Prelim 10/3/13 no 385 SHERMAN Prelim ARB for 55,566 sf mixed use building. ARB Prelim 12/5/13 no 2555 PARK Formal ARB for 23,269 sf office; demo existing building. Historic review initiated no 2609 ALMA Prelim ARB for four-unit multi-family residential condos. ARB Prelim January 2014 no City of Palo Alto Page 14 In-process Major Development Projects as of November 12, 2013 Address Project Description Status PC? 441 PAGE MILL RD New 32,524 sf mixed use building (21,540 sf commercial and 8 residential units) and one level of below grade parking. Formal submittal of a Site and Design application on 7/29/13 no 2609 ALMA Preliminary Architectural Review Board review of a new four unit multifamily residential condominium project. Prelim ARB no 3877 ECR Preliminary ARB review for new two story mixed use project in at the Compadres site. 18 dwelling units and 3,000 sf. commercial Prelim ARB no 395 PAGE MILL ROAD AND 3045 PARK BLVD Planned Community and Comp Plan Amendment for New Office Buildings, Structured Parking and Public Safety Building PTC Initiated PC 7/10/13; ARB review 9/19/13. Applicant holding community meetings yes 1050 PAGE MILL ROAD Prelim ARB for a 284,000 sf. office building ARB 12/5/13 no 816 SAN ANTONIO AV Minor ARB approval to allow a 8,200 square foot structure for Hertz Rent-a- Car. Notice of incomplete issued to applicant no 240 HAMILTON AV Major ARB and variance to allow a new 15,000 sf mixed use building. ARB Approved 7/18/13, appealed no 1875 EMBARCADERO RD Site and Design Review for the golf course reconfiguration project. Pending Council review PTC and ARB completed no 3980 EL CAMINO REAL APT 001 PC Application for conversion of Buena Vista Mobile Home Park. Project under review yes 2755 EL CAMINO REAL PC for a 19,563 sf, four story mixed use building with three stories of below grade parking. CC prelim was February 2013. 9/11/13 PTC Planned Community initiation continued to date uncertain yes City of Palo Alto Page 15 The development described above represents a portion of the total number of projects under review by Planning staff and other City representatives; it includes projects that would do any of the following: add over 5,000 square feet of net new floor area, require design review under the Site & Design process, consist of a major subdivision and/or a Preliminary Review of a major project. As illustrated in the charts in the preceding section, the Development Services Department issues a significant number of building permits each year, with total building permit valuation approaching $600 million in FY 2013. New developments typically represent an increased intensity of use at each site as compared to the existing conditions. This increased intensity of use can place additional demands on the roadway network and automobile parking infrastructure. Citizens have clearly communicated their concerns regarding the perceived increase in automobile traffic, the reduction of available parking spaces in public-owned lots, automobile parking intrusion into residential neighborhoods adjacent to commercial areas, and overall difficulty in moving through intersections due to traffic congestion. As illustrated earlier, daily traffic volumes ebb and flow over time, and with the end of the recession, volumes are approaching levels attained during the Dot-Com boom. In addition, local and regional traffic congestion is noticeably worse for drivers, whether they’re commuting long distances, or making short local trips. Complaints about traffic and parking are widespread across the Bay Area. Architecture & Design A relatively recent community concern engendered by ongoing development activity relates to the architecture and design of newly constructed buildings. Some community members have complained that the Architectural Review Standards, contained within the Municipal Code, are not being applied strictly and evenly and as a result, new buildings do not meet the level of architectural quality that Palo Alto expects. This concern about design compatibility is often expressed as a critique of individual projects that have been approved since the adoption of the 1998-2010 Comprehensive Plan. Some of these projects are listed in the following table: City of Palo Alto Page 16 Sample of Significant Projects Approved Since Adoption of 1998-2010 Comprehensive Plan Projects Zoning Year Approved 800 High Street- multi-family residential PC 2003 Vantage of Palo Alto ROLM 2003 Echelon- multi-family residential, East Meadow Drive ROLM 2004 Downtown parking garages (High Street & Bryant) PF/PC 2000 Hyatt Ricky’s/Arbor Real- multi-family residential CS/CN/R- 1/RM-15 2005 TKCJL- community center and residential PC 2006 Altaire- Fabian Way, multi-family residential, affordable housing PC 2006 801 Alma- affordable housing RT-50 2009 Sterling Park multi-family residential, E. Bayshore Rd. ROLM 2007 Elks Lodge/Rosewood Gate- multi-family residential and private lodge RM- 15/RM- 30 2007 Palo Alto Bowl Site Redevelopment- hotel and multi-family residential CS 2009 Alma Plaza- retail and multi-family residential PC 2007 SUMC- hospitals modernization and expansion Hospital 2011 Edgewood Plaza- retail redevelopment PC 2013 101 Lytton- commercial office PC 2011 Source: Planning and Community Environment Department By comparison, there has been relatively little criticism of the post-war strip mall design of El Camino Real, for example, or other mediocre architecture from earlier periods. City of Palo Alto Page 17 Most importantly, discussion of some existing standards and their rigid application (height limit, for example) can contribute to poorer building design when the density and FAR (floor area ratio) of a project remains unchanged. A discussion of design as an integrated systems challenge and not simply a collection of individual standards and requirements could generate an important and needed conversation and improve design. Land Use & Transportation Studies In addition to considering and approving individual development applications that are consistent with the 1998 Comprehensive Plan, the City has undertaken numerous land use and transportation studies since the adoption of the Comprehensive Plan: Land Use and Transportation Studies Completed/In-progress since Adoption of 1998-2010 Comprehensive Plan Projects Completed / In-progress Downtown Cap Study In-progress Phase 1 data collection/analysis completion: May 2014 Phase 2 policy development and CEQA completion: October 2014 Comprehensive Plan Amendment  Transportation Element- Council review  Citywide Transportation Model- Council review  Land Use Element- Council review  California Avenue Concept Area Plan  East Meadow Circle/Fabian Way Concept Area Plan In-progress Completion Q2 2015 Q1 2014 Q1 2014 Q1 2014 PTC Review 11/20 Council approved Jan 2012 2014-2022 Housing Element In-progress Completion: Q1 2015 City of Palo Alto Page 18 Transportation survey Completed; to be Transmitted to Council 12/9/13 Residential Permit Parking (RPP) Programs In-progress, scheduled for Council discussion on 12/16/13 Parking studies In-progress, status will be provided at the RPP Council discussion on 12/16/13 California Avenue Streetscape In-progress, currently out to bid High Speed Rail/CalTrain Modernization In-progress El Camino Real Grand Boulevard Initiative In-progress Sidewalk Width Colleague’s Memo Implementation In progress, ARB & PTC input Q1 2014 Urban Forest Master Plan In-progress Completion June 2014 Parks & Recreation Master Plan In-progress Arts & Innovation District, 27 University On-hold, pending outcome of the 12/2/13 study session 1999-2006 Housing Element 2003 South of Forest Area Coordinated Area Plan I & II 2003- 2005 El Camino Real Design Guidelines Adopted by ARB in 2002 and incorporated in the Municipal Code in 2005) 2005 El Camino Real Master Plan Study 2007 Zoning Ordinance Update 2007 Baylands Master Plan 2009 Bicycle and Pedestrian Master Plan 2012 City of Palo Alto Page 19 Sustainable Communities Strategy, Plan Bay Area 2013 2007-2014 Housing Element 2013 Rail Corridor Study 2013 Source: Planning and Community Environment Department The renewed pace of development since the end of the recession, daily traffic and parking conditions, and the number of concurrent planning studies, have resulted in many people feeling that there is no coherent vision or narrative connecting individual project review and the various planning efforts underway. This feeling has led to significant discontent with the Planned Community (PC) district rezoning process as well some concerns that the Comprehensive Plan is being ignored or has lost its currency. Planned Community Development Rezoning to a PC district follows a set of procedures and standards, which are prescribed in Chapter 18.38 of the Palo Alto Municipal Code (PAMC). The PC process begins with PTC review of the concept plans, development program statement and draft development schedule. If the PTC recommends initiating the PC request, the development plan, site plan, landscape plan and design plans are submitted to the ARB for design review in the same manner as any commercial or mixed-use project. The environmental document is prepared and circulated prior to ARB consideration. The development plan recommended for approval by the ARB is then returned to the PTC, together with a draft PC ordinance and environmental document, for review and recommendation to the City Council. The PC ordinance would identify the permitted and conditionally permitted uses and site improvements, as well as a schedule for completion of the project. The Council may approve a PC zone change only if it finds that: 1. The site is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow the proposed development. 2. Development of the site under the provisions of the PC planned community district will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. In make the findings required by this section, the Planning and Transportation Commission and City Council, as appropriate, shall specifically cite the public benefits expected to result from use of the planned community district. City of Palo Alto Page 20 3. The use or uses permitted, and the site development regulations applicable within the district shall be consistent with the Palo Alto Comprehensive Plan, and shall be compatible with existing and potential uses on adjoining sites or within the general vicinity. The PC process, whereby the City and a developer negotiate site-specific design and development standards in exchange for “public benefits,” is viewed by many as too opaque and transactional, allowing neighborhood impacts to be “traded” for benefits that accrue to those outside the immediate vicinity. The process and some of its outcomes (i.e. the public benefits resulting from individual projects) have been critiqued as inadequate, and the ad hoc nature of each separate negotiation has contributed to community concerns about the lack of a coherent set of values or vision for the future. The following table describes the Planned Community districts approved by Council since the adoption of the Comprehensive Plan in 1998. Council Adopted Planned Community Districts Since 1998 Planned Community Address Known As Approval Date Public Benefits PC-4511 502-562 Driscoll Place Driscoll Place Townhomes 07/01/98 TDM program, pedestrian oriented landscaping on ECR, BMR units PC-4611 445 Bryant Street Parking Lot S/L 03/20/2000 Parking garage, landscaping, art PC-4612 528 High Street Parking Lot R 03/20/2000 Parking garage, landscaping, art PC-4637 PC-2533 3000 El Camino Real Palo Alto Square; amendment to previously approved PC 05/22/2000 None listed on original 1969 ordinance. PC-4753 2051 El Camino Real 2051 El Camino Real 06/13/2002 Redevelopment of underutilized site, two smaller housing units, one BMR unit. PC-4779 800 High Street 800 High Street condos 02/18/2003 Public parking, open space plazas, auto access to 801 Alma affordable housing City of Palo Alto Page 21 site, BMR units PC-4782 33 Encina Avenue Opportunity Center 03/17/2003 Services center for homeless, BMR units. PC-4831 2701 El Camino Real Sunrise Assisted Living 06/21/2004 Redevelopment of underutilized site, senior assisted living units, BMR units for 12 persons, publically accessible open space, $20K for street trees at ECR, art, Avenidas meeting space PC-4843 PC-2592 690 San Antonio Avenue Auto dealership design features; amendment to previously approved PC 10/04/2004 None listed on original 1971 ordinance. PC-4846 PC-2554 1730 Embarcadero Road Auto dealership design features; amendment to previously approved PC 10/04/2004 None listed on original 1970 ordinance. PC-4847 PC-3350 1766 Embarcadero Road Auto dealership design features; amendment to previously approved PC 10/04/2004 None listed on original 1982 ordinance. PC-4917 3895 Fabian Way Altaire Market Rate Condos / Alta Torre Senior Apts. 10/10/2006 Alta Torre 100% BMR senior apartment units PC-4918 901 San Antonio/3921 Fabian Way Taube-Koret Campus for Jewish Life 10/10/2006 Shared-use community facility, BMR senior assisted living units PC-4956 3388-3557 Alma Village Circle Alma Plaza 06/18/2007 15K sqft grocery store as a permanent use, park, community room, 14-BMR units PC-4995 449-453 Addison Avenue Creation of a flag lot 03/10/2008 Allows preservation of two historic residences PC-5034 488 West Charleston Road TreeHouse Apts. 03/30/2009 100% BMR project, 35 units City of Palo Alto Page 22 PC-5069 2180 El Camino Real JJ&F Market 01/11/2010 8,000 sqft grocery store, four BMR units, $5K tree planting on ECR PC-5116 4025-4075 El Camino Way Palo Alto Commons, residential addition 04/21/2011 $100K to Avenidas, rental senior assisted housing, pedestrian/bus stop improvements PC-5150 2060 Channing Avenue Edgewood Shopping Center 04/09/12 Preservation of historic grocery store, public park, 3 charging stations, historic preservation payment PC-5158 101 Lytton Avenue 101 Lytton Commercial Office 06/11/12 4 charging stations, 1 zip car space, parking study payments of $310K, BMR non-profit rental space, 8 surface parking spaces Discussion Comprehensive Plan Update Using the work of the PTC on the Comprehensive Plan Amendment as a foundation, Staff suggests that now may be the appropriate time to initiate a renewed community engagement effort around the Comprehensive Plan’s vision and priorities. A visioning exercise would examine goals and priorities related to community character, land development, traffic and parking, and the preservation and conservation of valuable resources, and could be conducted concurrently with a comprehensive cumulative impacts analysis in the form of a program-level Environmental Impact Report (EIR). Specific questions that could be framed for the public’s consideration include:  Should the City increase, decrease or maintain the non-residential development caps currently in-place for Downtown and the 1986 land use study areas?  Are there specific areas or development sites that should be the focus of change, so as to protect and preserve other areas?  Are there specific transportation investments that are needed in the near term or long term to improve mobility, preserve the City’s neighborhoods, and perpetuate a robust economy? City of Palo Alto Page 23 At the time of the work plan initiation in 2006, the City Council did not include a visioning exercise as part of the Comprehensive Plan Amendment. However, given the length of time it has taken to amend the Comprehensive Plan and the significant changes that have occurred since the adoption of the existing Comprehensive plan in 1998, Council may find it appropriate to conduct a visioning exercise at this time. The outcome of the visioning exercise would be to inform the Comprehensive Plan Amendment process and validate or alter the work that has been achieved thus far. The visioning exercise will require additional time and resources, but can happen concurrently with preparation of a program-level EIR, which can provide the kind of overarching cumulative impacts analysis that members of the community are requesting and also propose a series of mitigating actions and programs for incorporation into the plan. The graphic below illustrates how the community visioning process and the program-EIR can combine to inform the final Comprehensive Plan amendment that is proposed for adoption by the City Council. If Council is amenable to this overall approach, staff would return to Council with a work plan and schedule early in 2014. The Council will also have to decide which implementing ordinances and practices can be tackled concurrently with the Comprehensive Plan Amendment, and which should be reserved for future action. For example, the Council could seek to reform the Planned Community zoning process ahead of the Comprehensive Plan Update or as part of that process. The Council City of Palo Alto Page 24 could also initiate the reform themselves, or request the PTC formulate a recommendation first. One important issue to note is that the Housing Element of the Comprehensive Plan will have to be updated on a separate schedule due to requirements in State law. Specifically, an update for the planning period 2014-2022 must be completed and adopted in January 2015 or the City will face significant penalties. The most notable penalty would be a requirement to update the element again in four years, rather than in eight years as provided for in SB 375 and companion legislation. Planned Community Zoning Planning staff believes that the Planned Community zoning tool can be re-examined and refined to better achieve its original intent. As stated in the Specific Purposes section of PC regulations, “The planned community district is particularly intended for unified, comprehensively planned developments which are of substantial public benefit, and which conform with an enhance the policies and programs of the Palo Alto Comprehensive Plan.” There may be intersections between this effort and the Comprehensive Plan update, and possible refinements can range from wholesale reform to adjustments that:  Specifically define the types of projects that may apply for a PC district;  Create minimum lot sizes that would be eligible for PC districts;  Establish a buffer (a minimum distance) between a proposed PC district and existing low-density residential districts;  Create a menu of public benefits that would be allowed under a PC, and/or  Establish a mechanism for mitigation and condition monitoring. Pipeline Projects The Council may decide whether to entertain rezoning proposals -- including proposals for the use of the PC district – prior to reforming the PC zoning process and/or completing the Comprehensive Plan update. Logically, most such proposals would be deferred, however there may be special circumstances in which the Council may wish to consider a rezoning proposal and the Council could choose to articulate related criteria or provide other guidance to property owners. This community has long valued property rights of landowners to develop in conformance with existing zoning. Both State law (State Permit Streamlining Act) and local law prescribe time City of Palo Alto Page 25 limits time limits for processing entitlements for zoning compliant projects. Also, the ability of a local jurisdiction to efficiently and predictably process building permits and other entitlements that are consistent with its zoning regulations typically helps to define a positive business climate. Palo Alto takes pride in a business climate that supports innovation and entrepreneurship; this climate would be challenging to maintain if proposals that are consistent with current zoning regulations are deferred. There are also legal hurdles associated with deferring certain zoning compliant projects. On the other hand, Council has much more flexibility in deferring consideration of discretionary zoning decisions like PC’s or other up-zoning requests. The need to process development proposals that are consistent with current zoning regulations at the same time that the City is working on community-wide planning issues, suggests the need for consistency and transparency. Applicants and members of the public should clearly understand the existing regulations and standards by which a project is being evaluated, how direct, indirect, and cumulative impacts of the project are assessed, and how the project relates to the Comprehensive Plan update and other planning and transportation initiatives that are underway. While Staff is suggesting a visioning initiative with a strong emphasis on the Comprehensive Plan it is important to recognize that existing zoning on all properties in the city is the most concrete form of a city’s land use plan and placing restrictions on the use of that zoning (or down zoning) is something that requires extensive engagement with property owners and others in the community. This is a fact that is frequently misunderstood or ignored by some members of the public when the Council considers applications under existing zoning. Traffic and Parking Much of the community’s concerns regarding PC zoning and the cumulative impacts of development in general relates to parking and traffic issues. The Council will be getting an update on aspects of these issues in the coming weeks as staff brings forward a study session regarding Transportation Demand Management (TDM) on December 9th and a framework for Residential Permit Parking on December 16th. In this context, staff will also summarize initiatives to expand parking supplies. Also, on December 12th, staff will be providing the PTC with a summary of the traffic analysis methodology that is used to assess project-specific and cumulative impacts, including the adjustments that are being made to reflect an updated travel demand model. Following City of Palo Alto Page 26 Commission questions and comments, staff will forward a revised summary/explanation to the Council for review. Timeline The City Council has initiated a community outreach plan for a discussion of the City’s Core Values, and has requested that the public outreach component be completed in time for Council’s yearly retreat in Q1 2014 where Council sets its priorities for the upcoming year. The PTC is scheduled to provide recommendations regarding elements of the Comprehensive Plan amendment in the same timeframe. The Council may wish to use both events to preface a community engagement/visioning process about community character, land development, traffic and parking, and other topics, and to direct this community engagement effort to be completed concurrently with preparation of the program-level EIR for the Comprehensive Plan update. The Council may also wish to revise the City’s PC zoning process in 2014, and the City is required to update the Housing Element of its Comprehensive Plan by the end of January 2015. As a prelude to any revision process on PC’s, the City Manager recommends that all current PC projects under consideration be stopped and put on hold for a sufficient period of time to allow this comprehensive review of our plans and policies to unfold. At the closure of the study session, staff will attempt to summarize direction from the Council. One or more related action items will be brought back to the Council for formal direction early in the 2014. Resource Impact Resources to conduct a City-wide visioning process will vary depening upon the scope of the exercise. Resources to review and reform the PC zoning process will depend on the Council’s desired approach and schedule. The City Manager intends to restructure existing staffing to ensure an extensive community engagement initiative. This may include additional resource investments. The need for more planning capacity and staff will be a subject of the upcoming budget review and City Manager recommendations on the Budget. Future agenda items will outline alternative approaches and resources in detail, following Council’s study session. Policy Implications A community visioning exercise and cumulative impacts analysis (in the form of a program-level EIR) can result in an updated Comprehensive Plan with broad community support. At the same City of Palo Alto Page 27 time, reforms to the PC zoning process can improve the public’s perception of City government by focusing on ways to improve transparency and predictability, and updating the City’s Housing Element can ensure continued compliance with State housing laws. All three efforts, as well as ongoing initiatives related to traffic and parking, can honor the policies and programs of the existing Comprehensive Plan, including Program G-2: Periodically assess the need for citizen input on various policy issues and appoint advisory bodies and ad hoc committees as needed, and Policy G-11: Encourage the development of new planning processes that emphasizes a collaborative exchange of ideas. Retain City Council authority over decision- making in these processes. Environmental Review Study sessions by definition are not “projects” under CEQA, because no actions will be taken. When staff returns for Council direction regarding the issues discussed, the agenda report will provide information about the CEQA process for zoning and Comprehensive Plan changes that are considered in the future. Attachments:  Attachment A: Comprehensive Plan Update Overview (DOCX) ATTACHMENT A Comprehensive Plan Update Overview The ongoing Comprehensive Plan update has suggested rearranging chapters and elements and substantially changing the format of the existing plan, without changing its core values. The update also attempts to address the challenges of today, including affordable housing, sustainability and climate adaptation, traffic and parking, and maintaining a place in the community for non-profits and new businesses that can’t pay the same rents as established commercial enterprises. New policies and programs are intended to clarify existing policies and programs and to accommodate new State requirements. Aspects of the Comprehensive Plan that are proposed to remain unchanged include: 1. The limit of 3,257,900 square feet of new non-residential development in the 1986 land use study areas; 2. The limit of 350,000 square feet of new non-residential development in the Downtown area, or 10% above the amount of development existing or approve as of May 1986, and 3. The existing road network within the city. As currently drafted, approximately 85% to 90% of the existing policies and programs would be carried over either unchanged or with edits to improve clarity, intent, and to reduce repetition: Continuation of 1998-2010 Comprehensive Plan Goals, Policies, and Programs Elements % of Programs Completed and Not Continued % Edited and Carried Over % Carried Over w/o Edits Total % Carried Over Land Use Element 13 48 39 87 Transportation Element 11 70 19 89 Housing Element 13 69 18 87 Community Services and Facilities Element 14 46 40 86 Natural Environment Element 15 52 33 85 Source: Planning and Community Environment Department In addition to the carry-over of existing polices and program from the 1998-2010 Comprehensive Plan, staff and the PTC have suggested adding many new policies and programs that are meant to address existing priorities of the City, such as: Land Use Element L1.1 POLICY Require that land use policies be consistent with Palo Alto’s Climate Protection Plan, striving to achieve and exceed target reductions in greenhouse gas emission levels set forth by City Council goals from City operations and community emissions. (New Policy) L2.9 POLICY Require infrastructure improvements to serve all areas of the City fairly, address the most urgent needs, and accommodate future growth. (New Policy) L3.11.1 PROGRAM Introduce measures to counteract the loss of retail activities in Palo Alto’s Neighborhood Centers. (New Program) L3.18 POLICY Encourage retention and enhancement of research and development (R&D), office, light industrial, and commercial development consistent with the East Meadow Circle Concept Plan ensure that new and existing development is compatible and includes appropriate transitions to nearby single- and multi- family development. (New Policy) Transportation Element T1.1 POLICY Reduce greenhouse gas emissions associated with transportation by reducing vehicle miles traveled and per-mile emissions through use of vehicle technologies to meet the City’s goals for greenhouse gas reductions by 2020. (New Policy) T4.1.1 PROGRAM Develop a Parking Management Program for both the University/Downtown and California Avenue business districts that supports alternative transportation modes. (New Program) T4.3.1 PROGRAM Study parking pricing and congestion pricing options for on-off-street parking in the Downtown/University Avenue and California Avenue business districts that is responsive to the market and results in approximately 85% parking occupancy. As part of creating this system, review the existing Downtown parking system to ensure it is still consistent with the overall approach to parking in the Downtown, and includes mechanisms that allow merchants to defray parking fees for their customers. (New Program) T4.5.1 PROGRAM Review on-street parking availability in residential neighborhoods adjacent to business districts to determine how it is used during business and non-business hours. Consider allowing designated disabled on-street parking upon resident request when conducting this review. (New Program) T4.5.2 PROGRAM Develop a program to implement new residential permit parking districts to preserve neighborhood quality of life. (New Program) Community Services and Facilities Element C1.3 POLICY The City’s community services should be a catalyst in creating a culture of health, wellbeing and active living in our community. It shall contribute to the intellectual physical and social health of the community by providing opportunities for learning, expression and social interaction for all ages at our libraries, community facilities, parks and cultural centers. (New Policy) C1.4 POLICY Incorporate the “Developmental Assets” approach into the City’s planning, development, implementation and evaluation of programs and services for children and youth. (New Policy) C1.6 POLICY Develop strategies to help the community identify and combat depression, isolation, stress and other mental health issues. (New Policy) Natural and Urban Environment and Safety Element N2.1 POLICY Achieve and exceed City Council targeted goals for reductions in greenhouse gas emission levels from City operations and community emissions. (New Policy) N2.3 POLICY Pursue the goal of achieving zero net energy homes for all new detached or single-family residences by 2025. (New Policy) N3.5 POLICY Encourage renewable energy use by continuing to implement a dynamic 100% carbon neutral Renewable Portfolio Standard for electric service. (New Policy) N8.10 POLICY Regularly review the adequacy of law enforcement services and emergency services in the city. Plan and develop law enforcement infrastructure and technology according to overall need and the growth within the City. (New Policy) Housing Element H3.1.10 PROGRAM Adopt a revised density bonus ordinance that allows up to a maximum zoning increase of 35 percent in density and grants up to three concessions or incentives. The density bonus ordinance will meet State standards for the provision of housing units for very low- and lower-income renters, seniors and moderate-income condominium buyers in compliance with Government Code Section 65915, et seq. (New Program) H 2.2.6 PROGRAM Amend the Zoning Code to create zoning incentives that encourage development on and consolidation of smaller lots, such as development review streamlining, reduction in required parking for smaller units, setback modifications, or graduated density when consolidated lots are over one-half acre. (New Program) The intent of City staff and the PTC is to honor and maintain the themes and values described in the existing Comprehensive Plan, repeated here:  Building Community and Neighborhoods;  Maintaining and Enhancing Community Character;  Reducing Reliance on the Automobile;  Meeting Housing Supply Challenges;  Protecting and Repairing Natural Features;  Meeting Residential and Commercial Needs, and  Providing Responsive Governance and Regional Leadership and adding additional themes:  Adapting to climate change  Protecting neighborhood-serving retail  Infrastructure management  Health and well-being of our residents CITY OF PALO ALTO CITY COUNCIL MINUTES Page 1 of 20 Special Meeting December 2, 2013 The City Council of the City of Palo Alto met on this date in the Council Conference Room at 6:05 P.M. Present: Berman, Burt, Holman, Klein, Kniss, Price, Scharff, Schmid, Shepherd Absent: None Parks and Recreation Commission Members: Present: Ashlund, Crommie, Hetterly, Lauing, Markevitch, Reckdahl Absent: Knopper AGENDA CHANGES, ADDITIONS, AND DELETTIONS None CLOSED SESSION 1. Conference with Legal Counsel - Government Code Section 54956.9(b), (c) Potential Litigation: Construction of the Mitchell Park Library and Community Center The Council returned from the Closed Session at 6:50 P.M., and Mayor Scharff advised no reportable action. MINUTES Page 10 of 20 City Council Meeting Minutes: 12/02/13 STUDY SESSION 10. Initiating a Community Conversation on the Future of the City, Including the Comprehensive Plan, Planned Community Zoning, Parking and Traffic Strategies, and Related Matters. James Keene, City Manager, acknowledged that residents were fortunate to live in the center of one of the world's premier areas. Increasingly, every existing industry felt compelled to connect to Silicon Valley, and Palo Alto was the heart of Silicon Valley. The impacts of renewed demand for Silicon Valley generated significant contemporary challenges and concerns in the community. Because of concerns regarding planning for and managing of growth, the Council scheduled the Study Session. Staff was concerned about their ability to manage demands and workload. The Study Session was a positive opportunity to clarify a collective vision expressed through a renewed Comprehensive Plan and through citizen participation to inform the Council's decisions. Staff solicited initial comments and questions from the Council to shape the Staff Report. Hillary Gitelman, Director of Planning and Community Environment, reiterated that the Comprehensive Plan was the City's guiding document for land use and development decisions. Other policies were intended to be consistent with the Comprehensive Plan. The Comprehensive Plan was adopted in 1998 and remained valid. The Comprehensive Plan articulated limits for Citywide development and Downtown development, both of which the City had not reached. The Staff Report attempted to articulate changes in Palo Alto and concerns that occurred because of changes. The City had an opportunity to combine planning efforts into the Comprehensive Plan update and to subject it to community engagement and environmental review. Another opportunity was to continue short-term problem solving related to traffic and parking. A third opportunity was to continue processing projects consistent with current zoning while holding them to a high standard. Staff provided six broad questions to capture individual comments and suggestions from Council Members. In discussing the questions, Staff hoped to focus on a process and return with information at the time of the Retreat. Mr. Keene felt the Council needed time to hear from the public and to discuss broader strategies. Staff provided initial thoughts for discussion and could summarize the Council's comments at the end of the discussion. Harvey Miller indicated a discussion of the future of the City should be placed in the context of the future of the nation. The issue was the demographic shift. He provided copies of an Atlantic Monthly article regarding housing. MINUTES Page 11 of 20 City Council Meeting Minutes: 12/02/13 Low density usage caused traffic and increased land prices. More multi- family housing was needed as the population aged. Eric Filseth felt there were two conflicting visions for Palo Alto. Vision A was a medium-density, family town. Vision B was a financial and professional hub. Vision B came with unsolvable traffic, parking, pollution, and over- stretched City infrastructure and schools. Staff and the Council attempted to implement Vision B within a framework of laws supporting Vision A. A clear majority of residents were not willing to accept the costs of Vision B. Robert Lancefield urged the Council to take a long view when considering the small changes that led to large changes. Martin Bernstein stated a Planned Community (PC) was a tool for City evolution. A balance between developers and residents was key to a successful PC process. The public could support a PC if it felt it received a fair outcome. Robert Moss suggested the Council consider the interaction of planned projects with existing projects; transparency; comparison of proposed projects with the Comprehensive Plan; and careful revision of the PC process. Ruth Luoy related problems with traffic lights and lack of turn lanes on El Camino Real. Dick Rosenbaum indicated the Council was ignoring the Stanford-Arrillaga and Jay Paul Projects. The Council should direct Staff to notify both applicants that their projects were no longer likely to be approved. Neilson Buchanan recommended the Council initiate an effort with Staff and neighborhoods to understand development rights related to parking assessment districts. Staff continued to approve projects with no negative impact. Richard Brand indicated the parking problem in Professorville was worse than in areas south of Oregon Expressway. The Comprehensive Plan stated development should meet commercial needs but not at the expense of residential quality of life. People moved to Palo Alto for the quality of life it provided. David Kleiman encouraged responsible development. Projects should be parked. The Council should provide developers with transparency and consistency. MINUTES Page 12 of 20 City Council Meeting Minutes: 12/02/13 Ken Hayes stated PC Zoning allowed other opportunities not necessarily envisioned by the creators of the Zoning Ordinance. A PC Zone provided flexibility; however, that flexibility should be in accord with the objectives and spirit of the Comprehensive Plan. The PC process should engage the community. The Council should consider different PC Zone categories. Randy Popp felt existing guidelines and regulations were thoughtful and forward-thinking, imperfect but well drafted. Halting projects in midstream created an environment and an expectation of unmanageable risk. Growth of the City needed to occur in a fair and predictable manner within the established framework. Michael Alcheck remarked that a diversity of opinion was crucial to the discussion. He supported sustainable communities with smart growth and density done well. Susan Fineberg believed the Council and Staff did not listen to residents. The Council structured a planning process with predetermined outcomes that found no significant impacts. She requested the Council implement a series of reforms beginning with a moratorium on all major projects in all zoning designations; allow public participation in updating the Comprehensive Plan; revise the project review and approval process; restructure PC Zoning regulations with an emphasis on public benefit; and restore consistency and predictability for development applications that conformed with current zoning. Chris Donlay suggested the process was not broken but only running amok. The many planning hearings should allow disclosure of pertinent information. The review bodies did not apply critical thinking to individual projects. Paul Machado did not understand why the City had a Comprehensive Plan when many exceptions were granted. Herb Borock reported the 1989 Land Use and Transportation Study provided total development potential for nine areas of the City. The Council should direct Staff to provide development totals for the City and for each of the nine areas. PC Zoning was not needed to protect 100 percent affordable housing projects, because the State Housing Density Bonus Law provided protections. It was inappropriate for the Council to consider the Arrillaga and Jay Paul Projects at the current time. MINUTES Page 13 of 20 City Council Meeting Minutes: 12/02/13 Fred Balin remarked that individual projects recast the Comprehensive Plan. The current Comprehensive Plan was a good document and the result of wide community engagement; however, it was not respected. Shani Kleinhaus noted all cities in Silicon Valley struggled with traffic and parking problems. The City was slowly chipping away the open space, which was a vital treasure. Greg Goodwin related his experience with traffic and parking in San Francisco. Rapacious decisions could destroy the quality of the City. Adina Levin, Friends of Caltrain, noted the use of electronic media in other cities to include a wider population in community discussions. In coming transportation discussions, the Council should consider initiatives comprehensively and iteratively. Daniel Garber indicated the City should find ways to take advantage of growth to move forward the City's interests. Each project in the pipeline was an opportunity to work with applicants to move the City closer to its own goals. Involving the City earlier in the applicant's design process would be more effective than enacting legislation. Creating incentives to meet current parking demand was potentially a far more effective method to manage a project's size and impacts. Arthur Keller suggested the Council think proactively and consider changing past policies to reflect current needs. In addition, the Council should consider new and creative solutions. Davina Brown stated commercial development increased parking, traffic, and pollution problems while providing few benefits. She requested the Council stop granting exceptions to the Comprehensive Plan. Norman Beamer reported the City did not need more office space. The Council should halt efforts to build more office space in Palo Alto. Joe Hirsch believed residents did not like project approvals granted by the Council and its bodies. He requested a moratorium on all new higher- density developments until a Land Use and Transportation Study was completed. He requested the Council revise the Density Bonus Ordinance to grant the City more control and hold a true, two-way dialog with residents. David Jeong participated in two prior revisions of the Comprehensive Plan. The Council ignored the Comprehensive Plan and citizens' wishes. MINUTES Page 14 of 20 City Council Meeting Minutes: 12/02/13 David Adams suggested the Council eliminate the PC process and direct Staff to be transparent and impartial. Eric Rosenblum agreed that housing in Palo Alto was not affordable. Younger adults wanted a walkable community and higher density housing. Palo Alto did not need more offices. The Council had to work on the fundamental demand for transportation to alleviate the growing parking problem. Jennifer Landesmann felt out-of-scale development marred the quality of life in Palo Alto. The building height limit was important to maintain quality of life. Council Member Kniss requested Staff define Planned Community as it currently existed. Some valuable community projects would not exist without PC Zoning, such as the Opportunity Center and Tree House Apartments. In five years, the number of jobs in Palo Alto increased from 70,000 to 90,000, which caused a great deal of the parking problems. She requested Staff comment on traffic data provided in the Staff Report. Ms. Gitelman noted two data sets were included in the Staff Report. One was average daily traffic volumes for a number of locations in Palo Alto, comparing 1999 volumes with 2013 volumes. In many locations, daily traffic volumes were not equal to those in 1999; although, some areas were approaching 1999 volumes. The second data set compared average daily traffic volumes along El Camino Real from 2002 through 2012. That data demonstrated that traffic was essentially stable. Traffic data did not show significant traffic degradation. Traffic volumes followed economic cycles. Council Member Kniss was surprised by the data. The community had grown and changed since the 1980s. The Council did listen to public comments. Palo Alto was a vibrant and exciting community to live in. Council Member Schmid felt the dialog with respect to the Comprehensive Plan should express the vision for Palo Alto. The starting point for public dialog was the identification of data. While Staff's data indicated traffic was declining, travel time seemed to increase. He utilized data from the Current Comprehensive Plan and the recent Stanford project to determine that traffic delay at 12 intersections increased from 35 to 55 percent at each intersection between 1996 and 2009. Traffic studies provided by development projects indicated the number of cars at specific intersections increased 20 percent. Traffic was increasing dramatically, on the average of 3-5 percent per year. He requested Staff comment on the conflicting information provided through these studies. MINUTES Page 15 of 20 City Council Meeting Minutes: 12/02/13 Ms. Gitelman wished to clarify that traffic volumes were not the sole determinant of congestion. Peaking characteristics would differentiate daily traffic volumes from peak hour traffic volumes. Other factors were conflicting movements and signal operation. Staff needed to communicate a great deal of data as part of a comprehensive evaluation of traffic and parking impacts. Perhaps that data could be communicated in the context of the Comprehensive Plan. Council Member Schmid suggested the Council open a dialog with the community beginning with the basic issues of traffic and parking. The Palo Alto traffic model consistently indicated no significant impact to traffic. Staff could help the community engage in issues by providing data that everyone could work with. Council Member Klein believed a Special Meeting would be needed to develop a dialog. The debate of growth in Palo Alto extended to the 1890s. Palo Alto was a vibrant community. Moratoriums had many types of unintended consequences, usually negatives ones. He wanted to continue consideration of the Jay Paul Company Project. The Council needed to be creative in its outreach to all residents. Council Member Berman wanted to see smart, strategic, limited growth in Palo Alto. He expressed concern about the inability of his generation to afford housing in Palo Alto. Parking was clearly a problem for the City. The Council needed to create a comprehensive vision for the Downtown, California Avenue areas and the City as a whole. The Council and Staff would have to be creative in crafting a City dialog to create opportunities for residents to engage. Council Member Burt felt people lived in Palo Alto because they valued the quality of life in Palo Alto. The community had always been willing to accept a moderate rate of change under certain conditions. First, development projects should be high quality. Second, indirect impacts of development projects should not significantly degrade the broader quality of life. Third, residents wanted early and meaningful participation in the process for issues that affected them. The City could not accommodate every person who wanted to live or work in Palo Alto. The harm that resulted from misinformation was difficult to repair and undermined the Council's and Staff's credibility. Only 2 of the 21 projects in the pipeline were PC Zones. PC Zoning was not the primary culprit of too much development occurring too rapidly. The Council should ensure that PC projects were not abused. Zoning standards needed to be adjusted to allow public space and appropriately scaled buildings and parking. A 20 percent increase in jobs, an MINUTES Page 16 of 20 City Council Meeting Minutes: 12/02/13 8 percent increase in population, a 30-50 percent increase in intersection congestion, and a 20 percent decline in traffic was not possible. The number of PC projects had not increased over the prior 15 years. Many PC projects were now valued community assets. Community dialog was needed. He was frustrated by the lack of emphasis placed on project compliance with the Comprehensive Plan. Staff Reports should present all significant elements of the Comprehensive Plan that a project impacted. He was interested in the possibility of new projects being fully parked and perhaps even over parked. The Council needed data regarding the number of employees for each employer in the City. He favored implementation of a business registry to obtain accurate data. The review process should be altered to ensure the quality and compatibility of projects was better for the community. Council Member Holman inquired about further discussion of the topic and the possibility of Staff summarizing Council comments. Mayor Scharff indicated a Special Meeting would be held to continue the discussion. Council Member Holman requested clarity regarding next steps for Staff follow up. Council Member Klein called Point of Order. There should be an understanding regarding the length of Council Member comments. Mayor Scharff believed each Council Member should be allowed to speak at least once. Council Member Klein suggested Council Members be notified when their comments reached 15 minutes in length. Council Member Holman agreed with a number of Council Member Burt's comments. The Council recently discussed Core Values, and the Council should adopt public trust as a Core Value. The Council should require transparent, objective, and balanced Staff Reports. Data regarding traffic impacts was not plausible, and the Staff Report should contain other factors. The Staff Report mentioned support of innovation and entrepreneurship; however, it did not mention support of community character. The City should have a moratorium on PC projects, including projects in the pipeline. In a number of instances, public benefits were not delivered, were not consistent, were not clearly identified, or were not enduring. The Council, Boards, and Commissions needed specific training on compatibility. Development standards should be reviewed. Her previous question to Staff MINUTES Page 17 of 20 City Council Meeting Minutes: 12/02/13 regarding employee density in commercial space as it affected traffic analysis, parking demand, and traffic demand management programs should be addressed coherently. She also favored implementation of a business registry as a means to track traffic and parking implications. She questioned whether data contained in the Longitudinal Employee Household Dynamics Program was applicable to Palo Alto. Ms. Gitelman reported the data was specific to Palo Alto. Staff was engaged in collecting data regarding employee density as a part of the Downtown CAP Study. Council Member Holman believed California Environmental Quality Act (CEQA) training was necessary for the Council, Boards, and Commissions. The 27 University Avenue Project received public scrutiny with little of it being positive. Any project at that site should be significantly different and presented in a transparent manner. Vice Mayor Shepherd stated the sense of community in Palo Alto was vibrant. The Council's most impactful decision was dedicating 700 acres for development of Stanford Research Park. The Council could review processes to ensure transparency. She was unsure how to initiate a discussion regarding the future of the City. An update of the Comprehensive Plan had been delayed for various reasons; however, it should be presented without further delay. The City's website could contain a timeline regarding the Comprehensive Plan. Efforts to keep the community informed regarding development decisions were important. Council Member Price indicated the Council had a responsibility to define the terms of engagement. Her responsibilities as a Council Member were to represent both the current and future community. Decisions were needed regarding housing, density, and urban design. The residential population and the employment population would continue to grow. The questions were the pace of growth and how to anticipate growth. She opposed a moratorium for PC Zoning. Greater education regarding development standards, base zoning, and PC development was needed. She inquired whether the next discussion would include the integration of other plans and programs with an intensified community engagement program. Mr. Keene reported Staff would need to compile a map of the connections of all topics. Staff hoped to return to the Council in the first part of February 2014 with detailed recommendations. Time and intensive Staff work was needed to organize information coherently. MINUTES Page 18 of 20 City Council Meeting Minutes: 12/02/13 Council Member Price asked if a discussion of PC reform would occur in the short term. Mr. Keene would return to that issue in the summation. Mayor Scharff felt the Council was concerned with quality of life. The Council made progress during the year regarding parking; however, progress was small when compared to the magnitude of the problem. He wanted the City to build a parking garage. He inquired about the amount of money contained in the Parking Fund. Aaron Aknin, Assistant Director Planning and Community Environment, indicated the Parking Fund would contain $4-$4.5 million by the end of 2014. Mayor Scharff believed a parking garage and a Residential Parking Permit (RPP) Program would provide relief to neighborhoods. Traffic was a continuing problem. The best way to solve both the traffic and parking problems was to reduce car trips through a Traffic Demand Management (TDM) Program. The Planning Department was overwhelmed with initiatives. Updating the Comprehensive Plan while engaging the community was important. He asked if an updated Comprehensive Plan could be presented to the Council in two years. Mr. Keene responded yes. Mayor Scharff requested the City Manager provide a plan to increase Staff in the Planning Department. Both the City Manager and Director of Planning should carefully review Staff Reports for logic and accuracy. Staff Reports should list advantages and disadvantages in order to provide information to the Council. The right way to engage the community was through the Comprehensive Plan. Staff should come back with a plan for doing that. The City should have a moratorium on processing PC applications until the community understood PCs and PC Zoning. Mr. Keene clarified that the Jay Paul Project and the Arrillaga Outreach Project were removed from the December 2013 Agenda because of a community design process. The Agendas for meetings on December 9 and 16, 2013 were full. A discussion to frame the issues related to PC Zoning would inform next steps. Given the Council's comments, Staff would have to navigate between accuracy and completeness in its reports and recommendations. The Staff Report was careful not to draw conclusions with respect to the traffic data. Staff would begin a data and research initiative to support the Comprehensive Plan process. First Staff would need MINUTES Page 19 of 20 City Council Meeting Minutes: 12/02/13 to design a process for and have the capacity to support and implement topics suggested by the Council. Citizen participation and outreach alone would be a major undertaking. The Comprehensive Plan and Cumulative Impact initiative was the organizing focus around which other planning processes had to converge. The entire process would be a public collaboration that would be iterative and evolutionary. Staff could provide recommendations on the two PC projects for specific action prior to returning with components for the Comprehensive Plan discussion. He questioned whether the Council wished to target February 2, 2014 for Staff to return with the process design and resource plan. Ms. Gitelman noted public and Council comments covered many aspects of planning. Staff could return with specific resource and scheduling items or continue the Study Session discussion. Council Member Holman wanted to continue the discussion to either December 9 or 16, 2013 in order to provide clear direction to Staff regarding next steps. Mr. Keene could not include the discussion on either December 9 or 16. Staff could return on one of those dates with the two PC projects. Council Member Holman clarified that Staff would not need to return on December 9 or 16 with responses. She wanted the Council to complete the dialog in order to provide Staff with definitive direction. Mayor Scharff agreed the December 9 and 16 Agendas were full. The Council could hold a Special Meeting in December 2013; however, he was unsure if a Special Meeting was necessary. He understood Staff recommended February 2014 as a possible date. Mr. Keene reported Staff would return sooner than February 2014 if they could complete the work sooner. The main themes for discussion were clear. He wondered whether a Council discussion of next steps would be efficient. Council Member Kniss did not believe a discussion of next steps was needed. Staff would have a difficult time summarizing the Council discussion. Council Member Holman reiterated that she wished to hold a Council discussion to assist Staff with determining next steps. Council Member Kniss expressed confidence in Staff's ability. MINUTES Page 20 of 20 City Council Meeting Minutes: 12/02/13 Council Member Schmid suggested a prioritization of questions related to the Comprehensive Plan, visioning, and engagement would be helpful. It might be helpful for the Council to engage in determining the first steps. Mr. Keene indicated it was not realistic for Staff to prepare information in only eight days for the Council meeting on December 16, 2013. Staff needed time to organize and compile information. All the main pieces were there; Staff needed time to add details regarding the process. Council Member Burt inquired whether a discussion in January 2014 was feasible. Mr. Keene would begin working on information and provide a status update close to the New Year. Staff could present the two PC projects for a decision on January 13, 2014. ADJOURNMENT: The meeting was adjourned at 12:05 A.M. City of Palo Alto (ID # 4414) City Council Staff Report Report Type: Action Items Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: PC Time-Out and Zoning Reforms Title: PC Time-Out & Reform. Staff Recommends Adoption of a Motion: (a)Expressing the Council’s Intent to Defer Requests for Rezoning to the Planned Community (PC) Zoning District Until the Process and Requirements Regulating the PC Zone in Chapter 18.38 of the Municipal Code are Revised, and (b) Directing Staff to Return to the Council with an Analysis of Potential Revisions and Alternatives to the PC Zone for Public Input and Discussion From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council consider the following two motions: (a) expressing the Council’s intent to defer requests for rezoning to the Planned Community (PC) zoning district until the process and requirements regulating the PC zone in Chapter 18.38 of the Municipal Code are revised, and (b) directing staff to return to the Council with an analysis of potential revisions and alternatives to the PC zone for public input and discussion. Executive Summary As discussed at the Council December 2, 2013 “Future of our City” discussion, the PC process, whereby the City and a developer negotiate site-specific design and development standards in exchange for “public benefits,” has been viewed by many as too opaque and transactional. While many acknowledge the success of some past PC developments and advantages of PC zoning as a tool, the process and some of its outcomes have been critiqued as inadequate. Furthermore, the ad-hoc nature of each separate negotiation has contributed to the community concerns about the lack of a coherent set of values or vision for the future. Based on this concern, the Planning and Transportation Commission (PTC) and others have offered their analysis and suggestions about ways to improve the process. City of Palo Alto Page 2 Staff is proposing to conduct an analysis of proposed alternatives and reforms to the PC district to better achieve the district’s intent and is suggesting a “time-out” on PC re-zonings until reforms can be enacted. Staff’s analysis would include a thorough public review process, culminating in a draft ordinance to be presented to City Council. There is only one PC proposal currently pending before the City that could potentially be affected by this time-out. Background On December 2, 2013, the City Council initiated a community conversation about topics related to the future of Palo Alto, including topics such as the update of the Comprehensive Plan, traffic and parking problems and solutions, and new development within existing commercial corridors. The topic of PC districts and the need for possible reforms to the requirements and process were also discussed. While many Council Members acknowledged that there have been successful Planned Communities and that Palo Alto is one of the few cities in the position to receive public benefits, there was general agreement that the process could be improved. The City of Palo Alto established the regulations PC districts with the adoption of the City’s original Zoning Ordinance on February 19, 1951 (Ordinance No. 1324). The original purpose of the PC district, which remained unchanged for 27 years, was the following: “The PC district is designed to accommodate various types of development such as neighborhood and district shopping centers, professional and administrative areas, multiple housing developments, single-family residential developments, commercial service centers and industrial parks or any other use or combination of uses which can be made appropriately as part of a planned development.” The initial PC district regulations established the permitted uses (all and any uses shown on the development plan as approved by the City Council), conditional uses (all uses except a single- family residence on an approved building site), height and space requirements (as shown on the development plan), requirements for the Development Plan (including a map of street system, land use plan, public amenities, plot plans, parking and circulation diagrams, and landscape plans), and requirements for the project’s development schedule. The PC district regulations were revised in 1978 and have largely remained intact until the present. The Specific Purpose of the PC district now reads: “The PC planned community district is intended to accommodate developments for residential, commercial, professional, research, administrative, industrial, or other activities, including combinations of uses appropriately requiring flexibility under controlled conditions not City of Palo Alto Page 3 otherwise attainable under other districts. The planned community district is particularly intended for unified, comprehensively planned developments which are of substantial public benefit, and which conform with and enhance the policies and programs of the Palo Alto Comprehensive Plan.” The 1978 revisions included significant additions:  PC district findings, including the finding for public benefits not otherwise attainable by application of the general districts or combining districts;  A description of the application process, including the requirement for PC district initiation by the Planning Commission, design review by the Architectural Review Board, and a final review and recommendation by the Planning Commission to the City Council;  A requirement for a development program statement, essentially a written project description, that demonstrates the necessity of the PC district and information demonstrating consistency with the PC district findings;  Conditions of reversion, in the case when a developer fails to meet the adopted development schedule, and  Special requirements, including more restrictive site development requirements, for PC districts within 150-feet of low-density residential districts. These special requirements include the establishment of a daylight plane, a more restrictive maximum height, setbacks, and landscaping screens. The requirements for PC district adopted in 1978 remain essentially intact to the present day, with minor revisions to refine the application process and requirements, Development plan, Special requirements, Development schedule, PC inspections, and Recycling storage, among other minor changes. Planned Community Rezoning Procedures As introduced above, rezoning to a PC district currently follows a set of procedures and standards, which are prescribed in Chapter 18.38 of the Palo Alto Municipal Code (PAMC). The PC process begins with PTC review of the concept plans, development program statement and draft development schedule. If the PTC recommends initiating the PC request, the development plan, site plan, landscape plan and design plans are submitted to the ARB for design review in the same manner as any commercial or mixed-use project. The environmental document is prepared and circulated prior to ARB consideration. The development plan recommended for approval by the ARB is then returned to the PTC, together with a draft PC ordinance and environmental document, for review and recommendation to the City Council. The PC City of Palo Alto Page 4 ordinance would identify the permitted and conditionally permitted uses and site improvements, as well as a schedule for completion of the project. The Council may approve a PC zone change only if it finds that: 1. The site is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow the proposed development. 2. Development of the site under the provisions of the PC planned community district will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. In make the findings required by this section, the Planning and Transportation Commission and City Council, as appropriate, shall specifically cite the public benefits expected to result from use of the planned community district. 3. The use or uses permitted, and the site development regulations applicable within the district shall be consistent with the Palo Alto Comprehensive Plan, and shall be compatible with existing and potential uses on adjoining sites or within the general vicinity. The current ordinance does not specifically define community benefits and over the years there have been different community perspectives on how to address this issue. The City Council has approved over 100 PC districts (including revisions to existing PC districts), beginning in 1951 with PC-1362 at 3401-45 Alma Street for commercial uses and an automobile service station (later zoned to PC-4956 as Alma Plaza) and concluding most recently in June 2012 with PC-5158, the development known as 101 Lytton. The general types of PC districts that have been established include approximately 40% commercial, 50% residential and 10% mixed-use projects. In the past year, one request for a PC district was withdrawn (395 Page Mill Road, Jay Paul Development Company) and another was rescinded by public vote (Maybell-Clemo residential project, Palo Alto Housing Corporation). There is only one PC zoning application currently pending, which is proposing a 33,000 sq. ft. office building on the former VTA lot on the corner of Page Mill Road and El Camino Real (2755 El Camino Real). This application was submitted to the City on June 3, 2013, and has since been undergoing a review process. The PC zoning initiation was considered by the PTC in October 2013 and was continued to a date uncertain with a request to provide additional economic information related to the proposed public City of Palo Alto Page 5 benefit. A description of the proposed development and the public benefits proposed by the applicant are attached to the staff report. The City has also recently hired a land use economics consultant who has prepared a draft financial review of these public benefits. Among other findings, the report concluded that a potential development could be profitable under both a PC zoning designation and a C-S zoning designation. Discussion The PC process, whereby the City and a developer negotiate site-specific design and development standards in exchange for “public benefits,” is viewed by many as too opaque and transactional, allowing neighborhood impacts to be “traded” for benefits that accrue to those outside the immediate vicinity. The process and some of its outcomes (i.e. the public benefits resulting from individual projects) have been critiqued as inadequate, and the ad hoc nature of each separate negotiation has contributed to community concerns about the lack of a coherent set of values or vision for the future. Planning staff is recommending a “time-out” on PC projects to allow an examination of the potential alternatives and reforms, which conform with and enhance the policies and programs of the Palo Alto Comprehensive Plan. There may be intersections between this effort and the Comprehensive Plan Update, or reforms may be sought as near term actions. Possible alternatives/reforms to the PC process could include:  Specifically define the types of projects that may apply for a PC district;  Create minimum lot sizes that would be eligible for PC districts;  Establish a buffer (a minimum distance) between a proposed PC district and existing low-density residential districts;  Create a menu of public benefits that would be allowed under a PC, and/or  Establish a better mechanism for mitigation and condition monitoring. If so directed by Council, Planning staff would analyze these and other possible alternatives and present our analysis for Council direction and public comment. Pipeline Projects As noted above, there is one request for a PC district that is currently under review: 2755 El Camino Real at the corner of Page Mill Road and El Camino Real. This development proposing a 33,000 sq. ft. office building on the former VTA lot on the corner of Page Mill Road and El Camino Real (2755 El Camino Real). This site is currently zoned P-F, reflecting that it was used by a public agency (VTA) for a public use (carpool lot). Although the current zoning designation City of Palo Alto Page 6 would not allow a commercial development, the City cannot legally deny the property owner reasonable use of their property and thus the City will likely have to entertain a reasonable re- zoning request at some point. The most “natural” zoning designation for this site is Commercial Service or “C-S”, which is the same designation found on many similar El Camino Real sites. A C-S development on this site would be smaller, particularly from an office square footage standpoint, and would most likely also contain a number of residential units. However, the City would also not be able to receive extra “public benefits” from a C-S development, and could only mandate conditions and mitigations measures that have a direct nexus to project impacts. For example, among other proposed public benefits, the PC development currently proposes allowing the Page Mill Road and El Camino Real intersection to expand into what is now the VTA lot, in order to accommodate a new right hand turn lane. It is unlikely that a condition such as this would be part of a standard C-S development. The staff recommendation includes a recommendation for Council to express their intent to deny or defer requests for rezoning to the PC district until the process and requirements regulating the PC zone in Chapter 18.38 of the Municipal Code are revised. Adoption of a formal moratorium is unnecessary because the PC zoning district is set up as an optional district and individual property owners do not have an absolute right to develop under the optional standards. If Council adopts a statement implementing a “time out,” the action would clearly communicate to the 2755 El Camino Real applicant that their request would be deferred or denied if the project was sent to Council for review. The applicant could then chose to wait for the “time out” to be over, revise and resubmit their application as a request for re-zoning to C- S, or request consideration of their project in the context of a development agreement. Next Steps There are two process options for moving forward with PC reform. The first option is a stand- alone option, where staff will proceed with development PC reforms and alternatives, as follows:  February: Council direction to staff to proceed with the analysis of proposed Reforms to the PC district regulations and a statement to defer or deny existing and future requests for rezoning to PC districts until such reforms are adopted.  July-August: Staff presents Council with an analysis and recommendation for public review and comment. Alternatively, the PC public outreach process and discussion could be completed in conjunction with the Comprehensive Plan amendment public outreach process and overall discussion. If this City of Palo Alto Page 7 alternative were selected, the overall timeline would be extended; however it would be discussed in the context of many other related issues in the Comprehensive Plan. Resource Impact Staff’s recommendation to defer existing and future rezoning requests to PC would not have a substantial impact on staff resources or existing department budgets. Staff analysis of rezone requests are typically cost-recovery projects. The application fees collected for each rezone request represent a deposit, from which staff costs are recovered. During the deferral period, staff would not process PC rezone requests, which would allow staff to work on other department projects. The recommended activities to address PC reform have been included in the Planning department’s work plan for this year. Policy Implications The recommended activities could substantially alter the PC district requirements. However, staff does not foresee complete elimination of the PC district or functional equivalent from the Zoning Ordinance for the simple reason most cities have comparable processes. Typically processes are called Planned Development or Planned Unit Developments. Many cities also utilize site specific Development Agreements, which serve a similar function. Environmental Assessment Council’s action to temporarily defer or deny requests for rezoning to PC would not constitute a project under the California Environmental Quality Act (CEQA). Attachments:  Attachment A: Project Description for 2755 El Camino Real- Request for Planned Community (PDF) DRAFT 2755 EL CAMINO PROJECT Application Narrative PC Zone District Applicant: The Pollock Financial Group, Project Owner Jim Baer, Land Use Consultant Hayes Group Architects, Ken Hayes, Architect VERSION #2: January 27, 2014 1 | Page 2755 EL CAMINO PROJECT TABLE OF CONTENTS I. INTRODUCTION & EXECUTIVE SUMMARY II. CITY FINANCIAL CONSULTANT’S ENDORSEMENT III. PROJECT PUBLIC BENEFITS IV. PROPOSED PROJECT V. EXISTING CONDITIONS & MITIGATIONS VI. AMENDED GENERAL PLAN DESIGNATION VII. SUSTAINTABLE DESIGN & PROGRESSIVE TRANSPORTATION LEADERSHIP (Impact Fees and Future Revenues) VIII. PROJECT SCHEDULE IX. PROJECT SPECIFIC MINOR REQUESTS 2 | Page SECTION I INTRODUCTION AND EXECUTIVE SUMMARY 1.1 INTRODUCTION The 2755 ECR Project and its Applicant have begun with a rigorous series of public hearings that are not required under PAMC 18.38 for a PC Zone. The initial public hearings have included: a) February 11, 2013, City Council Study Session, where the Council provided encouragement as well as precautions for enhanced Public Benefits, a building with greater pedestrian attractions and features, and some modifications to the Project’s progressive parking and traffic programs. b) May 2, 2013 Preliminary ARB hearing, where the architect, Ken Hayes of Hayes Group Architects, responded to comments from the City Council Study Session to ensure that the 2755 ECR Project addressed suggestions that the building provide greater street setbacks, walkways, and public art. The project provides features that will make the 2755 ECR Project an iconic building for entry into the 11,000,000 square foot Stanford Research Park at the busiest street intersection in Palo Alto. In addition, the project will enhance vehicular and pedestrian improvements to the new California Avenue Business District. The ARB was pleased, generally, with the 2755 ECR Project direction and made many recommendations that have been adopted by Ken Hayes. c) The lengthy PTC hearing on September 11, 2013 disappointed the Applicant because the PTC chose not to initiate the PC Zone process, but, rather, to continue any PC Zone initiation action until the 2755 ECR Project had been reviewed, and, possibly, endorsed by the City’s third-party financial consultant. The report from the City’s third-party financial consultant is discussed in Section II and is included with the Staff Report. This Application provides a comprehensive narrative and planning materials for the PC Zone Application for 2755 El Camino Real (“2755 ECR Project”) that will include consultants’ reports necessary for CEQA analysis. Site and building plans prepared by the Hayes Group Architects have been delivered. The Applicant has modified the 2755 ECR Project to address issues raised at each of these three earlier City sessions. Foremost among the efforts of the Applicant has been its embracing the City’s desire to have any PC Zone applicant fully engage with analysis by a third-party municipal and real estate financial expert, retained by the City, with its review of any pending PC Application. This has been done to provide assurances, when appropriate, that the Public Benefits offered by a PC Zone Application is well balanced with the gains sought by the specific PC Zone Application under review. We discuss the City’s third-party review by Keyser/Marston in Section II. 3 | Page These hearings have well prepared the 2755 ECR Application to become one of the finest PC Zone applications ever received by the City and with many advanced programs and policy distinctions. During our initial PTC public hearing on September 11, 2013, the PTC continued the public hearing and deferred initiating the PC Zone process until the City’s third-party financial consultant had become able to advise the City about the adequacy of the Application for the 2755 ECR Project. The PTC further asked that the Applicant distinguish among (i) private benefits, even if such features offer leadership for enhancing community development programs; (ii) any mitigations for the Project’s community impacts; and (iii) genuine and meaningful, intrinsic and extrinsic public benefits. The 2755 ECR Project will consist of a four-story building with compliant parking and a total of 29,776 square feet or a 1.52 FAR. We summarize proposed Public Benefits that are presented in greater detail in Section III. This Application discusses total Public Benefits of $2,300,000 that is $225 per square foot of “bonus” PC Zone that greatly exceeds and, at least, doubles the value per square foot of any previous PC Zone. The 2755 ECR Project establishes a new Public Benefit threshold. The building is described in Section IV. In Section V we describe the 2755 ECR context for the neighborhood. Section VI identifies the need for a General Plan Amendment for a new land use designation from Public Facilities to Commercial Service. A Commercial Service land use designation, under the comprehensive plan, allows for and includes Planned Community zoned districts. Section VII describes sustainable design and progressive transportation leadership of the 2755 ECR Project. We have not included these features as Public Benefits as requested by several PTC members. We hope that Policy Makers and Staff Members will assist neighbors to well distinguish between the 2755 ECR Project with only 10,213 square feet of bonus PC Zone area, and that provides many meaningful Public Benefits valued at $2,300,000 that greatly exceeds Pubic Benefits offered by any prior Palo Alto PC Zone Project on the basis of any increased size. 4 | Page 1.2 COMMERCIAL AREAS PROVIDE SUBSTANTIAL SURPLUS CITY REVENUES OVER OPERATING COSTS ASSOCIATED WITH SERVING THE LARGER COMMUNITY More than one Council Member has spoken in a public hearing that commercial areas are “losers for the City by requiring greater operating funds and services from the City than beneficial payments to the City.” We believe this is mistaken and unhelpful for best decision-making. The City retained a fine organization specializing in Municipal finance in the 2000 decade. This firm is Applied Development Economics, “ADE”. After several years of analysis, ADE prepared a report for the City dated May 5, 2009. The purpose of the study was to aid City Staff and policymakers to best plan for an updated Comprehensive Plan. We provide as Exhibit #1 a brief 4-page segment of the ADE work to assist with your favorable analysis of the 2755 ECR Project. Page 2 of the ADE Study shows the fiscal net revenue or cost for the major land use categories. Commercial uses generated a surplus of $12,949,122 for the City in 2008. We provide the graph used by ADE below. On page 3 of the ADE Study a Commercial use generated $300 per employee as a surplus to the City budget based on 2008 budget data. The 2755 ECR Project generates a $33,000 annual surplus for the City unrelated to offsite sales taxes or property taxes. 5 | Page SECTION II CITY FINANCIAL CONSULTANT’S ENDORSEMENT 2.1 PRIMARY FINDINGS OF FINANCIAL CONSULANT FAVOR THE 2755 ECR PROJECT In accordance with the City of Palo Alto’s request, Keyser Marston Associates, Inc. (KMA) conducted an economic analysis to evaluate the proposed public benefits package in relation to the higher densities that can be achieved for the project through rezoning of the site to Planned Community (PC) District. The City requested the following tasks be accomplished in the analysis: Task 1: Create a development pro forma showing what the development return would be for the proposed project under PC zoning and how that return compares to a lower density alternative under Service Commercial (CS) zoning. The purpose of the pro forma analysis is to estimate the incremental profit that the applicant would realize as a result of the re-zoning. Task 2: Quantify the value of the proposed public benefits package, which would include impact fees that would apply under both the CS and PC zoning districts. KMA reviewed the applicant’s backup data and their justification for each public benefit and then used their own experience working with other public benefit assignments to determine if the applicant assessed reasonable values to the public benefits. Exhibit #2 is the favorable Keyser Marston report. (In the interest of a timely submission of this Narrative, Exhibit #2 will be forthcoming.) In this exhibit are financial materials and analyses that have been provided to Keyser/Marston as part of their review. There are several factual and financial exchanges in which Keyser/Marston provides encouragement and support – even for some conclusions beneficial to the Applicant: a) The Applicant generates greater current value under the permitted CS Mixed- Use Standards than is the value achieved at this time by the Applicant under a PC Zone. (Note that the Applicant’s goal is for longer-range stable value creation and the Applicant already has committed to and has a signed, long term lease with a community serving private bank, requiring a larger building to be occupied entirely by office. This outcome is not permitted under the CS Zone.) b) The $2,300,000 Public Benefit offered by the current 2755 ECR project is a substantial and compelling value share in proportion to the “private value” under the PC Zone. 6 | Page SECTION III PROJECT PUBLIC BENEFITS VALUE $2,300,000 PAMC 18.38.060 provides this required determination concerning public benefits for a PC Zone: “Development of the site under the provisions of the PC planned community district will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. In making the findings required by this section, the planning commission and city council, as appropriate, shall specifically cite the public benefits expected to result from use of the planned community district.” The 2755 ECR Project has planned many Public Benefits described in Section 3.2 The Applicant has listened well to Staff and Policy Makers in a way such that the 2755 ECR Project could become a role model project for advancing City goals for the highest quality analysis of any PC Zone Application. PC Zone Applications have become more controversial recently than has been true for 30+ years with very many PC Zone projects both (i) approved with large super-majority approvals by City Council; and (b) without appeals, referenda or substantial hostile commentary for the residential community. 3.1 ANALYSIS OF PUBLIC BENEFITS ON A PER SQUARE FOOT BASIS GREATLY EXCEEDING PREVIOUS PC PROJECTS: $225/ SF Our Public Benefit values greatly exceed previous PC Zone standards as have been verified by Keyser/Marston, the City’s third party financial analyst. The 2755 ECR Project offers Public Benefit of $2,300,000 for each of the 10,213 square feet of PC Zone “Bonus”. This Pubic Benefit value is $225 per square foot - twice the amount that had previously been established by City Staff as the threshold value per square foot for a PC Zone as first analyzed with the PC Zone for 101 Lytton in 2011. PUBLIC BENEFITS per SQUARE FOOT Proposed Public Benefits Value $2,300,000 Gross Floor Area Proposed (1.522 FAR) 29,776 sf CS Zone Permitted 19,563 sf PC Zone Bonus Area (29,776 – 19,563) 10,213 sf Public Benefit per sf of PC Zone Bonus Area $225 7 | Page 3.2 SUBSTANTIAL PUBLIC BENEFITS PROVIDED BY THE 2755 ECR PROJECT A. THREE LAND DEDICATIONS: VALUE $579,247 There are three components of land to be dedicated to the City and the County. See Exhibit #3. The form of land dedications will be a combination of grant deeds and easements determined with the County, the City Attorney’s office, and the City Public Works Department, as required to achieve City and County land use goals of widening Page Mill Road at the El Camino Real intersection, creating 5 feet of pedestrian right-of-way along the widened Page Mill Road, and creating an overall usable sidewalk width of 11 feet, free of construction above grade. This will include a public access easement on land that will remain the property of the Applicant. The easement will be above the sub-grade garage. The Applicant will reserve the right to place sub-grade tieback anchors within the areas of dedication, as necessary for construction of the proposed underground garage. Land areas to be dedicated are as follows: 1. DEDICATED LAND AREA #1: LAND DEDICATION TO ALLOW WIDENING OF PAGE MILL/OREGON EXPRESSWAY TO ADD A DEDICATED RIGHT TURN LANE ONTO EL CAMINO HEADED NORTH, OR TO WIDEN AND DEEPEN THE EXISTING SOUTHBOUND, DOUBLE LEFT-TURN LANES FROM OREGON EXPRESSWAY TO EL CAMINO REAL. 2. DEDICATED LAND AREA #2: FULL SUBSURFACE RIGHTS TO THE CENTER OF PAGE MILL ROAD TO ALLOW ANY CITY OR COUNTY CONSTRUCTION ABOVE OR BELOW GRADE. Exhibit #4 illustrates the area containing the extensive multi-million dollar installation of underground utilities. Required uses may need to be expanded in the future as well. 3. DEDICATED LAND AREA #3: FOR PUBLIC SIDEWALK EASEMENT ON 2755 ECR SITE TO CREATE A TOTAL SIDEWALK WIDTH OF ELEVEN FEET. We provide as Exhibit #5 more detailed budgets for Land Dedication #1 along with appraisal information and a legal letter regarding Land Dedication #2 and Land Dedication #3. 8 | Page B. CONTRIBUTION FOR CALIFORNIA AVENUE UPGRADES: VALUE $1,142,000 These features focus on pedestrian light poles on the very long blocks in the California Avenue District. Initially, City Staff Members had requested $750,000. After more detailed budget work for the California Avenue District improvements, Staff has determined that the contribution necessary to complete all California Avenue improvements in excess of budgeted City funds is $1,142,000. There is a powerful nexus between the 2755 ECR Project and completing the California Avenue improvements because the pedestrian movement from the Stanford Research Park to California Avenue will be greatly enhanced by the 2755 ECR Project with substantially increased daytime clients and visitors to California Avenue. This fulfills the objectives of the South El Camino Real Design Guidelines. We provide as Exhibit #6 a diagram prepared by the City showing a sample of the pedestrian pole lights along with some urban design features. C. CONTRIBUTION FOR INTERSECTION STUDY AND UPGRADE PLANS: VALUE: $275,000 The Applicant has been advised by Transportation and Planning officials and by its own Traffic Engineer, Fehr & Peers, that it may be of greatest community value to improve the entire intersection at El Camino Real and Page Mill/Oregon Expressway Intersection in order to improve this worst traffic intersection in Palo Alto rather than just improving our N/E corner at the site of 2755 ECR PROJECT. As a first, necessary step, The City of Palo Alto and the County of Santa Clara must prepare a collaborative traffic study that must be submitted to Cal Trans for its approval for any work at the intersection. The Applicant will provide a contribution of $275,000 toward completion of this study and planned solutions. If a study is approved by Cal Trans, there are abundant funds in the Stanford Research Park Impact Fee account, held and controlled by the City of Palo Alto, for performing actual street work and signal and pedestrian improvements. D. CONTRIBUTION FOR ELECTRICAL VEHICLE CHARGING STATIONS FOR CALIFORNIA AVENUE PUBLIC PARKING LOTS OR STRUCTURES: VALUE $175,000 We anticipate installing 6 Electrical Vehicle (EV) charging stations for California Avenue public surface a parking lot and for the two California Avenue public parking garages. We have located numerous public parking sites along California Avenue that are potential locations for the installation of electric vehicle charging stations. After talking with several companies, we have determined that most EV charger companies can 9 | Page provide chargers at rates that are greatly subsidized by California and federal governmental agencies such as EPA California Energy Commission. There are active well-financed governmental programs to help deploy EV Chargers throughout urban and suburban centers such as Palo Alto. We believe that the $175,000 contribution offered by the Applicant can be well leveraged to obtain up to $350,000 of governmental subsidizing funds for a total of $525,000. We provide as Exhibit #7 a sampling of EV Chargers that could be deployed by the City. E. PUBLIC RIGHT TO USE THE VTA LOT FOR PUBLIC PARKING DURING CONSTRUCTION OF THE CALIFORNIA AVENUE IMPROVEMENTS: VALUE $38,880 Normal parking will be disrupted during the construction of new California Avenue upgrades. Offering our parking lot could greatly assist the businesses along California Avenue for employee parking. The VTA parking lot 36 spaces @ $6.00 per day = $216 per day for 180 days = $38,880 There are thirty-six striped and legal parking spaces on the 2755 ECR. The City can use the parking area beginning late 2013 through mid-2014 when underground construction work can be begin for the 2755 ECR Project. . The value per day for a parking space charged for daily passes by the City in the California Avenue District is $6.00 per day. This value is comparable to monthly fees for some private parking spaces in the Downtown: 135 Hamilton: $200 per stall per month; and 400 Cowper Area: $150 per stall per month. F. TRAFFIC DEVICES FOR SHERIDAN AVENUE: VALUE $89,873 As discussed in Section VI the 2755 ECR Project has no significant traffic impacts. Rather, through its proposed Public Benefits, the 2755 ECR Project greatly improves traffic performance at El Camion and Page Mill. Nevertheless, some neighbors have asked that the 2755 ECR project assist with perceived traffic problems on Sheridan Avenue for vehicles that head east on Page Mill to then turn right on Ash Street and then right again in order to travel to Page Mill. This is a problem that has existed as a significant matter since the opening of Chipotle Restaurant. The 2755 ECR Project does not significantly worsen the conditions on Sheridan, as verified by Robert Eckols. However, as a good neighbor, the 2755 ECR Project offers the following traffic devices to assist with reduced through traffic on Sheridan Avenue: 10 | Page a) Three speed tables located on Sheridan Avenue – two located between Ash Street and El Camino and one located between Birch Street and Ash Street b) Installation of an all-way stop at the intersection of Ash St & Sheridan The speed tables and all-way stop are designed to control the vehicle operating speeds on Sheridan Avenue. G. URBAN DESIGN FEATURES THAT CANNOT BE COMPELLED BY THE CITY AS CONDITIONS OF APPROVAL: WE ASSIGN NO VALUE The proposed project infills a currently under-utilized transit parking lot with a four story commercial office building. In-lieu of building up to the property, the building is set back up to 31 feet on El Camino Real to create a pedestrian oriented forecourt. An artist has been commissioned to design a water feature to compliment the forecourt. Additional landscape and patterned paving are proposed to enhance the pedestrian experience on El Camino Real. H. QUALITY AND CHARACTER OF THE 2755 ECR PROJECT CONSTITUTES INTRINSIC PUBLIC BENEFIT: WE ASSIGN NO VALUE The proposed building is consistent with the size of the adjacent buildings on El Camino Real and Page Mill. It anchors the busy intersection with a building type and massing as prescribed by the South El Camino Design Guidelines and appropriate for an area unanimously deemed the gateway entrance to Silicon Valley and the Stanford Research Park. 11 | Page SECTION IV THE PROPOSED PROJECT The Applicant proposes a strong Urban Design leadership commercial-only project for this crucial site as the primary entry to the 11,000,000 square foot Stanford Research Park (SRP). Since its inception in the late 1950s, SRP has remained an internationally renowned technology and professional office and R&D center. 4.1 THE PROJECT FULFILLS MANY CITY DESIGN AND COMPREHENSIVE PLAN GOALS The 2755 ECR Project fulfills City of Palo Alto Comprehensive Plan Programs, Policies and Goals and enhances the El Camino Real Design Guidelines and the regional principles now being promoted by the Grand Boulevard Multimodal Transportation Corridor Plan. We provide the El Camino Real Design Guidelines as Exhibit #8 and the Grand Boulevard Task Force materials as Exhibit #9. One of Jim Baer’s 2011-2012 projects, 101 Lytton, has won the highest award from the Grand Boulevard Task Force. We are confident that the 2755 ECR Project will win a GBI award because of its transit-oriented features. The following is a specific segment of the El Camino Design Guidelines that indicates the type of building identified for the 2755 ER site. Our design specifically fulfills the objectives of the El Camino Real Design guidelines. Section 2.2.1.2 California Avenue Area Strategic Sites of the Palo Alto – South El Camino Real Design Guideline adopted on June 6th, 2002 states: “…In particular, the properties at the intersection of Page Mill Road and El Camino Real need to be architecturally prominent with a strong street presence so that they serve as anchors for the southern end of the district. Having strong anchors is critical for extending the momentum of the California Ave intersection down to Page Mill Road…” “Buildings should feature a prominent corner to anchor the large scale intersection. El Camino Real frontage should feature extensive windows, as well as pedestrian amenities such as an arcade of canopy, seating, and planters…” With a long term lease commitment in place by one of the premier community serving banks in Silicon Valley (private banking by appointment with no drive -up ATM traffic), our site’s tenant further complements and serves the workers that symbolize Silicon Valley as the technology hub of the US. SRP’s smart, high tech, cutting edge, entrepreneurial workers and companies are the lifeblood of Silicon Valley, having unique financial needs, which this bank serves. We feel our proposed use best fulfills the vision conceived for this Gateway site into Silicon Valley. A localized bank can also be a substantial reducer of trips generated because of its proximity to the employees at SRP. 12 | Page 4.2 SITE AND ZONING The 2775 ECR Property consists of a single parcel that is currently a vacant surplus parking lot owned by VTA that carries a PF Public Facilities Zone District designation that allows use only as a parking lot. We evaluate the parcel as if it were subject to CS Zone District Site Development Standards. PAMF 18.16 CS ZONE FAR PF or CS Total Parcel Size 19,563 SF 19,563 SF 19,563 SF Commercial FAR NA 0.4:1 7,825 SF Residential FAR NA 0.6:1 11,738 SF Total NA 1.0:1 19,563 SF The 2755 ECR Project described in Section 3.5 is based on achieving a PC Zone ordinance seeking only 29,776 square feet for the new commercial building with only 1.52 FAR at this strong corner intersection. PAMC 18.13 SITE DEVELOPMENT STANDARDS CS Proposed Project Front Setback 10 feet 20 feet Side Setback 5 feet 11 feet Rear Setback 10 feet 10 feet Height 50 feet 50 feet Lot Coverage 9,781 square feet 10,368 square feet FAR 19,563 square feet 29,776 square feet 4.3 PROPOSED COMMERCIAL BUILDING We propose to demolish and recycle, in accordance with Palo Alto’s waste and recycling requirements, the existing surface parking lot and rezone the property to a Planned Community (PC) zoning designation. The Applicant proposes a new four-story commercial building of 29,776 square feet and a 1.52 FAR making it a very modest PC surplus request. 2755 ECR will also develop three levels of underground parking with substantial on grade parking stalls on the 2755 ECR corner site. The 2755 ECR Project is modest for a complex PC Zone District. Among the 29,776 square feet, we provide 2000 square feet of area that is excluded from FAR under 18.04.030(65) (B) as employee amenity areas. This small area is excluded from FAR and does not require parking. The Permitted 0.6 FAR residential area of 11,738 square feet has the same value as will commercial area of 11,738 square feet. Therefore, the private benefit for the Applicant is 29,776 square feet less 19,563 permitted mixed-use FAR under Title 18.16. This means that PC private benefit is only 10,213 square feet. We analyze private benefit and public benefits for this PC Zone in Section IV. 13 | Page With Stanford Research Park and the original Hewlett Packard facility up the street from the project site, the northeast corner of Page Mill Road and El Camino Real serves as an entrance to the world-renowned Stanford Research Park of nearly 11,000,000 square feet, Silicon Valley and to the California Avenue neighborhood of Palo Alto. As a Gateway, the mass of the building reinforces the corner and provides outdoor space for pedestrians at grade and a rooftop terrace on the fourth floor with a view to the foothills. The building uses sustainable materials, including a concrete frame, high efficiency glazing systems, high recycled content materials, metal skin systems, cut stone, plaster finishes, abundant day-lighting and sun-shading systems, and an energy efficient cool roof. It will also be an entirely electric building, meaning that all appliances (except for the cafeteria’s gas stoves) and HVAC will be powered by electricity and not natural gas in order to meet the City’s carbon emissions. PROPOSED COMMERCIAL BUILDING AREA Floor 1 6,355 square feet Floor 2 9,122 square feet Floor 3 9,122 square feet Floor 4 7,197 square feet SUBTOTAL 31,776 square feet Exclude Amenity Areas pursuant to 18.04.030 (65) (B) 2,000 square feet TOTAL Gross Floor Area 29,776 square feet (FAR 1.52) We provide building Floor Plans as Exhibit #10. 14 | Page 4.4 BUILDING FACADE WITH PEDESTRIAN SCALE As one approaches Page Mill from El Camino Real, the building presents a modern two- level stone facade with deeply recessed windows that anchors the corner as it floats above a ribbon of ground-floor frameless glass. When one approaches the building from the foothills or Hwy 101 toward El Camino, the building façade draws inspiration from the landmark saw-tooth HP building as serrated window segments form a repetitive pattern in the façade, providing sun control on this southeast façade as well as a focus on the intersection and view of the hills beyond. The serrated glass plan wraps around the corner of the building pulling the energy of the activities of the intersection around the corner. Sun-shading FINS control interior solar insulation as well as providing visual interest and depth in the two-story glass plane on this façade. The new building reinforces the corner of the block with increased height and creates a welcoming ground floor pedestrian experience. It includes integral planters forming a building base with clear, frameless glass windows above, allowing visual access into the ground floor like the AT&T building across the street. A horizontal metal canopy reinforces the two entry doors that face both the plaza and the street and provides a pedestrian-friendly scale at the corner. We provide elevation plans and renderings as Exhibit #11. 4.5 PUBLIC ART The 2755 ECR Project provides public art in excess of the City’s new 1% art allocation requirement. The Public Art consists of a dramatic electronically controlled and colored water feature and a plaza with decorative items in the paving and walls and benches. The water feature will be a spectacular gateway, technological art statement that is a fitting entry to the Stanford Research Park. Exhibit #12 is a rendering of the public art. 4.6 MANY SUSTAINABLE DESIGN & TRANSPORTATION LEADERSHP PROGRAMS The 2755 ECR Project provides parking in excess of required parking. The 2755 ECR Project has no significant impacts under City of Palo Alto and CEQA standards, including no traffic impacts. Nevertheless, the 2755 ECR Project provides extensive transportation benefits described in Section VI. These expensive features, though of great leadership and benefit to the community, are not treated as Public Benefits but consist of sustainable design features and progressive parking and traffic programs that represent great leadership for the 2755 ECR Project as a role model for any future project. The 2755 ECR Project also serves as an advanced leader and role model for sustainable design features leading to the better than LEED silver equivalency that are costly to the Applicant but that are not treated as Public Benefits. The direct costs for these exceptional features are about $700,000 as are fully discussed in Section VII. These features are not treated as elements of public benefits but as private leadership for the Palo Alto community. 15 | Page SECTION V EXISTING CONDITIONS & MITIGATIONS 5.1 RFP AND SALE OF SURPLUS PARKING SITE BY VTA The Applicant purchased from the Valley Transportation Authority (“VTA”) the parcel located at the Northeast (logical northeast) corner of Page Mill Road and El Camino Real (APN 132-36-084). This location of 19,563 square feet was purchased for $4,182,000 at $213.77 per square foot as a formerly surplus parking lot for VTA bus commuters. VTA has determined that 2755 ECR has not been used by a significant number of VTA commuters. As a result of this high level of disuse, VTA has declared 2755 El Camino to be a “Surplus Site”. By having become a “Surplus Site” VTA widely distributed an RFP for the sale of 2755 ECR. After several rounds of offers in 2012 and 2013, the Pollock Financial Group was chosen as the qualified purchaser of 2755 ECR and the Pollock Financial Group has purchased 2755 ECR. We provide a parcel map and aerial photographs as Exhibit #13. 5.2 CURRENT ZONING Current zoning for 2755 ECR is (PF) Public Facilities under PAMC 18.28.060. As a Public Facility only the existing surface parking lot is a permitted use. Accordingly, the Applicant requests a PC Zone District that will allow a larger and better-suited building for 2755 ECR. Were the Applicant not seeking a PC Zone District, the CS Zone District would be the most likely zoning for 2755 ECR. Staff and the Applicant compare the proposed PC Zone District with the Site Development Standards of the CS Zone District since there are no site Development Standards for comparison under the PF Zone District and because the PF Zone District must evaluate the site as if it were only a parking lot as now used by VTA. We provide a Zoning Map as Exhibit #14. 5.3 NO EXISTING BUILDING & NO HISTORIC SIGNIFICANCE There is no building and has been no building at 2755 ECR for nearly fifty years. As a result, there is no historic characteristic of the site with any existing building that is an historic resource. Throughout its history, the site has been occupied by residential structures, a store and a restaurant. The site has been used as a VTA public parking lot for nearly 50 years. 16 | Page 5.4 ADJACENT PC ZONE DEVELOPMENTS SUPPORT THE CONTEXT OF THE 2755 EL CAMINO PROJECT The 2755 ECR Project is amidst several well-developed and consistently occupied set of mixed-used buildings. The directly adjacent properties, Sunrise Assisted Living and the Silverwood Condominiums are both PC Zones of greater mass and density than the proposed 2755 ECR Project. The Sunrise building is 65,000 square feet and is more than twice as large as the 2755 ECR Project. The Sunrise FAR is also larger than the 2755 ECR Project. The Silverwood buildings are 44,195 square feet much more than 1.5 times as large as the 2755 ECR Project. Both of these projects were subject to much less intense zoning before the PC Zone approvals. We provide massing models of both Sunrise and Silverwood in the following pages of this Narrative. 17 | Page CN/RM 40 zoning development at 2701 El Camino Real (Sunrise Senior Housing) 18 | Page RM40 zoning development at 435 Sheridan Ave (Silverwood Condominium) 19 | Page 5.5 NEIGHBORHOOD CONTEXT SUPPORTS THE 2755 EL CAMINO PROJECT Directly north of and adjacent to 2755 El Camino is 2701 El Camino, the Sunrise Assisted Living Facility that was approved as a PC Zone District in 2004 for the specific development of the now existing building and its landscaping and parking to be used only for Senior Assisted Living. Sunrise Assisted Living provides 81 dwelling units for Assisted Senior Living. The Sunrise Assisted Living Project is 4-stories and 50 feet tall with one-level of underground parking. We will use the same PC Zone process and seek a building of fifty feet in height just as did Sunrise Assisted Living. Directly east of 2755 El Camino is 435 Sheridan Avenue that is a PC Zone District developed in 2000. 435 Sheridan consists of 35 residential condominium units on a parcel of 57,400 square feet. 435 Sheridan is 3 stories tall over a partially elevated parking garage that provides adequate parking. 435 Sheridan is about 40 feet tall. South across Page Mill along the entire El Camino frontage is a well-developed block consisting of 3 projects all under the CS Zone District. a) 2805 El Camino is a major retail center for AT&T cell phone sales and service designed by Hayes Group Architects. b) 2825 El Camino is a three-story mixed-use building with quality office uses for the first two floors and with the third floor consisting of two, fine 2 & 3 bedroom residences that are leased and have not been schedule as “for sale” units. c) 2875 El Camino is a vacant lot, formerly Stanford Dry Cleaners. 2875 El Camino has received City approval for a new one-story commercial building of less than 5,000 square feet. Jim Baer has been involved with all three of these projects. Hayes Group Architects is the architect for 2805 El Camino and 2875 El Camino. Jim Baer has been involved with Sunrise Assisted Living, 2805 El Camino, 2825 El Camino and 2875 El Camino. The Hayes Group is the architect for 2805 El Camino and 2875 El Camino. West of the site across El Camino are the City of Palo Alto soccer fields of about 5 acres that are subject to a PF Zone District. Southwest of the site across El Camino and across Page Mill is the Palo Alto Square Office Center with the two tallest office buildings of 10 stories each located along El Camino Real. Palo Alto Square is a PC Zone District developed with a total of six office buildings with 320,468 square feet of office space, all served by a large surface parking area. Palo Alto Square is occupied by professional office and general business service offices. Amenities at Palo Alto Square include a movie theater and full time, 24-hour security. We provide several context plans and photos as Exhibit #15. 20 | Page 5.6 HAZARDOUS MATERIALS A review of regulatory records for the Site indicated that there were no violations at the Site. Additionally, no environmental liens were found for the Site. However, neighboring properties located adjacent to and up gradient of the Site have impacted the underlying groundwater with petroleum hydrocarbons and volatile organic compounds (VOCs). The Site is located within the northeastern portion of the Hewlett Packard- Varian plume where residual VOC contaminant levels are very low. We provide as Exhibit #16 a summary letter from our environmental engineer ICES. A. SITE INVESTIGATION Soil, groundwater, and soil vapor investigations were conducted at the Site in 2012. The results of the investigations indicated that groundwater beneath the Site has been impacted by petroleum hydrocarbons and solvents from the neighboring properties. The detectable contaminants in the groundwater within the Site include diesel, motor oil, cis-1, 2-dichloroethene, and trichloroethene. B. PROPOSED DEVELOPMENT The Applicant plans to build a four-story commercial building with three levels of underground parking at the Site. The underground portion of the construction activities will include temporarily lowering the groundwater table, foundation excavation, shoring, and installing the foundation and underground parking garage. The excavation will extend to a depth of approximately 35 feet below the existing street level to accommodate the building foundation and underground garage. C. RISK MANAGEMENT PLAN Based on the presence of the low levels of contaminants that were identified in previous site investigations, a Risk Management Plan (RMP) will be prepared for the Site. The RMP will describe mitigation measures for the proper handling and recycling/disposal of the lightly impacted soil and groundwater that will be encountered at the Site during excavation, shoring, and underground parking garage construction activities. Associated worker health and safety requirements, permits and regulatory agency approvals, and dust control measures will also be addressed. Additionally, the RMP will describe vapor mitigation measures that will be implemented during the construction activities of the proposed building to reduce the exposure of soil vapor contaminants to future occupants of the building. The San Francisco Bay Regional Water Quality Control Board will provide oversight for the activities that are presented in the RMP. 21 | Page 5.7 COMPLIANCE WITH STANDARDS PROTECTING NEIGHBORS Among the features that protect adjacent neighboring properties are the following: a) 2755 ECR provides a setback on the eastern property line shared with 435 Sheridan of mostly 23 feet. This setback greatly exceeds the 10 feet required for a property in the CS Zone District abutting a residential PC Zone District such as 435 Sheridan. b) 2755 ECR provides a setback on the northern property line shared with Sunrise Assisted Living of approximately 25 feet. 25 feet greatly exceeds the setback of ten feet required for a property in the CS Zone District abutting a PC Zone property. c) The 2755 ECR building, complies with the Daylight Plane requirements of the CS Zone District relative to its neighboring properties that are both PC Zone Districts. The top of the elevator tower is over 50’ tall but is considered rooftop equipment and is hidden behind an allowed roof screen. A rooftop mechanical/elevator tower is neither treated as exceeding the building height, nor as FAR for an unoccupied space. We provide daylight plane and setback diagrams as Exhibit #17. d) The 2755 ECR Project reduces noise impacts because of elimination of the all hours parking that brings cars to the current parking lot site early morning. e) The 2755 ECR Project greatly mitigates traffic impacts for neighboring properties by directing all traffic to enter its site only from El Camino and not from Page Mill. f) The 2755 ECR building screens its neighboring properties from either Page Mill or El Camino from heavy traffic noise. 5.8 PARKING COMPLIANCE Without a TDM adjustment, 2755 ECR requires 119 parking spaces. TDM plans qualify for up to 20% parking reductions. The 2755 ECR Projects seeks no parking reduction even though it is providing a comprehensive TDM plan that would have qualified for a 10% parking reduction under policy standards and even pervious hearings with policy makers. We provide simple attendant parking for six parking spaces for a total of 119 parking spaces Exhibit #18 illustrates the 6 attendant spaces. Employee amenity areas of about 2,000 square feet are excluded from FAR and parking requirements, under PAMC 18.04.030 (65)(B). 22 | Page We provide Table 4 of Title 18.52 identifying the parking adjustments not used by the 2755 ECR Project as Exhibit #19. Parking 1 space per 250 square feet 119 spaces* 5% reduction for TDM Plan (18.52) (6 spaces not taken) Total parking required 119 spaces Total parking provided 113 up to 119 spaces with attendant 5.9 NOISE AND TRAFFIC MITIGATIONS a) The 2755 ECR Project reduces noise impacts because of elimination of “all hours” parking that brings cars to the current parking lot site early mornings. b) The 2755 ECR Project greatly mitigates noise for 435 Sheridan and 2701 El Camino by providing its building as an obstacle for traffic noise from El Camino and Page Mill. Exhibit #20 is Noise Mitigation Report. c) The construction of 2755 ECR will include highly rated double pane windows and exterior walls that protect building occupants and neighbors from noise effects. d) Traffic impacts are mitigated for neighboring properties by directing all traffic to enter 2755 ECR only from El Camino and not from Page Mill. We provide: Exhibit #21 a Draft TDM Plan that is very comprehensive; Exhibit #22 is the Traffic Analysis; pages 8 in that analysis show the intersection improvement with the right turn lane. AM Peak Hours All approaches 6,050 PH trips ECR approaches 2,770 PH trips PMR approaches 3,280 PH trips PM Peak Hours All approaches 6,800 PH trips ECR approaches 3,225 PH trips PMR approaches 3,575 PH trips The land to be dedicated by 2755 ECR for widening Page Mill directly east of ECR will allow for highly successful, trip-reducing factors such as: (i) an improved right turn lane; and (ii) two left turn pockets of greater depth. Through Page Mill widening and through the collaboration among the applicant and it consultants, the City, and Santa Clara County, traffic management will substantially improve at Palo Alto’s most congested intersection. The traffic mitigations we are providing reduce CEQA impacts to less than 23 | Page significant. We include with our CEQA submittal the full traffic analysis and report by Fehr & Peers. The initial analysis suggests that there will be a reduction of two seconds for every lane at all four directions of the Page Mill/ECR intersection. 5.10 SOUTH EL CAMINO DESIGN GUIDELINES & GRAND BOULEVARD TASK FORCE South El Camino Real Design Guidelines are dated 2002 with subsequent updates. We attach as Exhibit #8 the South El Camino Design Guidelines. We identify the following Design Guideline provision. Ensure a healthy and vibrant market for new development projects We have entered into a letter of intent for the entire building to a very valuable and current tenant in this part of Palo Alto who desire to expand at this particular location. If we are approved and able to deliver a completed building in accordance with the LOI terms, having attracted this user to this site would ensure a healthy and vibrant market for future development projects. We know that Jim Baer is working on the vacant site at 2875 ECR and renovation of the large, old building at 2600 El Camino. These kinds of projects will follow soon, aided by the City’s approval of the 2755 ECR Project. We provide GBI guiding principles as Exhibit #9. We find the most significant feature concerns transportation at such a busy intersection as with Page Mill and El Camino. Develop a balanced multimodal corridor. The 2755 ECR Project is located at Palo Alto’s busiest intersection with Page Mill and El Camino design and transportation features provided by VTA, the City, the County and some private shuttle operators such as Stanford. The 2755 El Camino Project will provide a small private shuttle for assisting tenants and employees make maximum, best use of Cal Train. 24 | Page SECTION VI AMENDED GENERAL PLAN DESIGNATION 6.1 AMENDMENT OF COMPREHENSIVE PLAN The 2755 ECR Parcel is currently designated as “Publicly Owned Land.” Nearly all of the El Camino frontage parcels within a couple of blocks of 2755 ECR are designated as Service Commercial for the Comprehensive Plan. We seek a Comprehensive Plan amendment to change designation for 2755 ECR from “Publicly Owned Land” to “Service Commercial.” 6.2 COMPLIANCE WITH COMPREHENSIVE PLAN OBJECTIVES The 2755 ECR Project fulfills City of Palo Alto Comprehensive Plan Programs, Policies and Goals. Service Commercial: In almost all cases, Service Commercial uses require good automobile and service access. Examples of Service Commercial Areas include El Camino Real. The 2755 ECR Project provides very fine access and proximity to employment and retail centers. Employment Districts are relatively large areas of the City dominated by office uses. The broad land use goal is to impart a stronger sense of community to those who work or live here and to strengthen the connections between these areas and the rest of the City. 25 | Page SECTION VII SUSTAINABLE DESIGN & PROGRESSIVE TRANSPORTATION LEADERSHIP (Impact Fees and Future Revenue) 7.1 ADVANCED SUSTAINABLE BUILDING DESIGN: $525,000 The 2755 ECR Project serves as a fine role model for other new buildings with its important environmental design leadership becoming the “first ever” Palo Alto building to use all-electric equipment and devices, except for the gas stoves desired in the cafeteria. This approach was encouraged by the City Council in 2012 in order to achieve a 20% carbon emission reduction citywide. The environmental design features include the following, as never before: a) Achieving LEED Silver standards or better for the new site and building by complying with the Palo Alto Green Building Code. b) Installing two private and two public Electrical Vehicle Charging Stations on site. c) With the exception of the gas stoves in the cafeteria, the 2755 ECR Project will eliminate all other gas-operated appliance and devices, including HVAC equipment. This will be Palo Alto’s first “all electric: building. d) Superb management and remediation of the on-site underground water contaminated as part of the EPA superfund site known as the COE Plume. e) Highly efficient design of irrigation for landscaping and street trees. f) Refuse and perishable efficiencies with progressive purchasing policies for building tenants with comprehensive recycling, composting and other treatment of disposable items. We provide as Exhibit #23 a LEED Checklist and a LEED analysis for the community context of the 2755 ECR Project. 26 | Page 7.2 TRAFFIC ANALYSIS INDICATES NO SIGNIFICANT TRAFFIC IMPACTS. SIGNIFICANT PERFORMANCE IMPROVEMENTS FROM THE NEW PROJECT The Traffic Analysis prepared by Fehr & Peers indicates that the 2275 ECR Project will produce fewer than 100 peak hour trips in either the morning or evening peak hour. Therefore, a Congestion Management Program (CPM) traffic analysis is not required. The Traffic Analysis also indicates that the El Camino Real/Page Mill/Oregon Expressway intersection operates at acceptable service levels (LOS E or better). Fehr & Peers determines that there are no significant traffic impacts under analysis of both (i) the existing 2012 site and (ii) the existing 2012 condition plus the proposed new 2755 ECR Project of 29,776 square feet. In addition, the preliminary analysis shows that the intersections will operate more efficiently and will significantly improve traffic at this intersection with the addition of the land dedication by 2755 ECR to allow widening of Page Mill at El Camino. We discuss these transportation public benefits in Section III. Traffic analysis at the intersection of El Camino Real and Page Mill Road 27 | Page 7.3 EXTENSIVE TRAFFIC CONTROLS AND IMPROVEMENTS The 2755 ECR Project provides many innovative state-of-the art parking and traffic benefits. a) Bicycle pods for use of rental bicycles by tenants and neighbors of the 2755 ECR Project. b) Provided that vendors approve the need at the 2755 ECR Project site, the Project will provide “Zip” or Enterprise WeCar vehicles for short-term rent by tenants and neighbors. c) The 2755 ECR Project will provide Cal Train Transit Passes for building tenants for ten years at cost of about $15,000 per year and will cover all building employees. d) The 2755 ECR Project will provide a comprehensive TDM Plan that should reduce single occupant vehicle trips by 20% or greater that translates in significant traffic reduction. e) The 2755 ECR Project will participate in and contribute to the Stanford Shuttle for this part of town and for the Stanford Research Park. 7.4 PC ZONE PROVIDES $686,000 GREATER IMPACT FEES THAN WOULD A LARGE CS ZONE PROJECT This has been calculated based upon city impact fee ordinances. 28 | Page SECTION VIII PROJECT SCHEDULE We provide as Exhibit #24 a schedule for commencement and completion of construction that cannot be precise because of the remaining PC Zone Schedule for approval and the limited seasons for which underground construction performed. Winter rainy months are managed by the City to avoid underground construction between October 15 and April 15 subject to modifications if the General Contractor provides assurances of extraordinary management of sub-surface water. We hope to begin construction of the underground garage and other underground work by late spring with a full permit to be issued by late summer 2014. Under this schedule the 2755 ECR Building will be completed by early June 2015 with occupancy by a tenant or tenants, after construction of tenant improvements, during August 2015. In our final documentation, we will be requesting a more formal schedule allowing an exception for underground construction and excavation during the winter months in order to keep to our schedule. The RWQCB will be issuing an independent remediation plan. 29 | Page SECTION IX MINOR PROJECT REQUESTS ALLOWED UNDER PC ZONE 9.1 PROPOSED FEE SCHEDULE a) City Permit and Plan Review Fees prior to Issuance of permits. b) Transportation Impact Fee. We seek waiver of this fee because of our extensive traffic improvement work. c) Housing Impact Fee to be paid prior to issuance of occupancy permit. d) Parks, Library and Community Impact Fee to be paid prior to occupancy. e) Citywide Transportation Impact Fee. We seek waiver of this fee because of our extensive traffic improvement work. f) Stanford Research Park Traffic Impact Fee. We seek waiver of this fee because of our extensive traffic improvement work. 9.2 OTHER PROJECT SPECIFIC REQUESTS 30 | Page EXHIBITS 1. Fiscal Background Report, Applied Development Economics 2. Keyser/Marston Financial Analysis 3. Land Dedication Diagrams 4. Underground Utilities Map 5. Detailed Budget for Land Dedication, Appraisal Info, DLA Piper Letter 6. Pedestrian Light Poles Diagram 7. EV Car Chargers Sampling 8. South El Camino Real Design Guidelines 9. Grand Boulevard Initiative 10. Floor Plans 11. Elevation Plans and Renderings 12. Public Art Rendering 13. Parcel Map and Aerial Photograph 14. Zoning Map 15. Context Photo 16. ICES Summary Letter 17. Daylight Plane and Setback Diagrams 18. Parking Diagram 19. Table 4 of Title 18.52 20. Mei Wu Acoustics Report 21. Transportation Demand Management Plan 22. Fehr and Peers Traffic Report 23. LEED checklist 24. Project Schedule City of Palo Alto (ID # 4403) City Council Staff Report Report Type: Action Items Meeting Date: 2/3/2014 City of Palo Alto Page 1 Summary Title: Final Approvals for Golf Course Reconfiguration Project Title: Public Hearing: Approval of the Record of Land Use Action for a Site and Design Review Application and Adoption of a Park Improvement Ordinance for the Palo Alto Municipal Golf Course Reconfiguration Project, Adoption of a Resolution Certifying the Final Environmental Impact Report and Adopting a Statement of Overriding Considerations for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project, and Review of the Status of the Palo Alto Municipal Golf Course Reconfiguration Project, Capital Improvement Program Project PG- 13003 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve a Record of Land Use Action approving the Site and Design Review application for the Palo Alto Municipal Golf Course Reconfiguration Project (Project), Capital Improvement Program Project PG-13003, based upon the findings and conditions in the Record of Land Use Action (Attachment A); and 2.Adopt a Resolution Certifying the Final Environmental Impact Report and Adopting a Statement of Overriding Considerations for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project (EIR Project)(Attachment B); City of Palo Alto Page 2 3.Approve the attached Park Improvement Ordinance for modifications to the Palo Alto Municipal Golf Course (Attachment C); and 4.Review the update on the status of the Project. Executive Summary This report requests final Council approval of proposed modifications to the Palo Alto Municipal Golf Course. The project approvals include approval of a Site and Design Review planning entitlement and a Park Improvement Ordinance for the Palo Alto Municipal Golf Course Reconfiguration Project and Certification of the Final Environmental Impact Report for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project. This report also conveys updated information on the Golf Course Reconfiguration Project related to construction costs, implementation schedule, regulatory permitting, financial analysis, and debt financing. Due to the zoning designation of the Golf Course site, the Golf Course Reconfiguration Project requires Council to approve a Site and Design Review planning entitlement for the Project. The Site and Design Review application for the Project is based on design drawings consistent with Golf Course Renovation “Plan G”, which includes a full renovation of the Golf Course as well as the set- aside of 10.5 acres to be carved from the Golf Course footprint for future recreation uses, as approved by Council on July 23, 2012. By approving the attached Record of Land Use Action and its conditions and findings, Council makes a determination that the Project is consistent with a set of land development objectives outlined in the Municipal Code. The Site and Design Review application for the project has been reviewed and recommended for approval by the Parks and Recreation Commission, Planning and Transportation Commission, and Architectural Review Board. The proposed improvements at the Palo Alto Municipal Golf Course and their potential environmental impacts have been studied in an Environmental Impact Report (EIR) prepared in accordance with the requirements of the California Environmental Quality Act (CEQA). The scope of the EIR covers both the Golf City of Palo Alto Page 3 Course Reconfiguration Project and a conceptual Baylands Athletic Center Expansion Project that could be constructed on 10.5 acres of land,carved out of the existing golf Course footprint,for use as future recreational facilities. The EIR examined the impacts of the most intensive potential use of the property, which was assumed to be a 24,100 square foot gymnasium, five full-size athletic playing fields, and with associated parking areas and lighting. Due to the negative feedback received from advisory bodies and members of the public with respect to a future gymnasium at the site, staff has modified the EIR to eliminate the gymnasium from consideration at this time. This report also includes an extensive discussion of Project impacts,resulting from the removal of trees at the Golf Course and associated mitigation measures. Certification of the Final EIR will require Council to adopt a statement of overriding considerations with respect to aesthetics and air quality due to significant and unavoidable impacts resulting from the Project. Since the Palo Alto Municipal Golf Course is a dedicated City park, the Golf Course Reconfiguration Project is subject to Municipal Code Section 22.08.005, which requires that Council adopt an approved improvement plan by way of a Park Improvement Ordinance,whenever a substantial improvement is made to a dedicated park facility. Staff has prepared the attached Park Improvement Ordinance, which describes the key elements of the Project, for Council review and approval. This report also provides up-to-date information on the Golf Course Reconfiguration Project with respect to construction cost estimates, project implementation schedule, regulatory permitting, soil importation, and construction contractor pre-qualification. The report also includes an analysis of historical and projected financial impacts to the Golf Course before, during, and following construction of the Project, as well as updated information on required debt financing for the Project. Background The Palo Alto Municipal Golf Course was constructed in the mid-1950s on approximately 170 acres of flat former salt marsh and bay fill. The 18-hole, par 72 course is a classic championship course that measures over 6,800 yards from the City of Palo Alto Page 4 back tees. The course was constructed on a relatively flat site raised a few feet above the underlying, highly-saline salt marsh soils through the placement of imported fill material. The original clubhouse buildings were replaced with the current facilities in the mid 1970’s. Major course renovations, including the rebuilding of selected fairways, tees, and greens, a new drainage system and lift station, and a new irrigation system and pump station, were completed in 1998. The potential for Golf Course modifications was inspired by the San Francisquito Creek Joint Powers Authority’s (JPA)Bay-to-Highway 101 flood control project. The JPA project, currently anticipated to start in Spring 2014, includes construction of new earthen levees that will encroach onto the footprint of the Golf Course and parts of the Baylands Athletic Center’s overflow parking lot. The revised levee alignment will necessitate the reconfiguration of golf holes 4, 12, 13, 14, 15, 16, and 17 in order to maintain an 18-hole course. Given the anticipated scale of the changes that would occur as a result of the levee project, the JPA retained a professional golf course architect to design the course modifications. The JPA hired Forrest Richardson & Associates to perform the design work, based on Richardson’s extensive experience working with high-saline turf conditions and his knowledge of successful golf course operations. Richardson also stood out from the other potential golf course architects through the merits of his innovative proposal that the renovated golf holes should integrate cohesively with the surrounding Baylands natural environment. Over time, the City sought a more active role in the Golf Course renovation process. Community Services Department staff and the City Council identified the flood control project as an opportunity to re-examine the future of the Golf Course and to explore alternatives for providing supplemental City funding in order to undertake the renovation of the entire course with the intent of enhancing the customer experience, reducing water consumption, and increasing rounds of play and associated revenue for the course. In addition, staff explored the feasibility of incorporating new athletic fields and other recreational uses into the renovated Golf Course. At the request of the City, the scope of Richardson’s design work was expanded, eventually resulting in seven alternative design approaches for varying levels of Golf Course renovation. Throughout 2011 and the first half of 2012, various design alternatives were evaluated during public meetings with the Golf Advisory Committee, Parks and Recreation Commission, City of Palo Alto Page 5 Finance Committee, and City Council, as well as at general public forums conducted by the Community Services Department. On July 23, 2012, Council formally adopted the Finance Committee’s recommendation for Golf Course Renovation “Plan G”, which includes a full renovation of the Golf Course as well as the set-aside of 10.5 acres to be carved from the Golf Course footprint for future recreation uses. On October 15, 2012, Council awarded a contract to Forrest Richardson & Associates to complete the design of a renovated Golf Course based on Plan G, prepare final bid documents (plans, specifications, and cost estimate) for the project, and prepare an EIR for the proposed Golf Course modifications, including a conceptual analysis of the future recreation area. The preliminary project funding plan was based on the premise that the JPA would provide mitigation funding to the City to cover the cost of addressing their project’s direct impacts to the Golf Course, with the City providing the balance of the funding through debt financing to be serviced by future Golf Course and playing field revenues. In accordance with the adopted renovation Plan G, Forrest Richardson has prepared construction documents based on a design concept that will reconfigure Golf Course with a “Baylands” natural environment premise. The project design embraces the key tenets of the 2008 Palo Alto Baylands Master Plan,including a focus on overall environmental quality, minimization of urban intrusion, fostering of pedestrian and bicycle activities, preservation of environmentally sensitive areas, reduction of water consumption for irrigated turf,and restoration of the diversity of native species. The Golf Course Reconfiguration Project will modify all 18 holes of the Golf Course, a portion of the driving range and practice facility, and replace an outlying restroom facility, while retaining a regulation golf course with a par of 71. The reconfigured Golf Course will incorporate or modify existing low-lying areas into the Golf Course, reduce the area of managed irrigated turf, and introduce areas of native grassland and wetland habitat. The Project design has been developed to achieve the following objectives: ·A golf course that provides enhanced wildlife habitat, improved wetland areas, and a more interesting course that offers challenges for the experienced player and that can also be enjoyed by the beginner, while City of Palo Alto Page 6 reducing water and pesticide use and maintenance labor for turf and landscaping. ·Expanded recreation areas to satisfy existing and projected needs. ·Integration of the Golf Course into the Baylands design theme. ·Mitigation for impacts on the Golf Course resulting from the JPA’s flood control project. ·Improve Golf Course playing conditions –turf, drainage and irrigation. ·Increase rounds of play and expand recreational opportunities. Plan G includes the reservation of approximately 10.5 acres of the existing Golf Course for future development as an athletic recreation facility. Although the athletic facilities have not been sited or designed as part of Forrest Richardson’s design work, the Environmental Impact Report (EIR) has analyzed the potential impacts of constructing up to five new athletic fields and a gymnasium on the site. The Golf Course is located within the Baylands, an environmentally sensitive area of the City with a special zoning designation in which development projects are required to be reviewed through a planning entitlement process known as Site and Design Review. Site and Design Review is comprised of formal review by the Planning and Transportation Commission (PTC) and the Architectural Review Board (ARB), followed by City Council approval. The PTC and the ARB have reviewed the Project to ensure that it is consistent with the City’s Comprehensive Plan, Baylands Master Plan, and Baylands Design Guidelines, and that it is compatible with the environment and the surrounding land uses. Each of the advisory bodies has approved a recommendation to the City Council that Council should grant final approval to the project’s Site and Design Review application. The Project is subject to the provisions of the California Environmental Quality Act (CEQA). The City, acting as the CEQA Lead Agency, has prepared an EIR for both the proposed Palo Alto Municipal Golf Course Reconfiguration Project and the conceptual future Baylands Athletic Center Expansion Project (EIR Projects). City of Palo Alto Page 7 The Palo Alto Municipal Golf Course is a dedicated City park. The Project will make substantial changes to the existing conditions within the dedicated park, and,therefore, in accordance with Chapter 22.08.005 of the Municipal Code, construction of the Project triggers the need for Council to approve a Park Improvement Ordinance. Discussion Project Description The Golf Course Reconfiguration Project (Project) will reconfigure the entire Golf Course to an 18-hole, par 71, regulation-length course measuring 6,685 yards from the back tees. Following the designation of approximately 10.5 acres of the existing Golf Course for a future recreation facility and the loss of 7.4 acres to be incorporated into a widened San Francisquito Creek, the resultant area of the reconfigured Golf Course will be reduced to approximately 156 acres. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate six new driving stations. A new Youth Golf Area including elements designed to attract young people to the game of golf will be established along Embarcadero Road south of the existing driving range. The Project will include new 6.5-foot-wide concrete golf cart paths, concrete footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. The Project will also include a new 300 square foot restroom building located on the Golf Course. The Project does not include any modifications to the parking lot, clubhouse/restaurant/pro shop complex, or maintenance facility. The Site and Design Review application does not include any detailed design information for the future recreational uses to be sited in the southwest corner of the Golf Course. These improvements will be submitted for review at a future time when a specific type of recreational feature is selected and funding becomes available. The Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. New managed turf will include Creeping Bentgrass on the greens and salt-tolerant Paspalum at all other areas. During replacement, non- native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: City of Palo Alto Page 8 managed turf area, non-turf native grass zones, and Baylands native zones. The Project will also include a dramatic increase in topographic variability throughout the course, including buffer mounds which will act as a visual and acoustical barrier between the Golf Course and the future recreation area. The buffer mounds will be 15 to 25 feet tall.Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new 300 native trees to be planted on the course as part of the Project, the protection of 500 naturally-occurring oak saplings on the Arastradero Preserve, and the restoration of two acres of native bay ecosystem habitat at a site in Byxbee Park near the Golf Course. Further discussion of the Project’s tree impacts and mitigation measures is included in the Environmental Impact Report section of this report. The Project will replace the existing Golf Course irrigation system with a new high- density polyethylene (HDPE) pipe system with limited metal components to eliminate corrosion and leaks. The sprinkler heads will be individually controlled and adjustable to provide full or part circle coverage. The Project will also include underground soil sensor units which will monitor soil moisture levels to prevent overwatering. Overall water usage for Golf Course irrigation is expected to be reduced by at least 30 percent. A new main entry sign is proposed along Embarcadero Road to replace the existing sign. The proposed sign conforms to the Baylands Design Guidelines by utilizing weathered wood sign supports, rusted metal fittings, and a low profile with muted colors. Primary lettering will be internally lighted within reverse pan channel letters that cast a low-light halo back onto the primary background. The project design also includes a new Youth Golf Area along Embarcadero Road south of the existing driving range. Design of this area is being coordinated with local non-profit organization First Tee Silicon Valley (FTSV). Although this area is primarily intended to attract new young golfers, it will also accommodate other golfer groups, including seniors,men’s and women’s groups, and new player (lesson) groups. The area consists of three short holes measuring from 30 to 65 yards in length. At the far western end of this area will be a practice putting green with sand bunkers.Implementation of the Youth Golf Area will require a City of Palo Alto Page 9 management plan jointly administered by the City and FTSV to ensure that the area is safely utilized and fits golf programs approved by the City. It is anticipated that the Golf Course will be closed for approximately 16 months during construction, anticipated to begin in May 2014. Site and Design Review The Site and Design Review process, for major projects in areas within Palo Alto having the (D) zoning overlay, requires Planning and Transportation Commission (PTC), Architectural Review Board (ARB), and City Council review. The PTC considers whether the project meets the Site and Design Review objectives set forth in Palo Alto Municipal Code Section 18.30(G).060. Following the PTC public hearing, the project is forwarded to the ARB for its review. The ARB is requested to make a recommendation on the project based on the findings for architectural review approval contained in Palo Alto Municipal Code Section 18.76.020(d). The project, as recommended by the PTC and ARB, is then reviewed in a public hearing before Council for final action. Council is being asked to review the proposed Project, along with the recommendations from the PTC and the ARB, and approve the Site and Design Review application (Attachment D). The approval should confirm that the Project meets the Architectural Review and Site and Design Review findings included in the attached draft Record of Land Use Action (Attachment A). Prior to submitting the Site and Design Review application to the formal review bodies, staff presented the Golf Course Reconfiguration Project plans and design elements to the Golf Advisory Committee and the Parks and Recreation Commission on multiple occasions to receive their review comments and design input. During the last week of March 2013, staff submitted the project development drawings to the Golf Advisory Committee and the Parks and Recreation Commission in order to solicit their endorsement of the Project prior to the start of the formal Site and Design Review process. The Golf Advisory Committee (March 25, 2013) and the Parks and Recreation Commission (March 26, 2013) gave the Project positive reviews and endorsed the Site and Design City of Palo Alto Page 10 Review application for submittal to the PTC and ARB. On June 26, 2013, the PTC reviewed and recommended approval (motion passed 6-0, with Commissioner Tanaka absent)of the Site and Design Review application for the Golf Course Reconfiguration Project. During discussions, the PTC applauded the design concept for the renovated Golf Course, noting that it will be much more compatible with its Baylands setting and environment. The Commissioners expressed some concern about the significant loss of trees and requested that as many of the replacement trees as is feasible be planted relatively nearby in Byxbee Park. Two members of the public provided comments on the project during the public hearing. One person expressed concerns regarding the cumulative number of trees being removed in the Baylands area in conjunction with various development projects and asked that replacement trees be planted within the Baylands region when feasible. The second speaker advocated that the City consider installing solar panels on a set of canopies over the Golf Course parking lot as part of future plans for the facility. The staff report from the June 26, 2013 PTC meeting is attached to this report as Attachment E, and the meeting minutes are attached as Attachment F. On July 18, 2013, the ARB reviewed and recommended approval (motion passed 4-0, with Board Member Alizadeh absent) of the Site and Design Review application for the Golf Course Reconfiguration Project. No members of the public were present to speak to this item. The ARB added a condition to the project approval requiring staff to return to an ARB subcommittee for final review of the following details: 1.Skylight panels at the restroom roof 2.Inclusion of bottle filling station at the drinking fountain 3.Re-evaluation of the paint colors at the restroom interior 4.Potential addition of bike racks at the Golf Course clubhouse 5.Re-construct finding #11 to reflect the idea of restoring rather than preserving natural features at the site 6.Materials reflected on the sample color board be clearly specified on the City of Palo Alto Page 11 plans 7.Concrete trail color to improve the initial appearance with spray iron 8.Material used for treating the wood be the most sensitive and least impactful type possible 9.Fencing naturally weather instead of powder or glossy finish 10.Forward the following issues to the City Council for further consideration: incorporating the Embarcadero path into the scope of this project and a discussion regarding signage and how it relates to the City’s signage standard The staff report of the July 18, 2013 ARB meeting is attached to this report as Attachment G, and the meeting minutes are attached as Attachment H. The ARB subcommittee reviewed these items at its January 16, 2014 meeting and approved the follow-up Project submittals, with the exception of the Project signage, which is discussed below. Regarding ARB condition of approval #10 listed above, the Board requested that staff present the following issues to Council for final resolution: 1.Extension of bicycle/pedestrian path The ARB recommended that the proposed bicycle/pedestrian path included in the Golf Course design along Embarcadero Road be extended easterly to connect to the Golf Course/Airport entry road in order to improve safety and accessibility for bicyclists and pedestrians. The Board asked that this issue be forwarded to Council in acknowledgement that this recommendation would increase project costs. The cost to design and construct the recommended bicycle/pedestrian path extension is relatively minor in the context of the larger project, and staff has proceeded to include the path extension to the edge of the Golf Course border in the scope of the final design documents. 2.Design of Golf Course entry signage City of Palo Alto Page 12 The ARB recommended that the proposed Golf Course entry signage be modified to be consistent with the design standard recently approved by the Board for use at the Lucie Stern Community Center and Rinconada Park. They also expressed concern that the proposed signage did not provide clear indication that the Golf Course is a municipal facility owned by the City of Palo Alto. Staff and the golf course architect noted that the signage was designed to be consistent with the Baylands Design Guidelines and is an important element of the proposed re-branding of the reconfigured Golf Course as the Baylands Golf Links at Palo Alto, as previously endorsed by Council. The ARB agreed to defer the final approval of the entry signage to the City Council, but asked that the sign be referred back to the ARB for final review if Council directs that the sign be redesigned as recommended by the Board. In response to the ARB’s comments, the entry sign has been redesigned to add a panel emblazoned with the City’s name and logo and to utilize colors from the City’s standard color palette (see revised entry sign, Attachment I). During their January 16, 2014 review, the ARB subcommittee did not embrace the revised signage design. The subcommittee directed staff to request general guidance from Council regarding the overall signage design approach (i.e. sign conforming to existing City signage standard vs. custom sign based on Golf Course re- branding) and to subsequently return to the subcommittee for final approval of the sign. Staff recommends that Council endorse the entry sign design concept based on the Golf Course re-branding as part of the Site and Design Review approval, and refer the sign with comments back to the ARB subcommittee for final action. Environmental Impact Report The proposed changes at the Palo Alto Municipal Golf Course are subject to the California Environmental Quality Act (CEQA). Due to the complexity of the proposed improvements and their potential environmental impacts, a full Environmental Impact Report (EIR) was prepared. The scope of the EIR covers both the Golf Course Reconfiguration Project and a conceptual Baylands Athletic Center Expansion Project (EIR Projects) that could be built in the future at the site. In addition to the detailed improvement plans for the reconfiguration of the Golf Course, the EIR examines the potential environmental impacts of a set of conceptual improvements that could be constructed on the 10.5 acres of land City of Palo Alto Page 13 carved out of the existing golf Course footprint for use as future recreational facilities. While Council’s original intent for the future use of the 10.5 acres was playing fields,staff asked the EIR consultant to examine the impacts of the most intensive potential use of the property;this was assumed to be a 24,100 square foot gymnasium, five full-size athletic playing fields, along with associated parking areas and lighting. Examining the most intensive possible use of the property was intended to provide Council with more flexibility in considering the future use of the 10.5 acres should the community express interest in alternative park and recreational amenities for the site. As described below, staff recommends that the gymnasium be eliminated from consideration at this time due to the negative feedback received from advisory bodies and members of the public with respect to this project element. The EIR has been prepared to evaluate the proposed potential impacts of the EIR Projects and to identify the appropriate mitigation measures,with the City acting as the lead agency (The Final EIR was distributed to Council members with the January 23 Council packet and was placed at libraries and City offices and posted to the City’s web site [http://www.cityofpaloalto.org/gov/depts/csd/golf/new/default.asp] on January 22, 2014). The Draft EIR was released for public review for a period of 59 days beginning on June 3, 2013 and ending on August 1, 2013. During the public review period, a series of public meetings and formal public hearings were held to solicit comments on the EIR Projects, their impacts, and the proposed mitigation measures, including a public meeting at the Golf Course Clubhouse on June 25th, PTC hearings on June 26th and July 31st, and an ARB hearing on July 18th. All comments received during the public review period are documented in Chapter 2 of the Final EIR, along with a formal response to each comment. Some of the comments resulted in changes to the EIR and the identified mitigation measures. The joint comment letter from the Santa Clara Valley Audubon Society and the California Native Plant Society and the associated response to comments were inadvertently omitted from the Final EIR. The letter and the response to comments are attached to this report and are hereby made part of the official Project record (Attachment N). Some of the most common comments received during the public review process are summarized below. City of Palo Alto Page 14 Loss of Trees Comments were received from several members of the public, PTC Commissioners, and ARB Board Members expressing concern about the loss of 621 existing trees on the Golf Course as a result of the Golf Course Reconfiguration and Baylands Athletic Center Expansion Projects. Removal of existing trees from the Golf Course is consistent with the Project’s design intent to convert the facility from artificial parkland to a setting more consistent with the natural Baylands environment. The landscape plans for the reconfigured Golf Course include the planting of 300 native replacement trees appropriate to the Baylands setting, including California coast live oak, California coffeeberry, Pacific wax myrtle, and other suitable species. Nevertheless, it is acknowledged that tree removal is a potentially significant environmental impact, and appropriate mitigation measures have been developed. In response to the public concerns, the City created an ad hoc Stakeholder Group to review, prioritize and provide recommendations for near-site or off-site mitigation landscape restoration or tree planting plans. The Stakeholder Group was made up of representatives from the Community Services Department, members of the Parks and Recreation Commission, and representatives of environmental groups including Acterra, Canopy, Audubon Society, and the California Native Plant Society. The City also employed a consultant to calculate the current value of ecosystem services provided by the trees which have been proposed for removal. In addition, the consultant provided an estimate of the potential ecosystem services that would be supplied by the reconfigured golf course landscape, and calculated a monetized difference which equates to a dollar value of mitigation funding to be applied to off-site planting sites to make up the remaining ecosystem systems deficit. The dollar value of the required off- site mitigation calculated by the ecosystem services analysis was $130,000. The mitigation expenditure was increased to $200,000 in order to account for the additional tree removal impacts not addressed in the analysis (e.g. impacts to wildlife habitat, bird populations, etc.) Moreover, $200,000 is the estimated minimum cost to plant the number of trees needed to mitigate impacts per the Tree Technical Manual. City of Palo Alto Page 15 Based upon the findings of the ecosystem services analysis and input from the members of the Stakeholder Group, staff recommends the following measures as mitigation for the removal of trees from the Golf Course: 1) Planting 300 replacement trees (Baylands native species) as part of the Golf Course Reconfiguration Project, 2) Protection and monitoring of 500 naturally-occurring oak saplings in the Pearson Arastradero Preserve (the saplings will be caged to prevent browsing by deer until the trees have matured adequately to ensure their long-term survival), and 3) Restoration of two acres of native bay ecosystem habitat at a site in Byxbee Park near the Golf Course project site. 4) Long-term maintenance of the newly planted mitigation trees and Baylands restoration area through fiscal year 2034 at an annual cost of $20,000 beginning in fiscal year 2019 and continuing through fiscal year 2034 for maintenance of the trees and Baylands restoration area. This additional funding is predicated on the performance of the Golf Course and its ability to first pay for all Golf Course operating costs, debt service, Golf Course Infrastructure Reserve funding, and internal support costs. It should be noted that mitigation plan elements 3 and 4 listed above differ from those listed in the Final EIR. The differences arise because staff continued tree mitigation discussions with the Stakeholder Group beyond the publication date of the Final EIR. The specific mitigation measures listed above reflect staff’s final recommendation to Council. The cost of mitigation plan elements 2 through 4 is estimated to be $500,000 over a 20-year period ($200,000 for initial planting and maintenance through Year 5, and $20,000 per year for Years 6 through 20). The final tree mitigation plan was presented to the Parks and Recreation Commision for review at their January 21, 2014 meeting. Although the Commission was generally supportive of the staff-recommended mitigation plan, they approved a motion recommending a slightly modified alternative set of mitigation strategies summarized below. The primary differences between the staff recommendation and the Parks and Recreation Commission City of Palo Alto Page 16 recommendation is that the Commission endorses three acres of Baylands restoration (as opposed to two acres), and they do not want additional mitigation funding for the maintenance of trees and Baylands restoration areas to be predicated on the performance of the Golf Course for at least ten years. The cost difference between the two proposals is estimated to be $80,000, which is staff’s estimated cost for restoration of one acre of Baylands habitat over a five year period. The minutes of the January 21, 2014 Parks and Recreation Commission meeting are attached for reference (Attachment J). Park and Recreation Commission Tree Mitigation Proposal: 1.300 new trees will be planted in the Golf Course with a success criteria of 90 percent survival after 10 years 2.Restoration of three acres of native bay ecosystem habitat at a site in Byxbee Park near the Golf Course project site. 3.Protection and monitoring of 500 naturally-occurring oak saplings in the Arastradero Preserve (the saplings will be caged to prevent browsing by deer until the trees have matured adequately to ensure their long-term survival), and with a goal of 80 percent survival. 4.All of the above mitigation actions will require ongoing maintenance for 10 to 20 years. We want to see a guaranteed commitment by the City to fund this maintenance for first 10 years de-coupled from any performance metrics based on golf course revenue. This mitigation will create a new City resource that needs to be maintained. It needs to be done as a matter of course and not be dependent on the future business model of one of the City’s recreational assets. Siting of Gymnasium Several commenters, including both advisory bodies and members of the public, were concerned whether it is appropriate to consider siting a gymnasium at the Baylands Athletic Center. Some of the comments were focused on the site’s lack of proximity to neighborhood population centers and poor accessibility for pedestrians, bicyclists, and transit users. Others expressed concern that the large mass and scale of the proposed building would not be consistent with the City of Palo Alto Page 17 Baylands setting. There were also those who are not convinced that there is a demonstrated need for a new gymnasium in the City. It should be noted that there is no current capital improvement project proposal nor identified funding for a gymnasium. A determination of whether and where additional gymnasium space might be needed will be generated by the ongoing Parks and Recreation Master Plan process. The original purpose of including the gymnasium in the EIR was to establish environmental clearance for the most intensive potential use of the 10.5 acre area of the Golf Course parcel set aside by Council direction for future recreational use. Based on the general negative tone of most of the comments received during the public review period and the greenhouse gas emission impacts discussed below, staff is recommending that Council certify the Environmental Impact Report based on a project scope that does not include the gymnasium. Green House Gas Emissions The analysis performed during preparation of the EIR determined that the combination of the proposed Golf Course Reconfiguration and the Baylands Athletic Center Expansion would result in significant and unavoidable impacts due to increased greenhouse gas emissions primarily caused by increased vehicular trips to the new facilities. As a result, Council would need to make a finding of overriding considerations with respect to greenhouse gas emission impacts in order to certify the EIR covering both projects. There was debate at the PTC hearing as to whether these impacts could be reduced to below the threshold of significance by a combination of ridesharing programs, increased transit availability, and/or installation of electric vehicle charging stations at the new facilities,but there was no consensus that these programs would be effective at reducing vehicle trips to the required levels. At staff’s request, the project environmental consultant examined potential reductions in project scope that would reduce the greenhouse gas emission impacts to below the level of significance and determined that deletion of the gymnasium concept would eliminate a sufficient number of new vehicular trips to achieve the desired impact reduction goal. Staff is recommending that Council approve a resolution certifying the EIR based on a project scope without the gymnasium element in order to avoid having to make a finding of overriding City of Palo Alto Page 18 considerations with respect to greenhouse gas emission impacts. The primary downside to this strategy is that it does not provide environmental clearance for the future construction of a gymnasium at the site. The environmental analysis contained in the EIR could be used, however, as the basis for a supplemental EIR at a later date if it is decided that a gymnasium should be constructed at the site. The Project impacts are summarized in Table ES-1 of the EIR. For potentially significant impacts, mitigation measures are identified where feasible to reduce the impact on the environmental resources to a less-than-significant level. Chapter 3 of the EIR (Setting, Impacts, and Mitigation Measures) contains a detailed discussion of Project impacts and detailed description of the proposed mitigation measures. Significant and Unavoidable Impacts related to the following topics would remain significant despite the implementation of mitigation. ·Aesthetics. Lighting for the proposed athletic playing fields would create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area during Project operation. ·Air Quality. The Project would violate an air quality standard or contribute substantially to an existing or projected air quality violation during Project construction. Park Improvement Ordinance The Palo Alto Municipal Golf Course is a dedicated City park. In order to protect and preserve the continued integrity and functionality of City parks, Palo Alto Municipal Code Section 22.08.005 requires that Council adopt an approved improvement plan by way of a Park Improvement Ordinance whenever a substantial improvement is made to a dedicated park facility. The plans included within the Golf Course Site and Design Review application serve as the required improvement plan for the Golf Course Reconfiguration Project. Staff has prepared the attached Park Improvement Ordinance, which describes the key elements of the Project, for Council review and approval.The Parks and Recreation Commission recommended approval of the Park Improvement City of Palo Alto Page 19 Ordinance at their January 21, 2014 meeting with a vote of 6:1. The dissenting vote was from Commissioner Crommie who commented that she believed it was pre-mature to recommend approval at this time. Project Status Update The following is provided as an update on key issues affecting the project status: Soil importation On June 17, 2013, Council awarded a contract to Don Tucker & Son for the importation and stockpiling of soil for use on the Golf Course Reconfiguration Project and the San Francisquito Creek JPA’s flood control project. The contractor is paying the City $2.50 to $3.00 per cubic yard for the right to stockpile up to 364,000 cubic yards for the Golf Course Project and 127,000 cubic yards for the JPA Project at a soil stockpile site on the west side of the Golf Course. The soil importation process is expected to generate up to $1.3 million that will be used to directly offset the cost of the golf course construction work. The amount of soil imported to the site thus far (approximately 70,000 cubic yards, generating revenue of approximately $200,000) has been less than expected. Staff is continuing to work closely with the contractor to encourage soil to be brought in at an accelerated rate, although the availability of soil is largely out of the contractor’s direct control and is affected primarily by the level of nearby land development activity, the quality of soil (both soil physical properties and chemical contamination levels) being excavated from nearby construction sites, and market forces. It is likely that the full volume of soil needed for the Golf Course Reconfiguration Project will not be available on-site at the start of construction. Staff will negotiate with Don Tucker and the selected golf course contractor on an arrangement under which Don Tucker will continue to import and place soil on the Golf Course after the golf course contractor has begun work. Regulatory permits Implementation of the Golf Course Reconfiguration Project will require acquisition of regulatory permits from state and federal resource agencies. Specifically, the Project requires a Section 404 Permit from the US Army Corps of Engineers (which also involves consultation with the US Fish and Wildlife Service City of Palo Alto Page 20 with respect to potential impacts to federally-listed endangered species) and a Section 401 Water Quality Certification from the San Francisco Bay Regional Water Quality Control Board (Water Board). Permit acquisition for the Golf Course project has been hindered to-date because of delays related to the JPA’s permit acquisition process with these same agencies for their flood control project. Despite multiple overtures by staff, the state and federal resource agencies have been hesitant to deeply review the Golf Course Project because they believe that the JPA project may be forced to change in order to avoid undesirable environmental impacts in ways that will in turn require changes in the design of the Golf Course Project. Staff have been working closely with JPA representatives and our environmental consultant (the same environmental consultant is working on both projects) to expedite the permitting process for both projects. There have been recent breakthroughs with respect to the JPA project permit negotiations that will likely resolve the issues and result in moving the Golf Course Project permitting process forward. In spite of requests from the resource agencies to the contrary, permit applications for the Golf Course Project were submitted on December 20th. The resource agencies are required to notify applicants whether their applications are complete within 30 days from the receipt of the application. Staff received a letter from the Water Board on January 16, 2014 in response to the City’s permit application, citing deficiencies with the application. Staff submitted a letter to the Water Board on January 31, 2014 responding to each of the items cited in the deficiency letter. In addition, the city manager and project staff are scheduled to meet with Water Board representatives (including the Executive Officer) and San Francisquito Creek JPA representatives on the morning of February 3, 2014 to discuss the pending permit applications for the Golf Course Reconfiguration Project and the JPA flood control project and other related topics. Staff will provide information regarding the outcomes from this meeting at the February 3 Council meeting. Once permits are deemed to be complete, permit review and approval typically takes three to four months to complete. Due to seasonal scheduling constraints, staff intends to issue bid documents for the Golf Course Project prior to receipt of the executed permits. Staff believes that the likelihood of changes to the bid documents resulting from the permit review process is relatively low. Staff will not return to Council for award of the construction contract for the Golf Course Project until all required permits have been secured. City of Palo Alto Page 21 Contractor pre-qualification Golf Course construction is a specialized practice that requires experience and expertise that not all licensed contractors possess. Theoretically, any contactor with a Class A or Class C-27 state contractor’s license could submit a bid for construction of the golf course improvements. This group includes road construction/earthmoving contractors, underground construction contractors, and general landscaping contractors who may have substantial construction experience but lack the specific talents and abilities required for golf course construction. The building and shaping of a golf course includes particular artistic elements not required for other types of construction. Public contracting law requires that construction bids be awarded to the lowest responsible bidder. In order to increase the chances that the lowest responsible bidder on the Golf Course Project is qualified to build the project, staff implemented a pre- qualification process for potential bidders. Interested contractors submitted information regarding their company with respect to specific golf course construction experience, audited financial statements, ability to provide required bonds and insurance and on-the-job safety records for staff review. As a primary screening tool, the pre-qualification criteria required prospective bidders to hold status as Certified Golf Course Builders with the Golf Course Builders Association of America. Contractor submittals were reviewed and scored by staff to determine which firms have the requisite experience, financial strength, safety record, and client relations to meet or exceed the minimum scoring criteria. Staff has completed the pre-qualification process and has identified four golf course contractors who will have the exclusive right to submit a bid for the Golf Course Reconfiguration Project. Timeline Construction of the Golf Course Reconfiguration Project is scheduled to conform to the following schedule: February 17, 2014 Issue bid documents to pre-qualified bidders March 24, 2014 Deadline for submittal of bids City of Palo Alto Page 22 April 14, 2014 Council award of construction contract (subject to receipt of state/federal regulatory permits) May 5, 2014 Start of construction Closure of Golf Course for public use September 1, 2015 Opening of Baylands Golf Links for public use Resource Impact Funding for the Golf Course Reconfiguration Project is available in Capital Improvement Program (CIP) Project PG-13003 depending upon 1) the successful issuance of certificates of participation (currently estimated at $5.2 million if add- alternates of the constrution bid of approximately $500,000 are awared, 2) receipt of $1.3 million in revenue from soil imports, and 3) receipt of $3 million in mitigation payment from the San Francisquito Creek Joint Powers Authority (JPA). The funding (JPA) is mitigation payment for incorporating 7.4 acres of the existing Golf Course footprint into a widened creek channel for increased flood protection. The $3 million mitigation payment is based on the estimated value of the minimum Golf Course reconfiguration project that would have been required to restore a functional 18-hole golf course within the reduced land footprint resulting from the loss of the 7.4 acres. Although the $3 million payment has not yet been received from the JPA, this amount is included in the JPA’s flood control project budget. As mentioned above, the balance of the Project funding will be generated through the issuance of certificates of participation, with the resultant long-term debt to be serviced by future Golf Course and playing field revenues.If Golf Courses revenues in future years are not sufficient to cover debt service and operating expenses, additional General Fund resources or a reduction in Golf Course expenditures will be necessary to achieve a balanced Golf Course budget. Golf Course Financial Projections FY 2014 through FY 2021 In response to the Finance Committee’s request for an update on the Golf Course finances during pre-construction, construction and post-construction,staff has prepared the following update. City of Palo Alto Page 23 As Council may recall, in order to help assess the potential financial performance of the Golf Course during and after construction,staff entered into a contract with the National Golf Foundation (NGF) in 2012 to provide an independent Return On Investment analysis on the design options and long-range Golf Course plan (Attachment K). The NGF analysis was a key factor in the Finance Committee and Council decision to approve moving forward with the design of Plan G, which is before Council for approval. Since the NGF report was completed in 2012,staff have acquired additional information based on the fact that the project implementation has moved out a year, we have begun pre-construction work on the Golf Course and experienced impacts on golf rounds played, we have a revised construction cost estimate based on 100% Project design,and we have negotiated contract amendments with Brad Lozares and ValleyCrest Maintenance reflecting the impacts of the construction on their operations. While the NGF report and analysis remain very relevant, a new revised set of pro formas have been developed to reflect the new information currently available (Attachment L). Before discussing the revised pro formas,we will first review the revised construction cost estimate which is summarized below. (For more detail see Attachment M). These cost estimates are based on the 100% Project design and are inclusive of the base bid, soft costs, tree mitigation expenses, contingency, and add alternate bid items. Construction cost estimate for Palo Alto Municipal Golf Course Reconfiguration Project: Base Bid $8,416,755 Add Alternate bid items $535,920 Soft Costs $549,052 Total Project Costs $9,501,727 Less Estimated Soil Importation Revenue ($1,300,000) City of Palo Alto Page 24 Less Estimated SFCJPA Mitigation Payment ($3,000,000) Net Financed Costs with Add Alternate items (Funded by COPs)$5,201,727 Net Financed Costs without Add Alternate items (Funded by COPs)$4,665,807 The current cost estimate is above the estimated costs from when Council directed staff to complete the project design in 2012. At that time,the estimated net project costs, to be funded through the issuance of certificates of participation (COP) supported by Golf Course revenue,was $4.4 million. In an effort to better understand the financial risk of the Golf Course design, staff asked the National Golf Foundation to conduct a projections and sensitivity analysis on the expected number of golf rounds and potential for market-driven fees for the newly designed Golf Course. As with all financial analyses and projections, results depend on the assumptions used. The further a projection goes out in time, the less likely it is that results will materialize as anticipated. As NGF discloses in their report, varying the assumptions, along with such factors as weather and economic conditions, can change pro-forma projections. Overall, and with a few qualifications, Administrative Services Department and Community Services Department staff still view the NGF assumptions on revenues and expenses as reasonable for when the Golf Course re-opens. One of the most sensitive and key variables in the pro-formas that affects the bottom line, especially given the need to issue up to $5.2 million in certificates of participation, is the projected number of rounds played. Indeed, rounds at the Golf Course, which at one time surpassed 90,000 rounds annually, have dropped from 75,000 in FY 2008 to 58,000 in FY 2013. NGF’s “base” projection for the reconfigured Golf Course from 2012 is presented on pages 39-44 of the NGF Report, and the sensitivity analysis which considers 1) reduced rounds; 2) lower average green fees; and 3) lower rounds together with lower average green fees can be found on pages 49-55. The same three scenarios presented in the NGF report are presented on pages 2-4 of the updated pro-formas (Attachment L) and are summarized in the tables below. City of Palo Alto Page 25 Bottom Line Projections:National Golf Foundation FY2012 Compared to City Staff Projections FY2014 in -$000s- NGF FY2012 Projections: Scenarios 2014 2015 2016 2017 2018 2019 2020 2021 Base-Projection (124)(459)34 198 363 349 776 743 Sensitivity Analysis: 1. Lower Rounds (124)(459)(544) (343)(138)39 464 428 2. Lower Fees (124)(499)(115)38 191 176 601 567 3. Lower Fees/Rounds (124)(499)(658)(471)(279)(115)308 270 (Note –The 2012 NGF projections assumed construction during FY2013-14, the above shifts NGFs projections forward one year to reflect the FY2014-15 construction schedule) City Staff FY2014 Projections: Scenarios 2014 2015 2016 2017 2018 2019 2020 2021 Base- Projection (741)(1,272)(377)241 391 400 839 844 Sensitivity Analysis: 1. Lower Rounds (741)(1,272)(816)(299)(108)91 527 536 2. Lower Fees (741)(1,272)(495)92 232 239 677 687 3. Lower Fees/Rounds (741)(1,272)(843)(418)(240)(53)382 384 The first and most striking note of comparison between the 2012 NGF pro forma and staff’s 2014 pro forma is the net loss during pre-construction, construction, and short-term post-construction. Staffs current base projection in the 2014 pro City of Palo Alto Page 26 forma predicts the need for an estimated loss of revenue of $2.4 million for the Golf Course between FY2014 and FY2016.If base projections are realized,the $2.4 million revenue loss would be recuperated within five years. The primary reason for the difference between NGF’s 2012 projections and staff’s 2014 projections is that NGF assumed a 10-month construction period, whereas staff now anticipates a 16-month construction period. Also, NGF did not anticipate the reduced level of golf play that we have experienced throughout the pre- construction phase, during which the stockpiling of soil on the Golf Course has required a modified course layout for nine months before the course is closed for construction. Other factors include an increase in anticipated debt financing from $4.5 million to $5.2 million in capital costs, and increased maintenance costs during the grow-in period of golf course construction. The FY2014 -Base Projection is the scenario staff believes to be most likely at this time and includes several key assumptions: 1) The renovated Golf Course will attract 75,000 rounds of golf annually within three years. As a point of reference, the Golf Course last generated 75,000 annual rounds in fiscal year 2008.2) The market will accept a 10% increase in green fees (above 2012 fees)for the enhanced golfing experience. 3) The construction will be completed within 16 months beginning May, 2014. 4) The Golf Course debt will be $5.2 million paid back over 20 years. An estimated interest rate of 4.5% was used in this analysis, but that number may change by the time financing is completed. An important factor to appreciate as Council considers this investment is that the Golf Course has been on a trajectory of declining rounds and revenues for at least the past six years.Below is a history of annual golf rounds played for the past six years: FY Year Rounds of Golf Played 2008 75,000 2009 72,000 2010 68,000 City of Palo Alto Page 27 2011 67,000 2012 63,000 2013 58,000 This pattern is important context because the decision to invest in the Golf Course in such a way that creates a new paradigm, with the intent to reverse the downward trend in golf play,remains a key factor as to why to invest in a full renovation of the Golf Course. The sensitivity analysis for the 2014 pro formas assumes the same scenarios that NGF considered in 2012: 1) Rounds do not return to 75,000 annually, 2) The market will not tolerate a 10% increase in green fees, and 3) Rounds do not return to 75,000 annually,and the market will not tolerate a 10% increase in green fees. The sensitivity scenario of least impact is that of lower fees,since it would add a relatively small $117,000 to the subsidy compared to the base projection. In this scenario,there is adequate capacity to repay the subsidy from future cash flows. The next highest, negative impact comes from lower rounds which result in a considerable $846,000 in revenue loss compared to the base projection. The worst case, lower fees and rounds scenario pushes negative net income out through FY2019 and adds $1.2 million in revenue loss compared to the base projection. Should rounds fall below those projected or if rounds and fees fall below expectations, considerable pressure will be brought to bear on Golf Course operations. In such scenarios, operating costs for the Golf Course would need to be curtailed and other Community Services or City operating and/or capital funds would need to be reallocated to maintain a balanced budget. In addition, built into all pro-formas is an annual contribution of at least a $200,000 to an operating and capital reserve. Not funding this otherwise prudent reserve could offset some of the negative financial results from lower fees and/or rounds. The FY 2014 pro forma includes three columns representing: the approved FY2014 budget, year-to-date actuals (mid-year), and projected year-end balance. City of Palo Alto Page 28 The pro forma reflects the reduction in golf rounds played to-date due to pre- construction work, which involves the importation and stockpiling of soil needed for both the levee and golf course renovation. Importation of soil in advance of the project starting was initiated in order to produce a stockpile of certified soil to enable the flood control project and golf course renovation to get underway promptly in spring 2014. To accommodate the soil stockpile area, several holes on the Golf Course were shortened, reducing the par score of the entire course from 72 to 67. The course remains open for public use until spring 2014. Starting in the first quarter of FY 2014, the Golf Course experienced a greater reduction in golf rounds played than anticipated. On November 4th, staff received Council authority for greater flexibility in discounting golf fees in order to further promote the Golf Course during the pre-construction period. The Golf Course Management Team, which is made up of City staff, contracted Golf Professional Brad Lozares, Valley Crest Maintenance staff, Bay Café staff, Golf Course Architect Forrest Richardson, and members of the Golf Advisory Committee,continues to promote and market the Golf Course to encourage maximum golf play during the pre-construction period. The flexibility in discounting golf fees, including limited very low, to no-cost golf fees during slow times of the day, have helped increase visitation and revenue. Staff,however, project a loss of $741,459 at the Golf Course for FY 2014, which is up from the approved FY2014 budget, which projected a loss of $503,905.Therefore, at the FY 2014 Midyear Budget Review, staff will recommend reducing the Golf Course revenue estimate by approximately $237,000. The construction project is expected to begin in early May 2014 and last for 16 months, with the Golf Course reopening in September 2015. During construction,the Golf Course will be closed for play;however,the driving range, restaurant and practice facility will remain open. The revised Golf Course pro-formas also reflect the executed amendments to professional services and manintance contracts for the next five years. On March 18, 2013, Council approved amendments to: •Management Agreement for Golf Course professional services with Brad Lozares Golf Shop; •Lease of the Palo Alto Golf Pro Shop with Brad Lozares City of Palo Alto Page 29 •Maintenance agreement with Valley Crest Golf Course Maintenance. Each amended agreement has a five-year term of May 1, 2013 through April 30, 2018. Each of the amendments incudes a compensation schedule that reflects the closure of the Golf Course during construction. The revised pro-forma shows the expected revenues and expenses for Golf Course operations during construction in FY 2014 and FY 2015.As seen the Golf Course is expected to need a projected subsidy of $2.4 million dollars to cover costs during pre-construction, construction and short-term post-construction before realizing positive cash flows beginning in FY2017. The costs during this period come from debt service payments on the 1998 COPs, City internal support costs, salaries and benefits, water expenses, and contractor expenses for Valley Crest Maintenance and Brad Lozares Golf Professional services. The projected Golf Course performance after the reconfiguration, from FY 2017 forward, is anticpated to be positve with significant surplus revenues expected after FY2019 when the 1998 debt service expires. Financing Construction Staff recommends that the City use Certificates of Participation (COP) as the financing vehicle for the Golf Course Reconfiguration Project. COPs were used in 1998 to finance Golf Course capital improvements where the revenue streams of the Course were pledged as the credit.The pro forma uses debt service estimated at around $5.2 million at a 4.5% rate over 20 years. Environmental Review The Palo Alto Municipal Golf Course Renovation Project and Baylands Athletic Center Expansion Projects are subject to the California Environmental Quality Act (CEQA). An Environmental Imapct Report (EIR) has been prepared to evaluate the proposed potential impacts of the projects and to identify the appropriate mitigation measures, with the City acting as the lead agency. The final EIR will be certifed by the Council’s adoption of the attached resolution and its findings (Attachment B). The EIR certification pertains to the Palo Alto Municipal Golf City of Palo Alto Page 30 Course Reconfiguration Project and a Baylands Athletic Center Expansion project, consisting of up to five athletic playing fields and asociated field lighting and parking facilities. Attachments: ·A -Record of Land Use Action (PDF) ·B - Resolution Certifying FEIR(PDF) ·C -Park Improvement Ordinance (PDF) ·D -Site and Design Review Application (PDF) ·E -06/26/13 Planning and Transportation Commission Staff Report (PDF) ·F -06/26/13 Planning and Transportation Commission Meeting Minutes (PDF) ·G -07/18/13 Architectural Review Board Staff Report (PDF) ·H -07/18/13 Architectural Review Board Meeting Minutes (PDF) ·I -Proposed Entry Sign for Baylands Golf Links (PDF) ·J -01/21/14 Parks and Recreation Commission Meeting Minutes (PDF) ·K -National Golf Foundation Pro Forma (2012)(PDF) ·L -Community Services/Administrative Services Staff Pro Forma (2014)(PDF) ·M -Golf Course Reconfiguration Project Construction Budget (PDF) ·N -SCVAS Comment Letter and Response (PDF) Page 1 ATTACHMENT A APPROVAL NO. 2014-XX RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 1875 EMBARCADERO ROAD (PALO ALTO MUNICIPAL GOLF COURSE): ENVIRONMENTAL IMPACT REPORT AND SITE AND DESIGN REVIEW APPLICATION [FILE NO.13PLN-00103] (CITY OF PALO ALTO COMMUNITY SERVICES DEPARTMENT, APPLICANT) On February 3, 2014, the City Council approved the Environmental Impact Report (EIR) and Site and Design Review application for the Golf Course Reconfiguration and Baylands Athletic Center Expansion Project on a 176 acre site located in the PF(D) (Public Facilities) zone district. SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On March 6, 2013, the City of Palo Alto Community Services Department applied for a Site and Design Review application for a new 18 hole regulation Golf Course with a par of 71 to replace the existing 18 hole Palo Alto Municipal Golf Course in the PF(D) Public Facility with Site and Design Overlay zone district (“the Project”). The Project includes the replacement of a portion of the existing driving range and practice facility, and the construction of a new restroom facility. B. The scope of the EIR includes the new golf course project and the potential future expansion of the Baylands Athletic Center which would include a maximum of five full-size athletic playing fields with additional parking and lighting. C. Following staff review, the Planning and Transportation Commission (Commission) reviewed and recommended approval of the Site and Design Review Application on June 26, 2013, and continued the public hearing review of the Draft EIR to July 31, 2013. D. On July 31, 2013, the Commission concluded discussion and public hearing on the Draft EIR, and was informed the Final EIR would be provided to Commissioners prior to Council public hearing on the Project; the Final EIR was provided to Commissioners on January 24, 2014, ten days prior to the Council action on the Project. D. Following Commission reviews of the Draft EIR and Project, the Architectural Review Board (ARB) reviewed and recommended approval of the Project in a public hearing on July 18, 2013, with a condition to return to the ARB subcommittee with minor details addressing restroom roof skylights, drinking fountain, paint colors, bike racks, material notations on plans, concrete Page 2 trail color, wood treatment, and fencing finish; the subcommittee review was completed on January 16, 2014. SECTION 2. Environmental Review. The City as the lead agency for The Project has determined that the Project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA). An Environmental Impact Report (EIR) was prepared to evaluate the potential project impacts and identify appropriate mitigation measures. The Draft EIR (DEIR) was available for public review on June 3, 2013 through August 1, 2013; the Final EIR (FEIR) was published on January 22, 2014 for a 12-day public review and comment period prior to Council action. SECTION 3. Site and Design Review Findings. 1. The use will be constructed and operated in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites, in that: City standards and regulations will help to ensure that the use, or operation, of the Palo Alto Municipal Golf Course will be conducted in a manner that is compatible with the existing uses located in the immediate area. During construction, it is expected that there will be temporary impacts to the area in terms of construction-related noise, dust/debris and traffic. These impacts will be offset by applicable City construction standards, such as restrictions on hours of construction, the City’s noise ordinance, and the mitigation measures found in the FEIR. The proposed golf course renovation will be consistent with the existing functions of the park uses at the adjacent Baylands Athletic Center. The Project will not adversely affect the operation of the Palo Alto Airport or other adjacent land uses. 2. The Project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas, in that: The Project site is located in the Public Facilities (PF) zone district and will be reconfiguring an existing public facility/golf course with a new public facility/golf course. The Project will maintain desirability of investment in the same and adjacent areas in that the proposed goals and design are consistent with the existing Baylands environment, and the construction of all improvements will be governed by the regulations of the current Zoning Ordinance, the Uniform Building Code, and other applicable codes to assure safety and a high quality of development. 3. Sound principles of environmental design and ecological balance are observed in the Project, in that: Page 3 The Project will implement appropriate sustainable building practices as deemed feasible. The Project is required to comply with the City’s Construction and Demolition requirements during construction activities. The Project elements have been designed in a manner consistent with the Baylands Design Guidelines. The Project has been evaluated in the Environmental Impact Report for environmental impacts, and mitigations have been provided to reduce potentially significant impacts. Mitigation Measures in the areas of Aesthetics, Air Quality, Biological Resources, Cultural Resources, Geology and Soils, Hazardous Materials, Hydrology, Land Use, Noise, Public Services, Recreation, and Transportation and Circulation have been provided and are listed in the FEIR. The proposed project would have unavoidable significant impacts with regard to aesthetics (lighting) and short-term air quality. 4. The use will be in accord with the Palo Alto Comprehensive Plan, in that: The Project complies with the policies of the Land Use, Natural Environment, Transportation, and Community Services elements of the Comprehensive Plan as well as the Baylands Master Plan. The applicable Comprehensive Plan and Baylands Master Plan goals and policies were provided to the Commission and Council for their consideration. SECTION 4. Architectural Review Findings. The design and architecture of the proposed improvements, as conditioned, complies with the Findings for Architectural Review as required in Chapter 18.76 of the PAMC. (1) The design is consistent and compatible with applicable elements of the City's Comprehensive Plan in that the site is designated Public Park and the Comprehensive Plan Table provided to the ARB indicates compliance with all applicable policies; (2) The design is compatible with the immediate environment of the site in that the proposed Project is located within a Public Park/Open Space area and Public Facilities zone district where other uses and buildings of similar size and scale are common; (3) The design is appropriate to the function of the Project in that the design provides a well-designed golf course layout and ample landscaping that is consistent with the overall objectives of the Site Assessment and Design Guidelines for the Palo Alto Baylands Nature Preserve (Baylands Design Guidelines); Page 4 (4) In areas considered by the Board as having a unified design character or historical character, the design is compatible with such character. The overall design is more compatible with the aesthetic qualities unique to the Baylands area; (5) The design promotes harmonious transitions in scale and character in areas between different designated land uses. The proposed Project is surrounded by a mix of uses including athletic fields, the Baylands, an airport and single family residential which is separated from the golf course by the San Francisquito Creek. The replacement of the existing golf course with a new golf course with a smaller overall footprint should not reduce the overall functionality of the immediate area. The replacement of a new golf course with an existing golf course is permitted in the Palo Alto Municipal Code and is consistent with the Comprehensive Plan and will help support the employment uses in the vicinity; (6) The design is compatible with approved improvements both on and off the site in that the proposed use and building, as conditioned, includes improvements necessary for the new facility; (7) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community in that the proposed design is compatible with the applicable Baylands Design Guidelines, development standards and performance criteria; (8) The amount and arrangement of open space are appropriate to the design and the function of the structures; this finding is not applicable in that the entire project is considered open space/park space; (9) Sufficient ancillary functions are provided to support the main functions of the project in that the proposal includes sufficient automobile and bicycle parking, outdoor seating and on course restroom facilities; (10)Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles in that the existing conforming automobile and bicycle parking shall remain in place. New signage including a new entry sign and on course wayfinding signs are also provided; (11)Natural features are appropriately restored and integrated with the project in that the project includes replacement of Page 5 existing trees and shrubs with numerous trees and shrubs of species appropriate to the Baylands Nature Preserve; (12)The materials, textures, colors and details of construction and plant material are appropriate expressions of the design and function in that the proposed design is a balanced, sustainable design that is consistent with the Baylands Site Assessment and Design Guidelines and green buildings guidelines; (13)The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment in that the Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. New managed turf will include Creeping Bentgrass on the greens and salt-tolerant Paspalum (v. PE Platinum) at all other areas. During replacement, non-native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area, non-turf native grass zones, and Baylands native zones. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new trees to be planted on the course as part of the Project, protection of 500 naturally-occurring oak saplings in the Arastradero Preserve, and restoration of two acres of native Bay ecosystem habitat at a site in Byxbee Park; (14)Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant and to reduce consumption of water in its installation and maintenance in that appropriate plant materials that are compatible with the Baylands Nature Preserve are proposed (additionally described above in #13); (15)The Project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The following considerations should be utilized in determining sustainable site and building design: (A) Optimize building orientation for heat gain, shading, daylighting, and natural ventilation; (B) Design of landscaping to create comfortable micro- climates and reduce heat island effects; (C) Design for easy pedestrian, bicycle and transit access; (D) Maximize on site stormwater management through landscaping and permeable paving; (E) Use sustainable building materials; Page 6 (F) Design lighting, plumbing and equipment for efficient energy and water use; (G) Create healthy indoor environments; and (H) Use creativity and innovation to build more sustainable environments. The design incorporates energy conservation measures through such factors as decreasing overall water usage by 30-35%. (16)The design is consistent and compatible with the purpose of architectural review, which is to: (1) Promote orderly and harmonious development in the city; (2) Enhance the desirability of residence or investment in the city; (3) Encourage the attainment of the most desirable use of land and improvements; (4) Enhance the desirability of living conditions upon the immediate site or in adjacent areas; and (5) Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other. The design is consistent for all of the reasons and findings enumerated above. SECTION 5. Site And Design Approvals Granted. Site and Design Approval is granted by the City Council under Palo Alto Municipal Code Section 18.30(G).070 for application 13PLN-00103, subject to the conditions of approval in Section 6 of the Record. SECTION 6. Draft Conditions of Approval. Planning and Transportation Division 1. The plans submitted for Building Permit shall be in substantial conformance with plans received and date stamped March 6, 2013, except as modified to incorporate these conditions of approval. 2. All mitigation measures identified in the FEIR shall be incorporated into the project implementation. 3. The Project is subject to meeting all the requirements of Palo Alto Municipal Code Chapter 18.44, the City’s Green Building Ordinance. 4. 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 against Page 7 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 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. Planning Arborist 5. Transplant or compensate for loss of Protected Trees by planting vegetation both on-site and off-site consistent with applicable tree protection regulations as listed in the Tree Technical Manual and Palo Alto Municipal Code (PAMC) Ch. 8.10 Tree Preservation and Management Regulations. Public Works Engineering 6. REGULATORY PERMITS: Obtain all necessary regulatory permits and approvals for working in the wetlands from Bay Conservation and Development Commission (BCDC), Regional Water Quality Control Board, US Army Corps of Engineers, U.S. Fish and Wildlife Service, etc. 7. OFFSITE IMPROVEMENTS: At the end of the project, Embarcadero Road at the frontage of the project may require repaving (2- inch grind and pave) due to the damage from the construction traffic. The condition of the pavement will be assessed at the end of the project. Furthermore, as part of this project, the applicant must replace the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard per Public Works’ latest standards and/or as instructed by the Public Works Inspector. 8. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Permit for Construction in the Public Right-of-Way (“Street Work Permit”) from Public Works at the Development Center. 9. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of- way along the property’s frontage. Call City Public Works’ arborist at 650-496-5953 to arrange a site visit so he can Page 8 determine what street tree work will be required for this project. The site or tree plan must show street tree work that the arborist has determined including the tree species, size, location, staking and irrigation requirements. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by the Public Works’ arborist. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way (“Street Tree Permit”) from Public Works’ Urban Forestry. 10. STORM WATER TREATMENT: This project must meet the latest State Regional Water Quality Control Board’s (SRWQCB) C.3 provisions. 11. The applicant is required to satisfy all current storm water discharge regulations and shall provide calculations and documents to verify compliance. 12. All projects that are required to treat storm water will need to treat the permit-specified amount of storm water runoff with the following low impact development (LID) methods: rainwater harvesting and reuse, infiltration, evapotranspiration, or biotreatment. However, biotreatment (filtering storm water through vegetation and soils before discharging to the storm drain system) will be allowed only where harvesting and reuse, infiltration and evapotranspiration are infeasible at the project site. Complete the Infiltration/Harvesting and Use Feasibility Screening Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook - Appendix I). Vault-based treatment will not be allowed as a stand-alone treatment measure. Where storm water harvesting and reuse, infiltration, or evapotranspiration are infeasible, vault-based treatment measures may be used in series with biotreatment, for example, to remove trash or other large solids. Reference: Palo Alto Municipal Code Section 16.11.030(c) http://www.scvurppp- w2k.com/permit_c3_docs/c3_handbook_2012/Appendix_I- Feasibility_2012.pdf In order to qualify the project as a Special Project for LID treatment reduction credit, complete and submit the Special Projects Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook - Appendix J: Special Projects). Any Page 9 Regulated Project that meets all the criteria for more than one Special Project Category may only use the LID treatment reduction credit allowed under one of the categories. http://www.scvurppp- w2k.com/permit_c3_docs/c3_handbook_2012/Appendix_J-Special_P Utilities Engineering 13. The most recent plans submitted on March 6th, 2013 do not show any changes to the electrical utilities. If there any changes to the load requirement or physical relocation of utilities infrastructure (including the meter), the customer is required to contact CPAU and fill out a Utilities Service Application Fire Department 14. Cart path design for emergency medical response recommended. SECTION 7. Term of Approval. Site and Design Approval. In the event actual construction of the project is not commenced within two years of the date of council approval, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.82.080. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Deputy City Attorney Not Yet Approved Resolution No. Resolution of the Council of the City of Palo Alto Certifying the Adequacy of the Final Environmental Impact Report for the Palo Alto Municipal Golf Course Reconfiguration and 8aylands Athletic Center Expansion Project Pursuant to the California Environmental Quality Act and Adopting the Mitigation Monitoring and Reporting Program and the Statement of Overriding Considerations The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Introduction and Certification. (a) The City Council (the "Council") of the City of Palo Alto (the "City"), in the exercise of its independent judgment, makes and adopts the following findings to comply with the requirements of the California Environmental Quality Act ("CEQA"), commencing with California Public Resources Code ("PRC") §§ 21000 et seq., and the CEQA Guidelines (the "Guidelines"), commencing with the California Code of Regulations title 14, § 15000 et seq., in particular, §§ 15091, 15092 and 15093. All statements, including those set forth in this Section 1(a), set forth in this Resolution, constitute formal findings of the Council. These findings are made relative to the conclusions of the City's Palo Alto Municipal Golf Course Reconfiguration and 8aylands Athletic Center Expansion Project Final Environmental Impact Report (State Clearinghouse No. 2013012053) (the "Final EIR"), which includes the Draft Environmental Impact Report, the public comments, and the responses to comments (the "Comments and Responses") that are included in the Draft Environmental Impact Report and the Final EIR; both EIRs are incorporated herein by reference. The Final EIR addresses the environmental impacts of the implementation of the Palo Alto Municipal Golf Course Reconfiguration and 8aylands Athletic Center Expansion Project (the "Project"), described in Section 2(b), which is incorporated herein by reference. These findings are based upon the entire record of proceedings for the Project. (b) Mitigation Measures, as defined, associated with the potentially significant impacts of the Project will be implemented in accordance with the Mitigation Monitoring and Reporting Program (the "Program"), described in Section 4. (c) Under PRC § 21067, the City is the Lead Agency, as defined, as it has the principal responsibility to approve and regulate the Project, and the Project applicant. (d) The City exercised its independent judgment in accordance with the requirements of PRC § 20182.1(c), in retaining the independent consulting firm, ICF International ("ICF"), to prepare the Final EIR. ICF prepared the Final EIR under the supervision , and at the direction of the City's Director of Planning and Community Environment (the "Planning Director"). (e) The City, acting by and through ICF, initially prepared and circulated the Draft EIR for review by responsible and trustee agencies and the public and also submitted it to the State Clearinghouse for review and comment by state agencies, during a comment period, commencing on June 3, 2013 and ending on August 1, 2013 (the "Comment Period"). 140129 dm 00710339a 1 Not Yet Approved Comments and Responses that were received during the Comment Period are included in the Final EIR. (f) The City's Planning and Transportation Commission (the "Commission") has reviewed the Final EIR and a draft of these findings, and has provided its recommendations to the Council regarding the certification of the Final EIR. The Council has independently reviewed the Final EIR and has considered the Commission's recommendations in making these findings. (g) Based upon its review and consideration of the information in the Final EIR, the Council hereby certifies the Final EIR was completed in compliance with CEQA; this certification reflects the City's independent judgment and analysis. The Council has considered all of the evidence and arguments presented during consideration of the Project and the Final EIR. In determining whether the Project may have a significant impact on the environment and in adopting the findings set forth below, the Council certifies that it has complied with the requirements of PRC §§ 21081, 21081.5, and 21082.2. (h) The Final EIR contains all of the revisions that the Final EIR made to the Draft EIR, which revisions include all public comments made and the City's responses thereto. The comments and responses are included in the Final EIR. All references to the Draft EIR in these findings include references to all of the revisions to the Draft EIR, including the Comments and Response. In reviewing this Section 1 and the Final EIR, the Council hereby finds, determines, and. declares that no significant new information has been added to the Final EIR that would require the recirculation of all or a portion of the Draft EIR. Likewise, the Council has considered all public comments and other information submitted into the record since the publication of the Final EIR, and the Council further finds that none of comments or additional information constitutes significant new information that would require the recirculation of the Final EIR. SECTION 2. Project Information. The Project information provides the context for the discussion and findings that follow, but is intended as a summary and not a replacement for the information contained in the Draft EIR, final EIR, or the Project's approvals. (a) Project Objectives The Project Objectives of the Project applicant are set forth in Section 2.2 of the Draft EIR. (b) Project Description The Project would reconfigure all eighteen (18) holes of the Palo Alto Municipal Golf Course (the "Golf Course"), a portion of the driving range and practice facility, and replace a restroom facility, as it retains a regulation golf course with a par of 71. In addition to the reconfiguration of the Golf Course, the City has proposed incorporation of 10.5 acres of the Golf Course in the Baylands Athletic Center (the "Athletic Center"). The design and scale of the Athletic Center expansion are not yet finalized. For the purposes of the Final EIR, it is assumed 140129 dm 0071 0339a 2 Not Yet Approved that the Athletic Center expansion would include a maximum of five (5) full-size athletic fields and additional parking and lighting. The baseball field and softball field at the Athletic Center would not change. A complete description of the Project, proposed by the City as the Project applicant, is set forth in Chapter 2 of the Draft EIR, as modified and set forth in the Final EIR. (c) Required Approvals The approvals required by the City, as the lead Agency for implementation of the Project, include: Agency Permit/Review Required City of Palo Alto Grading Permit Building Permit Site and Design review and approval (Planning & Transportation Commission, Architectural Review Board, City Council) Parks and Recreation Commission Golf Advisory Committee Park improvement Ordinance San Francisco Bay Regional Water Quality 401 Certification Control Board Construction General Stormwater Permit Army Corps of Engineering Section 404 Permit U.S. Fish and Wildlife Service Biological Assessment Federal Aviation Administration FAA Form 7460-1, Notice of Proposed Construction or Alteration SECTION 3. Record of Proceedings. (a) For purposes of CEQA, the Guidelines § 15091(e), and these findings, the Record of Proceedings for the Project include, but are not limited to, the following documents: (1) (2) 140129 dm 00710339a The Final EIR, which consists of the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project Draft Environmental Impact Report (the "Draft EIR"), published and circulated for public review and comment by the City, during the Comment Period, and the Palo Alto Municipal Golf Course Reconfiguration and Baylands;Athletic Center Expansion Project Final EIR, published and made available on January 22, 2014, and all appendices, reports, documents, studies, memoranda, maps, testimony, and other materials related thereto; All public notices issued by the City in connection with the Project and the preparation of the Draft EIR and the Final EIR, including, but not 3 Not Yet Approved limited to, public notices for all public workshops held to seek public comments and input on the Project and the Notice of Preparation, the Notice of Completion, and the Notice of Availability; (3) All written and oral communications submitted by agencies or interested members of the general public during the Comment Period for the Draft EIR, including oral communications made 'at public hearings or meetings held on the Project's approvals; (4) The Program; (5) All findings and resolutions adopted by the Council in connection with the Project, and all documents cited or referred to therein; (6) All final reports, studies, memoranda, maps, staff reports, or other planning documents relating to the Project, prepared by the City and its consultants with respect to the City's compliance with the requirements of CEQA and the Guidelines, and with respect to the City's actions on the Project, including all staff reports and attachments to all staff reports for all public meetings held by the City; (7) Minutes and/or verbatim transcripts of all public meetings and/or public hearings held by the City in connection with the Project; (8) Matters of common knowledge to the City, including, but not limited to, federal, state, and local laws, rules and regulations; (9) Any documents expressly cited in these findings, in addition to those referenced above; and (10) Any other materials required to be included in the Record of Proceedings by PRC § 21167.6(e). (b) The custodian of the documents, comprising the Record of Proceedings, is the Planning Director, City of Palo Alto, 250 Hamilton Avenue, Palo Alto, California, 94301. (c) Copies of all of the referenced documents, which constitute the Record of Proceedings, upon which the City's decision on the Project is based, are and have been made available upon request at the offices of the Department of Planning and Community Environment, City of Palo Alto, 250 Hamilton Avenue, Palo Alto, California, 94301, and other business locations of the City. (d) The City has relied upon all of the documents, materials, and evidence listed above in reaching its decision on the Project. (e) The Council hereby finds, determines and declares that the referenced 140129 dm 00710339a 4 Not Yet Approved documents, materials, and evidence constitute substantial evidence, as defined by the Guidelines § 15384, to support each of the findings contained herein. SECTION 4. Mitigation Monitoring and Reporting Program. (a) Under CEQA, the Lead Agency, in approving a project, is required to adopt a Mitigation Monitoring and Reporting Program for the changes made to the project that it has adopted in order to mitigate or avoid significant effects on the environment. The Program has been prepared and is recommended for adoption by the Council concurrently with the adoption of these findings to ensure compliance with mitigation measures during the Project's implementation. As required by PRC § 21081.6, the Program designates the responsibility and delineates the anticipated timing for the implementation of the mitigation measures recommended in the Final EIR. The Program will remain available for public review during the compliance period. (b) The Council hereby adopts the Program for the Project, attached and incorporated by referenc~ as Exhibit A, and finds, determines, and declares that the adoption of the Program will ensure enforcement and continued imposition of the mitigation measures recommended in the Final EIR in order to mitigate or avoid significant impacts on the environment. SECTION 5. Potentially Significant Impacts to be Mitigated. The Draft EIR and the Final EIR conclude that the Project would result in potentially significant environmental impacts in the areas listed below. Through the imposition of the identified Mitigation Measures, these identified potentially significant environmental impacts will be reduced to less-than-significant impacts. Impact 810-1: Disturbance of Special-Status Plant Populations. Because special-status plants may be present on the Project site, construction operations of the Project could have a potentially significant impact pertaining to special-status plant populations. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measures BIO-l, B10-2a, B10-2b, B10-2c, BIO- 2d, and B10-2e will be adopted and will be implemented as provided in the Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure BIO-l will reduce the significant impacts to a less-than- significant level, because it requires worker awareness training regarding sensitive plant species that provides workers with information on what look for and what steps to take to avoid the disturbance of sensitive plant species. 140129 dm 0071 0339a 5 Not Yet Approved 2) Mitigation Measure BIO-2a will reduce the significant impacts to a less-than- significant level, because it requires the City to retain a qualified botanist to conduct a pre-construction survey to check for the presence of special-status plant species. 3) Mitigation Measure BIO-2b will reduce the significant impacts to a less-than- significant level, because it requires the protection of existing special-status plant species through the establishment of buffer zones around any identified locations where speCial-status plant species are identified on the Project site. 4) Mitigation Measure B10-2c will reduce the significant impacts to a less-than- significant level, because, in the event that on-site special-status plants cannot be protected during the Project, it requires the City to develop and implement a compensation plan that will ensure that there will not be a net loss of special-status plants as a result of the Project. 5) Mitigation Measure B10-2d will reduce the significant impacts to a less-than- significant level, because, in the event that on-site special-status plants cannot be. protected during the Project, it requires the City to develop and implement a 5-year monitoring program overseen by a qualified botanist that will ensure that there will not be a net loss of speCial-status plants as a result of the Project. 6) Mitigation Measure B10-2e will reduce the significant impacts to a less-than- significant level, because, if special-status plants are identified during the pre- construction survey, it requires the City to develop and implement a training program for Golf Course employees that provides workers with information on what look for and what steps to take to avoid disturbance of an special-status plants during h::mdscape maintenance activities, including depOSition of landscape waste. Impact BI0-3: Disturbance of Nesting Migratory Birds and Raptors. Because nesting migratory birds and raptors may be present at the Project site, construction operations of the Project could have a potentially significant impact pertaining to nesting migratory birds and raptors. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measure B10-3 will be adopted and will be implemented as provided in the Program. c) Findings. Mitigation Measure BIO-3 will reduce the significant impacts to a less- than-significant level, because it requires a pre-construction survey for nesting birds and raptors and establishes buffer zones around any identified nesting sites. Impact BI0-4: Disturbance of Western Burrowing Owls and Habitat. Because the Western Burrowing Owl may be present on the Project site, construction operations of the Project could have a potentially significant impact pertaining to the Western Burrowing Owl. 140129 dm 00710339a 6 Not Yet Approved a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measure B10-4 will be adopted and will be implemented as provided in the Program. c) Findings. Mitigation Measure B10-4 will reduce the significant impacts to a less- than-significant level, because it requires a pre-construction survey for the Western Burrowing Owl and establishes buffer zones around any identified nesting sites. Impact BI0-5: Disturbance of California Clapper Rail and California Black Rail and Removal of Habitat. Because the California Clapper Rail and the California Black Rail may be present at the Project site, construction operations of the Project could have a potentially significant impact pertaining to the California Clapper Rail and the California Black Rail. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measure B10-5 will be adopted and will be implemented as provided in the Program. c) Findings. Mitigation Measure B10-5 will reduce the significant impacts to a less- than-significant level because it requires a pre-construction survey for California Clapper Rail and California Black Rail and establishes buffer zones around any identified nesting sites or locations where rails are identified on the Project site. . Impact 810-6: Disturbance of Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew and Habitat. Because the Salt Marsh Harvest Mouse and the Salt Marsh Wandering Shrew may be present on the Project site, construction operations of the Project could have a potentially significant impact pertaining to the Salt Marsh Harvest Mouse and the Salt Marsh Wandering Shrew or their habitat. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measures B10-1 and B10-6 will be adopted and will be implemented as provided in the Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level, as follows: 1) Mitigation Measure B10-1 will reduce the significant impacts to a less-than- significant level, because it requires worker awareness training regarding habitat of the Salt Marsh Harvest Mouse and the Salt Marsh Wandering that provides workers with information on what look for and what steps to take if sensitive habitat is encountered. 140129 dm 00710339a 7 Not Yet Approved 2) Mitigation Measure B10-6 will reduce the significant impacts to a less-than- significant level, because it requires a pre-construction survey for the Salt Marsh Harvest Mouse and the Salt Marsh Wandering Shrew habitat and individuals and establishes buffer zones around any identified locations where the Salt Marsh Harvest Mouse and the Salt Marsh Wandering Shrew habitat are identified at the Project site. Impact 810-8: Disturbance or Loss of State or Federally Protected Wetlands. Because protected wetland areas at the Project site will be temporarily impacted by the reconfiguration of the Golf Course, the Project would have a potentially significant impact pertaining to wetlands. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measures B10-1, B10-7, and B10-8 will be adopted and will be implemented as provided in the Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level, as follows: 1) Mitigation Measure B10-1 will reduce the significant impacts to a less-than- significant level, because it requires worker awareness training regarding wetlands that provides workers with information on what look for and what steps to take to avoid the disturbance of wetland areas. 2) Mitigation Measure B10-7 will reduce the significant impacts to a less-than- Significant level, because it requires a pre-construction survey to identify and protect jurisdictional wetlands with exclusionary fencing. 3) Mitigation Measure B10-8 will reduce the significant impacts to a less-than- significant level because it requires the protection of existing and creation of new wetlands areas on the Golf Course that will ensure that there will not be a net loss of wetlands as a result of the Project. The measure also requires the development of a wetlands Mitigation Monitoring Plan (MMP) that will protect the long-term preservation of the wetlands. Impact 810-9: Loss of or Damage to Regulated Trees. Because a large number of existing trees will be removed as a result of the reconfiguration of the Golf Course, the Project would have a potentially significant impact pertaining to regulated trees. a) Potential Impact. The impact identified above is described and discussed in Section 3.3 of the Final EIR. b) Mitigation Measures. Mitigation Measures B10-1, B10-9, and B10-10 will be adopted and will be implemented as prOVided in the Mitigation Monitoring and Reporting 140129 dm 0071 0339a 8 Not Yet Approved Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure B10-1 will reduce the significant impacts to a less-than- significant level because it requires worker awareness training regarding tree protection that provides workers with information on how tp protect trees to designated to remain on the Golf Course. 2) Mitigation Measure B10-9 will reduce the significant impacts to a less-than- Significant level because it requires the City to develop and implement a plan to plant trees and other vegetation both on-site and off-site to compensate for loss of regulated trees. The mitigation plan includes a requirement for long-term monitoring and maintenance of the trees and vegetation. 3) Mitigation Measure B10-10 will reduce the significant impacts to a less-than- significant level because it requires the protection of existing trees designated to the remain on the Golf Course, as prescribed by the City of Palo Alto Tree Technical Manual. Impact CUL-l: Effect of Ground Disturbance on Undocumented Cultural Resources, Including Human Remains. Although no cultural resources are known to be present on the Project site, since it is possible that such resources may be present, construction operations of the Project could have a potentially significant impact pertaining to cultural resources. a) Potential Impact. The impact identified above is described and discussed in Section 3.4 of the Final EIR. b) Mitigation Measures. Mitigation Measures CUL-1, and CUL-2 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure CUL-1 will reduce the significant impacts to a less-than- significant level because it requires worker awareness training regarding cultural resources that provides workers with information on what look for and what steps to take to avoid the disturbance of cultural resources. 2) Mitigation Measure CUL-2 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the stoppage of work upon the discovery of any cultural resources on the site. Impact CUL-3: Damage to Significant Paleontological Resources. Although it is unlikely that paleontological resources will be exposed during the Project due to the presence of a 140129 dm 00710339a 9 Not Yet Approved significant layer of artificial fill on the site, since it is possible that such resources may be present, construction operations 'of the Project could have a potentially significant impact pertaining to paleontological resources. a} Potential Impact. The impact identified above is described and discussed in Section 3.4 of the Final EIR. b) Mitigation Measures. Mitigation Measures CUL-3, CUl-4, and CUl-5 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure CUl-3 will reduce the significant impacts to a less-than- Significant level because it requires a pre-construction paleontological resources survey and evaluation prior to the start of construction activity on the site. 2) Mitigation Measure CUl-4 will reduce the significant impacts to a less-than- Significant level because it requires worker awareness training regarding paleontological resources that provides workers with information on what look for and what steps to take to avoid the disturbance of paleontological resources. 3) Mitigation Measure CUl-5 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the stoppage of work upon the discovery of any paleontological resources on the site. Impact GEO-7: Loss of Topsoil. Because existing site topsoil will be disturbed as a result of the reconfiguration of the Golf Course, the Project would have a potentially significant impact pertaining to loss of topsoil. a} Potential Impact. The impact identified above is described and discussed in Section 3.5 of the Final EIR. b) Mitigation Measures. Mitigation Measure GEO-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure GEO-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the stockpiling and reuse of topsoil on the site. Impact GHG-l: Generate Greenhouse Gas Emissions, Either Directly or Undirectly, That May Have a Significant Impact on the Environment. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials during construction of the Project, the Project would have a potentially significant impact pertaining to greenhouse gas 140129 dm 00710339a 10 Not Yet Approved emissions. a) Potential Impact. The impact identified above is described and discussed in Section 3.6 of the Final EIR. b) Mitigation Measures. Mitigation Measure GHG-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure GHG-3 will reduce the significant impacts to a less- than-significant level because it requires the use of local materials and recycling/reuse of construction waste in order to minimize greenhouse gas generation from vehicle miles traveled and manufacturing of new products. Impact HAZ-l: Creation of Hazard through Transport, Use, or Disposal of Hazardous Materials. Because hazardous materials, including fuels, lubricants, and solvents, will be utilized during construction of the Project, the Project would have a potentially significant impact pertaining to hazardous materials. a) Potential Impact. The impact identified above is described and discussed in Section 3.7 of the Final EIR. b) Mitigation Measures. Mitigation Measures HAZ-1 and HAZ-2 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure HAZ-1 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a spill prevention and response plan. 2) Mitigation Measure HAZ-2 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a hazardous materials storage plan. Impact HAZ-2: Exposure of Workers or the Public to Existing Hazardous Materials Contamination. Becausethere are existing areas of potentially contaminated soil in the Project vicinity, the Project could have a potentially significant impact pertaining to worker exposure to hazardous materials. a) Potential Impact. The impact identified above is described and discussed in Section 3.7 of the Final EIR. b) Mitigation Measures. Mitigation Measures HAZ-l, HAZ-2, HAZ-3, and HAZ-4 will 140129 dm 007103398 ]] Not Yet Approved be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure HAZ-1 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a spill prevention and response plan. 2) Mitigation Measure HAZ-2 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a hazardous materials storage plan. 3) Mitigation Measure HAZ-3 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to stop work if hazardous materials are encountered during the work. 4) Mitigation Measure HAZ-4 will reduce the significant impacts to a less-than- significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to employ engineering controls and best management practices to minimize human exposure to potential contaminants. Impact HAZ-3: Generation of Hazardous Emissions/Use of Hazardous Materials within 0.25 Mile of Schools. Because hazardous materials, including fuels, lubricants, and solvents will be utilized during construction of the Project, and the Athletic Center is within 0.25 mile of the International School (151 Laura Lane), the Project could have a potentially significant impact pertaining to hazardous materials exposure near schools. a) Potential Impact. The impact identified above is described and discussed in Section 3.7 of the Final EIR. b) Mitigation Measures. Mitigation Measure ~AZ-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure HAZ-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a spill prevention and response plan. Impact HAZ-6: Interference with Emergency Response or Evacuation Plan. Because the construction activity associated with the Project could potentially interfere with evacuation 140129 dm 0071 0339a 12 Not Yet Approved of the Golf Course and/or Baylands Athletic Center, the Project could have a potentially significant impact pertaining to emergency evacuation. a) Potential Impact. The impact identified above is described and discussed in Section 3.7 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-l will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-l will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a requirement to maintain emergency access to the site. Impact HAZ-8: Breeding or Harborage of Disease Vector Organisms. Because the land disturbance associated with the Project could potentially contribute to increased mosquito breeding, the Project could have a potentially significant impact pertaining to vector organisms. a) . Potential Impact. The impact identified above is described and discussed in Section 3.7 of the Final EIR. b) Mitigation Measures. Mitigation Measure HAZ-S will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure HAZ-S will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to implement best management practices that will prevent the accumulation of standing water that increases mosquito breeding. Impact HYD-2: Depletion of Groundwater Supplies or Interference with Groundwater Recharge. Because the Baylands Athletic Center Expansion Project could utilize artificial turf that could hinder groundwater recharge, the Project could have a potentially significant impact pertaining to groundwater recharge. a) Potential Impact. The impact identified above is described and discussed in Section 3.8 of the Final EIR. b) Mitigation Measures. Mitigation Measure HYD-l will be adopted and will be implemented as provided in the Mitigation Mon'itoring and Reporting Program. c) Findings. Mitigation Measure HYD-l will reduce the significant impacts to a less- than-significant level because it requires the City to consider artificial turf products and base course material that allow for water infiltration and groundwater recharge. Impact HYD-4: Alteration of Stormwater Drainage Patterns to Cause Flooding On-or 140129 dm 00710339a 13 Not Yet Approved Off-Site. Because the Baylands Athletic Center Expansion Project would increase the imperviousness of the site and would consequently increase storm water runoff generated by the site, the Project would have a potentially significant impact pertaining to flooding. a) Potential Impact. The impact identified above is described and discussed in Section 3.8 of the Final EIR. b) Mitigation Measures. Mitigation Measure HYD-2 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure HYD-2 will reduce the significant impacts to a less- than-significant level because it requires the City to implement Low Impact Development (LID) measures to improve drainage through detention or infiltration of stormwater. Impact HYD-S: Create or Contribute Additional Runoff to Exceed Stormwater Drainage Capacities or Cause Additional Sources of Polluted Runoff. Because the Baylands Athletic Center Expansion Project would increase the imperviousness of the site and would consequently increase storm water runoff generated by the site, the Project would have a potentially significant impact pertaining to creation of additional stormwater runoff. a) Potential Impact. The impact identified above is described and discussed in Section 3.8 of the Final EIR. b) Mitigation Measures. Mitigation Measure HYD-2 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure HYD-2 will reduce the significant impacts to a less- than-significant level because it requires the City to implement Low Impact Development (LID) measures to improve drainage through detention or infiltration of stormwater. Impact HYD-6: Otherwise Substantially Degrade Water Quality. Because the Project could result in the discharge of fill material into waters of the United States, the Project could have a potentially significant impact pertaining to degradation of water quality in protected wetland areas. a) Potential Impact. The impact identified above is described and discussed in Section 3.8 of the Final EIR. b) Mitigation Measures. Mitigation Measures BIO-l, B10-7, and B10-8 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. The above-noted Mitigation Measures will reduce impacts to a less- than-significant level as follows: 1) Mitigation Measure BIO-l will reduce the Significant impacts to a less-than- significant level because it requires worker awareness training regarding wetlands that 140129 dm 00710339a 14 Not Yet Approved provides workers with information on what look for and what steps to take to avoid the disturbance of wetland areas. 2) Mitigation Measure B10-7 will reduce the significant impacts to a less-than- significant level because it requires a pre-construction survey to identify and protect jurisdictional wetlands with exclusionary fencing. 3) Mitigation Measure B10-8 will reduce the significant impacts to a less-than- significant level because it requires the protection of existing and creation of new wetlands areas on the Golf Course that will ensure that there will not be a net loss of wetlands as a result of the Project. The measure also requires the development of a wetlands Mitigation Monitoring Plan (MMP) that will protect the long-term preservation of the wetlands. Impact LU-2: Conflict with Applicable Plan, Policy, or Regulation. Because the Baylands Athletic Center Expansion Project would include nighttime lighting, the Project could have a potentially significant impact pertaining to operations at the adjacent Palo Alto Airport. a) Potential Impact. The impact identified above is described and discussed in Section 3.9 of the Final EIR. b) Mitigation Measures. Mitigation Measure LU-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure LU-1 will reduce the Significant impacts to a less- than-significant level because it requires voluntary coordination with the Airport Land Use Commission regarding the design of new lighting for the proposed athletic playing fields to ensure that it does not interfere with pilot visibility and/or other airport operations. Impact PS-l: Adversely Affect Fire Protection Services or Require the Provision of New or Physically Altered Fire Protection Facilities. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials during construction of the Project, the Project would have a potentially significant impact pertaining to fire equipment emergency access in the vicinity of the Project. a) Potential Impact. The impact identified above is described and discussed in Section 3.12 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a requirement to maintain emergency access to the site. 140129 dm 00710339a 15 Not Yet Approved Impact PS-2: Adversely Affect Police Protection Services or Require the Provision of New or Physically Altered Police Protection Facilities. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials during construction of the Project, the Project would have a potentially significant impact pertaining to police emergency access in the vicinity of the Project. a) Potential Impact. The impact identified above is described and discussed in Section 3.12 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a requirement to maintain emergency access to the site. Impact REC-l: Increase the Use of Existing Neighborhood and Regional Parks or Other Recreational Facilities Such that Substantial Physical Deterioration of Facilities Would Occur or Be Accelerated. Because construction of the Baylands Athletic Center Expansion Project could affect access to the Bay Trail along San Francisquito Creek, the Project could have a potentially Significant impact pertaining to recreational use of the Bay Trail by bicyclists and pedestrians. a) Potential Impact. The impact identified above is described and discussed in Section 3.13 of the Final EIR. b) Mitigation Measures. Mitigation Measure REC-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure REC-1 will reduce the significant impacts to a less- than-significant level because it requires the City to provide a clearly signed detour route for the Bay Trail when construction activities require closure of a portion of the trail. Impact TRA-l: Increased Traffic from Project Construction and Operation under Existing Plus Project Conditions. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials during construction of the Project, the Project would have a potentially significant impact pertaining to traffic operations in the vicinity of the Project during construction. a) Potential Impact. The impact identified above is described and discussed in Section 3.14 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and· Reporting Program. 140129 dm 00710339a 16 Not Yet Approved c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a 'requirement to limit truck access to the Project during peak traffic hours and to employ standard traffic control safety practices during construction of the Project. Impact TRA-2: Increased Traffic from Project Operation Under the Background (2015) Plus Project Condition.· Because the Project will generate a large number of vehicle trips for d~livery ofsupplies and materials during construction of the Project (which will extend into the year 2015), the Project would have a potentially significant impact pertaining to traffic operations in the vicinity of the Project during construction. a) Potential Impact. The impact identified above is described and discussed in Section 3.14 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction speCifications that requires the contractor to develop and implement a traffic control plan, including a requirement to limit truck access to the Project during peak traffic hours and to employ standard traffic control safety practices during construction of the Project. Impact TRA-3: Impacts to Air Traffic Patterns. Because the Baylands Athletic Center Expansion Project would include nighttime lighting, the Project could have a potentially significant impact pertaining to operations at the adjacent Palo Alto Airport. a) Potential Impact. The impact identified above is described and discussed in Section 3.14 of the Final EIR. b) Mitigation Measures. Mitigation Measure LU-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure LU-1 will reduce the significant impacts to a less- than-significant level because it requires voluntary coordination with the Airport Land Use Commission regarding the design of new lighting for the proposed athletic playing fields to ensure that it does not interfere with pilot visibility and/or other airport operations. Impact TRA-4: Impacts on Site Access and On-Site Circulation. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials and on-site staging of equipment and materials during construction of the Project, the Project would have a potentially significant impact pertaining to site access and on-site circulation during construction. a) Potential Impact. The impact identified above is described and discussed in Section 3.14 of the Final EIR. 140129 dm 00710339a 17 Not Yet Approved b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a requirement to limit truck access to the Project during peak traffic hours and to stage equipment and materials on-site in a manner that minimizes disruption of site operations during construction of the Project. Impact TRA-5: Impacts to Transit and Bicycle/Pedestrian Circulation. Because the Project will generate a large number of vehicle trips for delivery of supplies and materials during construction of the Project, the Project would have a potentially significant impact pertaining to transit, bicycle, and pedestrian circulation on roadways in the vicinity of the Project during construction. a) Potential Impact. The impact identified above is described and discussed in Section 3.14 of the Final EIR. b) Mitigation Measures. Mitigation Measure TRA-1 will be adopted and will be implemented as provided in the Mitigation Monitoring and Reporting Program. c) Findings. Mitigation Measure TRA-1 will reduce the significant impacts to a less- than-significant level because it requires the City to include a provision in the Project's construction specifications that requires the contractor to develop and implement a traffic control plan, including a requirement to limit truck access to the Project during peak traffic hours and to employ standard traffic control safety practices, including measures to protect transit, bicycle, and pedestrian circulation, during construction of the Project. SECTION 6. Significant and Unavoidable Impacts. As noted in the Draft EIR and the Final EIR, the Project would result in significant and unavoidable impacts which cannot be adequately mitigated through the adoption and implementation of feasible mitigation measures. Those impacts, along with mitigation measures to mitigate them to the extent feaSible, are listed below as referenced in the Draft EIR and the Final EIR. 3.1 Aesthetics Impact AES-4: The Athletic Center would create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area during the Project's operation. a) Potential Impact. The impact identified above is described and discussed at Pages 3.1.13 through 3.1-16 of the Draft EIR and the Final EIR. 140129 dm 00710339a 18 Not Yet Approved b) Mitigation Measures. The following mitigation measures will be adopted and will be implemented as provided in the Program, and as further described in the remainder of these findings: c) Mitigation Measure AES-l: Apply Light Pollution and Glare Reduction Measures All artificial outdoor lighting will be limited to safety and security requirements, signage and stadium lighting. Lighting will conform to the City's applicable zoning regulations to minimize visual impacts (set forth in Palo Alto Municipal Code ("PAMC") § 18.23.030) and will be subject to Site and Design review approval (PAMC chapter 18.76) to ensure appropriate light pollution and glare reduction standards are achieved. To meet the City's requirements, lighting will be designed, using the Illuminating Engineering Society's ("IES") design guidelines and in compliance with International Dark-Sky Association ("IDSA")-approved fixtures. All lighting will provide minimum impact to the surrounding environment and will use downcast, cut-off type fixtures that are shielded and direct the light only towards objects requiring illumination. Therefore, lights will be installed at the lowest allowable height and cast low-angle illumination while minimizing incidental light spill onto adjacent properties, open spaces, or backscatter into the nighttime sky. The lowest allowable wattage will be used for all lighted areas and the amount of nighttime lights needed to light an area will be minimized to the highest degree possible. Light fixtures will have non-glare finishes that will not cause reflective daytime glare. All outdoor lighting will possess individual photocells. Lighting will be designed for energy efficiency, will use high pressure sodium vapor lights with individual photocells, and will have daylight sensors or will be timed with an on/off program. Lights will provide good color rendering with natural light qualities with the minimum intensity feasible for security, safety, and personnel access. Lighting, including light color rendering and fixture types, will be designed to be aesthetically pleasing. Lights along pathways and safety lighting at building entrances and loading areas will employ shielding to minimize offsite light spill and glare and will be screened and directed away from residences and adjacent uses to the highest degree possible. The amount of nighttime lights used along pathways will be minimized to the highest degree possible to ensure that spaces are not unnecessarily over-lit. For example, the amount of light can be reduced by limiting the amount of ornamental light posts to higher use areas and by using hooded wall mounts or bollard lighting on travel way portions of pathways. Stadium lighting will employ spill and glare control features to minimize off-site light pollution. Luminaires will be chosen for the ability to provide horizontal and vertical beam control for better control in directing what is illuminated. In addition, shielding, such as a visor, will be used to further direct light and reduce light spill and ambient light glow. Luminaires will also incorporate photometric reflector systems that are designed to reduce light pollution. 140129 dm 00710339a 19 Not Yet Approved All design measures used to reduce light pollution will employ the technologies available at the time of the Project's design to allow for the highest potential to reduce light pollution and meet the City's standards. These technologies may be available through information and products endorsed by the IES and the ISDA in addition to the actual products that lighting manufacturers have developed to improve lighting technologies and reduce light pollution and glare. d) Findings. The referenced mitigation measures will reduce the severity of this potentially significant impact, ensuring this impact will be mitigated, as practicable, as follows: (i) there 'will be shielding to help reduce the amount and direction of the light as much as possible; (ii) downcast, cut-off type fixtures that are shielded and direct the light only towards objects requiring illumination will be used; and (iii) all design measures used to reduce light pollution will employ the technologies available at the time of the Project's design to allow for the highest potential to reduce light pollution and meet City standards. However, these measures would not fully mitigate this impact to a less-than-significant level. 3.2 Air Quality Impact AQ-2: Violate Any Air Quality Standard or Contribute Substantially to an Existing or Projected Air Quality Violation. The Project would violate an air quality standard or contribute substantially to an existing or projected air quality violation during the golf course Project's construction. a) Potential Impacts. The impacts identified above are described and discussed in Chapter 3.2, Air Quality, Impacts and Mitigation Measures, at Pages 3.2-19 through 3.2-24 of the Draft EIR and the Final EIR. b) Mitigation Measures. The following mitigation measures will be adopted and implemented, as provided in the Program, and as further described in the remainder of these findings: Mitigation Measure AQ-l: Implement Tailpipe Emission Reduction for Project Construction The City will require all construction contractors to implement the BAAQMD's exhaust Basic Construction Mitigation Measures and Additional Construction Mitigation Measures recommended by BAAQMD to control exhaust emissions. Emission reduction measures will include at least the following measures and may include other measures identified as appropriate by the Air District and/or contractor: Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 2 minutes. Clear signage shall be provided for construction workers at all access points. 140129 dm 0071 0339a 20 Not Yet Approved All construction equipment shall be maintained and properly tuned in accordance with manufacturer's specifications. All equipment shall be checked by a certified visible emissions evaluator. The simultaneous occurrence of excavation, grading, and ground-disturbing construction activities in the same area at anyone time shall be limited. Activities shall be phased to reduce the amount of disturbed surfaces at anyone time. The construction contractor for the Project shall develop a plan for submittal to the City that demonstrates that the off-road equipment (more than 50 horsepower) to be used in construction of the Project (i.e., owned, leased, and subcontractor vehicles) will achieve a Project-wide fleet-average 20 percent NOX reduction. Acceptable options for reducing emissions inClude the use of late-model engines, low-emission diesel products, alternative fuels, engine retrofit technology, after- treatment products, add-on devices such as particulate filters, and/or other options as such become available. All construction equipment, diesel trucks, and generators shall be required to be equipped with Best Available Control Technology for emission reductions of NOX and PM. All contractors shall be required to use equipment that meets CARB's most recent certification standard for off-road heavy-duty diesel engines. Mitigation Measure AQ-2: Implement BAAQMD's Basic Construction Mitigation Measures to Reduce Construction-Related Dust BAAQMD will require all construction contractors to implement the Basic Construction Mitigation Measures recommended by BAAQMD to reduce dust emissions. Emission reduction measures will include at least the following measures an~ may include other measures identified as appropriate by the Air District and/or contractor: • All exposed surfaces (including parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered two (2) times per day. • All haul trucks transporting soil, sand, or other loose material off-site shall be covered. • All visible mud or dirt track-out onto adjacent public roads shall be removed, using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited. • All vehicle speeds on unpaved roads shall be limited to 15 MPH. • All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading is completed, unless seeding or soil binders are used. • A publicly visible sign, disclosing the telephone number and name of the person to contact at the lead agency regarding dust complaints, shall be posted. This person shall respond and take corrective action within 48 hours. BAAQMD's 140129 dm 00710339a 21 Not Yet Approved phone number shall also be visible in order to promote and ensure compliance with applicable regulations. c) Findings. The referenced mitigation measures will reduce the severity of this potentially significant impact by: (i) requiring tailpipe emission reduction for the Project's construction; and (ii) implementing all feasible dust control measures as recommended by the BAAQMD. There are no additional feasible mitigation measures beyond those set forth in Mitigation Measure AQ-1 to reduce this to a less-than-significant level. Implementation of the mitigation measure will ensure that this impact is reduced to the extent feasible. However, even with the implementation of this mitigation measure, the NOx emissions would still exceed BAAQMD's thresholds and therefore would not fully mitigate these Impacts to a less-than- significant levels. SECTION 7. Findings Regarding Project Alternatives. Under PRC § 21002, a public agency is prohibited from approving a project if there are feasible alternatives or feasible mitigation measures available, which would substantially lessen the significant environmental effects of the project. When a lead agency finds, even after the adoption of all feasible mitigation measures, that a project will still cause one or more significant environmental effects that cannot be substantially lessened or avoided, the lead agency must, prior to approving the project, as mitigated, first determine whether there are any project alternatives that are feasible and that would substantially lessen or avoid the project's significant impacts. Under CEQA, "feasibility" includes "desirability" to the extent that it is based on a reasonable balancing of the relevant economic, environmental, social, and technological factors. An alternative may be deemed by the lead agency to be "infeasible", if it fails to adequately promote the project applicant's and/or the lead agency's primary underlying goals and objectives for the project. Th4S, a lead agency may reject an alternative, even if it would avoid or sub~tantially lessen one or more significant environmental effects of the project, if it finds that the alternative's failure to adequately achieve the objectives for the project, or other specific and identifiable considerations, make the alternative infeasible. The Council certifies that the Final EIR describes a reasonable range of alternatives to the Project, which could feasibly obtain the basic objectives of the Project, and that the Council has evaluated the comparative merits of the alternatives. As described below, the Council has decided to approve the Project, as proposed, and to reject the remainder of the alternatives, as summarized below. Section 2.1 of the Draft EIR set forth the Project applicant's objectives for the Project. That list is incorporated herein by reference. In light of the City's, the Project applicant, objectives for the Project, and as the Project is expected to result in certain significant environmental effects, even after the implementation of all feasible mitigation measures, as identified above, the City hereby makes the following findings with respect to whether one or more of the alternatives evaluated in the Draft EIR could feasibly accomplish most of the goals and objectives for the Project and substantially lessen or avoid one or more of its potentially significant effects. 140129 dm 00710339a 22 Not Yet Approved No Project Alternative The IINo Project Alternative" is discussed at Section 5.2.6 of the Draft EIR. Although the No Project Alternative would be the environmentally superior alternative, because there would be no construction-related impact, there would be greater impacts on hydrology and water quality, as storm water and irrigation water would continue to pond on the Golf Course and would not drain properly through the drainage system, and on recreation, as there would be no Athletic Center expansion. Further, the No Project Alternative does not meet the Project's objectives to provide a golf course with enhanced wildlife habitat and improved wetland areas, to expand recreation areas at the athletic fields, and to integrate the Golf Course and the Athletic Fields into the Baylands theme. Based on these findings, the No Project Alternative is hereby rejected as infeasible, because it would not achieve the Project's objectives. Phased Construction Alternative The "Phased Construction Alternative" would phase the construction so that the Golf Course could remain open and operable as a 9-hole course throughout the duration of construction, and. the Athletic Center Expansion would be similar to the Project. The Phased Construction Alternative is hereby rejected as infeasible, because it would not result in significant reductions in the impacts associated with the Project, construction would take longer, and the impacts on aesthetics and Noise and Vibration would be slightly greater, as explained in Section 5.2.6 of the Draft EIR. Limited Athletic Center Expansion Alternative With the IlLimited Athletic Center Expansion Alternative", the athletic field-type lighting would not be installed along the perimeter of the new playing fields at the Athletic Center, and so the playing fields at the Athletic Center would not be made available for use after dark. As there would be no additional nighttime lighting, there would be no impacts related to light spillage on sensitive viewers in the vicinity of the Athletic Center. The Limited Athletic Center ExpanSion Alternative would eliminate the significant and unavoidable impact finding related to Impact AES-4. Additionally, there would be no new built structure so impacts related to visual quality would be less than compared with the Project. The Limited Athletic Center Expansion Alternative is hereby rejected as infeasible; although the impacts are similar to or slightly less than what would be when compared with the Project, it would not meet the Project's objectives to address the shortage of athletic fields and gymnasiums, to expand recreation areas at the athletic fields to fill existing and projected needs and to increase the inventory of athletics fields and gymnasiums for residents and visitors to Palo Alto. Limited Reconfiguration Alternative The "Limited Reconfiguration Alternative" would reconfigure 6.5 holes and create five (5) new greens. Seven (7) of the existing greens would be retained. Approximately 38.5 acres would be transformed to naturalized areas (or non-managed turf). The Limited Reconfiguration Alternative would not include a new irrigation system, but it would include the Athletic Center Expansion similar to the Project. Impacts to Hydrology and Water Quality and Utilities and 140129 dm 00710339a 23 Not Yet Approved Service Systems (water usage) would be greater, because there would not be an improved irrigation system for the entire golf course and smaller amount of the site would be transformed to naturalized areas. Although the impacts from the remaining impacts would be similar or slightly less than the Project, the Limited Reconfiguration Alternative is hereby rejected as infeasible, because it does not meet the Project's objectives to provide a golf course that has enhanced wildlife habitat and improved wetland areas, and it does not integrate the Golf Course and the Athletic Fields into the Baylands theme. SECTION 8. Statement of Overriding Considerations Pursuant to PRC § 21081 and the Guidelines §15093, the Council adopts and makes the following Statement of Overriding Considerations regarding the remaining significant unavoidable impacts of the Project, as discussed above, and the anticipated economic, social and other benefits of the Project. The City finds that: (i) the majority of the significant impacts of the Project will be reduced to less-than-significant and acceptable levels by the mitigation measures described in the Final EIR and approved and adopted by these Findings; (ii) the City's approval of the Project will result in certain significant adverse environmental effects that cannot be avoided even with the incorporation of all feasible mitigation measures into the Project; and (iii) there are no other feasible mitigation measures or feasible Project alternatives that would further mitigate or avoid the remaining significant environmental effects. The significant effects that have not been mitigated to a less-than-significant level and are therefore considered significant and unavoidable are identified in Section 6 above. Despite these potentially significant impacts, it is the City's considered judgment that the benefits offered by the Project outweigh the potentially adverse effects of these significant impacts. The substantial evidence supporting the following described benefits of the Project can be found in the preceding findings and in the record of proceedings. The benefits of the Project, which the Council finds serve as "overriding considerations", justifying the Project's approval, include the following: (1) Implementation of the Project will transform the Golf Course from a flat, park-like expanse of maintained turf grass into a blend of land forms, vegetation, and golf course furnishings that are compatible with the unique Baylands setting, and will transform 66 irrigated acres to naturalized areas of Baylands vegetation and habitat. (2) As a part of the Project, existing non-native plants and trees will be replaced with native grasses, and low-lying baylands zones will be planted with indigenous plants that will survive in saline soil. With the increased use of native plants and the replacement of the irrigation system with one which monitors soil moisture, overall water usage for the Golf Course's irrigation is expected to be reduced by 30 to 35 percent. In addition, the use of native ground cover and vegetation will have greater infiltration capabilities, which will improve groundwater filtration and reduce the risk of flooding. The new vegetation zones would slow water down, allowing it to percolate into the ground, and provide increased benefits for groundwater recharge. 140129 dm 00710339a 24 Not Yet Approved (3) The Project is consistent with the City's Comprehensive Plan, which designates the site as a public park (consistent with PAMC § 22.08.240), and emphasizes the need to preserve and improve the aesthetic qualities of Palo Alto's natural and built environment. The Project is also consistent with the City's Baylands Master Plan, which encourages preservation and enhancement of the Baylands' environmental quality, guides recreation development to minimize destruction of wildlife habitat and limit development, vehicle parking areas and aboveground utility lines. The Project also conforms with the City's Baylands Design Guidelines, which contains design principles to reflect and preserve the Baylands' unique landscape character (4) The design of the course layout and topography will make the Golf Course more interesting and challenging for golfers. The design of the Golf Course is intended to reunite the course with its scenic and ecologically-rich setting. Large areas of turf will be replaced with low shrubs and grasses native to the Baylands environment which will make the facility unique. (5) The reconfigured Golf Course would improve drainage patterns across the entire Golf Course. The Golf Course terrain would be modified to provide new detention or low-lying areas that would collect water during rain events; that condition would aid in the diversion of water to storm drains and minimize large quantities of runoff across the site that could cause, and historically has caused, flooding and erosion. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Senior Assistant City Attorney 140129 dm 007103393 25 Mayor APPROVED: City Manager Director of Planning and Community Environment ----_._- EXHIBIT A MITIGATION MONITORING AND REPORTING PROGRAM PALO ALTO MUNICIPAL GOLF COURSE RECONFIGURATION AND BAYLANDS ATHLETIC CENTER EXPANSION PROJECT (SCH# 2013012053) Palo Alto, California January 2014 ICF International. 2014. Mitigation Monitoring and Reporting Program. Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project. January. (00631.12) San Jose, CA. Prepared for City of Palo Alto, Palo Alto, CA. Contents List of Tables ........................................................................................................................................... ii Page Mitigation Monitoring and Reporting Program ••••••••••••••••••••••••••••••..•••••.•••••••••••••••••••••••••••••••••••••••••••••• 1 Introduction ............................................................................................................................................ 1 Mitigation Measures ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•.•.... 9 Aesthetics ............................................................................................................................................... 9 Air Quality ............................................................................................................................................. 10 Biological Resources ............................................................................................................................. 11 Cultural Resources ................................................................................................................................ 19 Geology and Soils ................................................................................................................................. 21 Greenhouse Gas Emissions and Climate Change ................................................................................. 21 Hazards and Hazardous Materials ........................................................................................................ 21 Hydrology and Water Quality ................................................................................................................ 22 Land Use and Planning ......................................................................................................................... 23 Recreation ............................................................................................................................................ 23 Transportation and Traffic .................................................................................................................... 23 Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP January 2014 ICF 00631.12 Tables Page Table 1. Mitigation Monitoring Reporting Program -Summary of Mitigation Measures for the Golf Course Reconfiguration .................................................................. 2 Table 2. Mitigation Monitoring Reporting Program -Summary of Mitigation Measures for the Baylands Athletic Center Expansion ....................................................... 5 Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP ii January 2014 ICF00631.12 Mitigation Monitoring and Reporting Program Introduction The City of Palo Alto, as Lead Agency under the California Environmental Quality Act (CEQA) and State CEQA Guidelines, has prepared the Final Environmental Impact Report (EIR) for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Project (Project) (SCH # 2013012053). When a lead agency makes findings on significant effects identified in an EIR, it must also adopt a program for reporting or monitoring mitigation measures that were adopted or made conditions of project approval (Public Resources Code [PRe] Section 21081.6[a]; State CEQA Guidelines Sections 15091[d], 15097). This document represents the mitigation monitoring and reporting program (MMRP) prepared by the City of Palo Alto for the Project This MMRP includes all measures required to reduce potentially significant environmental impacts to a less-than-significant level. It also identifies the timing of implementation, the agency responsible for implementing the mitigation, and the agency responsible for monitoring the mitigation. The mitigation measures, timing, and responsibility are summarized in Tables 1 and 2, and the full text of the mitigation measures follows. Table 1 lists the mitigation measures required for the Golf Course Reconfiguration and Table 2 lists the mitigation measures required for the Baylands Athletic Center Expansion. This MMRP has been prepared by the City of Palo Alto, with technical assistance from ICF International, an environmental consulting firm. Questions should be directed to Joe Teresi at the City of Palo Alto. Contact Information: City of Palo Alto 250 Hamilton Avenue, 6th Floor Palo Alto, CA 94301 650.329.2129 Palo Alto Municipal Golf Course Reconflguratlon and Baylands Athletic Center Expansion Project MMRP January 2014 ICF 00631.12 City 01 Pilo Alto Miti,ation Monitorinl ind Reportln, Prolrlm Table 1. Mitigation Monitoring Reporting Program -Summary of Mitigation Measures for the Golf Course Reconfiguration MItigation Measure To be Implemented Prior to Construction BIO-l: Develop and Implement Worker Awareness Training BI0-2a: Conduct Preconstnlction Botanical Surveys BI0-2b: Confine Construction Oisturbance and Protect Special-Status Plants during Construction BI0-2c: Compensate for Loss ofSpecial-St<ltlis Plants BlO-2d: Develop and Implement Special-Status Plant Species Monitoring Plan BI0-3: Establish Burrer Zones for Nesting Raplors and Migratory Birds BI0-4: Implement Survey and Avoidance Measures for Western Bu rrowing Owls Prior to Construction Activities BIO-S: Implement 5mvey and Avoidance fo,'ieasures for California Clapper Rail and California Black Rail Prior to Construction Activities BIO-6: Implement Survey and Avoidance Measures for Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew Prior to Construction Activities BI0-7: Avoid and Protect Jurisdictional Wetlands during Construction BIO-8: Compensate for Impacls to Jurisdictional Wetlands and Waters of the United States prior to Project-Related Imp,lcts during Construction Pilo Alto Munlci~1 Gall CoufJe Reconfl,uritlon and Blylindl Athletic Cenler hpiiniion Project MMRP Implementation Responsibility City of Palo Alto and a qualified biologist '---- City and a qualified biologist City and construction contractor City and qualified botanist City and qualified botanist or biologist City and qualified biologist City and qualified biologist City and permitted biologist City and permitted biologist City and a qualified resource specialist (biologist, ecologist, or soil scieotist) City and qualified biologist 2 Monitoring Responsibility City of Palo Alto City of Palo Alto City, CDFW, USFWS City, CDFW, USFWS City of Palo Alto City or Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of P:llo Alto City and qualified biologist Monitoring Notes Jilnuary 2014 ICF 00&31 12 City of P,1o "'110 Mitigation Measure 810-9: Transplant or Compellsate for Loss of Protected Landscape Trees by pla nting both On-Site and Off-Si te, Consistent with Applicable Tree Protection Regulations BIO-IO: Protect Remaining Trees fro m Constructio n Impacts CUL-l: Conduct Worker Awareness Training for Archaeological Resources Prior to Construction CUL-3: Conduct a Preconstrucrion Paleontological Resources Field Survey and Paleontological Resources Inventory and Evaluation CUL-4: Conduct Worker Awareness Training for Paleontological Resources Prior to Construction HAZ-l: Preparation and Implementation of a Spill Prevention, Control. and Countermeasure Plan TRA-l: Develop and Implement a Construction Traffic Control Plan To be Implemented During Construction AQ-I: Implement Tailpipe Emission Reduction for Project Construction Implementation Respons ibility City of Palo Alto Construction Contractor and City's lSA Certified Arborist City of Pa lo Alto City and qualified personnel with experience in vertehrate fossil monitoring and salvage City and qualified professional paleontologist Construction Contractor Construction Contractor Construction Contractor AQ-2: Implement BAAQMD Basic Construction Mitigation Construction Contractor Measures to Reduce Construction-Related Dust CUL-2: Stop Work if Cultural Resources. Including Human Remains. are Encountered during Ground- Disturbing Activities CUL·5: Stop Work if Paleontological Resources are Encountered during Ground-Disturbing Activities P,lo AIIO MunicllHll Golf Coune R.confllunotion lind Bllvlilnds Alhltllc C.nter Exp,nslon Project MMRP City of Palo Alto City and qualified paleontologist or archaeologist 3 Monitoring Responsibility City of Palo Alt o City of POlio Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City and BAAQMD City and BAAQMD Qualified archaeologist and Native American representative City of Pal o Alto Mill'~tion Monilorin, 'nd R.porlln, Prolr,m Monitoring No tcs At least two times per day while construction activity is occurring. Jilnu.ry 2014 ICF OOI!JI 12 Citv of Plio Alto Mitigation Measure Implementation Responsibility GEO·I: Stockpile Topsoil during Earthwork Activities Construction Contractor and ({elise the Topsoil Qnsile during Revegetation as Needed GHG·l: Implement BAAQMD Best Management Practices Construction Contractor for Construction HAZ·2: Require Proper Storage and Handling of Potential Construction Contractor Pollutants and Hazardous Materials HAZ-3: Stop Work and Implement Hazardous Materials City of Palo Alto Investigations and Remediation in the Event that Unknown Hazardous Materials Are Encountered HAZ·4: Implement Engineering Controls and Best Construction Contractor Management Practices during Constnlction HAZ-S: Prevent Mosquito Breeding During Project Construction Contractor Construction HYD·2: Installation of 1.1 0 Measures to Improve Drainage City of Palo Alto in Detention or Low-lyi ng Areas To be Implemented Prtor to Project Operation BIO·2e: Deposit Landscape Waste Exclusively ill Developed or Ruderal Areas Absent ofSpccial-Statlls Plant Species Notes: All references to "City" refer to the City of Palo Allo. Qualified biologist/botanist: GolrCourse Staff CDFW = California Department ofFish <lnd Wildlife; USFWS '" United SI<lles Fish and Wildlife Service Plio AIIO Munlclpll Golf Coune Reconfilul'llion ilnd Bilvllnds Athlelic Cenler uplnsion ProJecl MMRP 4 Monitoring Responsibility City of Palo Alto City ofralo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of P"lo Alto City of P"lo Alto City of Palo Alto Mitllilion Monitorinllnd RepOrtinl PrOlrlm Monitoring Notes Jlnuilry 2014 ICF DCIGJ 1 11 City of P~lo Allo Miti,~tion Monitorin, and Report!nl Prolrim Table 2. Mitigation Monitoring Reporting Program -Summary of Mitigation Measures for the 8aylands Athletic Center Expansion MItigation Measure To be Implemented Prior to Construction AES· I; Apply Light Pollution and Glare Reduction Measures AES·2: Reconfigure Baseball and Softball Field Lighting to Meet or Reduce Existing Levels BIO·l: Develop and Implement Worker Awareness Training BIO·2a: Conduct Preconstruction Botanical Surveys BI0·2b: Confine Construction Disturbance and Protect Special·Status Plants during Construction 810-2c: Compensat'e for Loss of Special-Status Plants 810·2d: Develop and Implement Special-Status Plant Species Monitoring Plan 810·3: Establish Buffer Zones for Nesting Raplors and Migratory Birds BI0-4: Implement Survey and Avoidance Measures for Western Burrowing Owls Prior to Construction Activities BI0·5: Implement Survey and Avoidance Measures for California Clapper Rail and California Black Rail Prior to Construction Activities 810-6: Implement Survey and Avoidance Measures for Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew Prior to Construction Activities Palo Alto Munlci~' Golf Course Reconfi,ul'1ltion and 8~yl~nd$ Athletic Center Ex~nslon Project MMRP Implementa tion Responsibility City of Pa lo Alto City of Pa lo Alto City and a qualHied biologist City and a qualified biologist City and co nstruction contractor City and qualified botanist City and qualified botanist or biologist City and qualified biologist City and quallfied biologist City and permitted biologist City and permitted biologist 5 Mo nitoring Responsibility City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City, CDFW, USFWS City. CDFW, USFWS City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto Monitoring Notes Stadium lighting is field lighting '~nu~ry 2014 ICF 00631 12 City of Palo Alto MItigation Measure 810-7: Avoid and Protect Jurisdictional Wetlands during Construction 810-8: Compensate for Impacts to Jurisdictional Wetlands and Waters of the United States prior to Project-Related Impacts during Construction 810-9: Transplant or Compensate for Loss of Protected Landscape Trees by planting both On-Site and Off-Site, Consistent with Applicable Tree Pro"tection Regulations 810-10: Protect Remaining Trees from Construction Impacts ---------------.... ---... CUL-1: Conduct Worker Awareness Training for Archaeological Resources Prior to Construction CUL-3: Conduct a Preconstruction Paleontological Resources Field Survey and Paleontological Resources Inventory and Evaluation CUL-4: Conduct Worker Awareness Training for Paleontological Resources Prior to Construction HAZ-1: Preparation and Implementation ofa Spill Prevention, Control, and Countermeasure Plan HYD-1: Use of Artificial Turfwith High Permeability for Athletic Fields LU-1: Seek a Voluntary Referral or Ensure that the Provisions of the CLUP are Met TRA-1: Develop and Implement a Construction Traffic Control Plan Palo Alto Municipal Golf Course Reconflsuratlon and Baylands Athlotlc Center Expansion Project MMRP Implementation Responsibility City and a qualified resource specialist (biologist, ecologist, or soil scientist) Monitoring Responsibility City of Palo Alto Mitigation Monitoring and Reporting Prosram Monitoring Notes City and qualified biologist City and qualified biologist City of Palo Alto City of Palo Alto --------.. -----------_._ .. _------_. __ ...... . Construction Contractor and City's ISA Certified Arborist City of Palo Alto City of Palo Alto City of Palo Alto ---_ .. _-----.. ----_.- ------_. ------.. ----.. ---.--------- City and qualified City of Palo Alto personnel with experience in vertebrate fossil monitoring and salvage City and qualified City of Palo Alto professional paleontologist Construction Contractor City of Palo Alto City of Palo Alto City and the Airport Land Use Commission Construction Contractor 6 City of Palo Alto City of Palo Alto City of Palo Alto ---_ ... _--- January 2014 ICF00631.12 City of Pilo Aho MItigation Measure To be Implemented During Construction AQ-I: Implement Taill)ipe Emission Reduction for Project Construction AQ-2: Implement BAAQMD Basic Construction Mitigation Measures to Reduce Construction-Related Dust CUL-2: Stop Work ifCultmal Resources, Including Human Remains, are Encountcred during Ground- Disturbing Activities CUL-S: Stop Work if Paleontological Resources arc Encountercd during Ground-Disturbing Activities GEO-I: Stockpile Topsoil during Earthwork Activities and Reuse the Topsoil Onslte during Revegetation as Needed GHG-I: Implement BAAQMD Best Management Practices for Construction HAZ-2: I{equire Propel' Storage and Handling of Potential Pollutants and Hazardous Materials HAZ-3: Stop Work and Implement Hazardous Materials Investigations and Remediation in the Event that Unknown Hazardous Materials Are Encountered HAZ-4: Implement Engineering Controls and Best Management Practices during Construction HAZ-S: Prevent MOS(luito Breeding During Project Construction HYD·2: Installation of LID Measures to Improve Drainage in Detention 01' Low-lying Areas Pilo Alto MuniciPiI Golf Course RecOnfilul1Ition ind Biylinds Athletic Cenler E~Pinsion Project MMRP Implementation Responsibility Construction Contractor Construction Contractor City of Palo Alto City and qualified paleontologist 01' archeologist Construction Contractor Construction Contractor Construction Contractor City of Palo Alto Construction Contractor Construction Contractor City of Palo Alto 7 Monitoring Responsibility City and BAAQMD Cityaml13AAQMD Qualified archaeologist and Native American representative City of Pal o Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto City of Palo Alto Monitoring Notes At least two times per day while construction activity is occurring. linuiry 2014 ICF 00631 12 City of Palo Alto Mitigation Measure REC-l: Provide Clertrly Signed Detour for Pedestrians and Bicyclists To be Implemented Prior to Project Operation OlO-2e: Deposit Landscape Waste Exclusively in Developed or Ruderal Areas Absent of Sped ai-Status Plant Species Note: All references to ~City" refer to the City of Palo Alto. Implementation Responsibility City of Palo Alto Qualified biologist/botanist; Golf Course Staff Monitoring Responsibility City of Palo Alto City of Palo Alto CDFW:: California Dcpartment ofFish and Wildlifc; USFWS:: United Stales Fish and Wildlife Service Plio Alto Municipal Golf Cou'$' R.confiluration and Blyland$ Athletic Center Exp'nsion Project MMRP 6 Mitilation Monitorlnl <lnc/Reportlnl PrOiram Monitoring Notes January 2014 lCF 00631 12 City of Palo Alto Mitigation Monitoring and Reporting Program Mitigation Measures Aesthetics Mitigation Measure AES-l: Apply Light Pollution and Glare Reduction Measures All artificial outdoor lighting is to be limited to safety and security requirements, signage and stadium lighting. Lighting will conform to the City's applicable zoning regulations to minimize visual impacts (PAMC Section 18.23.030) and will be subject to Site and Design review approval (PAMC 18.76) to ensure appropriate light pollution and glare reduction standards are achieved. To meet City requirements, lighting will be designed using Illuminating Engineering Society's design guidelines and in compliance with International Dark-Sky Association approved fixtures. All lighting is to provide minimum impact to the surrounding environment and will use downcast, cut-off type fixtures that are shielded and direct the light only towards objects requiring illumination. Therefore, lights will be installed at the lowest allowable height and cast low-angle illumination while minimizing incidental light spill onto adjacent properties, open spaces, or backscatter into the nighttime sky. The lowest allowable wattage will be used for all lighted areas and the amount of nighttime lights needed to light an area will be minimized to the highest degree possible. Light fixtures will have non-glare finishes that will not cause reflective daytime glare. All outdoor lighting will be with individual photocells. Lighting will be designed for energy efficiency, use high pressure sodium vapor lights with individual photocells, and have daylight sensors or be timed with an on/off program. Lights will provide good color rendering with natural light qualities with the minimum intensity feasible for security, safety, and personnel access. Lighting, including light color rendering and fixture types, will be designed to be aesthetically pleasing. Lights along pathways and safety lighting at building entrances and loading areas will employ shielding to minimize offsite light spill and glare and be screened and directed away from residences and adjacent uses to the highest degree possible. The amount of nighttime lights used along pathways will be minimized to the highest degree possible to ensure that spaces are not unnecessarily over-lit For example, the amount of light can be reduced by limiting the amount of ornamental light posts to higher use areas and by using hooded wall mounts or bollard lighting on travel way portions of pathways. Stadium lighting will employ spill and glare control features to minimize off-site light pollution. Luminaires will be chosen for the ability to provide horizontal and vertical beam control for better control in directing what is illuminated. In addition, shielding, such as a visor, will be used to further direct light and reduce light spill and ambient light glow. Luminaires will also incorporate photometric reflector systems that are designed to reduce light pollution. All design measures used to reduce light pollution will employ the technologies available at the time of project design to allow for the highest potential to reduce light pollution and meet City standards. These technologies may be available through information and products endorsed by the Illuminating Engineering Society and International Dark-Sky Association in addition to the actual Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 9 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program products that lighting manufacturers have developed to improve lighting technologies and reduce light pollution and glare. Mitigation Measure AES-2: Reconfigure Baseball and Softball Field Lighting to Meet or Reduce Existing Levels Any reconfiguration of the baseball and softball field lighting will conform to the lighting standards described in PAMC Section 18.23.030 and will, at a minimum, be designed to create no net increase in the amount of light spill and ambient light glow produced when compared to existing conditions. If feasible, measures will be taken to reduce the amount of light spill and ambient light glow produced through the reconfiguration when compared to existing conditions using measures specified in Mitigation Measure AES-l. Air Quality Mitigation Measure AQ-l: Implement Tailpipe Emission Reduction for Project Construction The City of Palo Alto will require all construction contractors to implement the BAAQMD's exhaust Basic Construction Mitigation Measures and Additional Construction Mitigation Measures recommended by BAAQMD to control exhaust emissions. Emission reduction measures will include at least the following measures and may include other measures identified as appropriate by the Air District and/or contractor: • Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 2 minutes. Clear signage shall be provided for construction workers at all access points. • All construction equipment shall be maintained and properly tuned in accordance with manufacturer's specifications. All equipment shall be checked by a certified visible emissions evaluator. • The simultaneous occurrence of excavation, grading, and ground-disturbing construction activities in the same area at anyone time shall be limited. Activities shall be phased to reduce the amount of disturbed surfaces at anyone time. • The construction contractor shall develop a plan for submittal to the City that demonstrates that the off-road equipment (more than SO horsepower) to be used in construction of the Project (i.e., owned, leased, and subcontractor vehicles) will achieve a Project-wide fleet-average 20 percent NOX reduction. Acceptable options for reducing emissions include the use oflate-model engines, low-emission diesel products, alternative fuels, engine retrofit technology, after- treatment products, add-on devices such as particulate filters, and/or other options as such become available. • All construction equipment, diesel trucks, and generators shall be required to be equipped with Best Available Control Technology for emission reductions of NOX and PM. • All contractors shall be required to use equipment that meets CARB's most recent certification standard for off-road heavy-duty diesel engines. Palo Alto Municipal Golf Course Reconfiguration and 8aylands Athletic Center Expansion Project MMRP 10 January 2014 ICF00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program Mitigation Measure AQ-2: Implement BAAQMD Basic Construction Mitigation Measures to Reduce Construction-Related Dust The BAAQMD will require all construction contractors to implement the Basic Construction Mitigation Measures recommended by BAAQMD to reduce dust emissions. Emission reduction measures will include at least the following measures and may include other measures identified as appropriate by the Air District and/or contractor: • All exposed surfaces (e.g., parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered two times per day. • All haul trucks transporting soil, sand, or other loose material off-site shall be covered. • All visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited. • All vehicle speeds on unpaved roads shall be limited to 15 mph. • All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. • A publicly visible sign shall be posted with the telephone number and name of the person to contact at the lead agency regarding dust complaints. This person shall respond and take corrective action within 48 hours. The BAAQMD's phone number shall also be visible to ensure compliance with applicable regulations. Biol~gical Resources Mitigation Measure BI0-1: Develop and Implement Worker Awareness Training Prior to construction, Worker Awareness Training will be conducted by a qualified biologist to inform construction project workers of their responsibilities regarding sensitive environmental resources. The training will include environmental education about sensitive plant species (Alkali milk vetch, San Joaquin spearscale, Congdon's tarplant, Point Reyes bird's-beak, lost thistle, fragrant fritillary, woodland woollythreads, hairless popcorn flower, California seablite, Showy Rancheria clover, and saline clover), western pond turtles, nesting raptors and migratory birds including western burrowing owl, California clapper rail, California black rail, salt marsh harvest mouse, salt marsh wandering shrew, California red-legged frog, and San Francisco garter snake, as well as sensitive resources (e.g., trees, wetlands). The training will include information regarding protected status of the resource, visual aids to assist in identification of regulated biological resources, and actions to take should protected wildlife and biological resources be observed within the Project site. Qualified biologists will be on call and will regularly survey the site during construction. Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 11 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program Mitigation Measure BIO-2a: Conduct Preconstruction Botanical Surveys The City will retain a qualified botanist to survey suitable habitat in the Project site for the presence of special-status plants. Surveys will be conducted during the appropriate blooming periods as indicated in Table 3.3-4. Table 3.3-4. Timing of Surveys for Special-Status Plants Species Blooming Period Alkali mil kvetch March-June San Joaquin spearscale April-October Congdon's tarplant June-November Point Reyes bird's-beak June-October Lost thistle June-July Fragrant fritillary February-April Woodland woollythreads February-July Hairless popcorn-flower April-May California seablite July-October Showy rancheria clover April-June Saline clover April-June Period Surveys Should Occui' April-May July-August July-August July-August June-July February-April February-July April-May July-August April-May April-May a Exact timing of surveys should account for annual variations in climate and weather; surveys should be timed to coincide with blooming periods of known local populations whenever possible. Surveys will follow the CNPS Botanical Survey Guidelines (California Native Plant Society 2001) and occur 1 year prior to the start of construction. Since historical and recent routine disturbance has occurred on the project site, the potential for special-status plants to occur is reduced and only one season of surveys is expected to be necessary. Special-status plants identified during the surveys will be mapped using a handheld global positioning system unit and documented as part of the public record. A report of occurrences will be submitted to the City and the CNDDB. Surveys will be completed before ground-disturbing activities begin; survey timing will allow for follow-up mitigation, if needed. This may include seed collection or transplanting. If it is determined that individuals of identified special-status plant species could be affected by construction traffic or activities, Mitigation Measure B10-2b and, if necessary, Mitigation Measure BI0-2c, will be implemented. Mitigation Measure BI0-2b: Confine Construction Disturbance and Protect Special-Status Plants during Construction Construction disturbance will be confined to the minimum area necessary to complete the work, and will avoid encroachment on adjacent habitat If special-status plants are found, a setback buffer will be established around individuals or the area occupied by the population, based on judgment of a qualified botanist The plants and a species-appropriate buffer area determined in consultation with Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 12 January 2014 ICF00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program agency (CDFW and USFWS) staff will be protected from encroachment and damage during construction by installing temporary construction fencing to make crews visually aware of the plant population. Fencing will be brightly colored and highly visible. Fencing will be installed under the supervision of a qualified botanist to ensure proper location and to prevent damage to plants or the seed bank during installation. Fencing will be installed before site preparation or construction work begins and will remain in place for the duration of construction. Construction personnel will be prohibited from entering these areas (the exclusion zone) for the duration of Project construction. Fencing installation will be coordinated with fence installation required by other mitigation measures protecting wetlands, riparian habitat, and mature trees. If special-status plant species cannot be avoided during construction activities, then both Mitigation Measures BIO-2c and BIO-2d will be implemented. Mitigation Measure BIO-2c: Compensate for Loss of Special-Status Plants If any individually listed special-status plant is present and cannot be effectively avoided through implementation of Mitigation Measure BIO-2b, the City will develop and implement a compensation plan. The compensation plan will preserve an offsite area containing individuals of the affected species. The plan will be implemented so that there is no net loss of special-status plants. If an offsite population is not available for preservation, the City will employ a qualified nursery to collect and propagate the affected species, collected at the appropriate time of year, prior to population disturbance at the affected areas of the Project. Transplantation will also be implemented if practicable for the species affected, including mature native plants to the extent feasible. The compensation plan will be developed by a qualified botanist in coordination with and approval of CDFW or USFWS, depending on whether the plant has state or federal status, respectively, or both. The compensation area will contain a population and/or acreage equal to or greater than that lost as a result of Project implementation and will include adjacent areas as needed to preserve the special-status plant population in perpetuity. The quality of the population preserved will also be equal to or greater than that of the affected population, as determined by a qualified botanist retained by the City. Compensation sites and populations will be subject to CDFW and USFWS approval. The City will be responsible for ensuring that the compensation area is acquired in fee or in conservation easement, maintained for the benefit of the special-status plant population in perpetuity, and funded through the establishment of an endowment A monitoring and adaptive management plan will also be developed for each compensation site and will be similarly be subject to CDFW and USFWS approval. Mitigation Measure BIO-2d: Develop and Implement Special-Status Plant Species Monitoring Plan If any special-status plants are present and cannot be effectively avoided through implementation of Mitigation Measure BIO-2b, the City will develop and implement a monitoring plan. The monitoring plan will cover a span of 5 years beginning when construction is complete. The City will hire a qualified biologist or botanist to conduct the monitoring plan. Special-status plants found during the preconstruction botanical surveys for Mitigation Measure BIO-2a will be mapped and identified. The qualified biologist will monitor the status of those same populations once a year for five years, during the respective blooming seasons for each species. Golf Course staff will be aware of the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 13 January 2014 ICF00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program location of the special-status plant species to ensure that no operation and maintenance activities will disturb the existing populations. If the certain plant species' populations are unsuccessful, the City will reseed/plant suitable habitat and resume monitoring activities until the success criteria established by the monitoring plan are fully satisfied. Mitigation Measure BIO-2e: Deposit Landscape Waste Exclusively in Developed or Ruderal Areas Absent of Special-Status Plant Species Training will take place after Project construction is complete to educate Golf Course staff in the importance of the presence of special-status plant species. The training will include a handout of pertinent special-status plant species' pictures, relevant regulations and legal protections, and an in- person meeting with Golf Course staff and a qualified biologist/botanist Golf Course staff will only be permitted to deposit landscape waste in developed or ruderal areas absent of special-status plant species (including the proposed 25-foot buffer between the Golf Course and the Athletic'Center), as determined through the botanical surveys proposed in Mitigation Measure BIO-2a during the construction phase. Special-status plant species will be marked and protected clearly, so Golf Course staffwill be aware of appropriate deposit areas, as well as sensitive areas to avoid. Mitigation Measure BIO-3: Establish Buffer Zones for Nesting Raptors and Migratory Birds Prior to the start of construction activities that begin during the migratory bird nesting period (between February 1 and August 31 of any year), the City will retain a qualified wildlife biologist to conduct a survey for nesting raptors and migratory birds, including special-status species such as salt marsh common yellowthroat, Alameda song sparrow, northern harrier, and white-tailed kite, at a time(s) of day most opportune for active nest identification. Surveys will cover all suitable raptor and migratory bird nesting habitat that will be impacted directly or indirectly through disturbance, including habitat potentially used by ground-nesting migratory bird species. If an active nest is discovered during these surveys, the qualified wildlife biologist will establish a no-disturbance buff~r zone around the nest tree (or, for ground-nesting species, the nest itself). The no-disturbance zone will be marked with flagging or fencing that is easily identified by the construction crew and will not affect the nesting bird. In general, the minimum buffer zone widths will be 25 feet (radius) for non-raptor ground-nesting species; 50 feet (radius) for nonraptor shrub- and tree-nesting species; and 250 feet (radius) for all raptor species. Buffer widths may be modified based on discussion with CDFW, depending on the proximity of the nest, whether the nest would have a direct line of sight to construction activities, existing disturbance levels at the nest, local topography and vegetation, the nature of proposed activities, and the species potentially affected. Buffers will remain in place as long as the nest is active or young remain in the area. No construction presence or activity of any kind will be permitted within a buffer zone until the biologist determines that the young have fledged and moved away from the area and the nest is no longer active. If monitoring of active nests indicates that disturbance is affecting active nests, buffer widths will be increased until the disturbance no longer affects the nest(s) as determined by the biologist If the buffer cannot be extended further, then work within the area will stop until the nest is no longer active. Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 14 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program Mitigation Measure BIO-4: Implement Survey and Avoidance Measures for Western Burrowing Owls Prior to Construction Activities Prior to any construction activity planned to begin during the fall and winter non nesting season (September l-January 31), the City will retain a qualified wildlife biologist to conduct a preconstruction survey for burrowing owls. Surveys will follow the protocol outlined by the California Burrowing Owl Consortium (CBOC) (1993) and the 2012 CDFW staff report If any burrows occupied by western burrowing owls are found within the disturbance area during the surveyor at any time during the construction process, the City will notify CDFW and will proceed under CDFW direction. If construction is planned to occur during the nesting season (February 1- August 31), surveys for nesting owls will be conducted by a qualified wildlife biologist in the year prior to construction to determine if th~re is breeding within 250 feet of the construction footprint This prior-year survey will provide the Project team advance notice regarding nesting owls in the Project site and allow ample time to discuss with CDFW the appropriate course of action if nesting owls are found. In addition, same-year preconstruction surveys for nesting western burrowing owls will be conducted no more than 7 days prior to ground disturbance in all suitable burrowing owl habitat to ensure owls can be avoided. If the biologist identifies the presence of a nesting burrowing owl in an area scheduled to be disturbed by construction, a 250-foot no-activity buffer will be established and maintained around the nest while it is active. Surveys and buffer establishment will be performed by qualified wildlife biologiSts, will be coordinated with CDFW, and will be subject to CDFW review and oversight Mitigation Measure BIO-5: Implement Survey and Avoidance Measures for California Clapper Rail and California Black Rail Prior to Construction Activities If work is to be conducted during California clapper rail and California black rail breeding and rearing seasons (March l-August 31) within 700 feet of suitable habitat, the City will retain a permitted biologist to conduct protocol-level surveys at the Project site including rail call surveys and rail-track surveys in appropriate habitat for California clapper rail and California black rail (California Coastal Conservancy 2011). The surveys will be conducted no more than 48 hours prior to commencement of construction and maintenance activities and will be performed at dawn or dusk, the vocalization periods of highest intensity. Project activities occurring within 700 feet of active nests will be postponed until after young have fledged, unless activities are behind a levee and will not affect any active nests as determined by the biologist Outside of breeding season, the City will retain a permitted biologist to conduct surveys of appropriate habitat for California clapper rail and California black rail within the work area, including all staging and access routes, no more than 7 days prior to initiation of work within suitable habitat If individuals are observed during this survey, a biologist will conduct an additional survey immediately prior to initiation of construction activities. If individuals are observed within or near the work area, a no-disturbance buffer (minimum 50 feet) will be implemented. If the daily work area is expanded, then a qualified biologist will survey the suitable habitat prior to initiation of work and movement of equipment that day. No work will occur within the buffer until the biologist verifies that California clapper rail or California black rail individuals have left the area. If individuals are routinely detected in the work area, a species avoidance plan will be developed in coordination with USFWS and CDFW. If no individuals are detected during surveys, no buffers will Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 15 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program be required. All vegetation removal within suitable habitat of these species, as determined by a biologist, will be done by hand to the extent possible. If movement of heavy equipment in nece.ssary in suitable habitat or within 50 feet (audibly or visually) of habitat, then a biological monitor will observe the area in front of the equipment from a safe vantage point If these species are detected wit~in the area in front of the equipment, then the equipment will stop and the biologist will direct the equipment on an alternative path. If this is not possible, then equipment will stop until a clear path can be identified. Mitigation Measure BIO-6: Implement Survey and Avoidance Measures for Salt Marsh Harvest Mouse and Salt Marsh Wandering Shrew Prior to Construction Activities Prior to initiation of work within suitable habitat, a permitted biologist will be retained to monitor the hand removal of pickleweed to avoid impacts on salt marsh harvest mouse and salt marsh wandering shrew. Monitoring will occur for the duration of all clearing work within suitable habitat, and all clearing of pickleweed will be conducted by hand. If salt marsh harvest mouse or salt marsh wandering shrew are observed during clearing activities, clearing will cease and workers will move to 'a new area. Clearing work may begin in the area of the observation 1 day or more after the observation date. During the survey, if salt marsh harvest mouse or salt marsh wandering shrew individuals are observed, or if active nests of these species are observed, proposed Project activities within 100 feet of the observation will be postponed and a no-disturbance buffer will be established. The buffer will remain in place until the biologist determines that the individuals have left the area and are not present in or near (100 feet) of the work area. Ifno individuals are observed in accordance with the survey protocols, no buffers will be required. If salt marsh harvest mouse or salt marsh wandering shrew are observed within wetlands proposed to be affected by the Project, then a habitat avoidance, impact minimization, and compensation plant will be developed, in coordination with USFWS and CDFW, prior to alteration of occupied habitat If neither species is observed during preconstruction surveys, then no further mitigation associated with this measure is necessary. If salt marsh harvest mouse or salt marsh wandering shrew are observed within the Project Area, construction and maintenance work, including site preparation, will be avoided to the extent possible within suitable habitat for these species during their breeding seasons (February 1 to November 30). As work during the species' breeding seasons will be necessary, a species avoidance plan will be developed in consultation with USFWS and CDFW, and implemented. The avoidance plan, at a minimum, will include the following. • Hand removal of vegetation will start at the edge farthest from the largest contiguous salt marsh area and work its way towards the salt marsh, providing cover for salt marsh harvest mice and allowing them to move towards the salt marsh as vegetation is being removed. • In consultation with CDFW, exclusion fencing will be placed around a defined work area immediately following vegetation removal and before Project activities begin. The final design and proposed location of the fencing will be reviewed and approved by CDFW prior to placement Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 16 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program • Prior to initiation of work each day within 300 feet of pickelweed habitats, a qualified biologist will thoroughly inspect the work area and adjacent habitat areas to determine if saltmarsh harvest mice are present The biologist will ensure the exclusion fencing has no holes or rips and the base remains buried. The fenced area will be inspected daily to ensure that no mice are trapped. Mitigation Measure BIO-7: Avoid and Protect Jurisdictional Wetlands during Construction The City will ensure that a qualified resource specialist (biologist, ecologist, or soil scientist) will clearly identify wetland areas to be preserved and wetland areas outside of the direct impact footprint with temporary orange construction fencing before site preparation and construction activities begin at each site or will implement another suitable low-impact measure. Construction will not encroach upon jurisdictional wetlands identified by the wetland specialist The resource specialist will use the Project's wetland delineation (ICF International 2013) to confirm the location of wetland boundaries based on existing conditions at the time of the survey. Exclusion fencing will be installed before construction activities are initiated, and the fencing will be maintained throughout the construction period. No construction activity, traffic, equipment, or materials will be permitted in fenced wetland areas. Mitigation Measure BIO-8: Compensate for Impacts to Jurisdictional Wetlands and Waters of the United States prior to Project-Related Impacts during Construction The City will develop a wetland/waters of the United States mitigation monitoring plan (MMP), subject to approval by the USACE, that will ensure no net loss of wetlands will result from the Project's impacts. The details of site restoration, monitoring, and adaptive management will be included in the MMP in compliance with the Clean Water Act The MMP will include success criteria that will be assessed by comparing performance during the monitoring period against objective and verifiable, ecologically-based success criteria that reflect the goals and objectives of the site. Examples of success criteria may include, but are not limited to: (1) period of inundation similar to other wetlands of the same type in the South Bay region, (2) percent vegetation cover, and (3) plant species composition similar to other wetlands of the same type in the South Bay region, all aimed at replacing the functions and values that were lost in the wetland that was removed. The monitoring period will be a 5-year period; the success criteria for this period must be satisfied in at least 3 of the 5 years, but if the success criteria are not so satisfied, then the monitoring period will be extended from year to year until the success criteria are satisfied within a consecutive period of 3 years. The City will retain a qualified biologist to conduct annual monitoring to assess establishment of wetland vegetation and wetland function, and if necessary, implement adaptive management actions (including replanting, nonnative species removal, etc.) to ensure that there is no net loss of wetland habitat Wetland compensation habitat will be set aside and protected in perpetuity through appropriate legal means, consistent with U.S. Army Corps of Engineers' requirements and as specified in permits. The City will be responsible for all associated costs and logistics. The Project proposes to create and restore existing wetlands within the Golf Course, resulting in a total of 12.168 acres of wetlands. The plan will detail the amount and type of wetlands (based on the Project's wetland delineation once verified) that will compensate (through preservation, creation, and/or restoration) for Project impacts to existing wetlands/waters of the United States, and outline Palo Alto Municipal Golf Course Reconflguratlon and Baylands Athletic Center Expansion Project MMRP 17 January 2014 ICF 00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program the monitoring and success criteria for the compensation wetlands/waters of the United States. Once the plan is approved, the City will implement its wetland/waters of the state compensation measures. Wetland creation and enhancement activities will be completed concurrent with the . completion of the Project, after which the City will retain a qualified biologist to monitor the compensation features per the MMP. Mitigation Measure BIO-9: Compensate for Loss of Protected Landscape Trees by planting both On-Site and Off-Site, Consistent with Applicable Tree Protection Regulations Regulated trees that are removed will be replaced through a combination of on-site replacement with native Baylands-appropriate trees, protection of naturally-generated oak saplings in the Arastradero Preserve and/or other Foothills locations, and restoration of native Bay ecosystem areas to a total of 1 acre in close proximity to the Project The landscaping plan for tree mitigation will specifically identify the locations where replacement trees, oak sapling protection, and native Bay ecosystem restoration areas are to be planted; mitigation will occur both on-site and offsite. Offsite locations include Baylands locations near the Project site, the Arastradero Preserve and/or other locations in the foothills. The on-site tree replacement will consist of the planting of 300 native trees on the reconfigured golf course as part of the Project The off-site tree protection will consist of the placement of protective cages around 500 naturally-occurring oak saplings on the Arastradero Preserve in order to prevent browsing by deer until the trees have matured adequately to ensure their long-term survival. The off-site native Bay ecosystem restoration will consist of the planting of 1 acre or more of native grasses and shrubs at a site or sites within the Baylands in close proximity to the Project site. The final mitigation landscaping plan will be subject to review and approval by the City. Newly planted trees, protected saplings, and restored native Bay ecosystem areas will be monitored by the City staff and/or a contactor at least once a year for 3 years. Each year, any vegetation that does not survive will be replaced consistent with the City of Palo Alto Tree Technical Manual. Any vegetation and/or native plant material that does not survive will be replaced and monitored for an additional 3 years. Mitigation Measure BIO-I0: Protect Remaining Trees from Construction Impacts Trees not designated for removal will be protected from damage during construction by the installation of temporary fencing and other methods determined necessary and prescribed in the City of Palo Alto Tree Technical Manual such as, but not limited to, trunk wrapping, root mulching, and access route gravelling, consistent with International Society of Arboriculture tree protection zone recommendations. Fencing will be installed outside of the tree's dripline to keep construction equipment away from trees and prevent unnecessary damage to or loss of regulated trees on the project site. Any regulated trees retained on the site and located adjacent to construction activities will be monitored monthly during the term of construction and replaced off-site if they do not survive through the monitoring period. Consistent with Section 2.30 in the City of Palo Alto's Tree Technical Manual1, an ISA certified arborist will conduct monthly inspections to monitor tree health conditions and document such observations in a monthly inspection report Additional tree 1 ht:tpjllwww,caoopy.org/medja/files/Tree%20Tecnical%20Manyal.pdf Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 18 January 2014 ICF00631.12 City of Palo Alto Mitigation Monitoring and Reporting Program protection practices may be required in accordance with the City of Palo Alto Tree Technical Manual or at discretion of City staff. Cultural Resources Mitigation Measure CUL-1: Conduct Worker Awareness Training for Archaeological Resources Prior to Construction Prior to the initiation of any site preparation and/or start of construction, the applicant will ensure that all construction workers receive training overseen by a qualified professional archaeologist who is experienced in teaching nonspecialists, to ensure that forepersons and field supervisors can recognize archaeological resources (e.g., areas of shellfish remains, chipped stone or groundstone, historic debris, building foundations, human bone) in the event that any are discovered during construction. Mitigation Measure CUL-2: Stop Work if Cultural Resources, Including Human Remains, are Encountered during Ground-Disturbing Activities The applicant will ensure the construction specifications include a stop work order if prehistoric or historic-period cultural materials are unearthed during ground-disturbing activities. All work within 100 feet of the find will be stopped until a qualified archaeologist and Native American representative can assess the significance of the find. Prehistoric materials might include obsidian and chert flaked-stone tools (e.g., projectile points, knives, scrapers) or tool making debris; culturally darkened soil ("midden") containing heat-affected rocks and artifacts; stone milling equipment (e.g., mortars, pestles, handstones, or milling slabs); and battered-stone tools, such as hammerstones and pitted stones. Historic-period materials might include stone, concrete, or adobe footings and walls; filled wells or privies; and deposits of metal, glass, and/or ceramic refuse. If the find is determined to be potentially significant, the archaeologist, in consultation with the Native American representative, will develop a treatment plan that could include site avoidance, capping, or data recovery. Mitigation Measure CUL-3: Conduct a Preconstruction Paleontological Resources Field Survey and Paleontological Resources Inventory and Evaluation The City will retain qualified personnel with experience in vertebrate fossil monitoring and salvage at construction sites to conduct a paleontological resources field survey with native soils to determine whether significant resources exist within the Project site. The inventory and evaluation will include the documentation and result of these efforts, the evaluation of any paleontological resources identified during the survey, and paleontological resources monitoring, if the survey identifies that it is necessary. Mitigation Measure CUL-4: Conduct Worker Awareness Training for Paleontological Resources Prior to Construction Prior to the initiation of any site preparation and/or start of construction, the applicant will ensure that all construction workers receive training overseen by a qualified professional paleontologist Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project MMRP 19 January 2014 ICF 00631.12 *NOT YET APPROVED* 140110 dm 00710332A Ordinance No. ______ Ordinance of the Council of the City of Palo Alto Approving and Adopting A Plan of Improvements for the Reconfiguration of the Palo Alto Municipal Golf Course The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The City Council finds and declares that: (a) Article VIII of the Charter of the City of Palo Alto and Section 22.08.005 of the Palo Alto Municipal Code require that, before any substantial building, construction, reconstruction or development is commenced or approved, upon or with respect to any land held by the City for park purposes, the Council shall first cause to be prepared and by ordinance approve and adopt a plan therefor. (b) Palo Alto Municipal Golf Course (the “Golf Course”) is dedicated to park and recreational purposes. (c) The City intends to authorize the construction of park improvements (the “Project”) within the Golf Course, as shown on the Golf Course Reconfiguration Project Site Plan (Exhibit “A”), and as described below. The Project will result in the reconfiguration of the layout of the entire Golf Course to a modified 18-hole, par 71, regulation-length course that will measure 6,685 yards from the back tees. Approximately 10.5 acres of the existing Golf Course will be reserved for use as a future recreational athletic facility, and 7.4 acres of the Golf Course will be incorporated in the adjacent San Francisquito Creek Flood Reduction Project (the “Flood Reduction Project”). The reconfigured Golf Course’s size will be approximately 156 acres, which includes the clubhouse, parking lot and maintenance areas. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate approximately six new driving stations or “bays.” The Project will include new 6.5‐foot‐wide concrete golf cart paths, concrete footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. A pedestrian/bicycle trail will be constructed to link the Bay Trail to the Golf Course clubhouse area. The existing chain link fence, located along the west side of the Golf Course, will be removed and replaced with new chain link fencing as part of the Flood Reduction Project. The reconfigured Golf Course will not result in a change to lighting, operational hours, or number of employees. However, rounds of golf played per year are expected to rise to 67,900 rounds by 2015 and 75,700 rounds by 2017. In 2011, 65,653 rounds of golf were played. *NOT YET APPROVED* 140110 dm 00710332A The Golf Course’s reconfiguration will result in the following changes:  Reconfiguration of 18 golf holes  Construction of 18 new greens on the course and 3 new practice greens  Creation of a par 71 course with the following yardages from each of the tees. o Championship Tee: 6,685 o Back Tee: 6,091 o Regular Tee: 5,374 o Forward Tee: 4,588  Reconstruction or construction of all new bunkers  Transformation of 55 irrigated acres to naturalized areas (non‐managed turf) plus 7.5 acres to the realigned San Francisquito Creek  Reduction in irrigated turf from 135 acres to 81.7 acres  Construction of new player development area/practice green/short game area and Youth Golf Area  Expansion of the practice range tee area  Installation of new signage  Replacement of the entire Golf Course irrigation system  Construction of a new restroom that is accessible at Holes 4, 12 and 15 (d) The Project is consistent with park and recreation purposes. (e) The Council desires to approve the Project, described above, and as more specifically described in Golf Course Reconfiguration Project Site Plan, attached hereto as Exhibit "A.” SECTION 2. The Council hereby approves the construction of the improvements at the Palo Alto Municipal Golf Course, and it hereby adopts the Golf Course Reconfiguration Project Site Plan as part of the official plan for the construction of the park improvements at the Palo Alto Municipal Golf Course. SECTION 3. The Council finds that the Project (to construct the improvements at the Palo Alto Municipal Golf Course) under the California Environmental Quality Act requires an Environmental Impact Report, which has been completed. // // // *NOT YET APPROVED* 140110 dm 00710332A SECTION 4. 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: __________________________ ____________________________ Senior Asst. City Attorney City Manager ____________________________ Director of Community Services ____________________________ Director of Administrative Services *NOT YET APPROVED* 140110 dm 00710332A Exhibit “A” BAYLANDS GOL F L I NKS PALO A L TO CITY OF PALO ALTO PROJECT NO. PG -1300J Site & Design Review Submittal SHEET INDEX Aerial Photograph (existing site) 2 Stockpiling & Temporary Conditions ) Native Area Conversion 4 Landscape -Trees & Sh r ubs 5 Landscape -Native Area Plantings 6 Landscape -Golf Features & Shaping 7 landscape -Irrigation Technology 8 On·Course Restroom 10 Site Plan Sheet (reduced) 'I Tree Management Plan Sheet (reduced) 12 landscape Plan Sheet (reduced) 13 Grading Plan Sheet (reduced) PREPARED FEall,UARY ,8. ,Oil (REV &.,9.11) BAYLANDS GOLF LINKS PALO ALTO EXISTING SITE AERIAL Source : City of P alo Alto CITY OF PAL O ALTO PROJECT NO. PG-I 300] a PHOTOGRAPH lOa 600 900 feet EB N,,,, FORREST R ICHARDSON!!. ASSOc. ~ GOLF COURSE ARCHITECTS ~ www.golfg,oupltd.<om OBERKAHPER & ASSOC. I r;NGINHRING RUSS MITCHELL & ASSOC. I IRRIGATION DESIGN GOlF"UNA I SIOLOGIC"L RESOURcr; CQN$ULT"NT CITY OF PALO ALTO SHEET I OF 13 BAYLANDS GOLF LINKS PALO ALTO STOCKPILING & TEMPORARY Source: City of Palo Alto CITY OF PA L O ALTO PROJECT NO. PG-13003 CONDITIONS Of-I --JOt-IO--6t-~--9~fe" EB NO'," FORREST R ICHARDSON!!. ASSOc. ~ GOLF COURSE ARCHIHeTS ~ WW ... golf g,oupltd. <om OBERKAHPER & ASSOC. I r;NGINHRING RUSS MITCHEll & ASSOC. I IRRIGATION DESIGN GOlf"UNA I SIOLOGIC"L RESOURCE CONSULTANT CITY OF PALO ALTO SHEET 2 OF 13 ~. _ • ., Golf Cou~se Turl A~ea L._ . .J SI .7Ac~es ro·-'., • • Non-turf Native Gnu Zones L, _,.J 41.0 Acres ~. -'""! ··Baylands'· Native Zone. L._,,J 12.13Acres Existing Turf Acreage: 135.00 New Turf Acreage: SI.7 (40% Reduction) Player Development Area Fu,ure Athlet'c Ff.:ds (C.ty) Youth Golf Are. R.nge Tee ~~~;;;:;:::.:::~~(~;:...,~ Exp.nsion , Buffer Mou~dl ------------_____ 1 BAYLANDS GOLF LINKS PALO ALTO Pr.ctice __ y <,,: PU"'"I Grnns Palo Alto A"por< GOLF COURSE SITE PLAN Native A1'ea COrJveniorJ CITY OF PALO ALTO PROJECT NO. PG-13003 Maint.na~ce Facility l ·~ . . CTo 0 .7 L .'1' -------------_/ P.loAlto Airport I I I I I I I ru N tr. o 100 200 300 400 500 600 feet W or FORREST RI CHARDSON l'.. Asso c. ; GOLF COU RSE A RC HITE CT S ~ ........ ollt.o"pll~. <0"' 05ERI("MPER & .... ssoc. I ENGINHRING RUSS MITC~HL & .... ssoc I IlIRIC .... TION DESIGN GOLfIIUN .... I BIOLOGIC .... L RESOURCE CONSUL' .... NT CITY OF PALO ALTO SHEET 3 OF 13 BAYLANDS GOLF LINKS PALO ALTO EXISTING TREES (INCLUDED IN PRESERVATION SCHEDULE) Blue Gum Eucalyptus I Eucalyptus g/obu/us Stone Pine I Pinus pineo NEW TREE VARIETIES (NON-TURF, NATIVE ZONES) Pacific Wax Myrtle I Myrica cnli(ornico Californi Live Oak I Quercus agri(olio GOLF COURSE LANDSCAPE Baylartds Theme I Tree & Shrub Palette CITY OF PAL O ALTO PROJECT NO. PG-I 300] NEW SMALL TREE & SHRUB VARIETIES (NON-TURF, NATIVE ZONES) California Coffeeb erry I Rhomus coli(ornicus Silver Bus h Lu pine I Lupinus o/bi(rons California W ild lilac I Ceanothus thrysifJorus Sticky Monkey Fl ower I Dip/fleus aurantio(Us Coast Buckwheat I Erioganum lotifolium FORREST R ICHARDSON ~ ASSOc. ~ GOLF COURSE ARCHITECTS ~ www.o"lfg,ouplid.<o", 0 8ERKAMPER & ASSOC. I .NGINHRING JU;S$ MITCHEll a ASSOC. I IRRIGATION DESIGN GOLFAUNA I 810LOGICAL RESOURCE CONSULTANT CITY OF PALO ALTO SHEET 4 OF 13 BAYLANDS GOLF LINKS PALO ALTO PRIMARY NATIVE GRASS MIX (Non-turf Zones) Diego Bent Grass I Agrostis pollens Tufted Hairgrass I Deschampsia coespitosa Creeping W ild Rye I Leymus tr;ticoides Blue W ild Rye I Elymus g/oucus Red Fescue I FestucQ rubra Purpl e Needlegrass I Nossella pukhra Blue-eyed Grass Sisyrinchium bellum Look and Feel (mix) GOLF COURSE LANDSCAPE HALOPHYTES (Non-turf, Low-Lying "Baylands" Zones) Salt Bush I Atriplex prostroto Salt Grass I Distichlis spicoto Sea Lavender I Limcmium carolin/anum Pickleweed I SorCQcornio pacifico Fleshy Jaumea I joumeo camusa Look and Feel (mix) FORREST R ICHARDSON!!. ASSOc. ~ Baylartds Theme I Native Grasses & H a l ophyte P a lette GOLF COURSE ARCHITECTS ~ www.golfg,oupltd.<o", CITY OF PAL O ALTO PROJECT NO. PG-I 300] O BERK AHPER '" ASSOC. I .NGINHRING RUSS MITCHEll a ASSOC I IRRIGATION DESIGN GOLfAUNA I BIOLOGICAL RESOURCE CONSULTANT CITY OF PALO ALTO SHEET 5 OF 13 BAYLANDS GOLF LINKS PALO ALTO PRIMARY NATIVE GRASS ZONE (Non-turf Areas) BAYLANDS (LOWLANDS) ZONES (Halophyte Planting Areas) Wood Bulkhead (Hole No. 12) GOLF COURSE LANDSCAPE Bayfands Theme I Goff Features & Shaping CITY OF PALO ALTO PROJECT NO. PG-I 300] BUFFER MOUND ZONE (Native Grass & California Live Oak) PRIMARY CART TRAIL SYSTEM (6.5 ft. width concrete) COrlceptlJal images shown FORREST R ICHARDSON!!. ASSOc. ~ GOLF COURSE ARCHITECTS ~ www.golfg,oupltd.<om 0 8ERKAHPER & ASSOC. I r;NGINHRING RUSS MITCHELL & ASSOC. I IRRIGATION DESIGN GOlF"UNA I 810LOGIC"L RESOURcr; CQN$ULT"NT CITY OF PALO ALTO SHEET 6 OF 13 BAYLANDS GOLF LINKS PALO ALTO PRIMARY IRRIGATION SYSTEM Individually Controlled Sprinkler Heads (Decoder System Technology) HDPE Pipe & Fittings (with limited metal components to reduce leaks) INTEGRATED WEATHER MONITORING & CONTROL SYSTEM On-course Weather Station Remote Control Application . " .. Main Control & Data System with Water Usage History Efficiency Flow & Adjustable Sprinkler Heads (to full and part circle coverage) GOLF COURSE LANDSCAPE I rrigation Technology CITY OF PALO ALTO PROJECT NO. PG-I 300] SOIL SENSOR TECHNOLOGY Soil Sensor Units (underground soil monitoring for moisture readings to prevent overwatering) Wireless Broadcast Pods (to relay data to central control system and golf superintendent) FORREST R ICHARDSON §, ASSOc. ~ GOLF COURSE ARCHITECTS ~ www.o"lfg,oupltd.<"In 0 8ERKAHPER & ASSOC. I .NGINHRING RUSS MITCHHL & ASSOC. I IRRIGATION DESIGN GOLfAUNA I alOLOGICAL RESOURCE CONSULTANT CITY OF PALO ALTO SHEET 7 OF 13 BAYLANDS GOLr LINK S PAL O AL T O @-(2) @- -@X!~~~ plan n _@)~;>~~Plan CD CD CD CD , (2) /n ® I ., .. L RESTROOM SIGNAGE (NTS) (Wall mounted Grade 2 Braille Plaq ues at knob si de; California ADA Compliant) ® ® ® _@elevationA _@elevati onc _@elevati on B _@elevation 0 ON-COURSE RESTROOM Fl oor Plan, R oof Plan , Signage & Elevati ons C ITY O F PA L O A LTO PROJECT N O. PG-I 3 003 Refer to site plan for location within project limits Refer to materials dr'ld colors board for paint and fi nish specifics FORREST RICHARDSON l!. ASSOc. ~ GOLF COURSE ARCH IHCTS ~ ....... golfg,,,"plid,coln O BERKM1PER & ASSOC. I E'NGINHRING RUSS MITCHell & .o.5$OC . I IRRIGATiON DESIGN GOLFAUNII I SIOLOGICAL flESOURCt CON5ULTI\NT o CITY OF PALO ALTO SHEET 8 O F 13 BAYLANDS GOLF LINKS PALO ALTO HOLE 5 • O N -COURSE SIG NAGE & FURNISHIN GS (NTS) GOLF COURSE SIGNAGE O n -Course Signage, Furnishings & CITY OF PALO ALTO PROJECT NO. PG-I 3003 f----------------------------".---------------------------f Reverse Pan Channel Letters with Back Halo Lightir'lg (internal) Mounted at 2" Metal Plaque Powder Coated Cabir'let (6"+/-) "-1:-__ 10" Oia. Treated Pine Pole Support .&---Steel Band Hardw~re GOLF LINKS· PALO ALTO __ ;c--::---Individually Cut Metal l etters Entry Signage (Two Faced Freestanding Refer to Site Plan for l ocation) EN TRY SIGN AGE (NTS) Refer to site plan for location within project limits Refer to materials and colors board for paint and finish specifics F ORREST RICHARDSON!!. Assoc. ~ GOLF COURSE ARC HITECTS ~ www.golfg,ouplid.<o," 0 8ERK AHPER & ASSOC. I .NGINHRING RUSS MITCHEll & ASSOC. I IRRIGATION DESIGN GOLFAUNA I 810 LOGICAL RESOURCE CONSULTANT o CITY OF PALO ALTO SHEET 9 OF 13 ! ~ , IlL "_-_-1 o a ~ ~. ~I "-8 13 ", ~. ." g' ~ • ~ :r m m -< o o ~ ~ <0 . , " >z ~ . 2 • o , • Cfl ro ." " ~ ) !:, l£ .~ ~I O\J~ ~8 ' . ~ill ." i ffi o • , • ffi ! . ,~ o = , P, " .. , -, t:,.-" , 'Ii i~ \ \~U -... ;...,.. .~ CITY OF PALO ALTO, CALIFORNIA BAYLANDS GOLF COURSE 900'11. 1875 EMBARCADERO RD., PAlO ALTO, CA 94303 CITY OF PALO ALTO PROJECT NO. PG-13003 FORREST RICHAADSOt-l '" ASSOC. GOLF COURSE ARC HITECTS PHOE~I~, "'R'Z. STI.IOIQ CITY, ''''"'F. ~Ol.906.1 e I & ~w., •• II ••••• II •. , ... / II 11 L ~ , i I ! ~ ! i \ \\ REfERENCE OWn. _ D. Sm~~ R"" __ O.SnWI Rev.-D,Sm<th Re._·D_Sml~ , , M" ~ 11·9·12 12-21-12 2·21!.-13 J II o NOTt:TRITS PRl:stRVtO SHAlt. BI: PROTE:CTtO P(R enyor P>'IlO III.TO m(t P1lO1'ECTIO~ ~IRC"ENTS "ore: TREE IDENTIFICATiON IS PER TIlE CITY'S TREE IN\fENTOFty ·0,",1£0 oeCEMBER 12, 2(]" LEGEND: C:J GREENS o TEES W 8UNKERS ~ • COtlCRETE V ~CART""'ms ...... GPJlVEUOO -p,o,nlS c:=:::J TURF LINE • TREES TO SE f>flESERVEO @ TREES TO BE REMOVED LOW·LYING NATIVE "'R~ PROJEClENGINE ... : OBERKAMPER & ASSOCIATES u " 0 ~ • • • • u • " >' ~~ • zto V 0 02 0 • u ~ 0 • • • • -2 • ~ • " • 0 • " 0 • • u -.-• z • " ~ ·0 ~o z • (fJ o ~z o <{ ~...J o?; .... ~ [lJ ~ .. o~rH E9 • , , ~ , ~ • • ~ • ~ • • • " • • • ~ ~ ~ 0 T ree Management Plan SHEET II OF 13 o D*"9-~ !fJ\""b' ~ @ ~~'I~ gJ O;;;;~-~, ~ g ~ ~ ~ "'J ~ :. ~ ~ '" 9b~~~~~ po,!: t.: ." '" '" fnl I~ ~ ~ ! ~ • 0 ~ , • , n ",....," ... » C)::;-",lli", ~ ~ '" :: ~ .. ~ ~ ~ 25 * _ 0 @ ~@ \':~ I@@ .5 I~ ~~c I~ c~ ~ me! ~ ":s ~;tl '" ><z '" • ." • ;lIG)!ll ~~£ ;u~ 0 <= m ~~ l: Ell) '3 mm X • z 0l~~ ~CI t; 1I ~ ~ . ~. ~ ~ m <. • ~ ffi ! I .... m m w .... "UE. ~ ili~ ~ w 0 "0 ~ ~ • ,~ ,., ~ / CITY OF PALO ALTO, CALIFORNIA BAYLANDS GOLF COURSE 1875 EMBARCADERO RD., PALO ALTO, CA 94303 CITY OF PALO ALTO 900'1\. PROJECT NO. PG-13003 ;"~,I!f~~~ ~~ a. ~,~;; I! ! Ili ., , , 'I " ! I! , I FOflREST fllCt-lARDSON '" ASSOC. GOLF COURSE ARCHITECTS PMOU.I~, "~IZ. STUDIO ClrY. C"'LI~. 601_906·1 & I & _.",~.II ••••• ""'." ® iI • m m , ~ ,j\' z , z 0 0 m !iiijli! I'i; IIi ~ -e li!liill!l! III • 0 m • li!:'J! Iii 'I • % Willi 1 I > z , rn ,l.! " i , ! !II I i \ " 0 > [ © ~ m ~ • ~ ~ r ~ • ~ r ~ ~ ~ :;; ~ \ , , . "\ \ :, , "\> \ \ I -- \ \ REFERENCE DATE OWe.' D. SmK~ ~ R",,_, D. S'lW> 11·9·12 Roo •• -0, Smith 12-21-12 Re>o __ D.Sn>I'd> 2·211-13 [I o P<CAVATJ()N. <MBAN~ME.'IT, Nn rr...!. ~\IPORn: 7~,T.I"C Y 424,3Tec Y. )64,1'SCY. LEGEND: CJ o CJ GREEfIS TEES C::J TURF UNE C'':::'; LOW-<.YING NATIVlO "REA • TREcES TO BE PRESUlVED ~~ PROPOSED GRADES * BAYVIEWlOCAnONS ""'n...C"l IiNC)<f,'" OBERKAMPER & ASSOCIATES NOIUN o Grading Plan SHEETI 3 0FIJ City of Palo Alto (ID # 3718) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 6/26/2013 City of Palo Alto Page 1 Summary Title: Approval of Palo Alto Municipal Golf Course Site and Design Application Title: Palo Alto Municipal Golf Course, 1875 Embarcadero Road [13PLN- 00103]: Request by the City of Palo Alto Community Services Department for Site and Design Review of the Palo Alto Municipal Golf Course Renovation Project and Public Hearing for Review of the Project's Draft Environmental Impact Report. Zone District: PF(D). From: Joe Teresi, Senior Engineer Lead Department: Public Works Recommendation Staff recommends that the Planning and Transportation Commission (PTC) conduct a public hearing on the Draft Environmental Impact Report and recommend that the City Council approve the project based upon the findings and conditions in the Record of Land Use Action (Attachment A). Background Project Description The Palo Alto Municipal Golf Course was constructed in the mid-1950s on approximately 170 acres of flat former salt marsh and bay fill. The course was designed by noted golf course architects William P. and William F. Bell of Pasadena, California. The 18-hole, par 72 course is a classic championship course that measures over 6,800 yards from the back tees. The course was constructed on a relatively flat site raised a few feet above the underlying, highly-saline salt marsh soils through the placement of imported fill material. The original clubhouse buildings were replaced with the current facilities in the mid 1970’s. Major course renovations, including the rebuilding of selected fairways, tees, and greens, a new drainage system and lift station, and a new irrigation system and pump station, were completed in 1998. The potential for Golf Course modifications originated with the SFCJPA’s Bay-to-Highway 101 flood control project. The project, currently scheduled to start in April 2014, includes City of Palo Alto Page 2 construction of new earthen levees that will encroach onto the footprint of the Golf Course. The revised levee alignment will necessitate the reconfiguration of golf holes 4, 12, 13, 14, 15, 16 and 17 in order to maintain an 18-hole course. Community Services Department staff and the City Council identified the flood control project as an opportunity to reexamine the future of the Golf Course and to explore alternatives for providing supplemental City funding in order to undertake the renovation of the entire course. On July 23rd, 2012, Council formally adopted Golf Course Renovation “Plan G”, which includes a full renovation of the Golf Course as well as the set-aside of 10.5 acres to be carved from the Golf Course footprint for future recreation uses. Implementation of “Plan G” will transform the Golf Course from a flat, park-like expanse of maintained turf grass to a blend of landforms, vegetation, and golf course furnishings that are compatible with the unique Baylands setting. On October 15, 2012, Council awarded a contract to golf course architect Forrest Richardson & Associates to complete the design of a renovated Golf Course based on “Plan G”, prepare final bid documents (plans, specifications, and cost estimate) for the project, and prepare an environmental impact report for the proposed Golf Course modifications, including a conceptual analysis of the future recreation area. Forrest Richardson has completed the preparation of the plans and related materials required for the Site and Design application. The site plan and related design documents included in the application package are consistent with the “Plan G” layout adopted by the Council. The Palo Alto Municipal Golf Course Renovation Project (Project) would reconfigure all 18 holes of the Golf Course, a portion of the driving range and practice facility, and replace a restroom facility. The reconfigured Golf Course would be designed with a Baylands theme that would incorporate or modify the existing low-lying areas into the Golf Course, reduce the area of managed turf, and introduce areas of native grassland and wetland habitat. The Project design has been developed to achieve the following objectives: • A golf course that provides enhanced wildlife habitat, improved wetland areas, and a more interesting course that offers challenges for the experienced player and that can also be enjoyed by the beginner, while reducing water and pesticide use and labor. • Integration of the Golf Course into the Baylands theme. • Mitigation for impacts on the Golf Course resulting from the SFCJPA’s Flood Reduction Project. • Improve Golf Course playing conditions – turf, drainage and irrigation. The Project will reconfigure the entire Golf Course to an 18-hole, par 71, PGA-regulation course measuring 6,655 yards from the back tees. Following the designation of approximately 10.5 acres of the existing Golf Course for the future recreation facility and the loss of 7.4 acres to be incorporated into a widened San Francisquito Creek, the resultant area of the reconfigured Golf Course will be reduced to approximately 156 acres. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate six new driving stations. A new Youth Golf Area including elements designed to attract young people to the game of golf City of Palo Alto Page 3 will be established along Embarcadero Road south of the existing driving range. The Project will include new 6.5-foot-wide concrete golf cart paths, compacted decomposed granite footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. The Project will also include a new 300 square foot restroom building located on the Golf Course. The Project does not include any modifications to the parking lot, clubhouse/restaurant/pro shop complex, or maintenance facility. The Site and Design application does not include any detailed design information for the future recreational uses to be sited in the southwest corner of the Golf Course. These improvements will be submitted for review at a future time when a specific type of recreational feature is selected and funding becomes available. The Golf Course renovation will result in the following changes: • Relocate 18 golf holes • Construct 18 new greens on the course and two new greens in the practice areas • Create a par 71 course • Create a course with 6,545/6,091/5,374/4,588 yardages from each set of tees • Reconstruct or construct all new bunkers • Transform 66 irrigated acres to naturalized areas (non-managed turf) • Reduce irrigated turf from 135 acres to 81 acres • Create new practice green/short game area and Youth Golf Area • Expand driving range tee area • Replace entire irrigation system • Complete temporary grading, drainage, and seeding for the future athletic fields The Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. New managed turf will include Creeping Bentgrass on the greens and salt-tolerant Paspalum (v. PE Platinum) at all other areas. During replacement, non-native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area, non-turf native grass zones, and Baylands native zones. The Project will also include a dramatic increase in topographic variability throughout the course, including buffer mounds which will act as a visual and acoustical barrier between the Golf Course and the future recreation area. The buffer mounds will be 15 to 25 feet tall. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new trees to be planted on the course as part of the Project and the planting of trees at a suitable off-site location that would benefit from an increased tree canopy. In accordance with the requirements of the City’s Tree Technical Manual, the number of on-site and offsite trees to be planted will serve to replace the loss of tree canopy resulting from the tree removals within a period of ten years. 300 new native trees, including a variety of 15 gallon and 24 to 36 inch boxed sizes, will be planted across the site. The remaining number of trees required to achieve the mitigation goals will be planted off-site. The off-site trees will primarily consist of native oak seedlings and City of Palo Alto Page 4 acorn plantings at the Arastradero Preserve and elsewhere in the foothills. The off-site tree planting effort will be overseen by the City’s Urban Forester and coordinated with Canopy and Acterra. The Project will replace the existing Golf Course irrigation system with a new high-density polyethylene (HDPE) pipe system with limited metal components to eliminate corrosion and leaks. The sprinkler heads will be individually controlled and adjustable to provide full or part circle coverage. The Project will also include underground soil sensor units which will monitor soil moisture levels to prevent overwatering. Overall water usage for Golf Course irrigation is expected to be reduced by between 30 and 35 percent. A new main entry sign is proposed along Embarcadero Road to replace the existing sign. The proposed sign conforms to the Baylands Design Guidelines by utilizing weathered wood sign supports, rusted metal fittings, and an overall low profile (11.6 ft. in width by 4.25 ft. in height) with muted colors. Primary lettering will be internally lighted within reverse pan channel letters that cast a low-light halo back onto the primary background. One of the latest additions to the project design is a new Youth Golf Area along Embarcadero Road south of the existing driving range. Design of this area is being coordinated with local non-profit organization First Tee Silicon Valley (FTSV). Although this area is primarily intended to attract new young golfers, it will also accommodate other golfer groups, including seniors, men’s and women’s groups, and new player (lesson) groups. The area consists of three short holes measuring from 30 to 65 yards in length. At the far western end of this area will be a practice putting green with sand bunkers. Implementation of the Youth Golf Area will require a management plan jointly administered by the City and FTSV to ensure that the area is safely utilized and fits golf programs approved by the City. It is anticipated that the Golf Course will be closed for approximately 12-15 months during construction, anticipated to begin in April 2014. Site and Design Review The Site and Design Review process, for major projects in areas within Palo Alto having the (D) zoning overlay, requires PTC, ARB, and City Council review. The PTC considers whether the project meets the Site and Design Review objectives set forth in Palo Alto Municipal Code (PAMC) Chapter 18.30(G).060. The PTC meeting minutes and recommendation are shared with the ARB, and eventually forwarded to the City Council. After the PTC public hearing, review and recommendation, the project would be forwarded to the ARB. The ARB is scheduled to conduct a public hearing on July 18, 2013 to consider the project. The ARB would be requested to make a recommendation based on the findings for architectural review in PAMC Section 18.76.020(d). The project, as recommended by the PTC and ARB, would then be scheduled for a public hearing before Council for final action. The PTC is asked to review the proposed project, and recommend approval, or recommend City of Palo Alto Page 5 such changes as it may deem necessary to accomplish the following objectives: (a) To ensure construction and operation of the use in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. (b) To ensure the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. (c) To ensure that sound principles of environmental design and ecological balance shall be observed. (d) To ensure that the use will be in accord with the Palo Alto Comprehensive Plan. These Site and Design Review findings are included in the attached draft Record of Land Use Action (Attachment A) for PTC consideration. Previous Review Both the PTC and the Architectural Review Board (ARB) conducted Study Session reviews of the Golf Course Renovation Project in 2012 and 2013. In addition, the project has been reviewed on multiple occasions by the Golf Advisory Committee, Parks and Recreation Commission, Finance Committee, and the City Council. The project received preliminary review by the ARB during a Study Session on December 20, 2012. Golf Course Architect Forrest Richardson presented an overview of the proposed Golf Course renovation project in order to solicit input from the Board members. During the meeting presentation, Mr. Richardson highlighted the project’s key design concepts, including integration into the Baylands setting, reduction in the amount of managed turf and associated irrigation water demand, making the golf course more interesting and challenging for golfers through the design of the course layout and topography, and conformance with the Baylands Design Guidelines. The ARB was supportive of the project and the proposed design approach. Board members commented and asked questions regarding proposed perimeter fencing, colors and energy conservation strategies for the new restroom building, and project signage. The PTC received its initial briefing about the project at a February 13, 2013 Study Session. Commissioners commented and asked questions regarding the project’s benefits to golf course drainage, benefits and challenges of using reclaimed water for turf irrigation (water conservation, increased soil salinity, etc.), efforts to encourage youth participation in golf, methods to increase the appeal of the golf course as compared to the existing course and surrounding competing golf courses, flood risk to the course and its users, and signage/branding for the renovated course. The staff report and minutes from the PTC Study Session of February 13, 2013 are attached to this report (Attachment B). During the last week of March, staff submitted the project development drawings to the Golf Advisory Committee and the Parks and Recreation Commission in order to solicit their endorsement of the project prior to the start of the formal Site and Design review process. Both advisory bodies had reviewed the project on multiple prior occasions and provided City of Palo Alto Page 6 substantial input to the golf course architect as to what they would like to see incorporated into the project design. The Golf Advisory Committee and the Parks and Recreation Commission gave the project a positive review and endorsed the Site and Design application for submittal to the PTC and ARB. Summary of Key Issues Integration of the Golf Course into the Palo Alto Baylands The existing Palo Alto Municipal Golf Course was constructed in 1956 with little regard for its setting in the Palo Alto Baylands. The levees along San Francisquito Creek were being raised to provide increased flood protection following the catastrophic Christmas 1955 flood. The adjacent low-lying marshland was filled with imported soil to “reclaim” the area for recreational purposes. The course was designed with a parkland theme, featuring vast expanses of turf and planted with a large number of non-native trees to provide visual interest and serve as a windbreak. The flat, low-lying topography of the course combined with the raised perimeter levees prevented any visual connectivity to the surrounding creek and Baylands. Forrest Richardson’s proposed design for the renovation of the Golf Course, inspired by the visions presented in the Baylands Master Plan, is intended to reunite the course with its scenic and ecologically-rich setting. On the renovated course, large areas of managed turf will be replaced with low shrubs and grasses native to the Baylands environment. Although the number of trees will be reduced, the modified landscape will more closely resemble the vegetation types found in natural Baylands settings. Placement of a large amount of imported fill throughout the course will elevate the ground and provide vista points from which golfers will enjoy views of San Francisquito Creek, San Francisco Bay, and the surrounding coastal mountains. The golf course architect has carefully designed the course signage and furnishings to further celebrate the Baylands theme. The proposed branding of the renovated course, Baylands Golf Links – Palo Alto, was developed to attract golfers to the unique setting of the venue. Reduction of Irrigation Water Demand Although the existing Palo Alto Municipal Golf Course is partially irrigated with reclaimed water effluent from the nearby Regional Water Quality Control Plant, the amount of irrigation water required to maintain the course is higher than an ideal amount. Irrigation demand is increased by the large area of managed turf throughout the course at the fringes of the fairways and between the golf holes. Reclaimed water cannot be used to satisfy the full irrigation demand because it has much higher salts content than potable water. As a result, the course requires the use of a blend of potable and reclaimed water (rather than 100% reclaimed water) because of the type of non-salt-tolerant grass planted on the course and the high saline content of the near-surface soils underlying the course. City of Palo Alto Page 7 Overall water usage at the renovated Golf Course is expected to decrease by 30-35%, and potable water usage is expected to drop by even more due to a number of factors. The fairways will be planted with salt-tolerant Paspalum turf, which can tolerate a much higher percentage of reclaimed water (due to their intensive usage and to satisfy aesthetic and playability constraints, the new course greens will be planted with Creeping Bentgrass, which requires potable irrigation water). The area of managed turf will be reduced by 40% on the new course, with fringe areas planted with native grasses and shrubs that have a much lower irrigation demand. In addition, innovations in irrigation system technology, such as ground moisture sensors and individually-controlled sprinkler heads, will help the golf course maintenance staff to avoid overwatering the turf. Policy Implications The Golf Course Renovation Project is consistent with the Comprehensive Plan programs and policies, the Baylands Master Plan, and the Baylands Design Guidelines. An extensive list of the applicable policies and programs is included in this report as Attachment C. Timeline The Golf Course Renovation Project is subject to the Site and Design review process. The tentative meeting schedule for the review process is as follows: Planning and Transportation Commission June 26, 2013 Architectural Review Board July 18, 2013 City Council Late Fall 2013 (following circulation of the project environmental review document) Environmental Review The Golf Course Renovation Project is subject to the California Environmental Quality Act (CEQA). A Draft Environmental Imapct Report (DEIR) has been prepared to evaluate the proposed potential impacts of the project and to identify the appropriate mitigation measures, with the City acting as the lead agency (Attachment D). The DEIR was released for public review for a period of 45 days beginning on June 3, 2013 and ending on July 19, 2013. The June 26, 2013 PTC meeting is serving as the public hearing customarily held during the public comment period for the DEIR. Comments on the DEIR made by PTC Commissioners and members of the public during the public hearing will be entered into the official administrative record for the Project. The final EIR will be modified as appropriate to address the comments made during the comment period, and the comments will be listed along with the City’s offical responses in the final document. The City Council will be asked to certify the final EIR in late Fall 2013, along with approval of the Site and Design application. City of Palo Alto Page 8 The Project impacts are summarized in Table ES-1 of the DEIR. For potentially significant impacts, mitigation measures are identified where feasible to reduce the impact on the environmental resources to a less-than-significant level. Chapter 3 (Setting, Impacts, and Mitigation Measures) contains a detailed discussion of Project impacts and detailed description of the proposed mitigation measures. Significant and Unavoidable Impacts related to the following topics would remain significant despite the implementation of mitigation.  Aesthetics. The Athletic Center would create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area during Project operation.  Air Quality. The Project would violate an air quality standard or contribute substantially to an existing or projected air quality violation during Project construction. The Project would result in a short-term increase in particulate matter (PM), which consists of PM that measures 10 microns in diameter or less (PM10) and PM that measures 2.5 microns in diameter or less (PM2.5) and diesel particulate matter (DPM) due to grading and construction during Project construction.  Greenhouse Gas Emissions. The Project would generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment during Project operation. The Project would conflict with an applicable plan, policy, or regulation adopted for the purpose of reducing the emissions of greenhouse gases during Project operation. The greenhouse gas impacts of the Project are largely attributable to increased vehcicle trips that would be generated by the enhanced gof course and the addition of new recreational facilities at the expanded Baylands Athletic Center. Although CEQA criteria does not define the level of significance for the impact of climate change, the DEIR does contain a qualitative discussion of climate change. The Project site would be subject to increased flood risk due to future sea level rise resulting from projected climate change. Any new structures (e.g. golf course restroom, gymnasium) would be elevated above the current Base Flood Elevation, and the renovated golf course will be elevated 3 to 25 feet through the placement of imported fill. The Project site will have increased flood protection as a result of the San Francisquito Creek Joint Powers Authority’s (JPA) flood reduction project slated to begin in 2014. City of Palo Alto Page 9 Courtesy Copies Golf Advisory Committee Len Materman, SFCJPA Attachments:  Attachment A: Draft Record of Land Use Action (PDF)  Attachment B: P&TC Minutes, February 13, 2013 (PDF)  Attachment C: Comprehensive Policies & Programs (PDF)  Attachment D: Draft Environmental Impact Report (Commission only) (PDF)  Attachment E: Palo Alto Municipal Golf Course Reconfiguration Site and Design Plans (Commission only) (PDF) Page 1 ATTACHMENT A APPROVAL NO. 20013-XX RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 1875 EMBARCADERO ROAD (PALO ALTO MUNICIPAL GOLF COURSE): ENVIRONMENTAL IMPACT REPORT AND SITE AND DESIGN REVIEW APPLICATION [FILE NO.13PLN-00103] (CITY OF PALO ALTO COMMUNITY SERVICES DEPARTMENT, APPLICANT) On ______________, 2013, the City Council approved Environmental Impact Report (EIR)and Site and Design Review application for the Golf Course Reconfiguration and Baylands Athletic Center Expansion Project on a 176 acre site located in the PF(D) (Public Facilities) zone district. SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On March 6, 2013, the City of Palo Alto Community Services Department applied for a Site and Design Review application for a new 18 hole regulation Golf Course with a par of 71 to replace the existing 18 hole Palo Alto Municipal Golf Course in the PF(D) Public Facility with Site and Design Overlay zone district (“the Project”).The Project includes the replacement of a portion of the existing driving range and practice facility, and a the construction of a new restroom facility. B. The scope of the EIR includes the new golf course project and the potential future expansion of the Baylands Athletic Center which would include a maximum of five full-size athletic playing fields and a 24,100 square foot gymnasium with additional parking and lighting. C. Following staff review, the Planning and Transportation Commission (Commission) reviewed and recommended approval of the Project on June 26, 2013. D. Following Commission review, the Architectural Review Board (ARB) reviewed and recommended approval of the Project on July 18, 2013. SECTION 2. Environmental Review. The City as the lead agency for The Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA). An Environmental Impact Report (EIR) was prepared to evaluate the potential project impacts and identify appropriate mitigation measures. The Draft EIR (DEIR) was available for public review on June 3, 2013 through July 17, 2013. SECTION 3. Site and Design Review Findings. Page 2 1. The use will be constructed and operated in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites, in that: City standards and regulations will help to ensure that the use, or operation, of the Palo Alto Municipal Golf Course will be conducted in a manner that is compatible with the existing uses located in the immediate area. During construction, it is expected that there will be temporary impacts to the area in terms of construction-related noise, dust/debris and traffic. These impacts will be offset by applicable City construction standards, such as restrictions on hours of construction, the City’s noise ordinance, and the mitigation measures found in the attached DEIR(Attachment D). The proposed golf course renovation will be consistent with the existing functions of the park uses at the adjacent Baylands Athletic Center. The Project will not adversely affect the operation of the Palo Alto Airport or other adjacent land uses. 2. The Project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas, in that: The Project site is located in the Public Facilities (PF) zone district and will be reconfiguring an existing public facility/golf course with a new public facility/golf course. The Project will maintain desirability of investment in the same and adjacent areas in that the proposed goals and design are consistent with the existing Baylands environment, and the construction of all improvements will be governed by the regulations of the current Zoning Ordinance, the Uniform Building Code, and other applicable codes to assure safety and a high quality of development. 3. Sound principles of environmental design and ecological balance are observed in the Project, in that: The Project will implement appropriate sustainable building practices as deemed feasible. The Project is required to comply with the City’s Construction and Demolition requirements during construction activities. The Project elements have been designed in a manner consistent with the Baylands Design Guidelines. The Project has been evaluated in the Environmental Impact Report for environmental impacts, and mitigations have been provided to reduce potentially significant impacts. Mitigation Measures in the areas of Aesthetics, Air Quality, Biological Resources, Cultural Resources, Geology and Soils, Hazardous Materials, Hydrology, Land Use, Noise, Public Services, Recreation, and Transportation and Circulation have been provided and are listed in DEIR provided as Attachment D. Page 3 The proposed project would have unavoidable significant impacts with regard to aesthetics (lighting), short-term air quality, and greenhouse gas emissions. 4. The use will be in accord with the Palo Alto Comprehensive Plan, in that: The Project complies with the policies of the Land Use, Natural Environment, Transportation, and Community Services elements of the Comprehensive Plan as well as the Baylands Master Plan. The applicable Comprehensive Plan and Baylands Master Plan goals and policies and are provided as Attachment C. SECTION 4. SITE AND DESIGN APPROVALS GRANTED. Site and Design Approval is granted by the City Council under Palo Alto Municipal Code Section 18.30(G).070 for application 13PLN-00103, subject to the conditions of approval in Section 5 of the Record. SECTION 5. Draft Conditions of Approval. Planning and Transportation Division 1. The plans submitted for Building Permit shall be in substantial conformance with plans received and date stamped March 6, 2013, except as modified to incorporate these conditions of approval. 2. All mitigation measures identified in the DEIR shall be incorporated into the project implementation. 3. The project is subject to meeting all the requirements of Palo Alto Municipal Code Chapter 18.44, the City’s Green Building Ordinance. 4. 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 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 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. Planning Arborist 5. Transplant or compensate for loss of Protected Trees by planting both on-site and off-site consistent with applicable tree protection regulations as listed in the Tree Technical Manual and Palo Alto Municipal Code (PAMC) Ch. 8.10 Tree Page 4 Preservation and Management Regulations. Public Works Engineering 6. REGULATORY PERMITS: Obtain all necessary regulatory permits and approvals for working in the wetlands from Bay Conservation and Development Commission (BCDC), Regional Water Quality Control Board, US Army Corps of Engineers, U.S. Fish and Wildlife Service, etc. 7. OFFSITE IMPROVEMENTS: At the end of the project, Embarcadero Road at the frontage of the project may require repaving (2- inch grind and pave) due to the damage from the construction traffic. The condition of the pavement will be assessed at the end of the project. Furthermore, as part of this project, the applicant must replace the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard per Public Works’ latest standards and/or as instructed by the Public Works Inspector. 8. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Permit for Construction in the Public Right-of-Way (“Street Work Permit”) from Public Works at the Development Center. 9. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of- way along the property’s frontage. Call City Public Works’ arborist at 650-496-5953 to arrange a site visit so he can determine what street tree work will be required for this project. The site or tree plan must show street tree work that the arborist has determined including the tree species, size, location, staking and irrigation requirements. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by the Public Works’ arborist. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way (“Street Tree Permit”) from Public Works’ Urban Forestry. Page 5 10. STORM WATER TREATMENT: This project must meet the latest State Regional Water Quality Control Board’s (SRWQCB) C.3 provisions. 11. The applicant is required to satisfy all current storm water discharge regulations and shall provide calculations and documents to verify compliance. 12. All projects that are required to treat storm water will need to treat the permit-specified amount of storm water runoff with the following low impact development (LID) methods: rainwater harvesting and reuse, infiltration, evapotranspiration, or biotreatment. However, biotreatment (filtering storm water through vegetation and soils before discharging to the storm drain system) will be allowed only where harvesting and reuse, infiltration and evapotranspiration are infeasible at the project site. Complete the Infiltration/Harvesting and Use Feasibility Screening Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook - Appendix I). Vault-based treatment will not be allowed as a stand-alone treatment measure. Where storm water harvesting and reuse, infiltration, or evapotranspiration are infeasible, vault-based treatment measures may be used in series with biotreatment, for example, to remove trash or other large solids. Reference: Palo Alto Municipal Code Section 16.11.030(c) http://www.scvurppp- w2k.com/permit_c3_docs/c3_handbook_2012/Appendix_I- Feasibility_2012.pdf In order to qualify the project as a Special Project for LID treatment reduction credit, complete and submit the Special Projects Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook - Appendix J: Special Projects). Any Regulated Project that meets all the criteria for more than one Special Project Category may only use the LID treatment reduction credit allowed under one of the categories. http://www.scvurppp- w2k.com/permit_c3_docs/c3_handbook_2012/Appendix_J-Special_P Utilities Engineering 13. The most recent plans submitted on March 6th, 2013 do not show any changes to the electrical utilities. If there any changes to the load requirement or physical relocation of utilities infrastructure (including the Page 6 meter), the customer is required to contact CPAU and fill out a Utilities Service Application Fire Department 14. Cart path design for emergency medical response recommended. SECTION 6. Term of Approval. Site and Design Approval. In the event actual construction of the project is not commenced within two years of the date of council approval, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.82.080. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Deputy City Attorney 1 1 Planning and Transportation Commission 2 Verbatim Minutes 3 February 13, 2013 4 5 EXCERPT 6 7 8 1875 Embarcadero Road (Palo Alto Golf Course): Community Scoping meeting 9 regarding the scope and content of the Draf t EIR’s environmental analysis for the Palo 10 Alto Municipal Golf Course Renovation a nd Baylands Athletic Center Expa nsion 11 Project. Request for Study Sess ion review of preliminary plans for the golf course 12 renovation. Zone District: PF(D). 13 14 Chair Martinez: And we’ll go right into our first agenda item which is a let m e get it right, an 15 Environmental Impact Report (EIR) scoping session and study session for the Palo Alto Golf 16 Course. And we will begin with a staff report. Excuse me, before you start, m embers of the 17 public that care to speak on this item you can submit speaker cards. Thank you. 18 19 Aaron Aknin, Assistant Director: And Chair be fore we go into this can, you m ay want to 20 mention that Item Number 1, which was the public hearing that was initially set to a date certain, 21 which was tonight, has been continued at staff’s request to the 27th. We’ll be sending out notices 22 to the neighborhood about that, but since it’s on the agenda tonight it might be… I’m sorry now 23 March 5th not February 27th. 24 25 Chair Martinez: So noted. Thank you. Ok let’s begin with our first item tonight. Staff report. 26 27 Mr. Aknin: Thank you and good ev ening honorable Chair and Pla nning Commission. Tonight 28 we have basically two items within this one item. Initially we were thinking of having them on 29 separate nights. We thought it would be best fo r the Commission to both get an overview of the 30 Master Plan for the Palo Alto Golf Course as well as have the EIR sc oping session on the same 31 night so the public could have som e background about what is being proposed in order to 32 formulate their comments on what should be in revi ew from an environmental standpoint. So at 33 this point I will turn it over to Rob De Geus as well as Joe Teresi to give their presentation. 34 35 Joe Teresi, Senior Engineer, Public W orks: Thank you and good evening. I’m Joe Teresi a 36 Senior Engineer with the City’s Public Works Department and I’m the Project Manager for this 37 project. And at this point I would like to ju st introduce some of the other staff mem bers and 38 consultants who are here to assi st us with this item. On m y left is Rob De Geus from 39 Community Services. Also in the audience is Jo e Vallaire from the Golf Course and then we 40 also have our consultants here this evening; Forre st Richardson is the Golf Course Architect and 41 Shilpa Trisal is the Environmental Consultant. And they’ll be both going to be m aking parts of 42 the presentation. 43 44 Again as Aaron mentioned the purpose tonight is twofold. One it’s the scoping m eeting for the 45 Environmental Impact Report so w e’re seeking input from both from the Commission and the 46 members of the public on what issues and item s should be covered in th e Environmental Impact 47 Report that we’re about to start. And then secondly even though this project has been reviewed 48 2 several times by various bodies like the Council, the Finance Comm ittee, the Parks and Rec 1 Commission, the Golf Course Committee, an d the Architectural Review Board (ARB), you 2 haven’t had a chance to see it yet. So this is an opportunity for us to introduce the project to you. 3 It will be returning to yo u in several months as part of a fo rmal site and design application, but 4 we wanted to present it tonight so you could becom e acquainted with it. So a t this point I’m 5 going to introduce Forrest Richardson our Golf Cour se Architect to give you an overview of the 6 project. 7 8 Forrest Richardson, Forrest Richardson and Asso ciates: Good evening Comm issioners. Thank 9 you for having me here so that we can get into your questions I’m just going to go through a very 10 brief overview of the project to show you som e of the hallmarks of it. This project is really all 11 about transforming the existing golf course in Palo Alto to one of a Baylands theme. We spent a 12 lot of time with your staff working and understanding the approved Baylands Master Plan and so 13 virtually everything we’re doing is aimed at that. And Joe, tell m e what I’m doing here to get 14 this to go forward? Sorry. There we go. How do I go back? Yeah. You want to do it? Just go 15 back to the first slide. Sorry, second slide. 16 17 So real quickly this is the existing golf course boundary, the red line that you have there. It’s 18 171 acres. Next. That is the existing golf course . It’s largely what we call a parkland golf 19 course currently. Wall to wall turf and was built in the early 1950’s. It’s changed a lot but the 20 turf footprint and the parkland sett ing really hasn’t changed. So it really the way we describe it 21 as golf course architects it’s kind of like an island within the Baylands environment. Next. 22 23 The project goals were very cl ear. Reconfigure the golf co urse to accommodate the necessary 24 flood control with the Joint Powers Authority (JPA). Reinforce a sense of place to the completed 25 facility. Celebrate the Baylands environment. Restore the golf asset as a point of pride for the 26 community. Conserve resources by transform ing the fully turfed course to on e with m ore 27 naturalized areas that are in harm ony with the Baylands. And then prom ote Palo Alto by 28 establishing a must play golf experience for the residents as well as bringing people into the City. 29 30 I won’t go over each of these individually, but the hallmarks of the pro ject it’s b asically 31 rebuilding the golf course; so all of the features, the landscape, all of the areas of the golf course 32 will be fully replaced. And I’ll get to some of the highlights of that as we look at the plan. The 33 green line on this represents the project boundaries of the golf course. S o it’s 142 acres of the 34 171. It does not include the clubhou se; it doesn’t include the park ing area, the entryway, or the 35 maintenance facility. It’s just the golf course portions itself. 36 37 This document gives you a little bit of idea of what’s being carve d out of the golf course which 38 was direction from your Council to create an athletic field area, spor ts area. That is represented 39 by the orange. The yellow happens to be buffer mounding that was a very strong public request 40 that would separate the athletic field area from the golf course. And the red line represents a 41 stockpile area which is not only for the benefit of importing soil to the golf course but also would 42 serve the JPA and the creek realignment of San Francisquito Creek. The purple area, which is on 43 this plan, the, I think if you go back one… the purple area there, that is just showing you the area 44 that is being removed from the golf course for realignment of the creek. 45 46 This is the plan in Ju ly of last year that was adopted by your Council affectionately known as 47 Plan G of seven different plans th at were created. This is just showing you the turf acreage. 48 Currently 135 acres of turf on the parkland golf course. The new acreage would be 81.3, a forty 49 3 percent reduction. The next slide w ill show you the naturalized areas of the course. The tan 1 color are native; what we call Baylands them ed native areas. The kind of bluish color are 2 lowland areas. They’re not real ly water, but they would be pr one to halophyte type plants, the 3 salt tolerant plants. The cart pa ths and buildings have a 4.5 percent coverage to the site. Just to 4 give you an idea of the impact of th at. And this is the grading plan that’s currently in progress 5 which shows the importation of soil onto the site. 6 7 This is just giving you an idea of some of the landscape them e for the site. So the idea is to 8 transform the parkland setting to more of a Baylands compatible landscape. We will be retaining 9 and preserving some of the trees onsite such as the Stone Pines and som e of the landm ark 10 Eucalyptus, but not the ones that are in poor health or dying condition. On the left side here are 11 the native grasses for the upland areas and on the right are the salt tolerant plants for the lowland 12 areas just to give you an idea of the look that would be expressed in the finished landscape. 13 14 These are conceptual plans that have gone through your Golf Advisory Committee and the Parks 15 and other public meetings that just show the look and feel of the completed course. This is just a 16 document to show you some of the irrigation water saving measures that will be installed. Won’t 17 get into detail on it, b ut the idea is to rem ove much of the relianc e on water for the site; 18 somewhere between 30 and 40 percent. The restroom building that will be relocated goes here in 19 this area up toward the West along the relocated creek. T hese are some of the plans that are 20 currently in progress for that building. And this is just showing you the earthwork. There’s a net 21 increase to the site of about 340,000 cubic yards of material. 22 23 I’m now going to turn it over to Shilpa from IC F International to talk to you about the scoping 24 and cover the sequence of how that process will unfold. Shilpa? 25 26 Shilpa Trisal, ICF International: Thank you. Tha nk you for having us here. My nam e is Shilpa 27 Trisal. I’m with ICF International the California Environmental Quality Act (CEQA) consultant 28 on this project. On January 22 nd we released the Notice o f Preparation for an Environm ental 29 Impact Report announcing that we’re starting th e CEQA process. And it’s a 30 day scoping 30 process which will end on February 21st during which time we will be seeking comm ents from 31 the public and public agencies on what should be included in the E IR, what issues to be 32 examined, etcetera. Today’s meeting here also serves as the scoping meeting for the EIR. 33 34 The purpose of scoping in general as I explai ned is to get comments and input from the 35 Commission today and m embers of the general public and any agencies on what should be 36 examined in the EIR and to resolv e any early issues as early as possible and also g et a sense of 37 what should be the range of alternatives to be exam ined in the EIR and then exam ine potential 38 issues and strategies to deal with various issues that are raised here today. 39 40 The EIR will examine a broad range of resource areas. These are included in the Appendix G of 41 the CEQA guidelines. These are recommended by Office of Planning and Research (OPR) to be 42 examined in environmental documents. These range from aesthetics which includes lighting 43 analysis, scenic resource analys is, air qualit y, biological resources, cultural resources to 44 hazardous materials, noise, construction noise, transportation, any change construction traffic, 45 etcetera. Also in addition we will be looking at a lternatives; looking at cumulative impacts, 46 growth inducing impacts, and all other required sections within the EIR. 47 48 4 Regarding public outreach the project team here has over the last one year held several meetings 1 with the public and various commissions. They’ve been engaged in seeking feedback on the golf 2 course plan and the Plan G that was presented by Forrest today is a result of that communication 3 and feedback. And we as a project team hopes to come back to the Commission during the draft 4 EIR stage and have a site review and also meet with other departments and commissions and the 5 City Council and this will be an ongoing process and we hope to ha ve a project that meets, that 6 includes all the feedback that we get. 7 8 The EIR process we expect will be a 12 month process. We initiated the EIR last month. So this 9 will be a 1 0 to 12 m onth process. In th e next couple of months we will b e preparing the 10 administrative draft EIR with the City’s inpu t and then we hope that in the summer we will be 11 releasing the public draft for public comment. And through fall we’ll be responding to any 12 public comments and then certification at the end of the year. And at that point we’ll be back in 13 front of you. And thank you very much for your time today. 14 15 Mr. Teresi: That concludes our presentation. We’re here to answer any questions that you might 16 have. 17 18 Chair Martinez: Ok. I’d like to open the public h earing and ask if there are any m embers of the 19 golf community that care to speak on the project. I see none. Oh, I’ m sorry. Well, I’m glad I 20 asked. Thank you very much. You’ll have three minutes. 21 22 Emily Renzel: Well thank you. I’m Em ily Renzel, 1056 Forest Avenue, and I adm it to have 23 coming a bit unprepared. But I’m very concerned about the proposed gym nasium that is 24 suggested for this athletic center addition. New fi elds when they’re not in use at least prov ide 25 some semblance of habitat. A gymnasium will not . It will a lso be an increas ed urbanization 26 which is contrary to our Baylands Master Plan of no further urban intrusion. Part of this athletic 27 center expansion is very close to the creek an d as a resu lt will be an area that h as a higher 28 habitat, potential habitat value than further toward Embarcadero Road for example. 29 30 I’m also very concerned about increased night lighting out there in the Baylands. I would 31 consider that a serious urban intrusion. I think th e general thrust of changing the golf course to 32 being more water tolerant, salt tolerant, and Baylands habitat is a good one, but I think it may be 33 countermanded by some of these urban intrusions. I don’t know how many parking spaces, but it 34 seemed like there was a huge amount of additional parking proposed, which is paving. And I’m 35 not sure where that goes. Ther e is an acre of land on the, where Palo Alto Sanitation Company 36 (PASCO) used to be located, that is part of th e Baylands Athletic Center. And I don’t know if 37 that’s proposed to be used as part of this project, but certainly before going and putting 38 something urban close to the creek it would m ake more sense to put it in that ac re site that is 39 right next to an industrial area. And that may be where some of this proposed parking is going, I 40 don’t know, but the trend seem s to be going in a ve ry bad direction from preserving Baylands 41 habitat in general. And I think to th e extent that this project can avoid those kinds of i mpacts it 42 would be desirable. Thank you. 43 44 Chair Martinez: And thank you too. 45 46 Vice-Chair Michael: So the next speaker is Trish Mulvey. You’ll have three minutes. 47 48 5 Trish Mulvey: Thank you and I’d like to thank Ms. Renzel. She introduced the concerns I share 1 particularly about the lighting and the habitat valu e in the area of the athletic fields. Currently 2 the edges of the golf course have becom e quite useful habitat to a nu mber of small creatures 3 particularly the native grey f ox and I want to make sure that those needs are understood and to 4 the extent impacts can be m itigated. I particular ly share the concerns about the night ligh ting 5 aspects at the athletic fields. 6 7 The other comment I have is very different and that ’s about bicycle access to the athletic fields. 8 Between the work that’s going on now with Facebook and the Mid-Peni nsula Regional Open 9 Space District to complete the Bay Trail basically through Menlo Park to Mountain View as well 10 as the East Palo Alto plan f or a bicycle and pedestrian overcrossing that will terminate on Clark 11 Avenue in East Palo Alto. I’m particularly interested in making sure that we are accommodating 12 and acknowledging the i mpacts of an awful l ot more opportunity for bicycle access to the 13 athletic area as well as to the golf course and as I say on beyond in both di rections. I’d like to 14 make sure that there’s clear identification of the connection between this site and the JPA project 15 at the Palo Alto Pump Station and that there’s consideration of making sure we have adequate 16 bicycle parking as well as safety features. So thank you for your attention. 17 18 Chair Martinez: And thank you. 19 20 Vice-Chair Michael: Next speaker is Shani Kleinhaus. 21 22 Shani Kleinhaus: Good evening. I’m Shani Kleinhaus with Santa Clara Valley Audubon 23 Society, also a resident of Palo Alto. I’m here to ask that a lternatives would be considered that 24 have been perhaps eliminated already but shoul d be part of the CEQA analysis that you would 25 have maybe fewer athletic fields, maybe no gymnasium, and maybe more nature. So those types 26 of alternatives could have less , could be feasible and could ha ve less of an im pact on the 27 environment and should be included in the EIR. At the heart of the EIR is really the alternative 28 analysis. It seems like the City has done a lot of it pre EIR, but that doesn’t mean that it should 29 not be part of the EIR as well. Thank you. 30 31 Chair Martinez: And thank you. We’ll leave the public hearing open and we’ll go to members of 32 the Commission for questions. Let’s start with the Vice-Chair since he’s our resident golfer. 33 34 Vice-Chair Michael: Your resident “duffer” I thi nk is more accurate. So I thin k this is an 35 interesting project. Obviously there’s been significant community outreach and visibility to the 36 Council and other boards and commissions. A nd I appreciate it com ing to the Planning 37 Commission for our role in the process. 38 39 As a golfer and not so much as a Comm issioner I wonder if the period of construction and the 40 disruption of play and habits of your patrons, the golfers who play the course, is going to create a 41 challenge to bring them back when it’s done? And I think probably the significance of this is 42 twofold. Probably in terms of planning and budgeting and forecasting I would be cautious o r 43 conservative in terms of the extent of play you’d get when you reopen, partic ularly if the course 44 is going from a course which is parkland but re latively flat, not a lo t of out of bounds, not 45 particularly challenging to really skilled golfers , so your base of play is probably a group that 46 doesn’t include a lot of low handicap golfers w ho maybe don’t think of Pa lo Alto muni or the 47 new Baylands Golf Club to be as a place th ey’d like to spend their tim e and money. So 48 importance of marketing, but also being cautious in the forecasting. 49 6 1 One of the things that’s probably down in sort of the weeds in terms of the design is as you move 2 to a more challenging golf course but you have gol fers of sort of more normal abilities currently 3 playing probably very important to have the maximum amount of multiple tee boxes from 4 championship to forward tees and everything in between. I know th at there’s a course that I’ve 5 experienced in the Palm Springs area which is S ilverRock that has five tee boxes and it’s really 6 fabulous to have that level of choice involved so that you can be at any level you can have a 7 great experience. And so I don’t kn ow if this is in the design, but I would really maximize and 8 optimize the multiple tee box kind of idea so you can appeal to all levels. 9 10 And then there are a n umber of current P lanning Commission Members who served on the 11 Infrastructure Blue Ribbon Co mmission (IBRC) and as part of that we looked at a nu mber of 12 infrastructure issues in the City including the Municipal Services Center (MSC). And we 13 engaged in a little sort of speculative thinking; what if things were changed in the City relative to 14 the facilities that currently at the MSC or in th at area and with respect to the Baylands Master 15 Plan which is very important and obviously takes precedence over a lot of these things. I 16 wondered if it might be feasible not as part of th is current project, but maybe a future possibility 17 to think about som e sort of a hotel conference facility that would be conveniently nearby the 18 course that would attract players that would be interested in the beauty of the Baylands, the 19 amenities of the golf course, and so forth. I last year had a chance to visit Alabama and there’s a 20 state project there the Robert Tr ent Jones Golf Trail and th ey partnered with a ho tel, I think 21 Marriot Hotel, to have facilities at each of these Robert Trent Jones courses. And they use that to 22 stimulate a lot of visitors and play to Alabama that wasn’t ot herwise happening. So just as a 23 golfer I would make some suggestions about things to think about. 24 25 Chair Martinez: Yes? 26 27 Mr. Richardson: Honorable Commissioner “Duffer.” Regarding the multiple tees, well first of 28 all as someone who has to come here and visit your lovely City I support more hotels, especially 29 ones that are under a couple hundred dollars a night. But as far as the multiple tee boxes we’ve 30 spent a lot of time with the Golf Advisory Committee. I serve on a num ber of national 31 committees that addresses the very concern th at you brought up. And t o put it in perspective 32 your course now is about 5,000 yards at the forward tees. And we will be able to accomm odate 33 just below 4,000 yards. And it’s very important to us because it obviously needs to cater to as 34 you say a variety of skill levels. 35 36 Chair Martinez: I have kind of a related, I don’t think I would call it a follow up, but yeah, let me 37 call it a follow up. In the analysis that the Vice-Chair referred to of the profitability or the break-38 even point, does it take into a ccount the current usage and by ra ising the fees what num ber of 39 people will be priced out of the market? I kn ow there are low inco me people from East Palo 40 Alto and retired folks that use the golf course. Is that factored in? And as kind of a follow up to 41 my follow up, is it something that the EIR can take into account? 42 43 Rob De Geus, Recreation Services Manager, CSD: Rob De Geus, Recreation Services Manager. 44 I can start a response to this. I’m not sure if it’s included in an EIR analysis. I know that it was 45 included in our staff analysis. As we considered the different golf course design options. I think 46 we started out with seven from very sort of si mple reconfiguration to so rt of more complicated 47 and ambitious, which is what Council ultimately wanted to do. As p art of that work we also 48 retained the National Golf Foundation (NGF) that does financial analysis on pro formas and how 49 7 a golf course is likely to prefor m given the new features and how it competes with Shore Line 1 and our other competitive golf courses in the n eighboring area. And so they took a very clos e 2 look at that and did ten year pro formas and in terms of the pricing they anticipate that we can, 3 and not that we will, but we can increase fees probably 15 percent above where they are today 4 given the improved golf course p roduct. So that’s exciting for us to hear because as we look at 5 the trend of golf play over the last 10 years it’s been on a steady decline every year and so we do 6 need to change it up a little bit to capture more play. 7 8 Chair Martinez: And to the second part of my question about? 9 10 Mr. De Geus: Who gets priced out of the market? That question? 11 12 Chair Martinez: Well, is there kind of a connection to the EIR that can be part of our scoping. 13 14 Cara Silver, Sr. Assistant City Attorney: Chair Martinez I’ll take a crack at that and then perhaps 15 the EIR consultant can tag on. I think in terms of a change in the user ship of the golf course that 16 could have an environm ental impact in the ar ea of traffic and greenhouse gas em issions. It 17 probably will not have an im pact on the traffic an alysis because we typically look at peak hour 18 and golf course usage typically doesn’t occur in peak hour. However, it could have an impact in 19 vehicle miles traveled if the current usage is more of a local based and it’s expanding to more of 20 a regional facility I think that would be an appropriate area to look at in th e EIR and it’s good 21 that you brought the point up in this scoping session. This is exactly the type of fee dback we’re 22 looking for. 23 24 Chair Martinez: But no socioeconomic impact is being considered, is that correct? 25 26 Ms. Silver: Oh, in terms of social impacts and economic impacts those typically are not looked at 27 in the EIR except if those im pacts will result in a physical impact such as blight or som ething 28 like that. And we wouldn’t anticipate that type of analysis here. 29 30 Chair Martinez: Did you care to add something? 31 32 Ms. Trisal: No, that’s exactly what it is. That unless we have a physical impact EIR/CEQA does 33 not consider economic impacts. 34 35 Chair Martinez: Commissioner Keller. Before you begin I apologize I should’ve acknowledged 36 that Commissioner Tanaka arrived shortly after we began on this. 37 38 Commissioner Keller: Yes. Just for the reco rd perhaps Forrest Richardson who spoke earlier 39 could identify himself? 40 41 Mr. Richardson: I’m sorry, yes. Forrest Ri chardson, American Society of Golf Cours e 42 Architects, Forrest Richardson and Associates. Thank you. 43 44 Chair Martinez: And for that m atter, our Senior Assistant City Attorn ey did not acknowledge 45 herself. 46 47 Ms. Silver: Guilty as charged. Cara Silver, Senior Assistant City Attorney. 48 49 8 Commissioner Keller: So my first question is I guess a very high level scoping question. And 1 that is will the EIR include the playing field changes or proposed changes or options there or 2 only include the golf course and its proposed changes or alternative changes? 3 4 Ms. Trisal: The EIR will consider the Baylands Athletic Center expansion, which includes five; 5 right now the plan includes five new athletic fields and a new gym nasium. And we’re open to 6 considering as part of the scoping any other alternatives that come out. 7 8 Commissioner Keller: Thank you. So that’s very helpful for us to know that suggestions on what 9 might be in terms of playing fields or gymnasiums or placement is within scope. Thank you. 10 11 So here’s some things, some questions and things that I’d like considered in the EIR. The first is 12 consider impact of playing field noise on golf course play. And whether the lowlands area of the 13 golf course are potentially become classified as wetlands. And if they ar e potentially classified 14 as wetlands under the federal defin ition then what restrictions does that entail for the golf course 15 and for the City of Palo Alto? Is there a potential for creek a nd bay flooding? In other words, 16 even after the project is done is there creek flooding that m ay diminish, but bay flooding m ay 17 still continue? And if bay flooding, if either of these still exists how much notice would there be 18 for this flooding? And would th ere be adequate notice and time for people who are in the flood 19 prone area to leave safely considering particul arly for example, congestion on E mbarcadero 20 Road at peak hours? What is the effect on wildlife of both the golf course and the athletic center 21 in terms of noise and light, particul arly at night or in the evening? Is there potential for the use 22 of reclaimed water on watering the at hletic fields or watering the pa rts or all of the golf course? 23 And particularly consider the issues of the reclai med water and its salinity and other things that 24 are in the reclaimed water. 25 26 Perhaps we could hear a little m ore about th e proposed ideas for the playing fields and the 27 gymnasium so that we could better articulate questions and thoughts about them. And finally I 28 actually would like to u nderstand a little bit more about whether the PASCO site is part of this 29 analysis and how. So perhaps those last two que stions you could addre ss now and the rest of 30 them are things that would be properly addressed in the EIR. 31 32 Mr. De Geus: Again, Rob De Geus, Recreati on Services Manager, Community Services 33 Department. Regarding the PASCO s ite that is included in the study and it is the site where we 34 thought, we’re thinking about the gymnasium. That location where the gymnasium would go, so 35 the other side of Geng Road. The question about the athletic field area and what are the 36 possibilities and thinking of that space the design and concepts of that area is not as far along as 37 the golf course design, but the current thinking is multiuse athletic fields that allows for lacrosse 38 and soccer and football and a variety of sports to be companion fields to the baseball and softball 39 field across the parking lot. 40 41 Mr. Teresi: And can I add to that a little bit? I just wanted to clarify that although the athletic 42 fields and the possible inclusion of a gymnasium are going to be addressed in the Environmental 43 Impact Report those facilities are no t yet funded. They’re not really a project yet. They’re jus t 44 more or less concepts. And when we com e back to you with our site and design application it 45 will not include those elements. We’re coming back only with the spe cifics of the golf course 46 renovation. But the EIR is meant to cover these other athletic fields as a future project. 47 48 9 Commissioner Keller: Well I appreciate that. Certainly the EIR is supposed to look at the whole 1 of a project and even if a project is segm ented it should consider the whole thing. So certainly 2 from the point of view of the CEQA analysis it should include these playing fields and potential 3 gymnasium. And also from the point of view of a comprehensive analysis and cost it’s certainly 4 better to do it that way. 5 6 Could you identify perhaps the diagram that seems to make the most sense to me is this diagram 7 here, which is, I don’t think it’s, it’s sheet five, by the way som ebody likes extra “e’s” in the 8 word “sheet,” but sheet five seems to be the diagram I can figure out as to what’s going on. And 9 perhaps, I’m not sure where that fits on your diagram. Perhaps you can tell m e where on that 10 diagram the PASCO site is currently. 11 12 Mr. Teresi: So the area that I’m highlighting with the mouse, that is this PASCO site. This area 13 right here. 14 15 Commissioner Keller: So just if I get you correct it’s the triangular parking lot that you’ve placed 16 between the current Baylands Ath letic Center and Geng Road in th at little triangular space. 17 That’s what we’re talking about? 18 19 Mr. Teresi: Yeah. 20 21 Commissioner Keller: Is that correct? 22 23 Mr. De Geus: Yes, that’s correct. 24 25 Commissioner Keller: Thank you. I just figured I’d verbally describe it so somebody looking at 26 the minutes would be able to figure out what we’re talking about. Thank you very much. 27 28 Chair Martinez: Thank you. Commissioner Panelli. 29 30 Commissioner Panelli: Thank you Mr. Chair. If our esteemed Vice-Chair describes himself as a 31 “duffer” I aspire to be a “duffer.” I think I’m more of a “ hacker.” But having spent a couple 32 years on the Parks and Recreation Commission as well as s ome time on the Infrastructure Blue 33 Ribbon Commission I’m glad to see this finally, we ta lked about this for some time and it’s nice 34 to see that this come to fruition of course sped up by the JPA project. I have a few questions. 35 First of all do you have any, to go to Commissioner Keller’s question; is there an anticipated site 36 for this possible gymnasium? 37 38 Mr. De Geus: The current concept is at that PASCO site that Commissioner Keller pointed out 39 earlier. That triangular piece if yo u come down Geng Road and enter the Baylands Athletic 40 Center, right as you enter on the left side, that would be the location. 41 42 Commissioner Panelli: So on this diagram that we’re looking at now it would be between the 43 triangular parking lot and Geng Road there’s a strip there that? 44 45 Mr. De Geus: It’s right here in this area here. 46 47 Commissioner Panelli: Ok. 48 49 10 Mr. De Geus: The other side of Geng Road. 1 2 Commissioner Panelli: Ok. 3 4 Mr. Teresi: I mean if I could ju st clarify, I think when the Counc il initially was looking at this 5 Plan G the idea of a gymnasium hadn’t entered the discussion yet. Later on there was an 6 overture by someone who wanted to maybe make a contribution that w ould possibly add a gym 7 and that’s why we’ve got it adde d to the scop e of the EIR because that’s a possibility. It’s 8 certainly not a foregone conclusion at this point, but it was kind of a late addition to the idea of 9 these athletic fields. 10 11 Mr. De Geus: Right and I would say that’s true . That is the current thinking of a potential 12 location, but there is still a lot more community outreach that needs to occur about a location and 13 even if a gym is really appropriate for this space. 14 15 Commissioner Panelli: ok. Because I saw one very brief mention in the staff report. I didn’t see 16 it on any of the diagrams. So I was just curious about that. 17 18 Can you just from an engineering standpoint just give me an idea, from what I understand part of 19 this renovation is being done to sort of make the course m ore water resistant because it’s often 20 either shut down or barely playab le when there’s even just a little bit of precipitation. Can you 21 tell us when this project is done how much it should be able to handle? How m any additional 22 playable days per year the course could probably accommodate? 23 24 Mr. Richardson: Sure C ommissioner, Forrest Rich ardson again. The infras tructure of the golf 25 course, most of it was replaced or significant amount of work in the late Nineties. So the one 26 element that we’re preserving is the master drainage system, which was installed and paid for by 27 the City. But with the importation of soil we will be creating gradients that allow the golf course 28 to drain. So to your question all of the golf cour se should drain very rapidly, within a 10 to 12 29 hour period whereas now there’s a lot of standing water on the golf course that compounds all of 30 the issues that com e with standing water: m ore geese, settling, rutting from golf carts and 31 maintenance equipment, which then leads to more low areas, and the issues go on and on. 32 33 The rest of the infrastructure, the irrigation system and some of the other features and structure 34 of the golf course is past its usef ul life cycle. And just to gi ve you an idea the irrigation system 35 that will be installed will be all High-density Polyethylene (HDPE) long life pipe as opposed to 36 the metal couplings and Polyvinyl Chloride (P VC) that’s there today and that’s why it’ s 37 deteriorated with the high salts in the soil it’s only lasted 12 or 13 years whereas normally we’d 38 like to get 20 or more years out of the irrigation system. 39 40 And to Commissioner Keller’s question just real briefly the golf cour se is irrigated with effluent 41 water and it would, we would, by putting in Paspalum grass, which is on the sheet you have 42 there, we would be relying more and more on effluent and not as much on the potable water. So 43 right now it’s a blend and that blend will be significantly to the City’s favor and the community’s 44 favor because the reliance on potable water will go down. Effluent in ratio will go up, but the 45 overall water usage will go down with the im provements. Did I answer your question about the 46 infrastructure and the drainage? 47 48 11 Commissioner Panelli: One of the t hings that I was trying to get at tho ugh is, will this pro ject 1 effectively make it, make the course more usable? If I were to describe it in terms of number of 2 days in a year. 3 4 Mr. Richardson: It will drain as well as any gol f course can, given the am bient rainfall and the 5 environment. So right now if you experience days when it’s simply too wet those will go away 6 and play would be able to resume as soon as the weather’s clear. 7 8 Commissioner Panelli: Thank you. Question for, the assumption is that it’s going to take a year 9 to do the project so the course will be down for an entire year. Is there an opportunity to keep 10 the practice range open ? Because it seem s like perhaps that might take a lot less w ork and it 11 might be a way to sort of keep people engaged and to Vice-Chair Michael’s question, you know, 12 out of sight out of m ind, so if at least peop le are using the range and they see the pro ject 13 advancing and they don’t necessarily fully detach. 14 15 Mr. De Geus: We haven’t developed all of the sequencing yet, but the concept is that we would 16 keep some things open like the range, certainly the restaurant and pro shop and have lessons and 17 those types of things to keep activity going as much as we can. 18 19 Commissioner Panelli: Thank you. 20 21 Chair Martinez: Commissioner Alcheck. 22 23 Commissioner Alcheck: I was going to ask about drainage so that’s check. Ok, so m y first 24 question is I guess to the Pl anning Department. W ould you guys provide a little m ore 25 background with respect to the at hletic center and proposed gym nasium? I noted in the report 26 that the athletic center and/or gymnasium isn’t funded and is antici pated to be com pleted 27 sometime after the golf course reconfiguration. Does that, does approval of this project m ean 28 approval of the gymnasium? Are they going to be so rt of treated together or are they separate? 29 Would we be reviewing the gymnasium potentially years later? 30 31 Mr. De Geus: Right, they’ll be separate project s. You know unless a developer com es forward 32 and says, “We want to help you m ake this happen and build it within the next year.” Then we 33 may bring it back to you at the sam e time, but it’s unlikely. Really what we’re doing for the 34 most part is carving out land for potential playing fields and a gym nasium sometime in the 35 future. 36 37 Commissioner Alcheck: So is it sa fe to assume that as we continue to discuss this project over 38 the next three or four months th e concerns that some of these residents had about the increased 39 urbanization as a result of this gymnasium essentially unaddressable because it’s not really on 40 the table? 41 42 Mr. De Geus: It probably won’t be completely addressable, but it’ll be important to hear because 43 we haven’t fully developed a concept for what is going to be there and if there is significant 44 concern about a gymnasium or lights or other things then that’s going to help inform the concept 45 as it develops. And as our funding stream becomes, comes into sight then that’s when we really 46 will get to work on further development at that space. 47 48 12 Mr. Teresi: I mean I think the purpose of the intent is to kind of in the environmental document 1 to depict the most intense use that could happen so that’s kind of the worst case so that we’re 2 covered as far as the environm ental document. And then when we actually com e forward with 3 the project for planning review it would be a lot more specific, but the environmental document 4 would have covered kind of the most intense changes and impacts. 5 6 Commissioner Alcheck: Just a qui ck follow-up. W hat sort of precipitated the notion for a n 7 additional athletic facility? Was there sort of a need iden tified or a gymnasium need that there 8 was sort of a, there wasn’t a lot of bac kground on the gym nasium component and I sort of 9 wondered where that came from. 10 11 Mr. De Geus: Yeah I think I can help respond to this. The City doesn’t have any gym nasiums, 12 no community gymnasiums. The only gymnasiums we have access to is the school gymnasiums 13 at some times, which we have to pay for and we have the Cubberley Community Center, which 14 hangs in the balance a little bit as to what the future of Cubberley is. So there’s a docum ented 15 need for a gymnasium. We have lots of kids and families going outside of Palo Alto to get their 16 volleyball practice and those types of things, so we’ve known for some time that it would be 17 great to have or build a gymnasium somewhere in town. So that’s I mean something that we’ve 18 been thinking about for a while. 19 20 And with regard to the athletic fields there was a report written about 10 years ago now called 21 “Got Space” where it identified the lack of athletic fields an d playing fields in our sort of built 22 out community. And it indicated I don’t rem ember what the num ber was, but a significant 23 deficit in athletic fields. So that allowed us to build the fields on El Camino/Page Mill and so 24 we’ve done some things to add capacity but it still rem ains a problem. There are insufficient 25 fields to meet the demand of the community. And so the Council is well aware of that and as we 26 presented options to the Council about golf course design several had no athletic fields. It was 27 just purely golf course. We were instructed to go back and rethink, in f act I think there was one 28 design that had one athletic field and the C ouncil asked staff to go back and m aximize the 29 amount of athletic fields we c ould build into the design. So we di d that and went back to 30 Council and they liked it. So told us to go forward with that design. 31 32 Commissioner Alcheck: Ok thank y ou. That’s actually really helpful. I have two more quick 33 comments. There’s a golf course in Davis, California called th e Wildhorse Golf Course and it 34 uses signage, low level signage, to sort of provi de insight into the surr ounding natural landscape 35 and habitat and I’ve always thought that was sort of special because you’re sort of learning about 36 the random rodents that are feet from you and little owls. And they, you know, they sort of give 37 you the scientific, it sort of f eels like you’re on a little nature hi ke when you’re playing a round 38 there. and this sort of s eems like an ideal add ition to this concept plan considering that you’re 39 sort of playing into the them e of Baylands and how the natural landscape, I think it would be 40 interesting if the people who visit our community to play this and also our constituents can “Oh, 41 and that’s the that b ird that we w ere trying to save or whatever, that ’s where they live or 42 whatever.” You know? I don’t know, I think that would be interesting. 43 44 I also found it surprising that there are 844 trees on that course. I am also a golfer and I’ve 45 played that course a number of times and I’ve always thought it was ridi culously open. And the 46 notion that there are 84 4 trees is s o surprising because I feel like ther e are no trees. And I 47 understand that nearly three quarters of those trees are going to be removed. W ill they be 48 replaced in some fashion and is there an alte rnative to provide sort of separation between 49 13 fairway… this is going to sound sort of funny, but between fairways and enhance sort of the 1 intimacy of a round of golf there? It sort of feels like you can see every single golfer on the 2 course when you’re playing there and I wonder if there’s going to be some more separation? 3 4 Mr. Richardson: Those are good questions. Let m e just go back to one comm ent that you had 5 just so that you understand from a planning point of view as the golf course architects when the 6 Council decided to see what area could be carved out we didn’t know what would go there. That 7 was very conceptual in Plan G as far as thr ee soccer fields or whatever. But from a land 8 planning point of view just so the Comm issioners understand the process our role becam e not 9 only to see what we could carve ou t, but very importantly what we could preserve in the way of 10 the golf course. W e didn’t want to leave a golf course that wasn’t viable. And secondly w e 11 heard very loud and clear from both the people that play golf as well as the people that might be 12 using whatever athletic field th at they wanted separation. So those mounds, that area between 13 Hole 10 and the ten and a half ac res those are what we call th ese buffer mounds that are very 14 large, very strong mounds that will create a separation between those two uses. So I just wanted 15 to make sure that you understood that. 16 17 We’ve just been given a signage sc ope and I think some of what you’ve said are things that have 18 been talked about are really good ideas, I’m not familiar with the Wildhorse project specifically, 19 but it’s really a good idea to educate people about the habitat. And as fa r as separation and the 20 trees go many of the trees on that list are in the perimeter of the project so they’re up against the 21 airport or small trees that are on the Embarcadero property. Just in gene ral there are 200 trees 22 that have been identified on the gol f course, just 180 some trees that will be preserved. Some of 23 the trees are in the way of the creek. Som e of the trees are in the way of top soil importation. 24 Right now the budget calls for approximately 300 trees to be replaced by the golf course project. 25 There will ultimately be trees replaced by the JP A’s project and that number hovers between 80 26 and 120 and there will, the project that you’ll see in the future for the athletic fields will have its 27 own set of landscape. So I don’t know what the exact number is, but the intent of the golf course 28 is to change it to more of a links seaside Baylands environment. So it will be more open and the 29 trees and the shrubs and the plants will be lower on the landscape. 30 31 And the seclusion between holes will com e from the terrain rather than the vegetation. So right 32 now you see it as an op en landscape because there’s not much terrain difference across one side 33 of the course to the other. And in the grading plan that’s been created you have 25, 28 foot high 34 landforms that go way out onto Hole Twelve a nd then you have som e on Hole Seventeen and 35 Hole Five and then the big m ounds along Hole Ten. And in betw een that you have differences 36 of landforms and instead of being flat will be anyw here from four feet to twelve feet at any one 37 place on the golf course. So they’ll be quite a bi t of separation, but it’s not the kind you’re used 38 to now. You’re used to now a few trees. 39 40 Commissioner Alcheck: Well I’m not really used to any trees. Ok, I want to end with just sort of 41 one comment about the noise study, which is wi th all due respect really nobody plays Palo Alto 42 for the quiet of the course. Its p roximity to the airport makes certain holes really, really loud 43 (interrupted) 44 45 Mr. Richardson: Someone told me there was an airport nearby. 46 47 Commissioner Alcheck: Yeah, so I would sort of th ink that the potential noise implications from 48 the fields f or example wouldn’t necessarily pos e sort of a sign ificant problem to the golf 49 14 community considering that when they’re in the first half of thei r round they’re going to be next 1 to landing airplanes, which are r eally loud. But there’s something to be said for… I guess what 2 I’m understanding is that those mounds that you’re talking about, their purpose is for sound 3 isolation? 4 5 Mr. Richardson: Well they’re for the purpose of, yes. They’re for the purpose of separating the 6 uses and distinguishing a physical difference between the tw o sites and you have one group of 7 people using the athletic fields that have one use and type of need and then you have the golfers. 8 So, yeah, those mounds to give you an idea they’re 30, the highest one I think is 32 feet above 9 adjacent grades. So you’re talking about anywhere from a three story down to a one and a half 10 story building difference in terms of height between those two uses. The idea was also safety. 11 We wanted to create a physical barrier for a num ber of reasons: landscape aesthetics, safety, and 12 then also keeping the golf carts from going over there and keeping the kids and the patrons from 13 the athletic field from coming over to the golf course, so. 14 15 Commissioner Alcheck: Ok. 16 17 Mr. Richardson: And the noise was part of it. That was, I thi nk if you look at the Community 18 Services Department held a ve ry large forum. I think ther e were a couple hundred people or 19 thereabouts and they all broke into workshops a nd the m inutes of that are very useful to 20 understand what was on people’s mind as things were being contemplated for this 10 acres. 21 22 Commissioner Alcheck: Thank you. I think every golfer in Palo Alto is excited about the notion 23 of a must play golf course in our neighborhood, so I’m excited and thank you. 24 25 Mr. Richardson: I’m surprised you find the trees, I found them all. I don’t know why you 26 haven’t found them. 27 28 Commissioner Alcheck: No. Well, you know what I mean. It’s not quite as dense as you would 29 think with 844. 30 31 Chair Martinez: Ok, thank you. Commissioner Tanaka. 32 33 Commissioner Tanaka: Yes, first of all thank y ou for your work on this it’s quite nice. A fe w 34 questions. So first one is do we know like what, who plays at this golf course now? What 35 percentage of them are Palo Alto people versus others? 36 37 Mr. De Geus: W e do know that. It’s approxim ately 20 percent of total play is Palo Alto 38 residents, 80 percent is non-residents. 39 40 Commissioner Tanaka: Ok, so most people are driving to this place? Ok. And do we know how 41 this golf course is, I assume other municipal golf courses, other golf courses in general are also 42 evolving and changing. Do you know how this golf course is going to compare to other nearby 43 golf courses in terms of how they’re changing, how that’s going to affect the competitiveness of 44 this course? 45 46 Mr. De Geus: We do know something about that. Certainly as staff we’re always looking at our 47 main competitors, Shoreline and Poplar Creek and some of the others. But we had as I 48 mentioned earlier the National Golf Foundation com e out just to study that specifically is how 49 15 would this redesign preform against the competitors in the local region? And what would tha t 1 mean in terms of how much we could charge a nd the likely patronage we would see? And that 2 was a big part of why the Finance Committee and Council supported this project, because it was 3 quite favorable. So I think that’s a positive. 4 5 Commissioner Tanaka: So the comparison was not against the other g olf courses as they are 6 today, but as they will be when this is also completed? 7 8 Mr. De Geus: Yeah, the com parison was how they are today. I’m not sure that they, I don’t 9 think they looked at ok how are th ey going to change over the next 10 years? I don’t think that 10 was part of the study. 11 12 Commissioner Tanaka: I see. Ok. So I also, do you guys know m uch about the crime in that 13 area in terms of car break-ins or safety? Is there any data on that? 14 15 Mr. De Geus: You know I don’t have any statistics, but we’ve had som e trouble with crime in 16 the parking lot. Laptops being stolen out of cars and we’ve had to put signage up and had the 17 Police Department do sort of a sting operation, ac tually caught some people when we had a real 18 big rash of that. As far as sort of vandalism on the golf course over the years it just doesn’t 19 happen often, but occasionally it’ll happen where we’ll get like a motorbike or someone get on 20 the course and damage the turf or some of the greens. It’s only happened a few times. 21 22 Commissioner Tanaka: I see. Is it a big enough problem to actually think about it as you guys 23 were designing how to make it a little bit safer for people? 24 25 Mr. De Geus: It’s something that we’ve talked about a little bit, but maybe Forrest if you 26 (interrupted) 27 28 Mr. Richardson: Currently there’s a fence th at goes on the north and we st portions of the 29 property that separates the current trail system and the levy from the golf course. And then on 30 the east side there’s also a fence that separates the airport. 31 32 Commissioner Tanaka: Isn’t there a bridge that goes to East Palo Alto there as well? 33 34 Mr. Richardson: The bridge, Friends hip Bridge is where, it’s being shown there and as part of 35 the creek work that brid ge gets as you can see tu rned into an island that connects the trail with 36 the areas to the Northwest. We have currently been working with the JPA to make sure that the 37 City gets what th ey want in the way of a ba rrier fence replacement. And I don’t think those 38 details are worked out yet, but I know it’s been on everyone’s radar scope as far as how to 39 separate the golf from the trail and to prevent unauthorized access to the golf course. I think the 40 good news is that we’ll be creating perhaps a lit tle less inviting environment with all the terrain 41 changes. It’s no longer just a big park looking area, but it has broken areas that are I think the 42 feeling will be, “Oh, that’s a gol f course.” Whereas right now maybe the person doesn’t realize 43 it’s a golf course looks at it and thinks “That looks just like a park.” And so I think that will help 44 a great deal. 45 46 Commissioner Tanaka: Ok. You know I think that’s important too to do especially if you want 47 to have this as an upscale golf course. I actually also appreciate the Vice-Chair’s comment about 48 perhaps a conference or hotel center. I think th at’s something that on IBRC we actually ta lked 49 16 about and thought about and I don’t know if that’s too late to consider as part of the EIR, but I 1 would also support that thought. A nd I think that’s actually, not necessarily that we’re going to 2 do it, but to have it studied and see if that m akes sense and can the parking support it? I think 3 that would be something interesting to consider . And in term s of locations of that, you know, 4 perhaps on existing parking lot. But I think the other thing I’m thinking about is 80 percent of it 5 is from non-residents who are visiting. I would imagine that parking would also have to studied 6 closely to make sure that there’s sufficient parking. So if this is a very popular course there are 7 places for people to park. Thank you. 8 9 Chair Martinez: Ok. Developers have a way of m aking things happen in this town that surpris e 10 us all as we’ve seen. I think the idea of a developer coming forward and offer to build a 11 gymnasium is probably a real pos sibility. Other places not so much. Here it could happen 12 tomorrow. And I go back to som ething that struck me about one of the members of the public 13 that spoke and thought of this as urbanization. And I think before going too far with the idea of a 14 gymnasium here I would look at other places in the C ity where it would be more easily 15 accessible to volleyball players and young people to use it. 16 17 The idea of playing fields is com patible with golf courses. They kind of look the sam e, they 18 have the same irrigation needs, they don’t block views, and they provide a resource to a different 19 segment of our population and its incredible ne ed. The idea of a gymnasium wi th a ceiling 20 spring line that’s 18 feet high it’s a little b it, I want to say it dip lomatically, a little b it 21 incompatible with the Baylands. And so if this goes forward as a consideration in the EIR I want 22 to make sure that it is treated critically. That we don’t just say here’s a re ctangle that could be 23 there and they’ll be 20 kids a day com ing there or 100, but that the impact aesthetically, 24 culturally on this precious resource is really, really critically looked at because to me it seems 25 like an unsuitable fit. So I guess I’ve said enough about that. 26 27 I’d like if we can do like one fi nal round talking a little bit more and Commissioner Keller did a 28 good job on the scoping issues, but talking about some of the items that concern us. Like, for 29 example, the bay ris e of the bay water leve l, sea level rise. Is tha t being considered in the 30 Environmental Impact Report? A nd it should be . Is the JPA project the impact of that 31 construction simultaneous or somehow impacting the golf course project? Is that being under 32 consideration? I’d like to make sure the scoping and the EIR address the construction i mpacts. 33 We’ve talked about the year or more, two years where the golf course w ill be closed. Cultural 34 resources, there’s still some consideration for the Julia Morgan to be moved to the golf course as 35 a clubhouse. I know that’s still in debate, but it’s still a consideration. I’d like the, that to be part 36 of the scoping as well as the historic buildings that are still onsite. I want to make sure that those 37 are addressed and I’m certain that they will be by our consultant in this. And Commissioners if 38 we can just begin to add to areas of concern for th e, this project that we want to be addressed in 39 the scoping or at least considered, I’d like to have you continue with that. Commissioner Keller. 40 41 Commissioner Keller: Yes. So f irstly it’s not clear whether P lan G stands for “Golf” or 42 “Gymnasium.” So one question is the issue of to the extent that the project is segmented and the 43 golf course is redeveloped and there’s land vacated for playing fields, what is the tem porary 44 cover of that area that’s vacated from the golf course? Because you don’t want it to just be 45 muddy and disgusting. So there’s go ing to be a cost and som ething involved in th at. And that 46 cost might not be that much le ss than putting in the p laying fields themselves, so that’s an 47 interesting considering. 48 49 17 It was also talked about by several people that th ere would be increased usage of the golf course 1 and as alluded to by Commissioner Tanaka whether there’s sufficient parking for the golf course 2 is an interesting question. Several m embers of the Commission refer to the idea of a 3 hotel/conference center. There’s a n item that w ill be coming before us that c ame before us 4 several years ago and that is Ming’s. And that is an opportunity when considering Ming’s which 5 is nearby as redevelopment that is a potential hotel. That’s cons ideration as to whether that’s a 6 hotel/conference center. My understanding is that’s not what they originally proposed, but it will 7 be coming back. I know this is on our agenda for the next meeting, which I also notice is overly 8 full, so. 9 10 And two last things. O ne, they are both about the gymnasium. One is I’m wondering whether 11 the Julia Morgan building itself could be a gym nasium. It’s certainly a high building and a nice 12 space and so that’s an interesting q uestion. And the second question and this is, I’m not sure 13 how to address this, but there is a school nearby. I think it’s called The International School of 14 the Peninsula? Located near the P ost Office. And I’m wondering if pa rt of the reason that 15 there’s an interes t in h aving a gy mnasium near, is that that schoo l would like access to a 16 gymnasium. And which would then be perhaps used by them part of the time, partly by the City, 17 and then there’s a question as to the private use of a public resource. And I’m not sure whether 18 there are strings attached to a ny donation that would make that happen, but I notice that schools 19 tend to like gymnasiums and I’m wondering if ther e’s the question. So I’m just going to bring 20 that up as an open question. I’m not sure how to address it, but the conflic ts of interest have 21 certainly have raised some questions for me. And with that I’ll close. Thank you. 22 23 Chair Martinez: Commissioner Panelli. 24 25 Commissioner Panelli: Yeah, thank you Mr. Chair. I’d like to ech o the sentiments of Chairman 26 Martinez. I’m, as soon as I read that just a hi nt of a gymnasium I felt uncomfortable. It doesn’t 27 seem like a particu larly compatible use. And frankly I’d rather see a gym nasium built 28 somewhere more central in the City that has more access to public transit. I’m supportive of 29 including it in an EIR analysis because I understand Mr. Teresi’s point which is sort of see what 30 the worst case scenario is and you can always work back off of th at. I have no problem with 31 that, but I want to echo those sentiments. 32 33 The other thing is the night lighting. I think tha t’s going to take a lot of analysis because as I 34 recall from my days on Parks and Rec Comm ission the peak demand times are six to ten p.m . 35 Monday through Friday. You know that’s going to m ean lights, at least for three quarters of the 36 year are going to be necessary. And I’m just wondering if you could, we can do our lightening 37 round and then maybe you can address it at the end, but what your thoughts are how to minimize 38 that. Anyway, I’m going to pass on the rest of them. 39 40 Chair Martinez: Thank you. Commissioner Alcheck. 41 42 Commissioner Alcheck: Ok, final few comments. I want to know if the issue of bike and 43 pedestrian safety over 101 is going to be considere d. I mention that because if we enhance this 44 area with an athletic center that’ll invite children it’s going to mean kids and pedestrians biking 45 and walking across the Em barcadero and that’s a pretty unsafe intersection. I don’t anticipate 46 that they’ll all use the bike bridge to get there and it’s a concern because I think both off ra mps 47 on the freeway are sort of unprotected and there’s no crosswalks and we want to encourage the 48 use, so. 49 18 1 I also want to suggest or wonder if the course would consider a Palo A lto resident discount in 2 terms of its financial feasibility. I think this would obviously apply only to a minority of current 3 users. And I m ention it because it might be a nice way of saying “Thank you” to the City for 4 whatever costs and expenses that are undoubtedly going to be borne by the City. 5 6 And then the last thing, actually two more things. I know when we looked at Rinconada Park we 7 talked about outdoor sand courts , volleyball courts. Maybe that ’s something that could be 8 considered in the athletic area to kind of address some volleyball needs if the gymnasium is one 9 of the options then maybe sand volleyball courts could be a second option. 10 11 And then I don’t want to suggest that I’m against the gym nasium idea, but I think one of the 12 concerns that I came across in my mind when I read about it was the notion that we were sort of 13 putting a gymnasium on the edge of our City. A nd not that I’m suggesting it’s not available for 14 all, but I sort of thought are we building a gy mnasium for East Palo Alto? Because we’re 15 essentially putting it adjacen t to the good, what’s the name of that br idge? The Friendsh ip 16 Bridge. And I sort of wondered it’s sort of the safest access is sort of directly over that bridge 17 and I can’t imagine that we’re going to get a lo t of attendance to that gymnasium from the far 18 other side of the City and it sort made me pause to think where we were locating an amenity like 19 that. Ok, that’s it. 20 21 Chair Martinez: Thank you. Commissioner Tanaka. 22 23 Commissioner Tanaka: So I thi nk Commissioner Alcheck actually brings a good point. I was 24 thinking the same thing so he kind of stole my thunder, but I think that the City is going to incur 25 a lot of expense doing this project and so if we do build f acilities there it should be something 26 that the City’s residents can access easily through some sort of pedestrian access or perhaps also 27 by vehicular access. I also like the idea of resident discounts for usage of the golf course. Or the 28 other way of looking at it is higher fees for non-residents. I think that makes a lot of sense in my 29 mind. 30 31 In general if we can get good access to these facilities I do think about whether it makes sense to 32 have a gym here as well. And I think if a gym is here it has to be something that does kind of fit 33 the environment, so. But I think the purpose for the EIR is still worthwhile to consider like was 34 said earlier, the worst case scen ario so I think havin g a gym , having some sort of 35 conference/hotel facility or conference center makes a lot of sens e so should be considered and 36 look at the worst case scenario and then back off on it if it doesn’t make sense. Thanks. 37 38 Chair Martinez: Vice-Chair. 39 40 Vice-Chair Michael: So in the spirit of brainstorming just a few more things to consider. One is, 41 and this is in no particu lar order, I recen tly heard that the First Tee Open Program which i s 42 nationwide is particularly succe ssful in Monterey County. They got an award, The Best First 43 Tee Open Program in the country, and they, I hear d what they’re doing with the kids they have 44 5,000 kids and it’s just really inspirational. So one of the things about getting more people out at 45 the golf course and more kids and develop life long habits and this is very values oriented, 46 integrity, sportsmanship, respect, and it’s a wonderful program and I think if Palo Alto, and I’m 47 not aware that there’s a lot of awareness of th is in Palo Alto or Santa Clara County unlike 48 Monterey County where it’s a big deal. So th is might be something in terms of community 49 19 services and getting people out to try new thin gs and maybe get excited about the sport of golf 1 and the values of playing it and sort of the with the proper attitude. 2 3 One question and I don’t really want an answer now, but I was really surprised recently to see 4 how Shoreline Golf Course had deteriorated over th e last several decades. And I know that they 5 started with great plans and they hired Robert Trent Jones, Junior and built 14 of 18 holes until 6 they ran out of money and but when I went b ack and played m ost recently it was just awful . 7 Absolutely had fallen apart and they had lost, th ey were lowering the rates to nothing because 8 they couldn’t get anybody to pl ay the course. So you m ight just want to m ake sure you 9 understand the lessons learned. W hat happened there? I don’t know where they went off the 10 tracks, but they definitely lost it. So just be careful. 11 12 The comments from Emily Renzel and Trish, I forget your last name, about respect for the 13 purpose and goals and the policies of the Baylands Master Plan I th ink are really important. 14 There are a couple of golf course projects which are sort of extraordinary on a national level. 15 One is The Links at Spanish Bay has a links styl e golf course. And when they got their perm it 16 they had an edict that they had to have envi ronmentally sensitive areas which are kind of a 17 problem because you hit a golf ball and you’re not supposed to go get it. But it’s b eautiful and 18 they make a big, they respect the environm entally sensitive areas. So I wonder if m aybe we 19 could when we do the environm ental review and whatever conditions there are in the permit or 20 whatnot consider really formally respecting the environment maybe much like they did at the 21 Spanish Bay. And it’s a beautiful, beautiful cour se. Attracts a lot of play and it’s ju st a 22 wonderful asset for that region. 23 24 Another course that was rem odeled spectacularly was the Monterey Peninsula Country Club 25 shore course, which is now used in the AT &T Pro A m where I was las t week. But, 26 phenomenally beautiful, unbelievably beautiful. And they had to move a lot of dirt. I mean they 27 basically had a flat lan dscape just going out to the ocean there and it’s incredible. And the 28 habitat for birds and wildlife is just magnificent and it’s just inspirational. So if you’re going to 29 do something nice, think just expand the realm of possibility. You can make it really nice. The 30 Bay and Palo Alto in general is a wonderful loca tion for this. So just go for it and respect the 31 environment. 32 33 The gymnasium topic has been addressed I th ink by everybody. But I wonder and I know that 34 Rinconada Park has got a new m aster plan, Mitchell Park is, if you could consider the access to 35 kids on bikes, on foot, center of town, Rinconada Park, Mitchell Park, maybe the Lawn Bowling 36 Center has lived out its purpose and you can get mo re use out of changing it, repurposing it for a 37 different generation. 38 39 And on the sea leve l rise issue this is bigger than the golf course. So I personally think it’s 40 happening. You know, the useful life of this golf course isn’t as long as we might hope, but it’s 41 such a bigger issue. It’s going to hit the a irport and it’s g oing to hit the Municip al Services 42 Center and I would really recomm end to the Council that as they think that they’re working on 43 infrastructure really start thinking proactively about how this is going to impact not just the golf 44 course, but things which are vita l to the Public Works and other operation and safety and needs 45 of the City. 46 47 Chair Martinez: Very nice. W ould you care to comm ent about the golf course design and the 48 Vice-Chair’s thoughts about that? 49 20 1 Mr. Richardson: Well we’re in agreement with you and Mike Strantz, who did the shore course 2 that you mentioned was a terrific guy and we miss him. He passed away as you know a fe w 3 years ago. And m y artificial brot her Forrest Fezler bu ilt the course. I’ve spent a lot of tim e 4 there. It’s a beautiful, beautiful site. We’re trying to do similar things with the Baylands Golf 5 Facility to take advantage of that B ay and the vi ews and the proximity to the shoreline. I can’t 6 address exactly the sea level rise concerns that you mentioned tonight, but I will say that the 7 JPA’s work resolves a lot of the flooding and the sea level rise will be part of what ICF weighs in 8 on their report. 9 10 I was remiss Chairman Martinez for not saying earlier you had m entioned about the economic 11 part of this project and I was going so fast I didn’t mention that th ere is a dedicated youth 12 component to the project which is south of the driving range along Em barcadero, which is 13 intended to be a First Tee like facility and actually has good potential to be, have some dedicated 14 portion of it or use to th e First Tee. And that is something that we’re working very diligently 15 with the staff to get integrated to the bid documents on this project. We feel it’s very important 16 and that would be a stand-alone designated kids learning center that would be right off the 17 driving range to the left of the driving range. In addition there’s a new short game area which is 18 north of the driving rang e and that could also have a com ponent for bringing new players to the 19 game, introducing people to golf, etcetera. So there’s been a lot of thought put into bringing 20 people in here. 21 22 There’s been discussion of the rates and I’ll not get into tha t, but one thing the Comm issioners 23 that are interested in it m ight want to get from staff woul d be the National Golf Foundation 24 Report because it addresses so m any of the questions that each of you have had about rates and 25 resident rates, comparison to the other courses. One question cam e up that I can just touch on 26 real briefly. None of the other area courses that are competitive to Palo Alto have any Capital 27 Improvement Projects (CIP) that have been funded or appear to be funded in the n ext decade as 28 we can see it now. And the NGF spent a lot of tim e looking at San Jose and S horeline and 29 Poplar Creek and all the competitive facilities. You have an advantage with the population base 30 and being sort of in the heart of the 101 corridor here that they don’t have. And s o I won’t get 31 into the details of Shoreline, but there are nuances of all these facilities and even though we have 32 some issues with this site, high salts and ev erything, we’ve addressed all of those and will 33 continue to do so as we answer all of these questions. 34 35 Chair Martinez: Ok and I want to thank you. First I’m going to close the public hearing and 36 close with only my last sort of sentiments. I know in branding that it’s im portant to really look 37 to be progressive and such, but I’m not that happy with dropping Pa lo Alto off the name. So if 38 there’s time to consider it to be the Palo Alto Baylands Golf Course we should continue with 39 that. And with that we’re going to close this item. Take a 10 minute break. Thank you all very 40 much. 41 42 Mr. Richardson: Thank you. 43 44 Commission Action: Commission provided comments and recommendations to staff 45   Golf Cou 1. Po p co   2. Po ag im   3. Po ad   4. Po   5. Po   6. Po gr   7. P of n Golf Cou 1. P   2. U d   3. M Baylands 1. In   2.  U C rse Comp Pl olicy N‐1: ma rivate open s oncerns, and  olicy N‐10: W gencies to en mpact restora olicy C‐22: De daptability to olicy C‐24: Re olicy C‐26: M olicy C‐27: Se rowing needs rogram C‐1: D f community  ecessary reso rse Bayland reserve the h se only mute egrading.  Maintain and c s Master Pla nstall a new ir Use reclaimed Comprehe lan Policies/ anage existing pace areas in low impact r Work with the  hance riparia ation strategie esign and con o the changing einvest in agin Maintain and e eek opportun s of the reside Develop impr facilities, and ources.  ds Site Asses horizon with lo ed natural col continue to im an Policies/G rrigation syste d water upon  ensive Plan Poli /Goals  g public open n a manner th ecreation nee Santa Clara v an corridors a es.  nstruct new c g needs of th ng facilities to enhance exist ities to devel ents and emp rovement pla d keep these f ssment and D ow and horiz ors. Choose m mprove stand Goals  em.  completion o n and Bayla cies/Goals  space areas  hat meets hab eds.  valley Water  and provide a ommunity fa e community o improve the ting park facil op new parks ployees of Pal ns for the ma facilities viab Design Guid ontal elemen materials and dards of low e of the new bl ands Mast s  and encourag bitat protectio District and o dequate floo cilities to hav y.  eir usefulness ities.  s and recreat lo Alto.  aintenance, re ble community delines Polic nts  d finishes that external glare ending statio ter Plan  ged the mana on goals, pub other relevan d control by t ve flexible fun s and appeara ional facilitie estoration an y assets by in ies/Goals  t will weather e lighting.  on. Continue t agement of o blic safety  t  regional  the use of low nctions to ens ance.   s to meet the nd enhancem nvesting the  r without  to use  of  w  sure  e  ent   potable water on greens and tees as long as possible.    3.  Improve site drainage through regrading. Rebuild and reshape the aged greens,  tees, bunkers  and traps in conjunction with the drainage improvements.    4. Address airport safety issues by raising the fence near the sixth fairway and planting additional  trees.    5.  Install improvements such as repaved cart paths and rest room modifications required by the  Americans with Disabilities Act (ADA).    6. Continue with the implementation of the PaloAlto Municipal Golf Course Master Improvement Plan.    1 Planning and Transportation Commission 1 Verbatim Minutes 2 June 26, 2013 3 4 EXCERPT 5 6 7 1875 Embarcadero Road [13PLN-00103] – Request by the City of Palo Alto Public Works 8 Department on behalf of the City of Palo Alto Community Services Division for Site and Design Review of 9 the Palo Alto Municipal Golf Course reconfiguration project. The meeting will serve as a public hearing 10 for the review of the Draft Environmental Impact Report for the Palo Alto Municipal Golf Course 11 Reconfiguration and Baylands Athletic Center Expansion Project. Zone District: PF(D). 12 13 Chair Martinez: We have one item on tonight’s agenda and this is a review of site and design of the Palo 14 Alto Golf Course redesign and to review and comment on the Draft Environmental Impact Report (DEIR). 15 This is a quasi-judicial item as our City Attorney has reminded us so at this point we, Commissioners if 16 there’s any disclosure of ex-parte communications with members of the public or those involved in this 17 project? Commissioner Keller. 18 19 Commissioner Keller: Yeah, I got an e-mail on the unrelated matter that mentioned a complaint about all 20 the trees being cut down on this project. So that part of the e-mail was relevant to this project. 21 22 Chair Martinez: Anyone else? Ok and with that let me give you a little preview of this. There are two 23 parts to our review tonight. One is as I mentioned site and design review. The second is comment on 24 the Draft Environmental Impact Report. Normally our City Attorney reminds us the review of the DEIR 25 should come first. I’ve recommended that since it’s such a lengthy report that we divide up our review 26 into at least two sessions and asked that we continue the comment period until at least July 31st if that’s 27 possible so that we can comment on some of the most significant aspects of the Draft EIR tonight, 28 perhaps have staff come back with some responses and complete the review at our subsequent meeting, 29 which I think the next appropriate time was July 31st. So with that background we would review, staff is 30 hoping that we complete site and design review tonight so that our recommendations can go forward to 31 the review with the Architectural Review Board (ARB). So if I didn’t quite get that right you can during 32 your report you can correct me on that. So if that’s clear enough let’s open the public hearing and begin 33 with a staff report. 34 35 Joe Teresi, Senior Engineer – Public Works: Good evening, I’m Joe Teresi. I’m Senior Engineer with the 36 Public Works Department and I’m here with Rob De Geus from Community Services here at the table this 37 evening to lead the presentation on the Palo Alto Municipal Golf Course Reconfiguration Project and 38 Baylands Athletic Center Expansion Project. As the Chair mentioned I just wanted to clarify that we’re 39 asking for two specific and slightly different actions this evening. The first is that you recommend to the 40 City Council the approval of our site and design application for the golf course portion of the project. And 41 secondly and separately is to conduct a public hearing and provide comment on the Draft Environmental 42 Impact Report that covers both the golf course and the Athletic Center expansion. So on the screen here 43 I’m showing the golf course project and this is the subject of the site and design application. This is the 44 modification of the golf course. The Environmental Impact Report (EIR) also includes the separate but 45 related future project for recreational facilities on the site at the Baylands Athletic Field, the Athletic 46 Center. And so what’s been analyzed is the most intensive potential use of that expansion area for up to 47 five playing fields and a gymnasium located across Geng Road from the golf course site. 48 49 This evening the presentations are going to be made by two of our consultant team. First of all we’ll 50 start off with a presentation by Forrest Richardson our Golf Course Architect with Forrest Richardson & 51 Associates and that will be followed up with a presentation about the environmental process by Shilpa 52 Trisal from ICF International. Before we get to that however, I believe that the Senior Assistant City 53 Attorney Cara Silver would like to make some comments. 54 55 2 Cara Silver, Senior Assistant City Attorney: Thank you Joe. Cara Silver, Senior Assistant City Attorney. 1 And since this is the first full blown EIR that this Commission as constituted has heard I did want to 2 provide some more detailed background on California Environmental Quality Act (CEQA) and the EIR 3 process than we normally would in a presentation like this. And again, I’m here for any follow up 4 questions, but I will provide some level of detail right now. 5 6 So the overall purpose of CEQA is very important to keep in mind when you are reviewing the EIR. CEQA 7 is a statute that is with promulgated to provide decision makers with information before they made, make 8 a decision. And so the EIR is really for informational purposes only. It does not have a substantive 9 requirement. It is something that is provided to decision makers and the public to let people know what 10 the environmental impacts of a project are so that they have that information when they act. The EIR 11 should of course disclose the reasoning behind the very detailed technical studies. These technical 12 studies are generally contained in appendices, but the EIR document itself will contain a summary of the 13 important impacts, the analysis that was used, the methodology so that a layperson can understand 14 these very technical studies. The CEQA law actually requires that EIR’s be only 200 pages and 15 unfortunately nobody complies with that requirement and over the years we have seen EIR’s grow to 16 multiple bound documents. This EIR though is a very nice, compact, well written EIR written by a very 17 well respected consultant and the information is very easy to follow. 18 19 What we’re looking at in the EIR process is the physical impacts on the environment. And what CEQA 20 does is look at the projects impacts on the environment. It does not look at the environmental impacts 21 on the project. And that’s an important distinction to keep in mind. So that also determines what types 22 of decisions go through environmental review process. So for instance an interior remodel of a building 23 does not go through environmental review process because it doesn’t typically have impacts on the 24 overall environment. If you are changing the exterior of the building and demolishing the building, 25 constructing a new building that has the potential of having an impact on the environment. 26 27 What an EIR does is look at these impacts through either a qualitative or a quantitative basis. There are 28 a series of different thresholds that are used and the lead agency in this case of course, the City of Palo 29 Alto, has the ability to set its own thresholds and has a fair amount of discretion on what thresholds can 30 be used. It’s common, the State publishes a series of thresholds, it’s common to use those thresholds. 31 Palo Alto has its own thresholds that it has used in other EIR’s and you will see this EIR adopts many of 32 the thresholds that have been used in prior EIR’s. You will find that in some areas as the, as things 33 change those thresholds are also changed and updated. In this particular EIR as we will discuss in more 34 detail later the greenhouse gas emission section utilizes some new analysis that is continuing to evolve 35 and this is one of the first EIR’s that actually looks at climate adaptation. So it would be good to spend a 36 little bit more time with that particular chapter. It is very interesting to see that type of evolution in our 37 EIR analysis. 38 39 The primary components of an EIR are first of all what you want to do is define the project objectives 40 and that’s very important because as you go on in the process you look at other mitigations and other 41 alternatives to the project you always of course have to keep in mind the project objectives. Then the 42 EIR also will of course look at the various impact categories and that really is the meat of the EIR, the 43 impact analysis. The EIR is required to look at both the project based impacts, what we refer to as the 44 footprint impacts and also it is required to look at cumulative impacts. And we generally see cumulative 45 impacts in the area of traffic and greenhouse gas emissions. You sometimes see them in other areas for 46 instance, in the Stanford Medical Center EIR we saw a cumulative impact in the historic resources area, 47 which was a result of having some, the Edward Durell stone building demolished and there are only a few 48 of those buildings it left in Palo Alto and there were a couple of others that were being demolished 49 around the same time and so we look at the cumulative impact of losing a series of Edward Durell stone 50 buildings. You typically do not see cumulative impacts in aesthetics though. 51 52 Another key aspect of course of an EIR is the mitigation measures. Those are really important and it’s 53 also important to note that mitigation measures must be, must look at them to of course avoid an 54 impact, but also to reduce an impact. And so even if a mitigation measure does not completely eliminate 55 3 the impact, but it could reduce it to some extent the agency is required to impose that mitigation 1 measure. 2 3 Then of course the EIR looks at alternatives and generally alternatives come into play when a mitigation 4 does not completely mitigate an impact and that’s when you look at the alternatives. To the extent the 5 EIR does have any impacts that are not mitigated either through mitigation or through alternatives the 6 lead agency is required to adopt a statement of overriding considerations. And what that does is it looks 7 at some of the other benefits of the project that my justify moving forward with the project in light of the 8 residual impacts. 9 10 So the consultant will focus on some of the impact categories themselves. I did want to highlight for you 11 as you mentioned the greenhouse gas section. There are two types of analyses done for greenhouse gas 12 emissions. One is the project contribution to greenhouse gas emissions in general and then the second is 13 climate adaptation, which is the impact on the project of climate change. And we are starting to get 14 some case law in this area. It’s a very new evolving field. There was a recent case in the Southern 15 California area in relation to the Playa Vista build out. And so we do have a recent court ruling that says 16 that climate adaptation is not required under CEQA, but that does not mean that an agency is not 17 precluded from studying those impacts. Given the fact that the golf course is of course subject to 18 flooding and in the flood plain and so close to the bay and I believe in the scoping meeting climate 19 adaptation was brought up as a potential issue. This EIR does look at that issue in a qualitative sense 20 and I believe it’s the first EIR in the City that does that. 21 22 The EIR also looks at a more traditional analysis of greenhouse gas emissions and uses a standard that 23 has been promulgated by the Bay Area Air Quality Management District, a numeric standard of 24 greenhouse gas emissions of 1,100 metric tons per year of Carbon Dioxide (CO2) emissions for project 25 operations for non-stationary source projects. And under that threshold this EIR does find an impact 26 primarily relating to the playing fields and the additional car trips that will be generated as a result of the 27 playing fields and the pick-ups and drop offs and that type of thing. So that’s currently the EIR has found 28 that that impact cannot be mitigated. So I think that staff is going to take another look at that issue. It, 29 we’re going to internally explore some additional mitigations and that is certainly an area that we would 30 like some input from this Commission on as to whether there are some other mitigations or whether an 31 alternative or whether a statement of overriding considerations would be needed. So with that I will turn 32 it back to Joe. 33 34 Mr. Teresi: Thank you Cara. At this point I’d like to invite our Golf Course Architect, Forrest Richardson, 35 up to the podium to make the presentation, make the first part of the presentation. 36 37 Forrest Richardson, Golf Course Architect – Forrest Richardson & Associates: Thank you for having me 38 back Mr. Commissioners, Commissioners, and Mr. Chairman. It’s been four months. Before I go through 39 some of the slides I thought I’d just recap the notes that we took as it related to the golf course design 40 when we were here four months ago. Really had to do with seven areas that have been addressed in the 41 design and of course I’ll answer any questions about them as you have additional questions. And those 42 areas were drainage; you wanted to know that we had done everything possible to rectify the poor 43 drainage that exists on the site and we have as far as best practices that we’re able to do with the site. 44 You asked about signage and we still have the conceptual entry sign that’s on Embarcadero to show you. 45 You wanted to know about the future wetlands and how those would be interpreted by the corps in the 46 areas that we’re creating on the golf course and I think we have some good understanding of that from 47 ICF, the environmental consultants, early meetings with the corps. They seemed very pleased about the 48 approach that we’ve taken to the golf course so it really would be no change in the wetlands from what 49 you have now. There’s delineated wetlands now and there could be in the future, but those have been 50 integrated into the design. 51 52 Next you asked about the water use and reclamation and I think we’ve answered that as well as we can. 53 We’re reducing potable water use, reducing the overall water use, and changing the ratio of more 54 reclaimed water to be used with the turf choices and the smaller footprint of turf from what it is today. 55 The next area was playability. I think there were comments on making sure that this golf course was 56 4 fun, challenging for better players, but fun for beginners and bring people into the game. And then there 1 was some comments about market competitiveness and again I would refer I think Mr. De Geus could 2 answer any questions about that, but there was a very extensive study that was done prior to Council’s 3 decision last summer that really addressed the issues of competitiveness and that’s where the design 4 came from was trying to create something for Palo Alto that would be market competitive compared to 5 the other regional golf courses. 6 7 Lastly there were some comments about the name. And I think in the four months since coming before 8 you there’s been at least one other Golf Advisory Commission meeting in which they’ve really been 9 enthused and have adopted the idea of the Baylands Golf Links at Palo Alto as being the new branding 10 and name for the facility. So keeping the name Palo Alto, but creating this new excitement to the name 11 Baylands Golf Links at Palo Alto. 12 13 So with that I’ll quickly go through these slides. I think you’ve seen most of them, but just to go through 14 them again. The existing golf course is 171 acres. The actual area of the golf project is 143. It doesn’t 15 include the parking, the clubhouse, and the maintenance facility. This is a new slide that was put in to 16 really address the questions that have come up about the stockpiling of offsite import material to the golf 17 course and the yellow area represents the area that is designated for importation of soils for the golf 18 course and then the red colored area is where the Joint Powers Authority’s (JPA) soils would be 19 stockpiled. The reason to keep those separate is there’re two different soil specifications. The JPA needs 20 a different type of soil for the levy construction. The golf course needs a different type of soil to have a 21 growth medium for the turf. The temporary reconfiguration of the golf course during the stockpiling 22 shown in yellow, which really creates an 18 hole course that’s a little shorter in yardage, but still offers 23 the public a place to play and experience the golf course and as you can see it really uses most of the 24 existing golf holes with the exception of the ones that are within the stockpile area. 25 26 These are the project goals real quickly to go through these: reconfigure the golf course of course to 27 accommodate the JPA’s flood control project, reinforce a sense of place to the completed facility, 28 celebrate the Baylands environment through the new design, restore the golf asset as a point of pride to 29 the community, conserve resources by transforming the fully turfed parkland course to one that’s more 30 naturalized with less turf and fits more to the Baylands Master Plan, promote Palo Alto by establishing a 31 must play golf experience in the region, which addresses the market competitiveness that I talked about. 32 The project hallmarks are the same, nothing’s changed here: replacing all of the golf features, preserving 33 the existing drainage system that was invested in in 1998, replacing the irrigation system with high-34 density polyethylene (HDPE) noncorrosive fittings, reducing the turf by 40 acres from existing, using a 35 salt tolerant turf grass the paspalum variety, which can withstand more of the reclaimed water, adding 36 the 55 acres of naturalized areas, new cart trails, the new restroom building, new practice putting greens, 37 the new youth golf area, the expanded range tee, and the new Baylands image, which I mentioned. 38 39 This is the July 2012 Plan G as it’s referred to that was decided on by your City Council. And this really 40 set all of the design decisions that we’ve been making in motion; so all of the importation of top soil of 41 the conversion of areas to the Baylands themed native areas, the configuration of holes all pretty much 42 fit to this plan back from last summer. This again is just showing the acreage that has been shifted 43 around if you will to make room for the expanded Baylands Athletic Facility. At the top there you see at 44 the right 7.8 acres was what is being required by the JPA’s project that comes out of the golf course. 45 10.26 acres is the orange area, which is the future recreation use. And then the yellow is just shown for 46 informational purposes. That’s the buffer mounds that provide the physical and sound buffer between 47 the golf course and what will potentially be built on the recreation site, which was an important part of 48 the public process and some of the workshops that we had. 49 50 This is the current plan that just shows uses of areas. The green is the turf area that’s managed turf. 51 The straw colored, buff colored is the native areas and then the grey/blue color are what we call the 52 Baylands areas, which are native areas, but they’re salt tolerant plantings that are depressed into the 53 landscape generally as opposed to being mounded. So really this plan would kind of show you the grey 54 areas are what’s low into the landscape and mimics the original estuary flow across the site and the buff 55 5 color is the higher areas that represent the dunes and the separation between golf holes and then the 1 green is the actual playable area of the golf holes. 2 3 These are the tree palates. On the left are the two trees that we identified as being useful where we 4 could preserve them. And that was the eucalyptus that were in good health, that were sturdy and not in 5 poor health or in danger of falling over and also the stone pine, which does very well in this soil type. 6 And then we have the proposed tree palate which is the myrtles, coffee berry, the oak, which would be 7 on the buffer mound area not on the rest of the golf course, and then the lupine. This is the proposed 8 native grass palate. The left portion represents the areas that are raised with imported soils and the 9 right are the salt tolerant plants and grasses that would form what we call the Baylands or the lower 10 areas. 11 12 These are the landscape concept pictures on the left showing the golf course as it’s envisioned in its new 13 configuration. On the middle would be the low areas and at hole 12 we have the wooden bulkhead, 14 which boarders the 12th green and forms really what amounts to an island of the 12th green even though 15 it’s not surrounded by water it’s surrounded by native area. And then on the right is the cart path and 16 the Baylands, I’m sorry, the buffer mounds and the cart paths. 17 18 These are some of the before and after pictures. I can’t remember if we showed these to you before, 19 but this is looking at what would be the proposed 5th hole, which faces toward the east out on to the bay 20 with the elevated tees looking out across the airport. And then the next one is the 12th hole, the one I 21 mentioned with the bulkhead around it, which is looking north on the far northwest corner of the golf 22 course looking out toward the San Francisquito Creek bend as it makes its bend around the top of the 23 golf course and heads east. 24 25 Irrigation technology is an integral part of the plan. Soil sensors, rain, and weather gauges and there’s 26 been so many exciting things going on in irrigation it’s like software development and computers and cell 27 phone technology. It’s just an amazing what we can do now with telemetry and being able to control the 28 water that we deliver to the golf course. So these are all part of the new system that has been designed. 29 30 The restroom building, which is located in the northwest corner, currently it’s on the east and toward the 31 north over by the airport. The building is really unchanged since you’ve seen it. One little addition is a 32 storage room on the back, which was requested by your City staff and Park staff. This is the signage 33 that we showed you, the proposed signage for the, to replace the existing sign that’s on the Embarcadero 34 street front and then some of the on course furnishings and signs that are being proposed for the, out on 35 the golf course within the interior of the course. 36 37 One thing that you had talked about was access and involvement of youth and so I put this slide in here 38 just to show you the youth golf component that is along Embarcadero. That’s your existing driving range 39 in the large area and then the clubhouse you can see up there, existing clubhouse, which is not part of 40 the project. The new practice greens and then between the range and Embarcadero is this three hole 41 golf area that would be fenced so that it could be, you could keep the classes in one area just like a 42 playground for safety and they would have access to this at certain times of the week and during the 43 summer really for the purpose of bringing new players into the game and training kids to get involved in 44 golf. 45 46 These are the technical sheets that, for your submittal, for site and design review. This is the site plan. 47 The tree management plan. The planting plan showing new trees and different turf types and where 48 those different turf types fall, and then lastly the grading plan which obviously relates to everything else 49 and fits to the tree plan and all of the other plans. That really concludes my portion and I’m obviously 50 here to answer questions or follow up as needed. 51 52 Chair Martinez: Ok, thank you. 53 54 Mr. Teresi: Thank you Forrest and now we’re going to have (interrupted) 55 56 6 Chair Martinez: Can we, since we’re going to separate site and design from EIR can we see if there’s any 1 questions for Forrest from Commissioners and then we can go on? Commissioners at this point you want 2 to ask any questions of the golf course design? Commissioner Keller, yes. 3 4 Commissioner Keller: Yes, so I’m wondering about what happens when somebody hits the ball off course 5 and they have to go into the rough and get that ball. So is there an issue in terms of the maintenance of 6 the rough area and damage to it from? 7 8 Mr. Richardson: What we’ve done, Dr. Froke, Jeff Froke who has been the biological resource consultant 9 to us on this project he’s working down in Pebble Beach now on the redevelopment of Poppy Hills Golf 10 Course and he’s quite well known throughout California. He has put together this list of plants so that we 11 and the planting rates are such that where we have areas that might be in play we have a little less rate 12 of planting then we do off in the deeper portions. But what we’ve tried to do and the intent is to develop 13 a native area that is, requires little to no water once it’s established and little to no maintenance. But 14 there obviously are things that have to be done to it over time. The good news is it’s not intensive 15 managed turf. So the answer to the question is it’s sort of what we call in golf the rub of the green. If 16 you hit your ball in there you go in and look for it and hopefully those thinner areas are where it’s easy to 17 find and execute a shot and play it. 18 19 Commissioner Keller: Thank you. 20 21 Chair Martinez: Vice-Chair Michael. 22 23 Vice-Chair Michael: For some reason Chair Martinez seems to think that I’m a tremendous golf enthusiast, 24 which at different times in my life has definitely been true. So at the moment there’s a pond which is 25 really attractive to geese. What’s going to happen with the migratory water fowl in the redesigns? 26 27 Mr. Richardson: Well the pond is on the future Baylands Athletic Field expansion area and not a part of 28 the future golf course area. As far as what happens to it, my understanding is it gets slowly drained. It’s 29 not a naturally occurring pond as you may know, it’s filled with the pump system through the golf course 30 and I don’t know if Matthew if you want to speak to that or Shilpa if you have any comments about 31 actually what happens to it. I think it’s just a process of draining it at the appropriate time of the year 32 and the habitat they find other places to go. And hopefully the Canadian Geese go really far away. We 33 can get them to go far away. 34 35 Vice-Chair Michael: Maybe back to Canada. 36 37 Mr. Richardson: Maybe. Yes, Edmonton. 38 39 Vice-Chair Michael: Or asylum in the Ecuador Consulate or something. So I think for people taking up the 40 game of golf or people who are long time enthusiasts this is pretty exciting. I just want to say that I had 41 a chance last year to take a trip to Alabama and play an unusual course called Farmlink, which is the only 42 research and development golf course in the country and it’s on a mere 3,500 acres. And I’m astounded 43 at what you’re proposing to do in 170 acres of Palo Alto. It’s really quite impressive to have this quality 44 of design. 45 46 I also had a couple years ago a trip to another great course, which is on the shores of Lake Michigan, 47 Arcadia Bluffs, which is sort of a top 20 course consistently. And what surprised me there was that they 48 had basically removed all the trees as far as I can remember and they really made it very naturalistic with 49 just the configuration of the dunes sloping down towards the lower elevation of the lake, which made for 50 a surprisingly extraordinary pleasing aesthetic golf experience. It was one of the best days on a golf 51 course I’ve ever had aesthetically. And so I was wondering with the, particularly with the rebranding of 52 the golf course as the Baylands Golf Links are you actually thinking of really promoting a real Scottish 53 links style experience in terms of maybe drier fairways with more potential roll to the ball and more ups 54 and downs? What’s the plan for that? Or is it going to be more like say Spanish Bay where it’s a links, 55 but it’s well irrigated and (interrupted) 56 7 1 Mr. Richardson: Well, I think the good news is the new irrigation system and what we’ve done with the 2 drainage will allow the City to make that decision. It’s difficult sometimes in my role as you can imagine 3 to, you know, we say we should keep it a little drier and make it fast and firm like you’re talking about, 4 but obviously that’s not in my control, it’s in the City’s control. The good news is the City has the ability 5 and flexibility to do that if they want to. And I would encourage it. I think what we find and what the 6 United States Golf Association (USGA) finds is when courses are fast and firm the less skilled golfer, the 7 average golfer who doesn’t play that well benefits because the ball rolls and rolls and rolls and they’re 8 very thrilled. The better player who can hit the ball a long way gets into more trouble because typically, 9 giving you a little secret here, we tend to funnel things and narrow them out there a little further and 10 make it more challenging. So you saw some of that if you watched the US Open recently where on a 11 relatively short course, by the way the exact same length as Baylands Golf Links will be, 6,800 yards, the 12 better player was the one hit the ball a long way was getting into perhaps more trouble. So I would 13 encourage that and I think that the Scottish links concept will play very, very well in this region of the 14 Bay Area. There’s nothing else like that here. There have been some attempts up toward Oakland 15 metropolitan, but I think it makes perfect sense on the Baylands site to do a links style golf course. 16 17 Vice-Chair Michael: Ok, well that’s really exciting to hear. And the other thing that’s exciting to me is the, 18 sort of the golf learning area, the bringing youth golfers into it and I think the possibility of encouraging 19 whatever organizations like the First Tee Program or whatnot to really affiliate with Palo Alto and the 20 Baylands Golf Links to bring more golfers into the game and really have a love and appreciation of not 21 just the physical environment, but the values that make golf great. You know the integrity and they have 22 I can’t remember all the values that they promote, but it’s really a part of growing up to be good people 23 and that’s a great quality of golf and I think your project will help the City move in that direction. 24 25 Rob De Geus, Division Manager Recreation & Golf - Community Services Division: I just, good evening 26 Commissioners, Rob De Geus, Community Services Department. I just wanted to chime in on the youth 27 component. We have the First Tee at the golf course already four days a week and we also have as part 28 of our middle school athletic program, which the City runs for the three middle schools we’ve added golf 29 to that program so they’re out there as well and we provide the course for the high school golfers. And 30 so it’s one of the markets and one of the demographics that’s actually growing and we want to grow it 31 even further with the new course. And we’re partnering with the First Tee and they’ve approached us 32 and want to help us pay for some of these youth development areas on the course, which is very 33 appreciated. 34 35 Chair Martinez: Great, thank you. Commissioner King. 36 37 Commissioner King: Thank you. So I had one question, apologies if I missed that somewhere in the 38 packet, but one of the bullet items is “turf area reduction of 40 percent from existing, water reduction by 39 30 to 40 percent.” So can you explain why with all this, you spoke of the high tech irrigation system all 40 the sensors, why wouldn’t there be at least commensurate reduction in irrigation relative to reduction in 41 land? 42 43 Mr. Richardson: It’s a difficult formula to put together. That was a conservative number that was done 44 about a year ago when the National Golf Foundation was doing their study, but we do have a slight 45 increase in the size of greens, the putting surfaces on the golf course and those require potable water. 46 So there are different uses. We tried to make a general statement 30 to 40 percent is what our goal is 47 and with the idea to maybe not water as much and make it a faster, firmer course if that were 48 implemented and other, the soil sensing technology proves we don’t ever know exactly what it’s going to 49 do because we can’t contemplate what the soil is across 140 acres. You know we don’t know what it is 50 exactly, but it is entirely possible, probably reasonable that we approach the 40 percent. And in addition 51 to that we know we have leaking irrigation system now. That’s not something we can quantify. We 52 really don’t know by the water meter how much we’re putting on the course versus how much is leaking. 53 So we’re making a lot of assumptions on the existing system to get to that 30 to 40 percent. 54 55 Commissioner King: I see. And why, the style of course is why the greens are larger (interrupted) 56 8 1 Mr. Richardson: Well the greens shrink over time. Don’t listen to this joke, but as the maintenance just, 2 you know as the mowers just kind of come in a little bit and the greens get smaller and so over the last 3 20, 30, 40 years some of the greens have gotten smaller and for a public facility, especially a links facility 4 with wind influences we thought the greens needed to be a little bit bigger. They’re not very, I mean 5 we’re only talking 10, 15 percent larger than the existing greens, but it fits the style of the course. 6 7 Commissioner King: And then my other question following on Commissioner Keller’s question about the 8 native plants in the rough; so then it would seem since they are slow growing that there’s the potential 9 that if there is any damage to them they could be maintenance intensive because they grow so slowly. 10 11 Mr. Richardson: Well they’re self-propagating so those areas sort of take care of themselves. They 12 rejuvenate and what we find when we plant native areas to courses is we do our best to figure out what 13 won’t impact pace of play and make the course too difficult. Over time little adjustments get made to 14 them and with so many people walking this golf course you’ll also get little pathways through them and 15 there might be some adjustments, but for the most part the idea is they take care of themselves and the 16 biggest maintenance impact that they seem to have is when we have to go in and mow them down 17 because they’re getting too much water. We’ve tried to avoid that in the design. We think we’ve been 18 successful. So in other words we’re picking up and containing our water before it gets to these areas and 19 putting it in the drainage system or reusing it. What happens though if you have a low area off the side 20 of a golf hole and it’s getting continual irrigation water running off then these areas can overgrow, which 21 we try not to let happen. 22 23 Commissioner King: I see. And then what you just mentioned that with the high numbers of people 24 walking is that just a traditional number with the existing course or this style of course will result in 25 (interrupted) 26 27 Mr. Richardson: Well hopefully it will encourage more walking, but I think you do a fair amount of 28 walking rounds now. And the trend in the industry is we see more and more of a new generation of 29 golfers wanting to walk, which is the benefit of having a public play golf course is sometimes you see in 30 private facilities they mandate the use of golf carts, which is a revenue generator. But in a public course 31 I mean we like to see people out there walking and I think Palo Alto currently has a very healthy 32 percentage. I want to say it’s 35, 40 percent of walkers. 33 34 Commissioner King: Thank you. 35 36 Chair Martinez: Commissioner Alcheck. 37 38 Commissioner Alcheck: Ok, I have a couple of questions for staff. Assuming we recommend that the City 39 Council approve this project based on the findings and conditions what does the, what is the impact of 40 the fact that we’re not, that the project doesn’t really develop the other area, the recreational areas have 41 on a future project on that area? Would they need to go through another EIR process or? 42 43 Aaron Aknin, Assistant Director – Planning: Thank you Commissioner Alcheck. They would need to go 44 through a separate, so if the Environmental Impact Report covers for instance the playing fields and 45 gymnasium they may not have to go through a separate environmental review process. But what they 46 would have to go through is a separate site and design application process, which will go in front of the 47 Planning Commission, go in front of the ARB, and ultimately go to the City Council and during that 48 process we would have to make a finding that it is consistent with the environmental review that was 49 covered within this Environmental Impact Report. 50 51 Commissioner Alcheck: Is there any reason to think that that wouldn’t, is there anything that we should 52 be covering now to make that process, that future potential process better or in any sense not worse? Is 53 there any considerations we should be having now about those areas that are not really? 54 55 9 Mr. Aknin: Rob can correct me if I’m wrong, but my understanding is we’re looking at a worst case 1 scenario in terms of traffic generation associated with the playing fields and the gymnasium so I think 2 we’re covering our bases there in terms of looking at what’s the maximum potential for playing fields in 3 that area and just based on the area that’s dedicated to that. 4 5 Mr. De Geus: I would agree. So we’re looking at the sort of highest, most intensive use and included 6 that scenario in the EIR. 7 8 Commissioner Alcheck: Ok. I have a, there’s another question I didn’t get to ask before we met today. 9 So this may be sort of irrelevant, but there was a recent 60 Minutes episode about the use of coal ash as 10 a material for soil fill and in one particular case on a golf course. So they used what is a byproduct of 11 coal production, coal ash in what is considered a recyclable way. I guess this is sort of an 12 environmentally friendly practice, but now it’s sort of controversial and I’m just curious if again, it’s sort 13 of off the topic, but do we anticipate the introduction in this design of a lot of additional soil fill or 14 alternative fill on the site? Does anybody know what I’m even talking about? 15 16 Mr. Richardson: I think you’re talking about the golf course down in South Carolina or West Virginia that 17 was built on top of an ash reclamation project. 18 19 Commissioner Alcheck: Yeah. 20 21 Mr. Richardson: And now I think my understanding of that is the Environmental Protection Agency (EPA) 22 and everyone signed off on it so many years ago and now they’re kind of thinking that maybe they 23 shouldn’t have done that? I think that’s the way (interrupted) 24 25 Commissioner Alcheck: I don’t mean (interrupted) 26 27 Mr. Richardson: … to best summarize that project. 28 29 Commissioner Alcheck: I just watched it on Sunday and then the notion that (interrupted) 30 31 Mr. Richardson: What we are doing on this project the City Council approved plan that you saw, Plan G, I 32 think the Council was very strong in suggesting that staff look at bringing in imported soils from projects 33 around the area, Stanford and whatever and that’s what we did. So the current number is 360,000 34 yards, cubic yards of material coming to the golf course and then another 100 and something coming to 35 the JPA’s project. And all of that material has a very strict specification for contaminants and things that 36 we wouldn’t want and Mr. Teresi can answer questions. That’s currently been awarded to a contractor to 37 start that process in the next few weeks actually. 38 39 Commissioner Alcheck: Alright. 40 41 Mr. Richardson: But it’s not ash from South Carolina. 42 43 Commissioner Alcheck: It could be from anywhere. 44 45 Chair Martinez: Commissioner Panelli. 46 47 Commissioner Panelli: Thank you Mr. Chair. When this came to us the first time around one of the 48 questions I had was whether it would be possible to keep the practice range open during all the 49 reconfiguration efforts. And the response I think I got was “We don’t know yet.” Do you know yet? 50 51 Mr. Richardson: Yeah. The intention is to keep it open and the specification will be that it has to remain 52 open except for the small window to expand the netting and rebuild the tee surface. 53 54 Commissioner Panelli: Ah. 55 56 10 Mr. Richardson: So we don’t know exactly right now, but we’re guessing it will probably be closed for no 1 more than two weeks. That’s our hope. 2 3 Commissioner Panelli: Ok. 4 5 Mr. Richardson: Yeah. 6 7 Commissioner Panelli: But not the 14 months or whatever it was for the length of the project? 8 9 Mr. De Geus: That’s correct. And the restaurant will remain open and the pro shop and as far as the 10 sequencing for the practice facility we’re also taking a look at that to see, to maximize that space as 11 much as possible in its existing condition while we’re doing the primary course. 12 13 Commissioner Panelli: And then I really like the before and after pictures. It really gives a great visual 14 sense of what’s going on. Is there any chance that that was done for the hole that boarders where that 15 tall steep berm is going to be between the athletic fields and the golf course? I’d really like to see what, 16 I mean to me that’s one of the bigger sort of elements of this project. I understand why it needs to be 17 done and why it’s good that it should be done, but it would be helpful to see that. 18 19 Mr. Richardson: That hole was not included in those because I think that that direction to look at buffer 20 mounding came after the before and after was done. It would be a good idea. I think some of the 21 pictures that are in your booklet that you have that show the concept of the buffer mounding might be 22 somewhat of a placeholder for what you’re asking for. 23 24 Commissioner Panelli: Yeah, it’s not the same as these. I really like these in the presentation. So 25 anyway if it could get squeezed in that’s great, but don’t go out of your way to do it. Thanks. 26 27 Chair Martinez: Commissioner Keller, follow up? 28 29 Commissioner Keller: Yes, I’m following up to the question that Commissioner Alcheck asked and what I 30 understand is that there has been and in some cases continues to be an interest in terms of green 31 building of using what is called fly ash as opposed to coal ash. However, my understanding and 32 somebody who knows more about this than I might want to wish to chime in is that more recently people 33 are concerned about fly ash because of the heavy metal in it. So I think that’s six in one and half a 34 dozen in another, but they’ve determined that the disintegration, what I understand is they’ve 35 determined the disintegration of concrete does happen over time will release the heavy metals. It wasn’t 36 a way to dispose of it as they thought it was. So I’m not sure where we stand on that, but I would be 37 quite concerned about the use of fly ash in the concrete and I’m hoping that if we do that that we do so 38 very cautiously. Thank you. 39 40 Chair Martinez: Ok, before you go I understand the Vice-Chair’s exuberance for the golf course design. 41 I’m trying to understand. Ok. But in the staff report it says that the mounding or the elevation changes 42 varies from 3 feet to 35 feet on the golf course. Is that correct? 43 44 Mr. Richardson: The fill areas except for those low areas that are on the plan, the fill areas are all a 45 minimum of about 2 to 3 feet and then only the buffer mound areas get up into the 20’s and I think the 46 peak of one of them might be at 32; now that’s 32 above sea level, not 32 above the grade that’s out 47 there. So the grade in that area is about 8 to 10 so 32 minus 10, so about 20 feet give or take above the 48 existing grade. And that’s just the area that is on the, that separates the future recreation area from the 49 10th hole. 50 51 Chair Martinez: So the golf course itself you’re saying only varies two to three feet? 52 53 Mr. Richardson: No the golf course has other mounding on it I’m sorry, but nothing as strong or as large 54 as the ones that are the buffer mounds. There are some that get up into the 12, 14, 15 feet. So what 55 we’ve done is we’ve taken the existing drainage system, the trees we wanted to preserve, the playability 56 11 and the routing of the golf course and all of these other factors and we created the grading plan to fit 1 within those constraints and to provide the undulation throughout the entire golf course. And then they 2 sort of geomorph down into those low areas so that it looks like it was a natural area rather than 3 something that’s just created by machine. So the idea is it has a very natural look when it’s finished. 4 5 Chair Martinez: Ok, so that’s getting at the point of my question. The natural areas are supposed to echo 6 the look of the Baylands? Is that correct? 7 8 Mr. Richardson: I think they’re supposed to echo the look of the Baylands as if they were the tidal dunes 9 area that would be adjacent to a waterway such as the bay itself. So they would be the immediate 10 shoreline that you would expect in a windswept environment like this. And the buffer mounds are further 11 away from the bay than the other areas. You know those are more inland. 12 13 Chair Martinez: Ok. I got it. When I look at a golf course to me they look as kind of a lonely kind of 14 place. You know just a few people out there, but I was impressed with Pebble Beach that there are 15 actually places for non-golfers to walk and to observe and to see this beauty that you’re creating. Is it 16 going to be anything like that for the public? 17 18 Mr. Richardson: There, on the plans that we did when the Council looked at this back in July there was a 19 conceptual plan put together for that future recreation site that showed a public trail going from the 20 Baylands Athletic Center down to the clubhouse and that went through the new player development area 21 and I would still support that. I think that would be a terrific connection between the restaurant and the 22 restrooms and the airport and the Baylands Athletic Center. I think it would be a great connection. 23 24 As far as the golf course itself with the smaller footprint we have we really don’t have the flexibility to 25 have any public trails through the golf course. That’s the effect of going from 170 acres down to 143, 26 but what we do have, which I think will be very good is the levy trail that the JPA is improving will have a 27 tremendous connection to the golf course. I think this goes way back to the first work we did with the 28 JPA and the staff where the idea was to create not so much when you’re on the levy trail looking out at a 29 park that’s wall to wall turf and big tall trees that obstruct your view, but to look out at something that 30 makes sense in the foreground before you look out to the territorial view, to the bay itself and the 31 mountains in the distance. So that was the heart of the planning concept for what we’ve done on the 32 golf course is to try to create that terrain connection between the water and the public trail that goes 33 around the outside. And that really came from the JPA. That was a very, very, very important thing to 34 them was to make that connection and to have it be more like the natural creek area rather than some 35 park that happens to be next to the trail. 36 37 Chair Martinez: Ok. And then finally the trees. We’re losing 500 trees. Can you tell us a little bit about 38 sort of why that great amount of trees had to be taken out? 39 40 Mr. Richardson: I can do my best. We, once the decision was made to raise the site and separate the 41 turf from the salt prone soils. You know you’re bringing in 300,000 or 400,000 yards of material you’re 42 not going to be able to fill the site and preserve all of the trees that are there. So what we did is went 43 out and looked for what we call the iconic trees, the ones that would fit into the design and that had 44 value and were in good health. We used the City’s tree survey, which was very extensive. And if you 45 read over that and peruse it you’ll see that a great percentage of the trees on that survey are in very 46 poor health and very marginal, some are even since died, since the survey was completed. So based on 47 that what we did is we developed a list of the trees we wanted to preserve if we could and we were very 48 successful I think, give you a, I think it was about 80 percent of the trees that I wanted to see in the 49 finished design that we were able to integrate. The stone pine for example we worked very, very 50 tirelessly to get those stone pines preserved because they do well in that, the salt soil. And then the 51 large eucalyptus were the other trees that we looked for preserving. 52 53 I think, describe it we had a great public meeting last night. We had comments; we had lots of questions 54 about the trees. People were able to share both sides of the issue. And I think one of the things that 55 became apparent is there’s a misunderstanding when you say 500 trees that sounds like a lot of trees 56 12 and it is a lot of trees, but this City Hall sits on two acres and the 500 trees on that site would represent 1 me taking out 5.8 trees on this entire City Hall site. So just putting it in perspective less than 3 trees per 2 acre is what we were able to attain in terms of the removal and then we’re adding back 300 trees in the 3 planning plan. And then the City staff has developed a mitigation that goes beyond that for offsite 4 mitigation. 5 6 I think the best way to describe your, the heart of your question is that when you’re brining in almost a 7 half a million yards of offsite import and you’re preserving the wetlands that are there, which you can’t 8 plant trees in those wetlands really. There are not many varieties that will do well at sea level. We’re 9 simply faced with having to make tough decisions about some trees. The other important thing that 10 came out of last night’s meeting there was a question that I had about, from a couple of people about 11 the trees on the perimeter of the site. And for the most part all of those trees are remaining. So the 12 trees along Embarcadero, most of the trees at the clubhouse putting green area, the trees along the 13 airport, and the trees that are not part of the JPA’s new alignment the ones on the north fence line. 14 Those are all trees that we’ve preserved in place. Does that help answer that question or? 15 16 Chair Martinez: It was a very good answer. I appreciate that. 17 18 Mr. Richardson: Thank you. 19 20 Chair Martinez: Ok, thank you. Staff we’ll give it back to you now for, to continue with your presentation. 21 22 Mr. Teresi: Ok, I was maybe ask… are you going to want to act on the site and design element now or 23 wait till the end? 24 25 Chair Martinez: I think there might be some relevance of the Draft Environmental Impact Report. 26 27 Mr. Teresi: Ok. 28 29 Chair Martinez: So I’d like to… Pardon? 30 31 Commissioner Keller: We need to hear from the public before we make any Motions. 32 33 Chair Martinez: Yeah, definitely, but I thought the public would also want to hear from the environmental 34 consultant. 35 36 Mr. De Geus: Right so at this point I would like to invite Shilpa Trisal out from ICF International to give a 37 short summary of the environmental document and the environmental process we’re following. 38 39 Shilpa Trisal, Consultant – ICF International: Good evening Commissioners. My name is Shilpa Trisal. 40 I’m with ICF International; I am the EIR consultant to the City on this project. My presentation here is 41 focused on where we are in the CEQA process and what comes next, but I’m happy to answer any 42 questions about the impact analysis or the general EIR, what it covered, etcetera. 43 44 We started the EIR process in January of this year with the notice of preparation to prepare an EIR. 45 That’s when the City decided that this project should have an Environmental Impact Report. At that time 46 we had a 30 day scoping period during which we took comments from the public and we came to the 47 Commission to get comments on what should be examined in the EIR and whether they had any 48 concerns about the project itself. There was a meeting here, held here on February 13th and I will speak 49 a little more about that, about the issues that were address, were raised at that meeting. We are now in 50 the 45 day public review period that started June 3rd and it ends on July 19th. And today’s meeting is the 51 second meeting that we’re holding for the Draft EIR. We had a meeting yesterday at the golf course, 52 which was an open house workshop sort of set up where we had stations for different areas such as 53 engineering, golf course design, and environmental. And the public was asked to interact at various 54 stations and it was sort of a one to one interaction and we made the same presentation at that meeting 55 13 as well and I will also talk about what kind of comments we received at that, at last night’s meeting. 1 Next. 2 3 So the comments we received when we were here last in February were mostly to do with concerns 4 about the location of the gymnasium. That it’s located in the Baylands. Is that the perfect fit and what 5 would that, is that a good location for recreational facility? Some of the other comments raised by the 6 public were the increase in noise and lighting due to the athletic fields. What would that do to the 7 wildlife? And then there were some concerns about risk to investment that we’re putting in the golf 8 course due to sea level rise and flooding events potentially in the future. Also the Commissioners raised 9 the concern or encouraged the use of reclaimed water and as Forrest explained that has been done in 10 this golf course design. There were concerns about future drainage improvements. I believe right now 11 when there’s a rain event the golf course is clogged or unplayable for a few days. That problem has also 12 been solved with the new golf course design. And of course the loss of trees; the City staff and the 13 consultants we’ve been hard at work to minimize the loss of trees and find feasible mitigation onsite and 14 offsite to cover, to recover the canopy loss as best as possible. 15 16 At yesterday’s meeting we had a good turnout. I would say about 25 people came to the meeting. The 17 meeting lasted for two hours. And most of the concerns were about the public didn’t seem to know 18 about the athletic center portion of the project. I think people were well informed about the golf course 19 design, but did not know what’s going to happen at the athletic center so we shared some information 20 about what is the design, what is the conceptual design right now and how it would go through a site 21 and design review process and how there would be opportunities for the public to comment on the site 22 and design and their input would be taken into consideration. The other question of course was about 23 loss of trees. That seems to be a concern of the residents in the community in general. 24 25 We are talking comments until July 19th. For the members of the public who are here the comments can 26 be mailed or e-mailed and the members of the public can provide comments tonight. Those will be 27 compiled in the final EIR. We will respond to each and every comment and provide detailed responses 28 and if it’s necessary we will revise the EIR and make changes if that’s necessary. For the members of the 29 public the Draft EIR is available at seven City locations. The hardcopies available at these locations and 30 then it’s also located, it’s also available on the website for download and viewing. 31 32 The next steps after July 19th the team goes back, reviews each comment, provides written responses, 33 and looks at whether the project needs to be changed or refined in any way. Are there new mitigation 34 strategies that we need to incorporate? Any sort of good suggestions that come out of the comments 35 that we receive? We expect that the final EIR will be ready to be released any time in fall 2003 and there 36 will be more opportunities for the public to provide public comment at that time and we’ll come back to 37 the Commission at that time with our findings and what comments we’ve received and how we’ve 38 responded to them. And the certification of the final EIR is expected at the end of the year. That 39 concludes my presentation, but I’m happy to have, answer any questions about the impacts or general 40 (interrupted) 41 42 Chair Martinez: Ok that’s fine on process, but I think we wanted to get more into the content of the EIR 43 and talk about your section on the greenhouse gas emissions and on traffic. 44 45 Ms. Trisal: Sure. 46 47 Chair Martinez: So if you can go into those for the benefit of the public and for our discussion, thank you. 48 49 Ms. Trisal: Sure. I will try my best and our traffic consultant is also here today so she can supplement, 50 Michelle Hunt from Hexagon Transportation is also here and she can supplement my discussion. So 51 basically I think what’s important is the EIR covers six seventeen areas ranging from visual air quality, 52 noise, traffic, to greenhouse gas emissions. So we’ve made findings in each of those areas for both the 53 golf course and the athletic center and we’ve kind of looked at the worst case scenario assuming for 54 example, the construction would start on the same date because that helps us quantify air emissions 55 quantitatively together so that’s the worst case in that scenario. For air quality the worst case would be 56 14 all the construction happens together. So in that case that’s what we’ve done. So that’s the approach 1 we’ve taken. In every section we’ve tried to say what is the worst case if, for both the components of 2 this project and then what is the impact and that’s the finding that we’ve made. 3 4 Right now we have unavoidable significant impacts. That means we have, we’ve provided mitigation 5 measures but they do not reduce the impacts to a less than significant level for three areas. Those are 6 aesthetics. Since the athletic center does not have, the fields do not have a lighting plan yet and the 7 lighting plan will go through a site and design process and lighting was a concern raised at the 8 Commission’s hearing in February we felt we’ve provided some performance standards in a mitigation 9 measure, but we felt that it could potentially be a significant and unavoidable impact. And that’s where 10 we have, that’s the finding that we have made for that not knowing what the lighting finding, what the 11 lighting plan would look like. 12 13 Then we have for air quality we have a significant and unavoidable impact due to construction, during 14 construction, which is due to the heavy grading the rough grading that is to occur at the golf course. We 15 will exceed the Air Quality Management District’s threshold for construction emissions and that leads us 16 to the finding of significant and unavoidable. We have mitigation measures there to reduce impacts as 17 much as possible, but even after doing, applying all the best available technology and all the feasible 18 mitigation measures we are not able to reduce it to a less than significant level. 19 20 And lastly we have a significant unavoidable impact on greenhouse gas emissions. And I know you’re 21 interested in hearing about that. So greenhouse gas emissions this was, we had, State CEQA guidelines 22 do not address greenhouse gas emissions before last year. So last year there were two thresholds added 23 under greenhouse gas emissions that require that all stage projects study greenhouse gas emissions. 24 And one of the thresholds is: does your project indirectly or directly exceed greenhouse gas thresholds or 25 does it conflict with any applicable plan or policy related to greenhouse gas emissions? And on those two 26 issues our project does. We are increasing the traffic at the athletic center by 200 percent due to the 27 athletic fields. We’re adding five athletic fields. That leads to an increase of 200 percent in the number 28 of daily trips and that is enough to exceed the 1,100 metric ton CO2 equivalent threshold that we have, 29 but there have been some good e-mails from Commissioner Keller on mitigation strategies that could be 30 applied using electric vehicles and carbon neutral energy and we will together with the City 31 representatives look at those mitigation strategies and incorporate them. 32 33 On the other climate adaptation piece, which is a qualitative, so this is sort of quantitative two thresholds 34 there’s a barrier Air Quality Management District has a quantitative threshold so you can compare: what 35 is the emission from the cars? What is the emission from the equipment? So that’s all quantitatively 36 done and that’s mathematical and you look at whether you exceed the threshold or not. On the sort of 37 qualitative side, which is the climate adaptation side we’re all new in this and our approach to the 38 analysis has been to identify what are, the premise is that no single project can, you know no single 39 project can contribute to a greenhouse, you know, we contribute to a greenhouse gas emission, to 40 greenhouse gas emissions, but no single project can violate or exceed some sort because there are no 41 thresholds we just as a single project cannot have a substantial effect on a greenhouse on the, you 42 know, global greenhouse gas emissions. 43 44 So we look at sort of what’s happening in the region and in the region we, the climate what’s going to 45 happen to the climate is there’s going to be sea level rise, there’s going to be more risk of fire, frequency 46 of fire. There’s going to be more flood events. There’s going to be, sorry I have a list here, more 47 precipitation and flood events and shifts in precipitation and plant and animal behavior and distribution. 48 And all those are probably true just because they are true of the region they are probably true of this 49 project as well. However, it’s sort of qualitative. We cannot say what our contribution is to these risks, 50 but we identify and sort of lay out what’s going to happen in the region in general and say, “Yes, our 51 project could in a small way contribute to these events.” So that’s sort of the approach that we’ve taken 52 kind of disclosing what’s happening in the region and what is the science say and what do the plans and 53 local plan and you have a climate action plan here. What does the literature say, and then sort of leave it 54 at that and not make, because it’s not possible for a single project to make a finding. 55 56 15 But on the other side to address CEQA questions we have, we’ve done the math and come out with 1 emission calculations and made a determination. And we’re looking at feasible mitigation strategies to 2 reduce so that we don’t have a significant and avoidable greenhouse gas emission. I hope I answered 3 the question, but I’m happy to, I’m not a greenhouse gas expert, but I’m happy to follow up and provide 4 more information on that to help you when you read the document. 5 6 Chair Martinez: Ok, thank you, but don’t go. Commissioners, questions? Yeah, Vice-Chair Michael. You 7 can start. 8 9 Vice-Chair Michael: So, I’m going to ask my last question first because I think it’s maybe one of the easier 10 ones. But on the mitigation of greenhouse gases and I think it was Cara Silver who mentioned the issue 11 of with the athletic facilities which aren’t related to the golf course, but may potentially be significant if 12 you have these facilities and there’s lots of games, drop offs and pick-ups is it a, has there been any 13 study of the possibility of a mitigation in terms of substantial increase in public transit or shuttles that 14 would alleviate the requirement for parents to actually drive their cars to get the kids back and forth to 15 the, participate in the activities? 16 17 Ms. Trisal: I believe there is a weekday, currently a weekday shuttle, but it only runs during the peak 18 hours. So certainly that is an area of further study that whether we can, whether providing a shuttle 19 service would benefit and get us down below the threshold. But certainly I think CEQA says we should 20 apply all feasible and practical mitigation measures. So that’s certainly something that can be examined. 21 It hasn’t been done in any detail by the City I believe. 22 23 Vice-Chair Michael: Ok. And then I’ve been trying to grapple with all the different possibilities related to 24 the trees. The existing trees, the new trees, the trees that might get planted somewhere else and I just 25 have a kind of a starting point that sort of not all trees are created equal. And maybe this is sort of an 26 issue for Mr. Whittaker in terms of the golf course site and design, but there are some great trees 27 associated with some regional golf courses. There’s the cypress tree bordering the 18th green at Pebble 28 Beach, which for a while there was the tree disappeared and the 18th green was defenseless and they 29 moved a new tree back in place and once again that restored the harmony of that really important golf 30 hole. Right now at the Palo Alto Golf Course I think on the 7th fairway, which is a short par four there’s 31 some eucalyptus trees which make it tough to get in there if you don’t hit the right shot and at Stanford 32 on the back nine I think it’s either the 13th or the 14th hole there’s a majestic oak tree in the middle of 33 one of the par fours which kind of makes it for me about a par eight because I always end up dealing 34 with that tree. And Poppy Hills has a, on the 18th fairway the approach to the green there’s a tree that 35 always gets in the way if you sort of drift off to the right. 36 37 And I’m thinking in the, it isn’t so much the quantity of trees, but it’s the quality of trees and kind of 38 where they’re placed. And you can have, this is obviously not going to be a forested area. It’s going to 39 be more sort of seaside/bayside links and but you could do some really interesting things if you put trees 40 in places that created both scenic interest but also maybe some challenge. So maybe this goes to the 41 issue of when the project is done the course is going to get rated and it’ll get a, the slope of the course 42 will get determined. And I don’t know if you’ve got a target for how easy it’s going to be from the front 43 tees or how challenging it might be from the back tees, but I hope that you have a range of challenges 44 that makes it really sort of compelling for people to come back and play again and again because it’s 45 really interesting, which I think is one of the current sort of drawbacks to the course which is really not 46 all that interesting. 47 48 But then along with sort of the tree removal and some of the design concepts the idea of potentially 49 environmentally sensitive areas some courses make that part of the challenge and also it preserves sort 50 of the quality of the foliage if people are sort of encouraged not to walk on them even to get balls that 51 they’ve, have strayed into the bushes or force carries over waist areas from the back tees maybe to make 52 it more challenging or possibly sort of a relative increase or decrease in the number of bunkers, sort of 53 the placing of bunkers that would create some again challenge for people who are motivated by those 54 things. But some of these golf design issues relate to the environmental impact and I, this is sort of a 55 rambling comment, but is there anything that the public should know about the solution that’s being 56 16 proposed that will sort of incorporate both the preservation of the trees and environmentally sensitive 1 areas, but also make it a really great resource for the City and a wonderful experience for the people who 2 visit? 3 4 Mr. De Geus: I can begin with some comments. I, we are excited about what we are doing at the golf 5 course because although we’re concerned about the trees as well and the loss of canopy, but we’re 6 excited about the fact that we’re adding over 50 acres of natural Baylands areas back to what wasn’t 7 there before. From 130 acres of irrigated, fertilized turf to only 80 acres and others can speak better to 8 this than I, but there’s ecosystem value to that that I think helps mitigate for the loss of some of the 9 trees. So I think that’s important for folks to understand. And even though there is great value in that 10 we’re going further than that and we’re going to replace the canopy. And we’re working on that plan and 11 it’s coming together. Working closely with partners like Canopy and Acterra and a local group called 12 Magic and we have a team that’s working on a plan to replace the full canopy within a 10 year period 13 some of which will be on the golf course, but other parts will be in areas where trees do much better and 14 they’re more appropriate like the foothills. 15 16 Mr. Teresi: Another thing that we’ve talked about is adding some interpretive signage on the course to 17 make people aware of the significance of some of these specially planted areas that are intended to 18 mimic the Baylands environment and we think that could add to the educational aspect of the course. 19 20 Chair Martinez: Ok, thanks. Let’s try to get back onto the environmental impact side of this deliberation. 21 Commissioner Panelli, you first. 22 23 Commissioner Panelli: Thank you Mr. Chairman. I want to take an opportunity to challenge the 24 greenhouse gas emission identification as significant and unavoidable. And since this is relatively new I 25 think, I have a particular concern because the statement that it’s going to increase traffic by 200 percent 26 implies that the people making these trips wouldn’t make them to recreate somewhere else. So I’m 27 really curious to know whether, are we talking a gross increase in trips or is it a net increase? To me the 28 net increase in trips is probably zero because unless the assumption is these people are just going to sit 29 at home and do nothing unless we build these athletic fields, which I don’t believe. I believe the kind of 30 people who are going to use these fields are going to be active in some way whether it’s going to the 31 gym, going to Foothills Park, going somewhere, going to the Sunnyvale Recreation Fields. So can you 32 talk a little bit to this? 33 34 Ms. Trisal: Sure. I’m sure there are some trips in there which are people who are going to other athletic 35 facilities who would go now to this new facility, but from the traffic analysis point of view it’s a new trip 36 generator and you look at it as we are generating 200 percent increase in trips. That’s how the model 37 works. However, I mean to identify whether these people would have been going to any other 38 recreational facility I think we’d have to do some sort of surveys to get that information. But I know 39 Michelle Hunt probably has dealt with this much more and she can elaborate on the methodology and 40 how much of it could be, if we can offset by saying that these people would have gone elsewhere and 41 now they’re coming here so in terms of sort of the total number of trips within the City would remain the 42 same. 43 44 Commissioner Panelli: Well and let me just add something to that. If the demand amongst Palo Altoans 45 for these kinds of fields is greater than the supply it suggests that they are currently making trips that are 46 longer to go to other places to do these kinds of activities. And so you could almost argue that you 47 reduce greenhouse gas emissions through this project, but that’s speculation on my part. 48 49 Michelle Hunt, Transportation Consultant – Hexagon Transportation Consultants: I’m Michelle Hunt with 50 Hexagon Transportation Consultants. So obviously we did the transportation section not the greenhouse 51 gas, but with regard to transportation the analysis considers these new trips because we’re looking at 52 impacts to specific intersections that are right near our site. So while it may be well true that many of 53 the residents are making trips to other facilities whether they’re in Palo Alto or outside of Palo Alto to the 54 intersections right around the golf course and the athletic field site the trips are new to those locations so 55 we don’t consider any credits for trips that are occurring already. And with regard to greenhouse gas 56 17 obviously that’s not my area of expertise so, but I think that the question is whether you’re looking at a 1 site specific impact or whether you’re looking at an overall how much emissions are we generating as a 2 city so those are different questions. 3 4 Commissioner Panelli: Well and I get that. I mean it clearly the traffic implications and the greenhouse 5 gas emission implications are related, but they are distinctly separate because if we consider our 6 biosphere, our Earth as one place it doesn’t matter if you emit here or over here it’s effectively going to 7 end up in the same place so, which is very different than traffic effects, right? And so I’m wondering, I 8 just I have a real problem identifying this as significant and unavoidable without a little asterisk on it. 9 That’s all I’m going to say about that. (Interrupted) 10 11 Chair Martinez: Can I do a follow up on that? Sure, go ahead. 12 13 Matthew Jones, Principal – ICF International: Hi, my name’s Matthew Jones, Principal with ICF 14 International. I’m the Principal in charge of this project and I would like to speak to it from a CEQA 15 context because CEQA asks us to look at a reasonable worst case scenario. And within that construct we 16 are looking at these trips coming to this location as occurring in a bit of a vacuum. And that does 17 sometimes overstate impacts. I wouldn’t argue with that at all, but in order to capture the totality of the 18 effect of a project you want to look at these trips not occurring. You have to look at what’s associated 19 with the project itself. And I agree with you, it is probably overstating the impact, but you are looking at 20 something where you can only quantify certain pieces of the puzzle. Without a transportation study 21 that’s looking at the effective trips of recreational users within the whole region you really can’t put 22 numbers to those things. So you have to deal with the numbers you have and yes, that is probably 23 overstating the impact, but we have to do the best we can with the data we have at hand to make 24 quantitative determinations. 25 26 Commissioner Panelli: I just want to be clear about something. This is, my line of questioning is not a 27 critique of what was done. It’s more a challenge to maybe the way that it’s presented or the way it’s 28 incorporated into an EIR. I think we’re sort of treading new ground here and so it’s a little bit of an 29 intellectual exercise. Anyway (interrupted) 30 31 Chair Martinez: No (interrupted) 32 33 Commissioner Panelli: I have other questions. 34 35 Chair Martinez: I wanted to do just a brief follow up with our transportation consultant if she can come 36 back. Can you differentiate for us the trips to the athletic facilities versus trips to the golf courses? 37 38 Ms. Hunt: Sure. We created a trip generation estimates for each component of the project: the athletic 39 fields, the gymnasium, and the golf course. For the athletic fields we did surveys at the Mayfield Soccer 40 Complex and our estimates are based on the actual observed trips that are generated at the Mayfield and 41 the number of fields there and then the number of fields proposed at this location. For the athletic fields 42 we estimated that on a daily basis the project would generate 907 trips and during the p.m. peak hour it 43 would be 225 trips. And that’s based on an observed trip rate of 45 trips per field at Mayfield and the 44 five trips that are proposed here. For the gymnasium we used published trip rates from the Institute of 45 Transportation Engineers (ITE) because it’s a use that common in many locations. It’s based on the 46 square footage of the proposed project and the daily trips for that use would be 815. And the peak hour 47 trips would be only 49 during the p.m. peak hour for the gymnasium. So the athletic fields generate five 48 times the number of trips as the gymnasium. 49 50 The golf course generates a total right now of 70 trips during the p.m. peak hour. Based on projections 51 that we were provided with an estimated increase in golf course usage of 14 percent increase above the 52 existing levels, that 70 peak hour trips would grow to 80 peak hour trips if it did increase by 14 percent 53 as projected. And then we estimated the daily trips based on the p.m. peak hour and trip rates that are 54 observed at other golf courses because we didn’t do a full survey of 24 hours at the golf course, but 55 based on that projection the proposed golf course would generate 977 trips, which is about roughly 70 56 18 trips more than what it would be generating right now. So the increase in trips for the golf course would 1 be only 10 trips during the peak hour, 70 trips during the day; so a very small increase for the golf 2 course. For the gymnasium 49 p.m. peak hour trips and the largest number is for the athletic fields, 3 which would be 225 trips. And this was based on surveys of Mayfield and it was being used very heavily 4 at the time even though it was in December, but the Mayfield fields are lighted and they are the only 5 fields that are lighted so therefore the usage at that time was a heavy use. 6 7 Chair Martinez: That’s excellent, thank you. Sorry Commissioner. You have the floor. 8 9 Commissioner Panelli: Thank you. On, going back to the athletic fields I understand that the decision 10 about whether to go with artificial turf or natural turf has not been made. Is that correct? 11 12 Mr. De Geus: That’s correct. 13 14 Commissioner Panelli: I know when we were on Parks and Rec, when we worked together with Parks and 15 Rec when I was on that commission at the time it was the decision with Mayfield was to go with the 16 artificial turf for a number of reasons primarily a significant reduction in maintenance costs and water. 17 That’s what I recall as being sort of the primary drivers. 18 19 Mr. De Geus: That and the more playability of the course. With any grass field we close down 20 (interrupted) 21 22 Commissioner Panelli: Being able to use it for more [unintelligible-talking over each other]. Absolutely, 23 absolutely. My question for Shilpa though is I see the environmental impact of, identified if it goes with 24 natural turf being the use, the runoff of additional water. Did you consider the potential impact of 25 artificial turf on the environment? And I’m specifically thinking about the pellets that are used to sort of 26 soften the field. And I didn’t see it on Page 2-8, but I’m wondering if that came up in the discussion or 27 perhaps that needs to be a part of the final EIR. 28 29 Ms. Trisal: You know the options, the two options were considered for example in hydrology what would 30 happen to impervious versus pervious surfaces if you had artificial turf versus natural turf and what it 31 would do to the flow rates. But if I think you’re alluding to the hazardous material aspects of the? 32 33 Commissioner Panelli: Well there’s been some controversy in the turf industry I suppose about the 34 potential impact of some of the materials that are used that are positioned as nontoxic but might have 35 perhaps not toxicity but other sort of side detriment. 36 37 Ms. Trisal: Right. 38 39 Commissioner Panelli: And I think our esteemed Mr. De Geus can speak to those a little bit in more detail 40 than I. 41 42 Mr. De Geus: Yeah. I don’t think that we’ve looked at that in the EIR. 43 44 Ms. Trisal: Not in any, I mean I think the assumption was that the City would use the materials that had 45 no health risk, known health risk. 46 47 Mr. De Geus: That is what the City would do and there are options. It’s actually sort of evolving type of 48 market and we see lots of changes. In fact now they have like a coconut husk type material that can be 49 the infill to that grass. So there’s different options, different costs, but to the point about synthetic 50 versus grass the decision hasn’t been made. I will say that staff’s position is synthetic turf is preferred. 51 If we do build athletic fields out there because it isn’t close to homes and it just has so many more hours 52 of playability. So that would be staff’s proposal. 53 54 Commissioner Panelli: Ok. Thank you. And then my last issue that I want to identify… so I think just as 55 a general rule all of us as Commissioners I think are very open minded people. We are open to others 56 19 arguments, but we generally when we consume the materials for that week’s meeting we formulate a 1 preliminary opinion. I think it is worth me sharing my preliminary opinion about something very 2 forcefully, which is the gymnasium to me is, and I know it’s going to come back to us for site and design 3 review, but I’m just going to let you know right now I think it has no place out there in the Baylands. 4 5 There are two separate policy issues here. One is: do we need more gymnasiums in this City? I will 6 leave that up to our esteemed people in Parks and Recreation to determine whether the demand 7 outstrips the supply. The second policy decision is, if you say yes to the first one, the second is: should it 8 be here of all the places that we can put it? And I, in an area that’s zoned OS (Open Space) I just can’t 9 get my head around that. So I’m, we always talk about with applicants let them know early. So as the 10 applicant I’m letting you know early. I don’t know how the rest of the folks here feel, but I have a sense 11 that they are more in tune with my opinion than perhaps the opposite. Thank you. 12 13 Chair Martinez: Commissioners I know there are further comments but I’d like to have the public have a 14 chance to weigh in and then we can come back to the Commission. Thank you for your patience. 15 16 Vice-Chair Michael: So we have cards for two speakers. The first will be Craig Allen and the second is 17 Libby Lucas. Oh, and three minutes. Craig. 18 19 Craig Allen: Members of the Transportation or Planning and Transportation Committee, my name is Craig 20 Allen. I live at 850, excuse me, 850 Webster Street. I’ve played at the golf course for over 50 years; 21 gotten a lot of value out of it. I’m now on the Advisory Council, Citizen’s Advisory Council for the City 22 Golf and I’m also a member of the Board of Directors of the Palo Alto Golf Club. This project to totally 23 rebuild the course is moving along well as you can see from tonight’s presentations and that has been 24 accomplished by a lot of hard work by our architect, by City staff, by citizens involvement, by Council, by 25 commissions, everybody has worked very hard to get to where we are today. Most of the golfers I talked 26 to believe that the end product will be a great place to play golf. 27 28 At this point in time we’re going through a very necessary project approval process. However the one 29 thing that can cause the project to run into difficulties at this point is the process itself and the amount of 30 time it takes to complete it. So I urge this Commission and I urge the other City bodies, which have to 31 go on to sign on to do this plan, to do so effectively, sufficiently, and without undue delay. The plan we 32 have has a schedule. It has a growing season, it has a lot of things depending on these approvals and 33 any delays will even increase more the loss of revenue that we’re going to proceed and all the other costs 34 associated with the project. 35 36 The United States Golf Association has a new program to encourage speedy play on the golf course. You 37 may have heard it if you watched the US Open. The slogan they’re using is “While we are young,” 38 indicating that perhaps the need for players to move swiftly around the course for the benefit of all. So I 39 urge you to complete your work on this proposal while we are young. 40 41 One more point, there’s a lot of concern about trees and we’ve, it was a number that jumped out of all 42 the plans. This decision regardless of the wonderful work Forrest has done on the individual trees, the 43 iconic trees and everything else, that decision was made possible, made necessary by the decision of the 44 City Council to rebuild the entire course. When you shrink the acreage you rebuild the course and you 45 realign the fairways and I know Commissioner Michael has brought three iconic trees to mind, which I 46 have all seen and played at and they are wonderful trees. I don’t see those out on the course at this 47 point. However, trees mostly do not belong in the middle of fairways. And since almost every hole has 48 been moved trees which were planted to line a fairway are now not in, are now will be in a fairway 49 unless they remove them. And this is to say nothing at all of the bad trees and the other ones that are 50 out there. I think trees are not an issue we need to spend much more time on, but I did want to make 51 that point. Thank you very much for your time. 52 53 Chair Martinez: And thank you for that. 54 55 Vice-Chair Michael: So the next speaker will be Libby Lucas followed by Zach Rubin. 56 20 1 Libby Lucas: Hello, I’m Libby Lucas. I’m afraid I’m back on trees. I’d like to start off by saying I am pro 2 golf course, but basically I’m concerned about the cumulative effect of all the projects that you have 3 going on in the Baylands at the moment. You have the Water Quality Control Plant landscaping, which is 4 removing a lot of old shrubbery. You have an upgrade of the landscaping around the Harbormaster’s 5 Station and you have the Flood Control Project. Now the Flood Control Project I can’t remember the 6 exact number of trees they’re removing on that bank in between the San Francisquito Creek and the golf 7 course, but basically they’re not doing any mitigation for that loss. They’re talking about mitigation 8 within the channel. There’s also an acre and a third of Matadero Creek mitigation that’s also on that 9 riverbank that they aren’t bothering with too. So I think the cumulative loss of trees is a serious 10 consideration. 11 12 Palo Alto has always had a reputation of having the best wildlife biodiversity complex in the South Bay. 13 You’ve got your migratory Pacific flyway birds; you’ve got your resident birds. I would like to see 14 mitigation somewhere in the Baylands that will be useful for habitat for these species. I’m still very 15 unhappy that the Water District when they did mitigation for the Matadero Creek they took out the Black-16 crowned Night Heron trees and they took out the Salt Marsh Yellowthroat shrubbery so those are two 17 species that were highly impacted. And so I think that you have to consider the importance of your 18 wildlife capability in the Baylands and your wildlife corridors. I think you also have a Gray Fox den in 19 there too. So please ask for your mitigation within the Baylands and have it a supplement to this EIR. I 20 think that’s the only way to adjudicate this properly. Thank you so much. 21 22 Chair Martinez: Thank you. 23 24 Vice-Chair Michael: Next speaker is Zach Rubin. 25 26 Zach Rubin: Good evening gentlemen. I’m not sure if this is a dialogue or can you just tell me do I speak 27 and then I don’t get any comments back. Is that how this works? 28 29 Chair Martinez: Sometimes. 30 31 Mr. Rubin: Fair enough. So I live in Palo Alto recently and I also have a company here based in Palo Alto. 32 I’m the CEO of THiNKnrg and we have offices in New York and as of recent Palo Alto. And I’m sitting 33 here listening to this and we’re talking about emissions and we’ve done some due diligence on this 34 project because we’ve heard about it through the utilities. We’re developing several solar projects in Palo 35 Alto. 36 37 So we looked at the car park that was existing here and I was trying to get some information whether or 38 not that would stay in place. And if it does stay in place we were, wanted to propose and I don’t know if 39 it’s to be proposed to the Commission or to these gentlemen, but we would be interested in building a 40 car park project which we think we can probably get somewhere between 250 to a half a megawatt of 41 solar. So you’re looking at that I mean you’ve got to step back here you look at the trees, which I 42 understand is an important concern. When you put a half a megawatt of solar there I mean that can 43 equate to a relatively large number to make up for the displacement of the trees. But more importantly 44 we would be interested in building this for the project. We would finance it and put up that capital. All 45 we would ask is that the tenant purchase the energy back from us. So it’s a suggestion, but we’d like to 46 explore it further and I’m not sure how that would go from here whether it would be a meeting with Joe 47 or you guys would recommend some kind of dialogue. Thank you. 48 49 Chair Martinez: Before you go, Joe do you have a card? Yes. Good luck with your project. Ok. I think 50 that’s all in terms of public comment so it’s going to come back to the Commission. First I would, before 51 going to Commissioner if you’d indulge me? City Attorney Silver you had some thoughts about additional 52 work on the greenhouse gas emissions part of this. Can you elaborate on that? 53 54 Ms. Silver: Yes, thank you Chair. It is unusual to find an impact in the area of greenhouse gases that is 55 just related to car trips. And I think that part of that is due to a point that was raised by Commissioner 56 21 Panelli that this is taking, this approach, this methodology is taking a very conservative approach by not 1 factoring in any offsetting trips. And so to the extent there is user ship data available I think that it might 2 provide a more realistic disclosure statement if that offsetting data were factored into the analysis. And I 3 think that staff can go back and if the Commission recommends it and do some further analysis on that. 4 And then there are some additional mitigations that have been proposed by Commissioner Keller. I think 5 that the staff should be directed to look at those and perhaps there could be, there are some other 6 suggestions as well. And I think that would be a worthwhile task for staff to do. 7 8 Chair Martinez: Great, thank you. Commissioner Keller. 9 10 Commissioner Keller: Thank you. So the first thing I’ll start off with is that on Page 17 of the minutes of 11 the staff report, in the staff report I made a comment about wondering whether the Julia Morgan 12 building could be a gymnasium and I noticed while I share Commissioner Panelli’s concern about having 13 a gymnasium in this area that was one of the things which I expected to be in the EIR process and 14 apparently is not. At least I couldn’t find it. So if it’s there let me know. 15 16 With respect to the issue that Vice-Chair Michael brought up about shuttles there’s the Embarcadero 17 shuttle that runs down Embarcadero and that shuttle is likely to be able to displace trips after school for 18 those attending Palo Alto High School (Paly) and perhaps Jordan and perhaps some of the schools along 19 the corridor heading to the athletic fields at the Baylands. That would be acceptable, but it wouldn’t be 20 very effective for going home because I don’t think it runs that late depending on how, the nature of it. 21 So there perhaps expansion of hours, but it wouldn’t work on the weekends. But it’s most effective for 22 that direction, ok? In addition in the afternoon the shuttles tend to be more full on the inbound direction 23 from the Embarcadero shuttle from east of 101 because that shuttle was intended to transport people 24 after work to Caltrain. So the question on whether there’s capacity there for that purpose. 25 26 I did some analysis which I notice that the Commissioners and staff I’m not sure if the public have copies 27 of this analysis. And there’s numbers behind it but the numbers just meant to be illustrative based on 28 the numbers from Table 3.6-4 on Page 3.6-10, which is where I got my data from and I just did analysis 29 on percentages of that. So the first question is about transplanting trees as many as possible and I’m 30 wondering whether the trees could also be transplanted to Bixby Park to part of it that’s being reclaimed 31 from the dump. And that a lot of that is kind of denuded and it seems to be that transplanting the trees 32 to Bixby Park might be a suitable place for them and not as far to transport them to somewhere else and 33 they might be some value. I realize that some of the trees have value. Some of them that are being 34 taken out are good trees, some of them are not viable trees, but I think that transplanting trees as 35 opposed to cutting them down it seems to be a strategy that should be considered. I don’t know if you 36 want to address the comments one by one or if you want me to address all of them. 37 38 Mr. De Geus: I would say, I might ask Forrest to comment on this, but also in the audience our Urban 39 Forester Walter Passmore is here and Peter Jensen our Landscape Architect is here. They might want to 40 comment on the idea of transplanting trees. 41 42 Commissioner Keller: Sure. Maybe we should address this comment before I go on to the next one. 43 Thank you. 44 45 Walter Passmore, Urban Forester – Public Works: Good Evening Commissioners, Walter Passmore, Urban 46 Forester for City of Palo Alto. In regard to transplanting trees there was some early discussion in the 47 design process about doing precisely that. Bixby Park would obviously be a close location. It would be a 48 good candidate for transplanting trees. However, when we asked a consultant to evaluate the potential 49 to have trees survive the transplant process and reestablish into the new landscape we were given a very 50 low possibility of the trees that are currently on the golf course being good candidates for that process. 51 When trees are transplanted about 75 to 90 percent of the root system is severed and it takes large trees 52 a very long time to recover from the transplant shock. In addition the trees are not actively transpiring 53 so the environmental benefits that they produce following transplanting are very low in comparison to the 54 amount of maintenance that we have to do to help them recover from this very serious surgery of 55 removing so much of their root system. So we did evaluate that. We think that the potential to 56 22 transplant trees and have them thrive in a new location is not very good. It doesn’t mean we couldn’t 1 continue to evaluate that, but at this point we don’t think that’s a very efficient option for us. 2 3 One additional point since Bixby Park was brought up. We did have conversations at last night’s open 4 house meeting with members of the public and we are very receptive to planting new trees at the Bixby 5 Park location. We have broad staff support and also support from some members of the community that 6 are very interested in participating in that. So it’s likely that we can plant new trees at that location, but I 7 would say unlikely for us to transplant there. 8 9 Commissioner Keller: Thank you. So to the extent that that could be put in the, as a response to this 10 comment in the EIR that would be helpful. On the second comment I’m going to skip to my, skip the 11 second comment and go back to it and then talk about my third comment, which is that I understand 12 that the City of Palo Alto is establishing carbon neutral electricity. And therefore assuming that takes 13 place by 2015 when the project conditions are considered then that should eliminate the electricity 14 greenhouse gases of 122.18 metric tons per year. And so that would reduce the amount of impact there. 15 Similarly if natural gas were to be replaced, that usage were to be replaced by electricity then, which 16 would also be carbon neutral that would reduce 35.47 metric tons and so that would be also a fair 17 amount of savings considering that the total amount of excess above threshold is about 750 metric tons 18 per year. 19 20 The last thing I’m going to bring up in this regard is the issue of the greenhouse gases from traffic. And 21 I’m going to be a little expansive about some of the issues here because there’s actually a lot of things 22 that fit in together. So firstly to address the issues that were brought up by Commissioner Panelli I think 23 that there is potential for displacement of other trips to this location. However, that displacement is more 24 likely to take place if there were a surplus of playing fields. Other cities that could easily locate here and 25 I think that there’s actually a shortage of at least the Got Space people said 10 years ago when they put 26 the fields in Mayfield that there’s a distinct shortage in Palo Alto as well as throughout the surrounding 27 community. So while it’s possible that some playing fields, playing field use might be relocated from 28 other cities to here that should also be considered whether some of that relocation might include people 29 who are off, away from Palo Alto traveling to Palo Alto for those playing field replacements. So it could 30 be a wash either way in terms of the amount of displaced travel going from other cities and more travel 31 coming from other cities either way. 32 33 So it’s likely that the playing field use overall will increase because of the playing fields and it’s likely 34 there will be increased trips, but whether the increased trips are offset is a hard question to determine. 35 And also the issue is that there is a priority for Palo Alto as I understand and correct me if I’m wrong, 36 there’s a priority for people from Palo Alto using our fields, but there are people outside of Palo Alto that 37 are also using our fields and considering the shortage of playing field space when you add more fields 38 that may be likely to increase. Is that analysis reasonable? 39 40 Mr. De Geus: Yeah, that’s correct. And we do give priority access to our athletic fields to Palo Alto 41 residents and those groups that have 50 percent or more Palo Alto residents in their organization. And I 42 would add that the, it is true that we don’t have enough athletic fields to meet the demand for all of the 43 sports enthusiasts that we have particularly in the adult soccer area. 44 45 Commissioner Keller: And I assume that that’s not only true about Palo Alto, that’s also true about the 46 surrounding communities? 47 48 Mr. De Geus: Correct. 49 50 Commissioner Keller: Thank you. I think that Commissioner Panelli would like to add and I’d like to 51 temporarily cede him the floor if he wants. 52 53 Chair Martinez: I don’t think you have that power. 54 55 Commissioner Keller: Ok. 56 23 1 Chair Martinez: Commissioner Panelli, yes. Follow up? 2 3 Commissioner Panelli: One of the things I just like to add though is that a significant proportion of the 4 non-Palo Altoans who use Palo Alto playing fields actually work in Palo Alto. And so one of the reasons 5 that they want to recreate in Palo Alto is because it’s convenient in the sense that they can leave work for 6 example on Page Mill, go play soccer or whatever sport at Mayfield and then head home. 7 8 Chair Martinez: Commissioner Keller, yes. 9 10 Commissioner Keller: Yes so continuing. So I think it’s clear that the degree to which there is an increase 11 in greenhouse gases above or below the calculated amount is actually a complicated question. And I’m 12 not sure how well the analysis, whether there’s sufficient data to do that analysis. But what’s interesting 13 to me is that we don’t have significant traffic impacts, but we have significant greenhouse gas impacts. 14 And perhaps that’s because our traffic impact thresholds are too high and they are higher in Palo Alto 15 compared to the ones in Menlo Park and San Mateo County so maybe there’s a disparity there. And that 16 came up in Stanford. There are a lot of impacts in Stanford in terms of traffic in Menlo Park and much 17 fewer of them in Palo Alto just because our thresholds are that much higher. 18 19 That being said if we were to install electric vehicle charger either on this, at the golf course or the 20 playing fields and or offsite because for example the mitigation for removal of trees is actually an offsite 21 mitigation, those trees being replaced. Then that could reduce greenhouse gases from those vehicles. 22 And so I’ve done some calculation here. They are not necessarily, they are based on assumptions and I 23 played around with the numbers to show that you can actually achieve a reduction in greenhouse gases 24 from these various measures to be below the amount, below the threshold of significant so that it would 25 be mitigated. 26 27 Interestingly enough brought up by the speaker about the solar panels there is a program that you’re 28 probably aware of in terms of feed-in tariff for buying that electricity. And so Palo Alto has a program for 29 that. There’s also the potential for when you put in those solar panels putting in electric vehicle chargers 30 with them so that it combines the infrastructure that’s needed for both in some useful way. So I would 31 encourage considering that. But I think that, to summarize I think this first of all is interesting in terms of 32 I don’t think that there have been that many CEQA analyses with greenhouse gases that have significant 33 impacts. I don’t know how many there have been so far because this is in some sense a moving target 34 with the State. And if this project moves forward with electric vehicle and plug in hybrid mitigation for 35 greenhouse gases that could be a first. We’d have to figure out whether that is and I think that that 36 would be an interesting precedent for Palo Alto to set for our community and surrounding communities 37 and for future projects. Thank you. 38 39 Chair Martinez: Ok. I’d like to change course a little bit and talk about the aesthetic section if we can. I 40 understand that the gymnasium that’s proposed is one of the aesthetic items that can’t be mitigated, 41 which brings us back to Commissioner Panelli’s point that perhaps this suggests that one way to mitigate 42 it is not for it to be there. Yeah, go ahead. 43 44 Ms. Trisal: It’s the lighting impact which is unavoidable and significant, not the gymnasium. It’s the 45 athletic field lighting. 46 47 Chair Martinez: I thought I read somewhere that really the height of the building itself was an aesthetic 48 issue? 49 50 Ms. Trisal: It is an issue but not a significant and unavoidable issue because it’s still going through site 51 and design review. But the significant and unavoidable issue is due to the lighting. 52 53 Chair Martinez: Ok. Well from where I sit the significant and unavoidable is the building itself. So I’m 54 going to side with Commissioner Panelli that in our comments and if this should come back to us we 55 don’t want to see that building in that location for another reason and that is in the urban planning 56 24 aspects you may want to rebuke this as well, but I don’t think that the environmental document 1 adequately addresses issues of our Comprehensive Plan. For example, there’s an issue in our Community 2 Services Element that, a policy that states that we locate community facilities in neighborhoods, near 3 transit, within walking distance. And that location isn’t very friendly for that. So in my comments I 4 would like staff and it’s not usual for you to do this because we want to look at ways in which we can 5 support projects, and I understand that, but really take a hard look at ways in which this project, I mean 6 the whole project, even the golf course isn’t really supported by our Comprehensive Plan. Because I 7 don’t think you have been critical enough in that area. 8 9 And in that regard and I don’t know whether this is aesthetics or this is urban planning section if you 10 looked at our current golf course and when it was built it represents a time I called it being naïve about 11 this stuff the golden age of golf, but I was corrected. The 50’s is the golden age of baseball so I just 12 made an extension that also it must be golf, but be that as it may it was built at the time that Edgewood 13 Plaza was built. They were sort of going on at the same time. And if we were talking about tearing 14 down Edgewood Plaza, which I understand part of it was accidently torn down, that would be a 15 significant impact. So I don’t really see and I’m not sure if my point is clear or not so I’ll slow down; that 16 the replacement of an existing historic, I know it’s not a landmark, but I’m using it with a little “h” or the 17 “h” is silent, historic golf course has been addressed in the environmental document. So my, or 18 adequately addressed. So I’m not saying that this is the greatest golf course in our land, but as an 19 aesthetic issue or a community value it hasn’t been addressed what replacing this golf course with a new 20 modern environmentally correct golf course what that, how that impact has been addressed. There may 21 be photographs of famous people playing in our older golf course or pictures or some documentary or 22 something of that nature, but it doesn’t seem to me we’ve mitigated losing a piece of our history. So I’d 23 like that to be included when this comes back to us. And I understand Vice-Chair is going to make a 24 Motion. 25 26 MOTION 27 28 Vice-Chair Michael: So with the understanding that the Environmental Impact Report process and the 29 next steps slide will be continuing on a separate path I wanted to make a Motion with respect to site and 30 design review. That the Planning and Transportation Commission (PTC) would recommend that the City 31 Council approve the project based upon the findings and the conditions in the record of land use action. 32 33 SECOND 34 35 Chair Martinez: Ok, we have a Motion to approve site and design. Do we have a second? Yes, second by 36 Commissioner Panelli. Ok, comments on this issue or Commissioners? Commissioner? Oh, yes. 37 38 Commissioner King: So as we move into discussion of that Motion does that preclude questions of staff? 39 40 Chair Martinez: Not at all. 41 42 Commissioner King: Then I have questions of staff. 43 44 Chair Martinez: Ok. 45 46 Commissioner King: If I may. Let’s see. And I will have a question for Mr. Passmore a couple of 47 questions down so just to let you know that I’ll be asking. So regarding the fields and gym timing is that 48 a known, did I miss that? Is that a known quantity when that might be coming back? 49 50 Mr. De Geus: It’s unknown at this time and there’s no funding for that project at this time. 51 52 Commissioner King: Ok so it’s down the road. Got it. Ok. And I’ll just as a counterpoint and my bias is I 53 love basketball and coach basketball and there’s a shortage of gym space. I don’t know if that’s the right 54 place, but I know there are very few places. Just as we find with Below Market Rate (BMR) housing, 55 housing, you name it, there just aren’t a lot of places to put things that large. You know the last one 56 25 that was built I believe was the one on Fabian right off Bayshore there by the freeway, which isn’t an 1 ideal location either, but has been successful. In any event that’s years down the road so I’m done with 2 that part. 3 4 Second then regarding so the EIR potentially could address the impact of this project on climate change, 5 but I don’t think anyone discussed the impact of climate change on this project. So if we are to see a 6 three, whatever we’re potentially proposing or expecting a three foot sea level rise what would be the 7 impacts on this on the golf course? Obviously we’ve got the airport down there as well that’s at the same 8 elevation I assume so have we studied that at all? Do we? 9 10 Mr. Teresi: Well, it’s kind of being partially handled by the JPA’s Flood Control Project. That project is 11 being designed in a way to accommodate future sea level rise so the improvements to be made along the 12 levy of the creek are going to prevent the creek from flooding the golf course even accounting for the 13 future sea level rise. Now what’s not accounted for is the possibility of tidal flooding from the bay as sea 14 level rise occurs. The golf course is also in that flood plain and that is in the process of being addressed 15 at the regional level but is not yet addressed so I would say that over time that the risk of tidal flooding 16 at the golf course is going to increase unless subsequent flood control projects that improve the bay front 17 levies are implemented in the future. 18 19 Commissioner King: Ok and of course my concern is we spent all this money, do all this stuff and then 20 bad things happen. I assume flooding with salt water on the course would be fairly catastrophic to the 21 course? Would that be our belief? To the health of the flora and fauna? 22 23 Mr. Teresi: Well there would likely be damage, but I guess I would argue that a type of development like 24 the golf course being on the less intensive side is a better use of that land as far as flood risk then 25 putting say homes or offices there. And certainly you wouldn’t have the same risk of loss of life or any of 26 those kinds of things with a more passive use such as a golf course. 27 28 Commissioner King: Ok. Thank you. And then let’s see and I also echo Commissioner Panelli’s 29 questioning of the overall value of the greenhouse gas emissions again because we don’t know as 30 addressed by Commissioner Keller as well that we don’t know and I think it shows really how sometimes 31 through the legal system, in this case the CEQA or even just the environmental community grabbing onto 32 one fact that oh, this is going to increase greenhouse gases in the specific project might actually be doing 33 the exact opposite. And again we don’t know if kids are really sitting at home and not going to go 34 anywhere versus and they’re now creating trips. So anyway I echo that concern that sometimes trees 35 are lost for the forest. 36 37 And the other question I had, this is for Mr. Passmore or anyone on staff who might know the answer. 38 So what percentage of the trees on the golf course were there before the golf course and what 39 percentage were planted for the golf course? 40 41 Mr. Passmore: We did not investigate that. Ok, Rob has it. Great. Guess this is for Rob. 42 43 Mr. Teresi: We’d been asked about that and so I pulled up an image from Google Earth from 1948. The 44 course was built in 1956 and basically the golf course is this area right here. 45 46 Commissioner King: That bare spot. 47 48 Mr. Teresi: So there’s not a single tree that existed at that time. 49 50 Commissioner King: Ok, and then the other question I had though is then regarding the, and obviously 51 we all know the bay had been filled and altered over time. What is, are there trees that would be native 52 to that habitat out there? 53 54 Mr. Passmore: Yes, there would be few trees generally occurring along waterways. So San Francisquito 55 Creek would have transported seeds in times of flood and deposited those seeds and some trees would 56 26 become established in the Baylands environment. Generally these would be trees washing out of the 1 Foothills, the coast live oak, it is represented in the plant palate right now could have been one of the 2 trees that would naturally occur there with or without any human influence as are the other trees picked 3 in the plant palate. Something that’s not represented in the plant palate that would have likely occurred 4 there is our native willow trees and probably some native cottonwood trees. These are very common 5 creek side species that are not represented in the current plant palate, but design decisions were made 6 not to include every tree that could have potentially occurred in that Baylands environment. 7 8 Commissioner King: Ok and so when there was a comment made that it will be denuded of trees you 9 could also say or it’s going to return to its native state other than along the waterways. It’s actually 10 being, if you were to take all the trees out that’s really its native state. 11 12 Mr. Passmore: Well I said the trees would be rare and so when these flood occurrences happened the 13 seeds would be distributed over the landscape and where they had adequate soil conditions and sunlight 14 and water conditions to become established you would have rare trees dotted throughout the landscape. 15 The density would be heavier along the waterways. 16 17 Commissioner King: Thanks. And then, so I guess then my question would be as far as mitigation. I 18 think it’s a great idea. I think mitigation whether it’s for loss of heritage trees or other trees it’s a great 19 idea to then have a mitigation to plant somewhere else. But if we’re talking about planting at Bixby Park, 20 which of course is not a very natural habitat in that it’s a former refuse dump, but if we’re and I think if I 21 remember correctly there was some of this discussion out at Bayfront Park I believe in Menlo Park that 22 there was discussion of planting trees there and there were people who were proponents of not doing 23 that because it introduces the nonnative species to the environment of the area. so I guess I would I 24 don’t propose to be the guy to decide, but I would express some concern that we’re going to create 25 problems by planting trees in Bixby Park when there would not normally be many trees. 26 27 Mr. Passmore: Right and we certainly want to simulate natural conditions as closely as possible. So trees 28 being planted at Bixby Park are only a part of the overall mitigation strategy. What we’re proposing is 29 really a hybrid of onsite mitigation, near site mitigation, and offsite mitigation to reach this goal of a total 30 canopy replacement. And I think all of the people that have been involved have worked very hard to 31 plant trees as appropriate to the location. And so we certainly do not want to rely exclusively on any one 32 location to meet our mitigation goal. 33 34 Commissioner King: Thanks and then last question is you had mentioned about the transplant how we 35 didn’t think that was viable. So when you see for instance, at Stanford I think I’ve seen trees in huge 36 boxes. And so were they dug up from someplace or were they grown in those huge boxes and therefore 37 the root systems are more intact? 38 39 Mr. Passmore: They were established on the Stanford campus. They were dug from the site that they 40 were located, temporarily staged in the boxes until they’re transplanted into a new location. 41 42 Commissioner King: Ok. Thank you. 43 44 Chair Martinez: Ok. Back to the Motion. Any questions, comment? Commissioner Alcheck. 45 46 Commissioner Alcheck: I would just like to suggest that I think the, that we can feel comfortable, I would 47 like to suggest that I feel comfortable that this has met the objectives of our site and design review. I 48 think that this is a unique opportunity to sort of reinvest and because of the levy, the flood protection 49 project and I think that we’ve demonstrated that the, I’ll just go through the objectives that the 50 construction operation will be orderly and harmonious and compatible with the potential and existing 51 uses, which it’s already a golf course so I think that we’re ok there. I think this is a very desirable 52 investment. I think that we’re enhancing the educational opportunities here where there were sort of no 53 I guess educational opportunities and we’re making them. And I think that the notion that we’re 54 ensuring the sound principles environmental design ecological balance are being observed I think we’re 55 doing that too because again we’re literally talking about an existing golf course where we’re I think 56 27 creating a very appealing solution to the changes that are sort of being forced upon this site. And then 1 lastly it’s in accordance with the Palo Alto Comprehensive Plan. I think that’s also sort of very clear. 2 3 So I’m excited to support the recommendation or the approval of the land use plan, the record of land 4 use action and I sort of look forward to this project moving with no unnecessary delay. I think what was 5 it? “While we’re young”, Is that it? I look forward to playing this while I’m still young. I think I could be 6 more enthusiastic if there was some quid pro quo, maybe a clutch tee time on every fourth Saturday, no. 7 I’m only kidding. I think this is a, I think this is fabulous. You guys put a tremendous amount of effort 8 into this analysis and I think even for us, at least myself with the achievement of not only the objectives 9 that this project set out for itself, which are impressive alone. I mean how many golf course projects set 10 out to enhance wildlife habitats and improve wetlands and create an interesting course that challenges 11 players? So I think the objectives are great. I think we’ve met them. And I think we should move this 12 on. 13 14 Chair Martinez: Thank you. Well, despite what I said (interrupted) 15 16 Commissioner Alcheck: Can I say one more thing? Last comment. 17 18 Chair Martinez: You want to cut me off, Commissioner? 19 20 Commissioner Alcheck: Sorry. I also want to add that I’m not, I like the idea of us having an actual 21 proposal regarding a design for the site regarding the gymnasium. I’d rather us not spend too much time 22 focusing on the pros and cons of that until some project is in front of us because we may be impressed 23 with that at that time and I wouldn’t discourage that sort of thinking in the future. That’s it. 24 25 Vote 26 27 Chair Martinez: Good. I’m glad you said that so I can talk to the contrary. I, despite what I kind of 28 indicated earlier I really support the golf course project. I think it’s going to be beautiful. My main 29 concern about that I’ve addressed that in that I wish it could have more public access. That this big, 30 beautiful, natural place on the bay for only a few people that play golf is a little it doesn’t quite reach sort 31 of the impact in terms of the benefits to all our community that something like this could have. I know 32 that Rob and Greg Betts are actively trying, will pursue making this more accessible to the public. The 33 ideas that our golf course consultant suggested for linking the flood control project trails to the area 34 around the golf clubhouse I think are great and I want to recommend that you pursue that in exchange 35 for our support for this. 36 37 But that gymnasium project… the playing fields really we have no other place to put them because of the 38 expanse of land that they require. But there are many sites within the City that I could think of that are 39 near Caltrain, that are near public transit, that are more central to the City that are in compliance, that 40 our Comprehensive Plan really supports, that we should be looking for a location closer to where children 41 and families go for basketball or any other type of indoor sports. So I support the project and I want it 42 to go forward so we can all be out there watching the Vice-Chair play golf on Saturday. 43 44 So with that let’s call for the vote. Those in favor of the Motion on site and design of the golf course, aye 45 (Aye). The Motion passes unanimously. 46 47 Motion Passed (6-0, Commissioner Tanaka absent) 48 49 Chair Martinez: Thank you all. Thanks to our wonderful consultants too. I really learned a lot. Ok, 50 moving on. Let’s take like two minutes to allow everybody to reorganize. Yes. 51 52 Mr. Teresi: Could I ask a question? I just wanted to get some more clarity on where you wanted to go 53 with the second question about the Environmental Impact Report. I’m not clear (interrupted) 54 55 28 Chair Martinez: Well, we had discussed, thank you for that, it coming back to us on July 31st with an 1 extended comment period. There are areas of that that we haven’t discussed at all and I’d like the 2 Commissioners to hold onto the environmental document and have another a second session to ask 3 further questions, provide additional comments on that and also for staff to come back with what they’ve 4 promised us on greenhouse gases and response to some of our suggestions. And Commissioner Keller, 5 sorry I didn’t do this before. 6 7 Commissioner Keller: That’s right. So firstly I also expressed the skepticism about the gym being there. 8 And before, I think we need a, we can ask the City Attorney do we need a Motion to continue the 9 deliberation of the EIR? 10 11 Ms. Silver: Yeah it would be good and then if you want to hold the public hearing open… do we have a 12 date for this? 13 14 Mr. Aknin: Yeah, the scheduled date for the Planning Commission meeting is July 31st. I want to work 15 with you though in that if you need an earlier date of July 24th we have that extra Wednesday that we 16 could move a meeting if it’s absolutely necessary. So that’s something we can consider if we don’t want 17 to continue to a date specific. 18 19 Commissioner Keller: Ok. So may I? 20 21 Chair Martinez: Yes, continue. 22 23 MOTION 24 25 Commissioner Keller: Thank you. So one of the things, I’d like two things. It looks to me if you look at 26 Figure 2-7A, which is the proposed athletic center expansion, it’s hard for me to actually tell, but if you 27 rotate, if you remove the gym and rotate Field 3 in a perpendicular to its current direction it may or may 28 not be possible to place two playing fields next to each other in that over where the gym is and over part 29 of the parking lot. I don’t know. Worthwhile doing the geometry, but I think that may be something 30 worth being explored; if we can get six playing fields as opposed to five playing fields and a gym that 31 may be worthwhile. And I don’t know the geometry works or not, but it’s worthwhile exploring. 32 33 And with that I will make a Motion that we continue the comments on the Draft Environmental Impact 34 Report for a date uncertain. 35 36 SECOND 37 38 Chair Martinez: We have a Motion by Commissioner Keller and two seconds. 39 40 Commissioner Keller: I don’t think I need to speak further to the comment other than (interrupted) 41 42 Chair Martinez: And it’s also to hold the public hearing open for that date. Is that how you said it? The 43 public comment? 44 45 Ms. Silver: Well there are two issues. One is certainly we can hold the public hearing open to a date 46 uncertain. We’ll have to reagendize that so that the public knows when the date is actually scheduled. 47 The second question is whether you want to extend the comment period for the EIR for everyone to July 48 31st or do you want the comment period to end as previously scheduled, but conduct a further Planning 49 Commission hearing and obtain comments at that hearing after the comment period has formally 50 expired? 51 52 Commissioner Keller: So may I? 53 54 Chair Martinez: Well let me just weigh in a bit. So by not extending the public comment period then it’s 55 not reflected in the final EIR. Is that not correct? 56 29 1 Ms. Silver: What that would mean is that the, that we wouldn’t accept comments from members of the 2 public outside of the public hearing. They wouldn’t be able to submit additional comments during that, I 3 don’t know, two week period or something like that. But they could come to the hearing and submit 4 comments at that time and we would respond. 5 6 Chair Martinez: Commissioner Keller, yes. 7 8 Commissioner Keller: So firstly I think it’s the prerogative of the Chair as to whether to hold the public 9 hearing open or not, so I’m not going to make that part of the Motion. The second thing is I think that 10 since we don’t have a date certain for when we’re expanding this to I would just simply like to say that I 11 would recommend that in the process of publicizing when our next meeting, when the meeting is that we 12 will cover this that we will also publicize extending the public comment period to the day after that 13 meeting. But basically that, I don’t think it’s the place, I’m not sure if it’s the place of the Planning 14 Commission to recommend that extension. But anyway. 15 16 Mr. Aknin: Thank you Commissioner Keller. I just leaned over to the City Attorney and said the same 17 thing. I think it would just be cleaner that once we pick a Planning Commission date that we just extend 18 the public comment period to that date. That way everyone has the same time to comment. 19 20 Commissioner Keller: Yeah and the only reason I was suggesting it to be the next day is because usually 21 it’s 5:00 p.m. on that day and so the next day would make that cleaner. So I’m not going to make that 22 part of the Motion, just part of the commentary. Thank you. 23 24 VOTE 25 26 Chair Martinez: Ok any comments, question on that? Ok. So we have a Motion on the floor and two 27 seconds. Let’s vote on the Motion. Those in favor say aye (Aye). Motion passes unanimously with 28 Commissioner Tanaka absent. 29 30 MOTION PASSED (6-0, Commissioner Tanaka absent) 31 32 Chair Martinez: Yes? 33 34 Mr. De Geus: Just a last comment from me. If anyone’s interested in going to visit the golf course and 35 going out and talking to some of the golfers it’s actually a really unique and amazing place and we get, 36 it’s not uncommon that we’ll have 200 to 300 golfers a day and I’d be happy to give all of you a tour if 37 you want to call me. 38 39 Chair Martinez: And a lesson, please. Thank you Rob, we’ll take you up on it, one at a time. Ok, 40 anything else on this item? So we will ok. Commissioner King? 41 42 Commissioner King: One thing maybe you could consider as far as the public access is obviously 43 pedestrians and golf balls aren’t a great match, but I know, I can’t remember what time the golfing is cut 44 off in the evenings. I don’t know if it’s totally dark, but maybe you could consider some twilight ranger 45 led twilight hikes on the golf course to provide that public access. Because I agree it would, it is a 46 shortcoming of the structure that the public can’t get out there. So either some sort of creative working 47 around the golf schedule. Thanks. 48 49 Chair Martinez: Nice idea. Thank you. 50 Commission Action: Commission approved staff’s recommendation for Council approval of the projects 51 site and design based upon the findings and conditions with a subsequent follow up to the Draft EIR to 52 date uncertain. Motion for recommendation of site and design by Vice-Chair Michael, second by 53 Commissioner Panelli (6-0, Commissioner Tanaka absent), Motion to move Draft DEIR to date uncertain 54 by Commissioner Keller, second by Commissioner King (6-0, Commissioner Tanaka absent). 55 ~~ w CITY OF PAL ALT ' Agenda Date: To: From: Department: Subject: 2 Architectural Review Board Staff Report July 18, 2013 Architectural Review Board Jason Nortz, Senior Planner Joe Teresi, Senior Engineer (Public Works Department) Public Works Palo Alto Municipal Golf Course, 1875 Embarcadero Road 113PLN-00I031: Request by the City of Palo Alto Community Services Department for Site and Design Review of the Palo Alto Municipal Golf Course Renovation Project. Environmental Review: A Draft Environmental Impact Report has been prepared in accordance with the California Environmental Quality Act (CEQA) requirements. Zone District: PF(D). RECOMMENDATION Staff recommends that the Architectural Review Board (ARB) recommend that the City Council . approve the Site and Design Review application for this project, based upon the ARB findings (Attachment A) and the findings and conditions in the Record of Land Use Action (Attachment B). The Planning and Transportation Commission (PTC) also recommends approval of the application. BACKGROUND Existing Site The Palo Alto Municipal Golf Course was constructed in the mid-1950s on approximately 170 acres of flat former salt marsh and bay fill. The course was designed by noted golf course architects William P. and William F. Bell of Pasadena, California. The 18-hole, par 72 course is a classic championship course that measures over 6,800 yards from the back tees. The course was constructed on a relatively flat site raised a few feet above the underlying, highly-saline salt marsh soils through the placement of imported fill material. The original clubhouse buildings were replaced with the current facilities in the mid 1970' s. Major course renovations, including the rebuilding of selected fairways, tees, and greens, a new drainage system and lift station, and a new irrigation system and pump station, were completed in 1998. The site is located in the Public Facilities (PF) Zone District. The Site and Design (D) combining district designation also applies to the site. The PF zone district is designed to accommodate governmental, public utility, educational, and community service or recreational facilities. The Site and Design review combining district is intended to provide a process for review and approval of development in environmentally and ecologically sensitive areas. The Comprehensive Plan map designation is Public Park whose primary purpose is active recreation and whose character is essentially urban. Flood Control Project The potential for Golf Course modifications originated with the SFCJPA's Bay-to-Highway 101 flood control project. The flood control project includes construction of new earthen levees that will encroach onto the footprint of the Golf Course. The revised levee alignment will necessitate the reconfiguration of golf holes 4, 12, 13, 14, 15, 16 and 17 in order to maintain an 18-hole course. Community Services Department staff and the City Council identified the flood control project as an opportunity to reexamine the future of the Golf Course and to explore alternatives for providing supplemental City funding in order to undertake the renovation of the entire course. Renovation Plan G On July 23rd, 2012, Council formally adopted Golf Course Renovation "Plan G", which includes a full renovation of the Golf Course as well as the set-aside of 10.5 acres to be carved from the Golf Course footprint for future recreation uses. Implementation of "Plan G" will transform the Golf Course from a flat, park -like expanse of maintained turf grass to a blend of landforms, vegetation, and golf course furnishings that are compatible with the unique Baylands setting. On October 15,2012, Council awarded a contract to golf course architect Forrest Richardson & Associates to complete the design of a renovated Golf Course based on "Plan G", prepare final bid documents (plans, specifications, and cost estimate) for the project, and prepare an environmental impact report for the proposed Golf Course modifications, including a conceptual analysis of the future recreation area. Forrest Richardson has completed the preparation of the plans and related materials required for the Site and Design application. The site plan and related design documents included in the application package are consistent with the "Plan G" layout adopted by the Council. Project Description The Palo Alto Municipal Golf Course Renovation Project (Project) would reconfigure all 18 holes of the Golf Course, a portion of the driving range and practice facility, and replace a restroom facility. The reconfigured Golf Course would be reconstructed with a 'Baylands' theme that would incorporate or modify the existing low-lying areas into the Golf Course, reduce the area of managed turf, and introduce areas of native grassland and wetland habitat. Objectives The Project design has been developed to achieve the following objectives: • A golf course that provides enhanced wildlife habitat, improved wetland areas, and a more interesting course that offers challenges for the experienced player and that can also be enjoyed by the beginner, while reducing water and pesticide use and labor. • Integration of the Golf Course into the Baylands theme. • Mitigation for impacts on the Golf Course resulting from the SFCJPA's Flood Reduction Project. • Improve Golf Course playing conditions turf, drainage and irrigation. The Project will reconfigure the entire Golf Course to an I8-hole, par 71, PGA-regulation course measuring 6,655 yards from the back tees. Following the designation of approximately 10.5 acres of 1875 Embarcadero Road [13PLN-00103] Page 2 the existing Golf Course for the future recreation facility and the loss of 7.4 acres to be incorporated into a widened San Francisquito Creek, the tesultant area of the reconfigured Golf Course will be reduced to approximately 156 acres. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate six new driving stations. A new Youth Golf Area including elements designed to attract young people to the game of golf will be established along Embarcadero Road south of the existing driving range. The Project will include new 6.5-foot-wide concrete golf cart paths, compacted decomposed granite footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. The Project will also include a new 300 square foot restroom building located on the Golf Course. The Golf Course renovation will result in the following changes: • Relocate 18 golfholes • Construct 18 new greens on the course and two new greens in the practice areas • Create a par 71 course • Create a course with 6,545/6,09115,374/4,588 yardages from each set of tees • Reconstruct or construct all new bunkers • Transform 66 irrigated acres to naturalized areas (non-managed turf) • Reduce irrigated turf from 135 acres to 81 acres • Create new practice green/short game area and Youth Golf Area • Expand driving range tee area • Replace entire irrigation system • Complete temporary grading, drainage, and seeding for the future athletic fields Vegetation The Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. New managed turfwill include Creeping Bentgrass on the greens and salt-tolerant Paspalum (v. PE Platinum) at all other areas. During replacement, non-native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (Le., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area, non-turf native grass zones, and Baylands native zones. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new trees to be planted on the course as part of the Project and the planting of trees at a suitable off-site location that would benefit from an increased tree canopy. In accordance with the requirements of the City's Tree Technical Manual, the number of on-site and offsite trees to be planted will serve to replace the loss of tree canopy resulting from the tree removals within a period of ten years. 300 new native trees, including a variety of 15 gallon and 24 to 36 inch boxed sizes, will be planted across the site. The remaining number of trees required to achieve the mitigation goals will be planted off-site. The off-site trees will primarily consist of native oak seedlings and acorn plantings at the Arastradero Preserve and elsewhere in the foothills. Some trees will also be planted at suitable locations in Byxbee Park. The off-site tree planting effort will be overseen by the City's Urban Forester and coordinated with Canopy, Acterra, and Magic. 1875 Embarcadero Road [13PLN-00103] Page 3 Earth Mounds The Project will also include a dramatic increase in topographic variability throughout the course, including buffer mounds which will act as a visual and acoustical barrier between the Golf Course and the future recreation area. The buffer mounds will be 15 to 25 feet tall. Signage A new main entry sign is proposed along Embarcadero Road to replace the existing sign. The proposed sign conforms to the Baylands Design Guidelines by utilizing weathered wood sign supports, rusted metal fittings, and an overall low profile (11.6 ft. in width by 4.25 ft. in height) with muted colors. Primary lettering will be internally lighted within reverse pan channel letters that cast a low-light hal~ back onto the primary background. Restroom Facility The Project also includes the replacement of the existing on-course restroom facility. The new restroom would replace an old and aging structure currently located on the eastern side of the Golf Course near the airport. The design concept of the replacement restroom is coordinated with the Baylands Design Guidelines and integrated with the terrain and landscape of the renovated Golf Course. The building would be located to be consistent with a requirement that new structures be constructed above the Base Flood Elevation (10.5 foot elevation above sea level). The building would be surrounded by native grass hillocks and be accessed by 1 O-foot wide concrete cart paths that connect to a network of gravel maintenance paths. Electric, potable water and sanitary sewer service will be extended to service the new location. The proposed exterior wood siding, 6-inch horizontal and 2.5-inch vertical, is stained and sealed with Eco Wood, a graying agent that seals and protects natural wood while accelerating the natural silvering of wood. This will provide a rustic look and finish consistent with the Baylands Design Guidelines concept of using nlaterials that age over time without deteriorating. The clear Galvalume finish proposed for the corrugated roof is functional and blends with the appearance of the gray wood. The roof will have a muted finish and will also age over time, yet retain its corrosion resistant finish. The perforated bird screen below the roof plane allows for natural air ventilation. This screen, as well as the translucent window panes, allow ambient light to the interior during the day in order to reduce reliance on electric lighting. The accent color on the building would be a green hue selected to work with the Baylands Golf Links image and the Baylands Design Guidelines. Focusing the color on the doors provides a visual cue to the two entrances. Signage would be kept minimal, yet consistent with State of California! ADA guidelines. Automatic locking doors and a storage room are proposed, to meet City maintenance and security needs. The concrete floors will be sealed with a clear matte finish. The windows are translucent, allowing light into the space without people being able to see in. The overall color palette complements the Baylands theme. The building's appearance will be compatible with the Golf Course and its native grass landscape and will be functional, subtle, non-reflective, and have the appearance of being a part of the landscape for a long time. 1875 Embarcadero Road [13PLN-OOI03] Page 4 Not Included in Project The Project does not include any modifications to the parking lot, clubhouse/restaurant/pro shop complex, or maintenance facility. The Site and Design Review application does not include any detailed design information for the future recreational uses to be sited in the southwest comer of the Golf Course. These improvements will be submitted for review at a future time when a specific type of recreational feature is selected and funding becomes available. DISCUSSION Site and Design Review The Site and Design Review process, for major projects in areas within Palo Alto having the (D) zoning overlay, requires PTC, ARB, and City Council review. The PTC considers whether the project meets the Site and Design Review objectives set forth in Palo Alto Municipal Code (P AMC) Chapter 18.30(G).060. The ARB is requested to make a recommendation based on the findings for architectural review in PAMC Section 18.76.020(d) (Attachment A). The project, as recommended by the PTC and ARB, will then be scheduled for a public hearing before Council for final action. Previous Review Both the PTC and the Architectural Review Board (ARB) conducted Study Session reviews of the Golf Course Renovation Project in 2012 and 2013. In addition, the project has been reviewed on multiple occasions by the Golf Advisory Committee, Parks and Recreation Commission, Finance Committee, and the City Council. The project received preliminary review by the ARB during a Study Session on December 20, 2012. Golf Course Architect Forrest Richardson presented an overview of the proposed Golf Course' renovation proj ect in order to solicit input from the Board members. During the meeting presentation, Mr. Richardson highlighted the project's key design concepts, including integration into the Baylands setting, reduction in the amount of managed turf and associated irrigation water demand, making the golf course more interesting and challenging for golfers through the design of the course layout and topography, and conformance with the Baylands Design Guidelines. The ARB was supportive of the project and the proposed design approach. ARB members commented and asked questions regarding proposed perimeter fencing, colors and energy conservation strategies for the new restroom building, and project signage. The PTC received its initial briefing about the project at a February 13,2013 Study Session. Commissioners commented and asked questions regarding the project's benefits to golf course drainage, benefits and challenges of using reclaimed water for turf irrigation (water conservation, increased soil salinity, etc.), efforts to encourage youth participation in golf, methods to increase the appeal of the golf course as compared to the existing course and surrounding competing golf courses, flood risk to the course and its users, and signageibranding for the renovated course. During the last week of March, staff submitted the project development drawings to the Golf Advisory Committee and the Parks and Recreation Commission in order to solicit their endorsement of the project prior to the start of the formal Site and Design review process. Both advisory bodies had reviewed the project on multiple prior occasions and provided substantial input to the golf course architect asio what they would like to see incorporated into the project design. The Golf Advisory Committee and the Parks and Recreation Commission gave the project a positive review and endorsed '~e Site and Design application for submittal to the PTC and ARB. 1875 Embarcadero Road [13PLN-00103] Page 5 Overall water usage at the renovated Golf Course is expected to decrease by 30-35%, and potable water usage is expected to drop by even more due to a number of factors. The fairways will be planted with salt-tolerant Paspalum turf, which can tolerate a much higher percentage of reclaimed water (due to their intensive usage and to satisfy aesthetic and playability constraints, the new course greens will be planted with Creeping Bentgrass, which requires potable irrigation water). The area of managed turfwill be reduced by 40% on the new course, with fringe areas planted with native grasses and shrubs that have a much lower irrigation demand. In addition,innovations in irrigation system technology, such as ground moisture sensors and individually-controlled sprinkler heads, will help the golf course maintenance staff to avoid overwatering the turf. POLICY IMPLICATIONS The Golf Course Renovation Project is consistent with the Comprehensive Plan programs and policies, the Baylands Master Plan, and the Baylands Design Guidelines. An extensive list of the applicable policies and programs is included in this report as Attachment D. ENVIRONMENTAL REVIEW The Golf Course Renovation Project is subject to the California Environmental Quality Act (CEQA). A Draft Environmental Impact Report (DEIR) has been prepared to 'evaluate the proposed potential impacts of the project and to identify the appropriate mitigation measures, with the City acting as the lead agency (available online at http://www.cityofpaloalto.org/civicax/filebank/blobdload. aspx?BlobID = 34641). The DEIR was initially released for public review for a period of 45 days beginning on June 3, 2013 and ending on July 19, 2013. A public hearing for the DEIR was held during the June 26, 2013 PTC meeting. The PTC voted to continue their review of the DEIR at their July 31, 1013 meeting. Consequently, the public comment period has been extended to August 1, 2013. The fmal EIR will be modified as appropriate to address the comments made during the comment period, and the comments will be listed along with the City'S official responses in the final document. The City Council will be asked to certify the final EIR in late Fall 2013, along with approval of the Site and Design Review application. TIMELINE Action: ARB Study Session: Application Submitted: Date: 12/20/2012 03/06/2013 06/26/2013 07/18/2013 07/3112013 TBD P&TC Meeting: ARB Meeting: P&TC Meeting (continued from 6/26): City Council Meeting: ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: ARB Findings Draft Record of Land Use Action (including approval conditions) PTC Staff Report (June 26, 2013) Comprehensive PlanlBaylands Master PlanlBaylands Design Guidelines Policies and Programs Site and Design Plans (ARB members only) 1 87S'Embarcadero Road [13PLN-OOI03] Page 7 ATTACHMENT A DRAFT FINDINGS FOR APPROVAL 1875 Embarcadero Road Palo Alto Municipal Golf Course 13PLN-OOOOO-00103 The design and architecture of the proposed improvements, as conditioned, complies with the Findings for Architectural Review as required in Chapter 18.76 of the PAMC. (1) The design is consistent and compatible with applicable elenlents of the City's Comprehensive Plan in that the site is designated Public Park and the Comprehensive Plan Table (Attachment D) indicates compliance with all applicable policies; (2) The design is compatible with the immediate environment of the site in that the proposed project is located within a Public Park/Open Space area and Public Facilities zone district where other uses and buildings of similar size and scale are common; (3) The design is appropriate to the function of the project in that the design provides a well designed golf course layout and ample landscaping that is consistent with the overall objectives of the Site Assessnlent and Design Guidelines for the Palo Alto Baylands Nature Preserve (Baylands Design Guidelines); (4) In areas considered by the board as having a unified design character or historical character, the design is compatible with such character. The overall design is more compatible with the aesthetic qualities unique to the Baylands area; (5) The design promotes harmonious transitions in scale and character in areas between different designated land uses. The proposed project is surrounded by a mix of uses including athletic fields, the Baylands, an airport and single family residential which is separated from the golf course by the San Francisquito Creek. The replacement of the existing golf course with a new golf course with a smaller overall footprint should not reduce the overall functionality of the immediate area. The replacement of a new golf course with an existing golf course is permitted in the Palo Alto Municipal Code and is consistent with the Comprehensive Plan and will help support the employment uses in the vicinity; (6) The design is compatible with approved improvements both on and off the site in that the proposed use and building, as conditioned, includes improvements necessary for the new facility; (7) The planning and siting of the various functions and buildings on the site create an internal sense of order and provide a desirable environment for occupants, visitors and the general community in that the proposed design is compatible with the applicable Baylands Design Guidelines, development standards and performance criteria; (8) The amount and arrangement of open space are appropriate to the design and the function of the structures; this finding is not applicable in that the entire project is considered open space/park space; (9) Sufficient ancillary functions are provided to support the main functions of the project in that the proposal includes sufficient automobile and bicycle parking, outdoor seating and on course restroom facilities; (10) Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles in that the existing conforming automobile and bicycle parking shall remain in place. New signage including a new entry sign and on course wayfinding signs are also provided; (11) Natural features are appropriately preserved and integrated with the project in that the existing site is replacing existing trees and shrubs with numerous trees and shrubs of species appropriate to the Baylands Nature Preserve; (12) The materials, textures, colors and details of construction and plant material are appropriate expressions of the design and function in that the proposed design is a balanced, sustainable design that is consistent with the Baylands Site Assessment and Design Guidelines and green buildings guidelines; (13) The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment in that the Project will reduce the Golf Course managed turf area by 40 percent from 135 acres to 81 acres. New managed turf will include Creeping Bentgrass on the greens and salt-tolerant Paspalum (v. PE Platinum) at all other areas. During replacement, non-native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area, non-turf native grass zones, and Baylands native zones. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new trees to be planted on the course as part of the Project and the planting of trees at a suitable off-site location that would benefit from an increased tree canopy; (14) Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety which would tend to be drought-resistant and to reduce consumption of water in its installation and maintenance in that appropriate plant materials that are compatible with the Baylands Nature Preserve are proposed (additionally described above in #13); (15) The project exhibits green building and sustainable design that is energy efficient, water conserving, durable and nontoxic, with high~quality spaces and high recycled content materials. The following considerations should be utilized in determining sustainable site and building design: (A) Optimize building orientation for heat gain, shading, daylighting, and natural ventilation; (B) Design of landscaping to create comfortable micro-climates and reduce heat island effects; (C) Design for easy pedestrian, bicycle and transit access; (D) Maximize on site stormwater management through landscaping and permeable paving; (E) Use sustainable building materials; (F) Design lighting, plumbing and equipment for efficient energy and water use; (G) Create healthy indoor environments; and (H) Use creativity and innovation to build more sustainable environments. The design incorporates energy conservation measures through such factors as decreasing overall water usage by 30-35%. (16) The design is consistent and compatible with the purpose of architectural review, which is to: (1) Promote orderly and harmonious deVelopment in the city; (2) Enhance the desirability of residence or investment in the city; (3) Encourage the attainment of the most desirable use of land and improvements; (4) Enhance the desirability of living conditions upon the immediate site or in adj acent areas; and (5) Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each Qther. The design is consistent for all of the reasons and findings enumerated above. 1. The use will be constructed and operated in a manner that will orderly, harmonious, and compa tible wi th sting or potential uses of adjoining or nearby sites, in that: City standards and regulations will help to ensure that the use, or operation, of the Palo Alto Municipal Golf Course will be conducted in a manner that is compatible with the existing uses located in the immediate area. During construction, it expected that there will be temporary impacts to the area in terms of construction-related noise, dust/debris and traffic. These impacts wi be offset by applicable City construction standards, such as restrictions on hours of construction, the City's noise ordinance, and the mitigation measures found in the attached DEIR(Attachment D). The proposed golf course renovation will be consistent with the existing functions of the park uses at the adjacent Baylands Athletic Center. The Project will not adversely affect the operation of the Palo Alto Airport or other adjacent land uses. 2. The Project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas, in that: The Project site is located in the Public Facilities (PF) zone district and will be reconfiguring an existing public facilitY/golf course with a new public facility/golf course. The Project will maintain desirability of investment in the same and adjacent areas in that the proposed goals and design are consistent with the existing Baylands environment, and the construction of all improvements will be governed by the regulations of the current Zoning Ordinance, the Uniform Building Code, and other applicable codes to assure safety and a high quality of development. 3. Sound principles of environmental design and ecological balance are observed in the Project, in that: The Proj ect will implement appropriate sustainable building practices as deemed feasible. The Project is required to comply with the City's Construction and Demolition requirements during construction activities. The Project elements have been designed in a manner consistent with the Baylands Design Guidelines. The Project has been evaluated in the Environmental Impact Report for environmental impacts, and mitigations have been provided to reduce potentially significant impacts. Mitigation Measures in the areas of Aesthetics, Air Quality, Biological Resources, Cultural Resources, Geology and Soils, Hazardous Materials, Hydrology, Land Use, Noise, Public Services, Recreation, and Transportation and Circulation have been provided and are listed in DEIR provided as Attachment D. Page 2 Preservation and Management Regulations. Public Works Engineering 6. REGULATORY PERMITS: Obtain all necessary regulatory permits and approvals for working in the wetlands from Bay Conservation and Development Commission (BCDC), Regional Water Quality Control Board, US Army Corps of Engineers, U.S. Fish and Wildli Service, etc. 7. OFFSITE IMPROVEMENTS: At the end of the project, Embarcadero Road at the frontage of the project may require repaving (2- inch grind and pave) due to the damage from the construction traffic. The condition of the pavement will be assessed at the end,of the project. Furthermore, as part of this project, the applicant must replace the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard per Public Works' latest standards and/or as instructed by the Public Works Inspector. 8. The plan must note that any work in the right-of-way must be done per Public Works' standards by a licensed contractor who must first obtain a Permit for Construction in the Public Right-of-Way ("Street Work Permit") from Public Works at the Development Center. 9. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of- way along the property's frontage. Call City Public Works' arborist at 650-496-5953 to arrarige a site visit so he can determine what street tree work will be required for this project. The site or tree plan must show street tree work that the arborist has determined including the tree species, ze, location, staking and irrigation requirementi. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by the 'Public Works' arborist. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way ("Street Tree Permit") from Public Works' Urban Forestry. Page 4 10. STORM WATER TREATMENT: This project must meet the latest State Regional Water Quality Control Board's (SRWQCB) C.3 provisions. 11. The applicant is required to satisfy all current storm water discharge regulations and shall provide calculations and documents to verify compliance. 12. projects that are required to treat storm water will need to treat the permit-speci amount of storm water runoff with the following low impact development (LID) methods: rainwater harvesting and reuse, infiltration, evapotranspiration, or biotreatment. However, biotreatment ( ltering storm water through vegetation and soils before discharging to the storm drain system) will be allowed only where harvesting and reuse, infi ration and evapotranspiration are infeasible at the project site. Complete the Infiltration/Harvesting and Use Feasibility Screening Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Progra~ C.3 Stormwater Handbook - Appendix I). Vault-based treatment will not be allowed as a stand-alone treatment measure. Where storm water harvesting and reuse, infiltration, or evapotranspiration are 'infeasible, vault-based treatment measures may be used in series with biotreatment, for example, to remove trash or other large solids. Reference: Palo Alto Municipal Code Section 16.11.030(c) http://www.scvurppp- w2k.com/permit_c3 docs/c3_handbook_2012/Appendix_I- Feasibility_2012.pdf In order to qualify the project as a Special Project for LID treatment reduction credit, complete and submit the Special Projects Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook -Appendix J: Special Projects). Any Regulated Project that meets all the criteria more than one Special Project Category may only use the LID treatment reduction credit allowed under one of the categories. http://www.scvurppp- w2k.com/permit_c3 docs/c3_handbook_2012/Appendix_J-Special_p Utilities Engineering 13. The most recent plans submitted on March 6th, 2013 do not show any changes to the ectrical utilities. If there any changes to the load requirement or phys 1 relocation of utilities infrastructure (including the Page 5 meter), the customer is required to contact CPAU and 11 out a Utilities Service Application Fire Department 14. Cart path design for emergency medical response recommended. SECTION 6. Term of Approval. Site and Design Approval. the proj ect not commenced council approval, the approval force or effect, pursuant to 18.82 .. 080. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Senior Deputy City Attorney In the event actual construction of within two years of the date of shall expire and be of no furth~r Palo Al to Municipal Code Section APPROVED: Director of Planning and Community Environment Page 6 • ATACHMENTC CITY OF City of Palo Alto (10 # 3718) PALO ALTO Planning & Transportation Commission Staff Report Report Type: Meeting Date: 6/26/2013 Summary Title: Approval of Palo Alto Municipal Golf Course Site and Design Application Title: Palo AJto Municipal Golf Course, 1875 Embarcadero Road [13PLN- 00103]: Request by the City of Palo Alto Community Services Department for Site and Design Review of the Palo Alto Municipal Golf Course Renovation Project and Public Hearing for Review of the Project's Draft Environmental Impact Report. Zone District: PF(D). From: Joe Teresi, Senior Engineer Lead Department: Public Works Recommendation Staff recommends that the Planning and Transportation Commission (PTC) conduct a public hearing on the Draft Environmental Impact Report and recommend that the City Council approve the project based upon the findings and conditions in the Record of land Use Action (Atta·chment A). Background Project Description The Palo Alto Municipal Golf Course was constructed in the mid-19S0s on approximately 170 acres of flat former salt marsh and bay fill. The course was designed by noted golf course architects William P. and William F. Bell of Pasadena, California. The lS-hole, par 72 course is a classic championship course that measures over 6,SOO yards from the back tees. The course was constructed on a relatively flat site raised a few feet above the underlying, highly-saline salt marsh soils through the placement of imported fill material. The original clubhouse buildings were replaced with the current facilities in the mid 1970's. Major course renovations, including the rebuilding of selected fairways, tees, and greens, a new drainage system and lift station, and a new irrigation system and pump station, were completed in 1995. The potential for Golf Course modifications originated with the SFCJPA's Bay-to-Highway 101 flood control project. The project, currently scheduled to start in April 2014, includes City of Palo Alto Page 1 construction of new earthen levees that will encroach onto the footprint of the Golf Course. The revised levee alignment will necessitate the reconfiguration of golf holes 4, 12, 13, 14, 15, 16 and 17 iii order to maintain an 18-hole course. Community Services Department staff and the City Council identified the flood. control project as an opportunity to reexamine the future of the Golf Course and to explore alternatives for providing supplemental City funding in order to 'undertake the renovation of the entire course. On July 23rd, 2012, Council formally adopted Golf Course Renovation "Plan Gil, which includes a full renovation of the Golf Course as well as the set-aside of 10.5 acres to be carved from the Golf Course footprint for future recreation uses. Im-plementation of "Plan Gil will transform the Golf Course from a flat, park-like expanse of maintained turf grass to a blend of landforms, vegetation, and golf course furnishings that are compatible with the unique Baylands setting. On October 15, 2012, Council awarded a contract to golf course architect Forrest Richardson & Associates to complete the design of a renovated Golf Course based on "Plan Gil, prepare final bid documents (plans, specifications, and cost estimate) for the project, and prepare an environmental impact report for the proposed Golf Course modifications, including a conceptual analysis of the future recreation area. Forrest Richardson has completed the preparation of the plans and rel'ated materials required for the Site and Design application. The site plan and related design documents included in the application package are consistent with the "Plan Gil layout adopted by the Council. The Palo' Alto Municipal Golf Course Renovation Project (Project) would reconfigure all 18 holes of the . Golf Course, a portion of the driving range and practice facility, and replace a restroom facility. The reconfigured Golf Course would be designed with a Baylands theme that would incorporate or modify the existing low-lying areas into the Golf Course, reduce the area of managed turf, and introduce areas of native grassland and wetland habitat. The .Project design has been developed to achieve the following objectives: • A golf course that provides enhanced wildlife habitat, improved wetland areas, and a more interesting course that offers challenges for the experienced player and that can also be enjoyed by the beginner, while reducing water and pesticide use and labor. • Integration of the Golf Course into the Baylands theme. • Mitigation for impacts on the Golf Course resulting from the SFCJPA's Flood Reduction Project. • Improve Golf Course playing conditions -turf, drainage and irrigation. The Project will reconfigure the entire Golf Course to an lS-hole, par 71, PGA-regulation COurse measuring 6,655 yards from the back tees. Following the designation of approximately 10.5 acres of the existing Golf Course for the future recreation facility and the loss of 7.4 acres to be incorporated into a widened San Francisquito Creek, the resultant area of the reconfigured Golf Course will be reduced to approximately 156 acres. The existing driving range will be expanded to the north by approximately 8,000 square feet to accommodate six new driving stations. A new Youth Golf Area including elements designed to attract young people to the game of golf City of Palo Alto Page 2 will be established along Embarcadero Road south of the existing driving range. The Project will include new 6.5-foot-wide concrete golf cart paths, compacted decomposed granite footpaths at the practice putting green area, and compacted gravel maintenance path connections between the concrete cart paths. The Project will also include a new 300 square foot restroom building located on the Golf Course. The Project does not include any modifications to the parking lot, clubhouse/restaurant/pro shop complex, or maintenance facility. The Site and Design application does not include any detail.ed design information for the future recreational uses to be sited in the southwest corner of the Golf Course. These improvements will be submitted for review at a future time when a specific type of recreational feature is selected and funding becomes available. The Golf Course renovation will result in the following changes: • Relocate 18 golf holes • Construct 18 new greens on the course and two new greens in the practice areas • Create a par 71 course • Create a course with 6,545/6,091/5,374/4,588 yardages from each set of tees • Reconstruct or construct all new bunkers • Transform 66 irrigated acres to naturalized areas (non-managed turf) • Reduce irrigated turf from 135 acres to 81 acres • Create new practice green/short game area and Youth Golf Area • Expand driving range tee area • Replace entire irrigation system • Complete temporary grading, drainage, and seeding for the future athletic fields The Project will reduce the Golf Course' managed turf area by 40 percent from 135 acres to 81 acres. New managed turf will include Creeping Bentgrass on the greens and salt-tolerant Paspalum (v. PI: Platinum) at all other areas. During replacement, non-native plants and trees will be replaced with native grasses, and low-lying Baylands zones will be planted with indigenous halophyte plants (i.e., plants that survive in saline soil). The Golf Course will include three types of vegetated zones: managed turf area~ non-turf native grass zones, and Baylands native zones. The Project will also include a dramatic increase in topographic variability throughout the course, including buffer mounds which will act as a visual and acoustical barrier between the Golf Course and the future recreation area. The buffer mounds will be 15 to 25 feet tall. Of the 711 trees on the existing Golf Course site, 123 trees will remain, and 588 will be removed. The loss of trees will be mitigated through a combination of new trees to be planted on the course as part of the Project and the planting of trees at a suitable off-site location that would benefit from an increased tree canopy; In accordance with the requirements of the City's Tree Technical Manual, the number of on-site and offsite trees to be planted will serve to replace the loss of tree canopy resulting from the tree removals within a period of ten ·years. 300 new native trees, including a variety of 15 gallon and 24 to 36 inch boxed sizes, will be planted across the site. rhe remaining number of trees required to achieve the mitigation goals will be planted off-site. The off-site trees will primarily consist of native oak seedlings and City of Palo Alto Page 3 acorn plantings at the Arastradero Preserve and elsewhere in the foothills. The off-site tree planting effortwill be overseen by the City's Urban Forester and coordinated with Canopy and Acterra. The Proje~t will replace the existing Golf Course irrigation system with a new high-density polyethylene (HDPE) pipe system with limited metal components to eliminate corrosion and leaks. The sprinkler heads will be individually controlled and adjustable to provide full or part circle coverage. The Project will also include underground soil sensor units which will monitor soil moisture levels to prevent overwatering. Overall water usage for Golf Course irrigation is expected to be reduced by between 30 and 35 percent. A new main entry sign is proposed along Embarcadero Road to replace the existing sign. The proposed sign conforms to the Baylands DeSign Guidelines by utilizing weathered woodsign supports, rusted metal fittings, and an overall low profile (11.6 ft. in width by 4.25 ft. in height) with muted colors. Primary lettering will be internally lighted within reverse pan channel letters that cast a low-light halo back onto the primary background. One of the latest additions to the project design is a new Youth Golf Area along Embarcadero Road south of the existing driving range. Design of this area is being coordinated with local non-profit organization First Tee Silicon Valley (FTSV). Although this area is primarily intended to attract new young golfers, it will also accommodate other golfer groups, including seniors, men's and women's groups, and new player (lesson) groups. The area consists of three short holes measuring from 30 to 65 yards in length. At the far western end of this area will be a practice putting green with sand bunkers. Implementation of the Youth Golf Area will require a management plan jointly administered by the City and FTSV to ensure that the area is safely utilized and fits golf programs approved by the City. It is anticipated that the Golf Course will be closed for approxim-ately 12-15 months during construction, anticipated to begin in April 2014. Site and Design Review The Site and Design Review process, for major projects in areas within Palo Alto having the (D) zoning overlay, requires PTC, ARB, and City Council review. The PTC considers whether the project meets the Site and DeSign Review objectives set forth in Palo Alto Municipal Code (PAMC) Chapter 18.30(G).060. The PTC meeting minutes and recommendation are shared with the ARB, and eventually forwarded to the City Council. After the PTC public hearing, review and recommendation, the project would be forwarded to the ARB. The ARB is scheduled to conduct a public hearing on July 18, 2013 to consider the project. The ARB would be requested to make a recommendation based on the findings for architectural review in PAMC Section 18.76.020{d). The project, as recommended by the PTC and ARB, would then be scheduled for a public hearing before Council for final action. The PTC is asked to review the proposed project, and recommend approval, or recommend City of Palo Alto Page 4 such changes as it may deem necessary to accomplish the following objectives: (a) To ensure construction and operation of the use in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. (b) To ensure the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. (c) To ensure that sound principles of environmental design and ecological balance shall be observed. (d) To ensure that the use will be in accord with the Palo Alto Comprehensive Plan. These Site and Design Review findings are included in the attached draft Record of Land Use Action (Attachment A) for PTC consideration. Previous Review Both the PTC and the Architectural Review Board (ARB) conducted Study Session reviews of the Golf Course Renovation Project in 2012 and 2013. In addition, the proJect has been reviewed on multiple occasions by the Golf Advisory Committee, Parks and Recreation Commission, Finance Committee, and the City Council. The project received preliminary review by the ARB during a Study Session on December 20, 2012. Golf Course Architect Forrest Richardson presented an overview of the proposed Golf Course renovation project in order to solicit input from the Board members. During the meeting presentation, Mr. Richardson highlighted the project's key design concepts, including integration into the Baylands setting, reduction in the amount of managed turf and associated irrigation water demand, making the golf course more interesting and challenging for golfers through the design of the course layout and topography, and conformance with the Baylands Design Guidelines. The ARB was supportive of the project and the proposed design approach. Board members commented and asked questions regarding proposed perimeter fencing, colors and energy conservation strategies for the new restroom building, and project signage. The PTC received its initial briefing about the project at a February 13, 2013 Study Session. Commissioners commented and asked questions regarding the project's benefits to golf course drainage, benefits and challenges of using reclaimed water for turf irrigation (water conservation, increased soil salinity, etc.), efforts to encourage youth participation in golf, methods to increase the appeal of the golf course as compared to the existing course and surrounding competing golf courses, flood risk to the course and its users, and signage/branding for the renovated course. The staff report and minutes from the PTC Study Session of February 13, 2013 are attached to this report (Attachment B). During the last week of March, staff submitted the project development drawings to the Golf Advisory Committee and the Parks and Recreation Commission in order to solicit their endorsement of the project prior to the start of the formal Site and Design review process. Both advisory bodies had reviewed the project on multiple prior occasions and provided ' City of Palo Alto PageS substantial input to the golf course architect as to what they would like to see incorporated into the project design. The Golf Advisory Committee and the Parks and Recreation Commission gave the project a positive review and endorsed the Site and Design application for submittal to the PTC and ARB. Summary of Key Issues Integration of the Golf Course into the Palo Alto Baylands The existing Palo Alto Municipal Golf Course was constructed in 1956 with little regard for its setting in the Palo Alto Baylands. The levees along San Francisquito Creek were being raised to provide increased flood protection following the catastrophic Christmas 1955 flood. The adjacent low-lying marshland was filled with imported soil to IIreclaim" the area for recreational purposes. The course was designed with a parkland theme, featuring vast expanses of turf and planted with a large number of non-native trees to provide visual interest and serve as a windbreak. The flat, low-lying topography of the course combined with the raised perimeter levees prevented any visual connectivity to the surrounding creek and Baylands. Forrest Richardson's proposed design for the renovation of the Golf Course, inspired by the visions presented in the Baylands Master Plan, is intended to reunite the course with its scenic and ecologically-rich setting. On the renovated course, large areas of managed turf will be replaced with low shrubs and grasses native to the Baylands environment. Although the number of trees will be reduced, the modified landscape will more closely resemble the vegetation types found in natural Baylands settings. Placement of a large amount of imported fill throughout the course will elevate the ground and provide vista points from which golfers will enjoy views of San Francisquito Creek, San Francisco Bay, and the surrounding coastal mountains. The golf course architect has carefully designed the course signage and furnishings to further celebrate the Baylands theme. The proposed branding of the renovated course, Baylands Golf Links -Palo Alto, was developed to attract golfers to the unique setting of the venue. Reduction of Irrigation Water Demand Although the existing Palo Alto Municipal Golf Course is partially irrigated with reclaimed water effluent from the nearby Regional Water Quality Control Plant, the amount of irrigation water required to maintain the.course is higher than an ideal amount. Irrigation demand is increased by the large area of managed turf throughout the course at the fringes of the fairways and between the golf holes. Reclaimed water cannot be used to satisfy the full irrigation demand because it has much higher salts content than potable water. As a result, the course requires the use of a blend of potable and reclaimed water (rather than 100% reclaimed water) because of the type of non-salt-tolerant grass planted on the course and the high saline content of the near-surface soils underlying the course. City of Palo Alto Page 6 Overall water usage at the renovated Golf Course is expected to decrease by 30-35%, and potable water usage is expected to drop by even more due to a number of factors. The fairways will be planted with salt-tolerant PaspalLim turf, which can tolerate a much higher percentage of reclaimed water (due to their intensive usage and to satisfy aesthetic and playability constraints, the new course greens will be planted with Creeping B~ntgrass, which requires potable irrigation water). The area of managed turf will be reduced by 40% on the new course, with fringe areas planted with native grasses and shrubs that have a much lower irrigation demand. In addition, innovations in irrigation system technology, such as ground moisture sensors and individually-controlled sprinkler heads, will help the golf course maintenance staff to avoid overwatering the turf. Policy Implications The Golf Course Renovation Project is consistent with the Comprehensive Plan programs and policies, the Baylands Master Plan, and the Baylands Design Guidelines. An extensive list of the applicable policies and programs is included in this report as Attachment C. Timeline The Golf Course Renovation Project is subject to the Site and Design review process. The tentative meeting schedule for the review process is as follows: Planning and Transportation Commission Architectural Review Board City Co u nci I Environmental Review June 26, 2013 July 18, 2013 late Fall 2013 (following circulation of the project environmental review document) The Golf Course Renovation Project is subject to the California Environmental Quality Act (CEQA). A Draft Environmentallmapct Report (DEIR) has been prepared to evaluate the proposed potential impacts of the project and to identify the appropriate mitigation measures, with the City acting as the lead agency (Attachment D). The DEIR was released for public review for a period of 45' days beginning ,on June 3, 2013 and ending on July 19, 2013. The June 26, 2013 PTC meeting is serving as the public hearing customarUY held during the public comment period for the DEIR. Comments on the DEIR made by PTC Commissioners and members of the public during the public hearing will be entered into the official administrative record for the Project. The final EIR will be modified as appropriate to address the comments made during the comment period, and the comments will be listed along with the City's offical responses in the final document. The City Council will be asked to certify the final EIR in late Fall 2013, along with approval of the Site and Design application. City of Palo Alto Page 7 The Project impacts are summarized in Table ES-1 of the DEIR. For potentially significant impacts, mitigation measures are identified where feasible to reduce the impact on the environmental resources to a less-than-significant level. Chapter 3 (Setting, Impacts, and Mitigation Measures) contains a detailed discussion of Project impacts and detailed description of the proposed mitigation measures. Significant and Unavoidable Impacts related to the following topics would remain significant despite the implementation of mitigation. • Aesthetics. The Athletic Center would create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area during ProJect operation. • Air Quality. The Project would violate an air quality standard or contribute substantially to an existing or projected air quality violation during Project construction. The Project would result in a short-term increase in particulate matter (PM), which consists of PM that measures 10 microns in diameter or less (PM10) and PM that measures 2.5 microns in diameter or less (PM2.5) and diesel particulate matter (DPM) due to grading and construction during Project construction. • Greenhouse Gas Emissions. The Project would generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment during Project operation. The Project would conflict with an applicable plan, policy, or regulation adopted for the purpose of reducing the emissions of greenhouse gases during Project operation. The greenhouse gas impacts of the Project are largely attributable to increased vehcicle trips that would be generated by the enhanced gof course and the addition of new re~reational facilities at the expanded Baylands Athletic Center. Although CEQA criteria does not define the level of significance for the impact of climate change, the DEIR does contain a qualitative discussion of climate change. The Project site would be subject to increased flood risk due. to future sea level rise resulting from projected climate change. Any new structures (e.g. golf course restroom, gymnasium) would be elevated above the current Base Flood Elevation, and the renovated golf course will be elevated 3 to 25 feet through the placement of imported fill. The Project site will have increased flood protection as a result of the San Francisquito Creek Joint Powers Authority's (.tPA) flood reduction project slated to begin in 2014. City of Palo Alto Page 8 Courtesy Copies Golf Advisory Committee len Materman, SFCJPA Attachments: • Attachment A: Draft Record of land Use Action (PDF) • Attachment B: P& TC Minutes, February 13, 2013 (PDF) • Attachment C: Comprehensive Policies & Programs {PDF} • Attachment D: Draft Environmental Impact Report (Commission only) (PDF) • Attachment E: Palo Alto Municipal Golf Course Reconfiguration Site and Design Plans (Commission only) (PDF) City of Palo Alto Page 9 1 . The use will be constructed and opera ted in a manner tha t will be orderly, harmonious, and compa tible wi th existing or potential uses of adjoining or nearby sites, in that: City standards and regulations will help to ensure that the use, or operation, of the Palo Alto Municipal Golf Course will be conducted in a manner that is compatible with the existing Uses located in the immediate area. During construction, it is expected that there will be temporary impacts to the area in 'terms of construction-related noise, dust/debris and traffic. These impacts will be offset by applicable City construction standards, such as restrictions on hours of construction, the City's noise ordinance, and the mitigation measures found in the attached DEIR(Attachment D}. The proposed golf course renovation will be consistent with the existing functions of the park uses at the adjacent Baylands Athletic Center. The Proj ect will not adversely affect the operation of the Palo Alto Airport or other adjacent land uses. 2. The Project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or oth-er authorized occupations, in the same or adjacent areas, in that: The Project site is located in the Public Facilities (PF) -zone district and will be reconfiguring an existing public facility/golf course with a new public facility/golf course. The Project will maintain desirability of investment in the same and adjacent areas in that the proposed goals and design are consistent with the existing Baylands environment, and the construction of all improvements will be governed by the regulations of the current Zoning Ordinance, the Uniform Building Code, and other applicable codes to assure safety and a high quality of development. 3. Sound principles of environmental desLgn and ecological balance are observed in the Project, in that: The Project will implement appropriate sustainable building practices as -deemed feasible. The Proj ect is required to comply with the City's Construction and Demolition requirements during construction activities. The Project elements have been designed in a manner consistent with the Baylands Design Guidelines. The Project has been evaluated in the Environmental Impact Report for environmental impacts, and mitigations have been provided to reduce potentially significant impacts. Mitigation Measures in the areas of Aesthetics, Air Quality, Biological Resources, Cultural Resqurces, Geology and Soils, Hazardous Materials, Hydrology, Land Use, Noise, Public Services, Recreation, and Transportation and Circulation have been provided and are listed in DEIR provided as Attachment D. Page 2 Preservation and Management Regulations. Public Works Engineering 6. REGULATORY PERMITS: Obtain all necessary regulatory permits and approvals for working in the wetlands from Bay Conservation and Development Commission (BCDC), Regional Water Quality Control Board, US Army Corps of Engineers, U.S. Fish and Wildlife Service, etc~ 7. OFFSITE IMPROVEMENTS: At the end of the project, E"mbarcadero Road at the frontage of the project may require repaving (2- inch grind and pave) due to the damage from the coristruction tr~ffic. The condition of the pavement will be assessed at the end of the project. Furthermore, as part of this project, the applicant must replace the existing sidewalks, curbs, gutters or driveway approaches in the public right- of-way along the frontage(s) of the property that are broken, badly cracked, displaced, or non-standard per Public Works' latest standards and/or as instructed by the Public Works Inspector. 8. The plan must note that any work in the right-of-way must be done per Public Works' standards by a licensed contractor who must first obtain a Permit for Construction in the Public Right-of-Way ("Street Work Permit") from Public Works at the Development Center. 9. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of- way along the property's frontage. Call City Public Works' arborist at 650-496-5953 to arrange a site visit so he can determine what street tree work will be required for this project. The site or tree plan must show street tree work that the arborist has determined including the tree species, size, location, staking and irrigation requirements. Any removal, relocation or planting of street trees; or excavation, trenching or pavement within 10 feet of street trees must be approved by the Publ Works' arborist. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way ("Street Tree Permit") from Public Works' Urban Forestry. Page 4 10. STORM WATER TREATMENT: This project must meet the latest State Regional Water Quality Control Board's (SRWQCB) C.3 provisions. 11. The applicant is required to satisfy all current storm water discharge regulatiohs and shall _provide calculations and documents to verify compliance. 12. All projects that are required tq treat storm water will need to treat the permit-specified amount of storm water runoff with the following low impact development (LID) methods: rainwater harvesting and reuse, inf~ltration, evapotranspiration, or biotreatment. However, biotreatment ( ltering storm water through vegetation and sOils before discharging to the storm drain system) will be allowed only where harvesting and reuse, infiltration and evapotranspiration are infeasible at the project site. Complete the Infiltration/Harvesting and Use Feasibility Screening Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook - Appendix I). Vault-based treatment will not be allowed as a stand-alone treatment measure. Where storm water harvesting and reuse, infiltration, or evapotranspiration are infeasible, vault-based treatment measures may be used in series with biotreatment, for example, to remove trash or pther large solids. Reference: Palo Alto Municipal Code Section 16.11.030(c} http://www.scvurppp- w2k.com/permit_c3_docs/c3_handbook 2012/Appendix_I- Feasibility_2012.pdf In order to qualify the project as a Special Project for LID treatment reduction credit, complete and submit the Special Projects Worksheet (Santa Clara Valley Urban Runoff Pollution Prevention Program C.3 Stormwater Handbook -Appendix J: Special Projects). Any Regulated Project that meets all the criteria for more than one Special Project Category may only use the LID treatment reduction credit allowed under one of the categories. http://www.scvurppp- w2k.com/permit c3 docs/c3_handbook 2012/Appendix_J-Special_p uti1ities Engineering 13. The most recent plans submitted on March 6th, 2013 do not show any changes to the electrical utilities. If there any changes to the load requirement or physical reloca tion of utili ties infrastructure (including the Page 5 meter}, the customer is required to contact CPAU and fill out a Utilities Service Application Fire Department 14. Cart path design for emergency medical response recommended. SECTION 6. Term of Approval. Site and Design Approval. the project is not commenced council approval, the approval force or effect, pursuant to 18.82.080. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Cl~rk APPROVED AS TO FORM: Senior Deputy City Attorney In the event actual construction of within two years of the date of shall expire and be of no further Palo Al to Municipal Code Section APPROVED: Director of Planning and Community Environment Page 6 ATTACHMENT B 1 2 Planning and Transportation Commission 3 Verbatim Minutes 4 February 13, 2013 5 6 EXCERPT 7 8 9 1875 Embarcadero Road (Palo Alto Golf Course) : Community Scoping meeting 10 regarding the scope and content of the Draft EIR's environmental analysis for the Palo 11 Alto Municipal Golf Course Renovation a nd Bayhmds Athletic Center Expa nsion 12 Project. Request for Study Sess ion review of preliminary plans for the golf course 13 renovation. Zone District: PF(D). 14 15 Chair Martinez: And we'll go right into our first agenda item which is a let m e get it right, an 16 Environmental Impact Report (EIR) scoping session and study session for the Palo Alto Golf 17 Course. And we will begin with a staff report, Excuse me, before you start, m embers of the 18 public that care to speak on this item you can submit speaker cards. Thank you. . 19 20 Aaron Aknin, Assistant Director: And Chair be fore we go into this can, you m ay want to 21 mention that Item Number 1, which was the public hearing that was initially set to a date certain, 22 which was tonight, has been continued at staffs request to the 2ih, We'll be sending out notices 23 to the neighborhood about that, but since it's on the agenda tonight it might be .. , I'm sorry now 24 March 5th not February 27th• 25 26 Chair Martinez: So noted. Thank you. Ok let's begin with our first item tonight. Staff report. 27 28 Mr. Aknin: Thank you and good evening honorable Chair and PIa nning Commission. Tonight 29 we have basically two items within this one item. Initially we were thinking of having them on 30 separate nights. We thought it would be best fo r the Commission to both get an overview of the 31 Master Plan for the Palo Alto Golf Course as well as have the EIR scoping session on the sam e 32 night so the public could have som e background about what is being proposed in order to 33. formulate their comments on what should be. in revi ew from an environmental standpoint. So at 34 this point I will tum it over to Rob De Geus as well as Joe Teresi to give their presentation. 35 36 Joe Teresi, Senior Engineer, Public Works: Thank you and good evening. I'm Joe Teresi a 37 Senior Engineer withthe City's Public Works Department and I'm the Project Manager for this 38 project. And at this point I would like to ju st introduce so me of the other staff mem bers and 39 consultants who are here to assi st us with this item. On m y. left is Rob De Geus from 40 Community Services. Also in the audience is Jo e Vallaire from the Golf Course and then we 41 also have our consultants here this evening; F orre st Richardson is the Golf Course Architect and 42 Shilpa Trisal is the Environmental Consultant. And they'll be both going to be making parts of 43 the presentation. 44 45 Again as Aaron mentioned the purpose tonight is twofold. One it's the scoping meeting for the 46 Environmental Impact Report so we're seeking input from both from the Conlmission and the 47 members of the public on what issues and item s should be covered in th e Environmental Impact 48 Report that we're about to start. And then secondly even though this project has been reviewed 1 1 several times by various bodies like the Council, the Finance Comm ittee, the Parks and Rec 2 Commission, the Golf Course Committee, an d the Architectural Review Board (ARB), you 3 haven't had a chance to see it yet. So this is an opportunity for us to introduce the project to you. 4 It will be returning to yo u in several months as part of a fo rmal site and design application, but 5 we wanted to present it tonight so you could becom e acquainted with it. So a t this point I'm 6 going to introduce Forrest Richardson our Golf Course Architect to give you an overview of the 7 project. 8 9 Forrest Richardson, Forrest Richardson and Asso ciates: Good evening Comm issionets. Thank 10 you for having me here so that we can get into your questions I'm just going to g~ through a very 11 brief overview of the project to show you som e of the hallmarks of it. This project is really all 12 about transforming the existing golf course in Palo Alto to one of a Baylands theme~ We spent a 13 lot of time with your staff working and understanding the approved Baylands Master Plan and so 14 virtually everything we're doing is aimed at that. And Joe, tell m e what I'm doing here to get 15 this to go forward? Sorry. There we go. How do I go back? Yeah. You want to do it? Just go 16 back to the first slide. Sorry, second slide. 17 18 So real quickly this is the existing golf course boundary, the red line that you have there. It's 19 171 acres. Next. That is the existing golf course . It's largely what we call a parkland golf 20 course currently. Wall to wall turf and was built in the early 1950's. It's changed a lot but the 21 turf footprint and the parkland sett ing really hasn't changed. So it really the way we descr ibe it 22 as golf course architects it's kind of like an island within the Baylands environment. Next. 23 24 The project goals were very cl ear. Reconfigure the golf co urse to accommodate the necessary 25f100d control with the Joint Powers Authority (JPA). Reinforce a sense of place to the completed 26 facility. Celebrate the Baylands environment. Restore the golf asset as a point of pride for the 27 community. Conserve resources by transform ing the fully turfed course to on e with more 28 naturalized areas that are in harm ony with the Bay lands. And then prom ote Palo Alto by 29 establishing a must play golf experience for the residents as well as bringing people into the City. 30 31 I won't go over each of these individually, but the hallmarks of the pro ject it's basically 32 rebuilding the golf course; so all of the features, the landscape, all of the areas of the golf course 33 will be fully replaced. And I'll get to some of the highlights of that as we look at the plan.· The 34 green line on this represents the project boundaries of the golf course. S 0 it's 142 acres of the 35 171. It does not include the clubhou se; it doesn't include the park ing area, the entryway, or the 36 maintenance facility. It's just the golf course portions itself. 37 38 This document gives you a little bit of idea of what's being carve d out of the golf course which 39 was direction from your Council to create an athletic field area, sports area. That is represented 40 by the orange. The yellow happens to be buffer mounding that was a very strong public request 41 that would separate the athletic field area from the golf course. And the red line represents a 42 stockpile area which is not only for the benefit of importing soil to the golf course but also would 43 serve the JPA and the creek realignment of San Francisquito Creek. The purple area, which is on 44 this plan, the, I think if you go back one ... the purple area there, that is just showing you the area 45 that is being removed from the golf course for realignment of the creek. 46 47 This is the plan in Ju ly of last year that was adopted by your Council affectionately known as 48 Plan G of seven different plans th at were created. This is just showing you the turf acreage. 49 Currently 135 acres of turf on the parkland golf course. The new acreage would be 81.3, a forty 2 1 percent reduction. The next slide w ill show yo u the naturalized areas of the cours e. The tan 2 color are native; what we call Baylands them ed native are as. The kind of bluish color are 3 lowland areas. They're not really water, but they would be pr one to halophyte type plants~ the 4 salt tolerant plants. The cart pa ths and buildings have a 4.5 percent coverage to the site. Just to 5 give you an idea of the impact of th at. And this is the grading plan that's currently in progress 6 which shows the importation of soil onto the site. 7 8 This is just giving you an idea of some of the landscape them e for the site. So the idea is to 9 transform th'e parkland setting to more of a Baylands compatible landscape. We will be retaining 10 and preserving som e of the trees onsite such as the S tone Pines and som e of the landm ark 11 Eucalyptus, but not the ones that are in poor health or dying condition. On the left side here are 12 the native grasses for the upland areas and on the right are the salt tolerant plants for the lowland 13 areas just to give you an idea of the look that would be expressed in the finished landscape. 14 15 These are conceptual plans that have gone through your Golf Advisory Committee and the Parks 16 and other public meetings that just show the look and feel of the completed course. This is just a 17 document to show you some of the irrigation water saving measures that will be installed. Won't 18 get into detail on it, b ut the idea is to rem ove much of the relianc e on water for the site; 19 somewhere between 30 and 40 percent. The restroom building that will be relocated goes here in 20 this area up toward the West along the reloc ated creek. These are so me of the plans that are 21 currently in progress for that building. And this is just showing you the earthwork. There's a net 22 increase to the site of about 340,000 cubic yards of material. 23 24 I'm now going to turn it over to Shilpa from IC F International to talk to you about the scoping 25 and cover the sequence of how that process will unfold. Shilpa? 26 27 Shilpa Trisal, ICF International: Thank you. Tha nk you for having us here. My nam e is Shilpa 28 Trisal. I'm with ICF International the California Environmental Quality Act (CEQA) consultant 29 on this project. On January 22 nd we released the Notice 0 f Preparation for an Environm ental 30 Impact Report announcing that we're starting th e CEQA process. And it's a 30 day scoping 31 process which will end on February 21 st during which tim e we will be seeking comm ents from 32 the public and p~blic agencies on what should be included in the E IR, what issues to be 33 examined, etcetera. Today's meeting here also serves as the scoping meeting for the EIR. 34 35 The purpose of scoping in general as I explai ned is to get comments and input from the 36 Commission today and m embers of the general public and any agencies on what should be 37 examined in the EIR and to resolve any early issues as early as possible and also g et a sense of 38 what should be the range of alternatives to be exam ined in the EIR and then exam ine potential 39 issues and strategies to deal with various issues that are raised here today. 40 41 The EIR will examine a broad range of resource areas. These are included in the Appendix G of 42 the CEQA guidelines. These are recommended by Office of Planning and Research (OPR) to be 43 examined in environm ental documents. These range from aesthetics which includes lighting 44 analysis, scenic resource analys is, air qualit y, biological resources, cultural resources to 45 hazardous materials, noise, construction noise, transpo rtation, any change construction traffic, 46 etcetera. A Iso in addition we will be looking at a lternatives; looking at cumulative impacts, 47 growth inducing impacts, and all other required sections within the EIR. 48 3 1 Regarding public outreach the project team here has over the last one year held several meetings 2 with the public and various commissions. They've been engaged in seeking feedback on the golf 3 course plan and the Plan G that was presented by Forrest today is a result of that communication 4 and feedback. And we as a project team hopes to come back to the Commission during the draft 5 EIR stage and-have a site review and also meet with other departments and commissions and the 6 City Council and this·will be an ongoing process and we hope to ha ve a project that meets, that 7 includes all the feedback that we get. 8 9 The EIR process we expect will be a 12 month process. We initiated the EIR last month. So this 10 will be a 1 0 to 12 month process. In th e next couple 0 f months we will b e preparing the 11 administrative draft EIR with the City's inpu t and then we hope that in the. summ er we will be 12 releasing the public draft for public comment. And through fall we'll be responding to any 13 public comments and then certification at the end of the year. And at that point we'll be back in 14 front of you. And thank you very much for your time today. 15 16 Mr. Teresi: That concludes our presentation. We're here to answer any questions that you might 17 have. 18 19 Chair Martinez: Ok. r d like to open the public hearing and ask if there are any m embers of the 20 golf community that care to speak on the project. I see none. Oh, I' m sorry. Well, I'm glad I 21 asked. Thank you very much. You'll have three minutes. 22 23 Emily Renzel: Well thank you. I'm Em ily Renzel, 1056 Forest Avenue, and I adm it to have 24 coming a bit unprepared. But I' m very concerned about the proposed gym nasium that is 25 suggested for this athletic center addition. New fi elds when they're not in use at least prov ide 26 some semblance of habitat. A gymnasium will not . It will a Iso be an increas ed urbanization 27 which is contrary to our Baylands Master Plan of no further urban intrusion. Part of this athletic 28 center expansion is very close to the creek an d as a resu It will be an area that h as a higher 29 habitat, potential habitat value than further toward Embarcadero Road for example. 30 31 I'm also very concerned about increased night lighting out there in the Baylands. I would 32 consider that a serious urban intrusion. I think th e general thrust of changing the golf course to 33 being more water tolerant, saIt tolerant, and Baylands habitat is a good one, but I think it may be 34 countermanded by some of these urban intrusions. I don't know how many parking spaces, but it 35 seemed like there was a huge amount of additional parking proposed, which is paving. And I'm 36 not sure where that goes. Ther e is an acre of land on the, where Palo Alto Sanitation Company 37 (PASCO) used to be located, that is part ofth e Baylands Athletic Center. And I don't know if 38 that's proposed to be used as part of this project, but certainly before going and putting 39 something urban close to the creek it would make more sense to put it in that ac re site that is 40 right next to an industrial area. And that may be where some of this proposed parking is going, I 41 don't know, but the trend seem s to be going in a ve ry bad direction from preserving Baylands 42 habitat in general. And I thinkto th e extent that this project can avoid those kinds of impacts it 43 would be desirable. Thank you. . 44 45 Chair Martinez: And thank you too. 46 47 Vice-Chair Michael: So the next speaker is Trish Mulvey. You'll have three minutes. 48 4 1 Trish Mulvey: Thank you and I'd like to thank Ms. Renzel. She introduced the concerns I share 2 particularly about the lighting and the habitat valu e in the area of the athletic fields. Currently 3 the edges of the golf course have becom e quite useful habitat to a nu mber of small creatures 4 particularly the native grey f ox and I want to make sure that those needs are understood and to 5 the extent impacts can be mitigated. I particular ly share the concerns about the night ligh ting 6 aspects at the athletic fields. 7 8 The other comment I have is very different and that's about bicycle access to the athletic fields. 9 Between the work that's going on now with Facebook and the Mid-Peni nsula Regional Open 10 Space District to complete the Bay Trail basically through Menlo Park to Mountain View as well 11 as the East Palo Alto plan f or a bicycle and pe destrian overcrossing that will terminate on Clark 12 Avenue in East Palo Alto. I'm particularly interested in making sure that we are accommodating 13 and acknowledging the impacts of an awful 1 ot more opportunity for bicycle access to the 14 athletic area as well as to the golf course and as I say on beyond in both di rections. I'd like to 15 make sure that there's clear identification of the connection between this site and the JP A project 16 at the Palo Alto Pump Station and that there's consideration of making sure we have adequate 17 bicycle parking as well as safety features. So thank you for your attention. 18 19 Chair Martinez: And thank you. 20 21 Vice-Chair Michael: Next speaker is Shani Kleinhaus. 22 23 Shani Kleinhaus: Good evening. I'm Shani Kleinhaus with Santa Clara Valley Audubon 24 Society, also a resident of Palo Alto. I'm here to ask that a ltematives would be considered that 25 have been perhaps e1im inated already but shoul d be part of the CEQA analysis that you would 26 have maybe fewer athletic fields, maybe no gymnasium, and maybe more nature. So those types 27 of alternatives could have less , could be feasible and could ha ve less of an im pact on the 28 environment and should be included in the EIR. At the heart of the EIR is really the alternative 29 analysis. It seems like the City has done a lot of it pre EIR, but that doesn't mean that it should 30 not be part of the EIR as well. Thank you. 31 32 Chair Martinez: And thank you. We'll leave the public hearing open and we'll go to members of 33 the Commission for questions. Let's start with the Vice-Chair since he's our resident golfer. 34 35 Vice-Chair Michael: Your resident "duffer" I thi nk is m ore accurate. So I thin k this is an 36 interesting project. Obviously there's been significant community outreach and visibility to the 37 Council and other boards and commissions. A nd I appreciate it com ing to the Planning 38 Commission for our role in the process. 39 40 As a golfer and not so much as a Comm issioner I wonder if the period of construction and the 41 disruption of play and habits of your patrons, the golfers who play the course, is going to create a 42 challenge to bring them back when it's done? And I think probably the significance of this is 43 twofold. Probably in terms of planning and budgeting and forecasting I would be cautious 0 r 44 conservative in terms of the extent of play you'd get when you reopen, partic ularly if the course 45 is going from a course which is parkland but re latively flat, not a 10 t of Qut of bounds, not 46 particularly challenging to really skilled golfers , so your base of play is probably a group that 47 doesn't include a lot of low handicap golfers w ho maybe don't think of Pa 10 Alto m uni or the 48 new Baylands Golf Club to be as a place th ey'd like to spend their tim e and money. So 49 importance of marketing, but also being cautious in the forecasting. 5 1 2 One of the things. that' sprobably down in sort of the weeds in terms of the design is as you move 3 to a more challenging golf course but you have gol fers of sort of more normal abilities currently 4 playing probably very important to have the maximum amount of multiple tee boxes from 5 championship to forward tees and everything in between. I know th at there's a course that I've 6 experienced in the Palm Springs area which is S ilverRock that has five tee boxes and it's really 7 fabulous to have that level of choice involved so that you can be at any level you can have a 8 great experience. And so I don't kn ow if this is in the design, but I would really maximize and . 9 optimize the multiple tee box kind of idea so you can appeal to all levels. 10 11 And then th ere are a n umber of current Planning Commission Members who served on the 12 Infrastructure Blue Ribbon Co mmission (lBRC) and as part of that we looked at a nu mber of 13 infrastructure issues in the City including the Municipal Services Center (MSC). And we 14 engaged in a little sort of speculative thinking; what if things were changed in'the City relative to 15 the facilities that currently at the MSCor in that area and with respect to the Baylands Master 16 Plan which is very important and obviously takes precedence over a lot of these things. I 17 wondered if it might be feasible not as part of th is current project, but maybe a future possibility 18 to think about som e sort of a hotel conference facility that would be conveniently nearby the 19 course that would attract players that would be interested in the beauty of the Baylands, the 20 amenities of the golf course, and so forth. I last year had a chance to visit Alabama and there's a 21 state project there the Robert Tr ent Jones Golf Trail and th ey partnered with a ho tel, I think 22 Marriot Hotel, to have facilities at each of these Robert Trent Jones courses. And they use that to 23 stimUlate a lot of visitors and play to Alabama that wasn't ot herwise happening. So just as a 24 golfer I yvould make some suggestions about things to think about. 25 26 Chair Martinez: Yes? 27 28 Mr. Richardson: Honorable Commissioner "Duffer." Regarding the multiple tees, well first of 29 all as someone who has to come here and visit your lovely City I support more hotels, especially 30 ones that are under a couple hundred dollars a night. But as far as the multiple tee boxes we've . 31 spent a lot of time with the Golf Advisory Committee. I serve on anum ber of national 32 committees that addresses the very concern th at you brought up. And t 0 put it in perspective 33 your course now is about 5,000 yard s at the forward tees. And we will be able to accomm odate 34 just below 4,000 yards. And it's very important to us because it obviously needs to cater to as 35 you say a variety of skill levels. 36 37 Chair Martinez: I have kind of a related, I don't think I would call it a follow up, but yeah, let me 38 call it a follow up. In the analysis that the Vice-Chair referred to of the profitability or the break- 39 even point, does it take into a ccount the current usage and by ra ising the fees what num ber of 40 people will be priced out of the market? I kn ow there are low inco me people from East Palo 41 Alto and retired folks that use the golf course. Is that factored in? And as kind of a follow up to 42 my follow up, is it something that the EIR can take into account? 43 44 Rob De Geus, Recreation Services Manager, CSD: Rob De Geus, Recreation Services Manager. 45 I can start a response to this. I'm not sure if it's included in an EIR analysis. I know that it was 46 included in our staff analysis. As we considered the different golf course design options. I think 47 we started out with seven from very sort of si mple reconfiguration to so rt of more complicated 48 and ambitious, which is what Council ultimately wanted to do. As p art of that work we also 49 retained the National Golf Foundation (NGF) that does financial analysis on pro formas and how 6 , 1 a golf course is likely to prefor m given the new features and how it competes with Shore Lin e 2 and our other competitive golf courses in the neighboring area. And so they took a very clos e 3 look at that and did ten year pro formas and in term s of the pric ing they anticipate that we can, 4 and not that we will, but we can increase fees probably 15 percent above where they are today 5 given the improved golf course product. So that's exciting for us to h ear because as we look at 6 the trend of golf play over the last 10 years it's been on a steady decline every year and so we do 7 need to change it up a little bit to capture more play. 8 9 Chair Martinez: And to the second part of my question about? 10 11 Mr; De Geus: Who gets priced out of the market? That question? 12 13 Chair Martinez: Well, is there kind of a connection to the EIR that can be part of our scoping. 14 15 Cara Silver. Sr. Assistant City Attorney: Chair Martinez I'll take a crack at that and then perhaps 16 the EIR consultant can tag on. I think in terms of a change in the user ship of the golf course that 17 could have an environm ental impact in the ar ea of traffic and greenhouse gas em issions. It 18 probably will not have an im pact on the traffic an alysis because we ty pically look at peak hour 19 and golf course usage typically doesn't occur in peak hour. However, it could have an impact in 20 vehicle miles traveled if the current usage is more of a local based and it's expanding to more of 21 a regional facility I think that would be an appropriate area to look at in th e EIR and it's good 22 that you brought the point up in this scoping session. This is exactly the type of fee dback we're 23 looking for. . 24 25 Chair Martinez: But no socioeconomic impact is being considered, is that correct? 26 27 Ms. Silver: Oh, in terms of social impacts and economic imp~cts those typically are not looked at 28 in the EIR except if those im pacts will resu It in a physical im pact such as blight or som ething 29 like that. And we wouldn't anticipate that type of analysis here. 30 31 Chair Martinez: Did you care to add something? 32 33 Ms. Trisal: No, that's exactly what it is. That unless we have a physical impact EIRlCEQA does 34 not consider economic impacts. 35 36 Chair Martinez: Commissioner Keller. Before you begin I apologize I should've acknowledged 37 that Commissioner Tanaka arrived shortly after we began on this. 38 39 Commissioner Keller: Yes. Just for the reco rd perhaps Forrest Richardson who spoke earlier 40 could identify himself? 41 42 Mr: Richardson: I'm sorry, yes. Forrest Ri chard son, American Society of Golf Cours e 43 Architects, Forrest Richardson and Associates. Thank you. 44 45 Chair Martinez: And for that matter, our Senior Assistant City Attorn ey did not acknowledge 46 herself. 47 48 Ms. Silver: Guilty as charged. Cara Silver, Senior Assistant City Attorney. 49 7 1 Commissioner Keller: So my first question is I guess a very high level scoping question. And 2 that is 'will the EIR include the playing field changes or proposed changes or options there or 3 only include the golf course and its proposed changes or alternative changes? 4 5 Ms. Trisal: The EIR will consider the Baylands Athletic Center expansion, which includes five; 6 right now the plan includes five new athletic fields and a new gym nasium. And we're open to 7 considering as part of the scoping any other alternatives that come out. 8 9 Commissioner Keller: Thank you. So that's very helpful for us to know that suggestions on what 10 might be in terms of playing fields or gymnasiums or placement is within scope. Thank you. 11 12 So here's some things, some questions and things that I'd like considered in the EIR. The first is 13 consider impact of playing field noise on golfcourse play. And whether the lowlands area of the 14 golf course are potentially become classified as wetlands. And if they ar e potentially classified 15 as wetlands under the federal de fin ition then what restrictions does that entail for the golf course 16 and for the City of Palo Alto? Is there a potential for creek a nd bay flooding? In other words, 17 even after the project is done is there creek flooding that m ay diminish, but bay flooding m ay 18 still continue? And ifbay flooding, if either of these still exists how much notice would there be 19 for this flooding? And would th ere be adequate notice and tim e for people who are in the flood 20 prone area to leave safely considering particul arly for example, congestion on Embarcadero 21 Road at peak hours? What is the effect on wildlife of both the golf course and the athletic center 22 in terms of noise and light, particul arly at night or in the evening? Is there potential for the use 23 of reclaimed water on watering the at hletic fields or watering the pa rts or all of the golf course? 24 And particularly consider the issues of the reclai med water and its salinity and other things that 25 are in the reclaimed water. 26 27 Perhaps we could hear a little m ore about th e proposed ideas for the playing fields and the 28 gymnasium so that we could better articulate questions and thoughts about them. And finally I 29 actually would like to understand a little bit more about whether the PASCO site is part of this 30 analysis and how. So perhaps those last two que stions you could addre ss now and the rest of 3 1 them are things that would be properly addressed in the EIR. 32 33 Mr. De Geus: Again, Rob De Geus, Recreati on Services Manager, Community Services 34 Department. Regarding the PASCO s ite that is included in the study and it is the site where we' 35 thought, we're thinking about the gymnasium. That location where the gymnasium would go, so 36 the. other side of Geng Road. The question about the athletic field area and what are the 37 possibilities and thinking of that space the design and concepts of that area is not as far along as 38 the golfcourse design, but the current thinking is multiuse athletic fields that allows for lacrosse 39 and soccer and football and a variety of sports to be companion fields to the baseball and softball 40 field across the parking lot. 41 42 Mr. Teresi: And can I add to that a little bit? I just wanted to clarify that although the athletic 43 fields and the possible 'inclusion of a gymnasium are going to be addressed in the Environmental 44 Impact Report those facilities are no t yet funded. They're not really a project yet. They're jus t 45 more or less concepts. And when we com e back to you with our site and design application it 46 will not include those elements. We're com ing back only with the spe cifics of the golf course 47 renovation. But the EIR is meant to cover these other athletic fields as a future project. 48 8 1 Commissioner Keller: Well I appreciate that. Certainly the EIR is supposed to look at the whole 2 of a project and even if a project is segm ented it should consider the whole thing. So certainly 3 from the point of view of the CEQA analysis it should include these playing fields and potential 4 gymnasium. And also from the point of view of a comprehensive analysis and cost it's certainly 5 better to do it that way. 6 7 Could you identify perhaps the diagram that seems to make the most sense to me is this diagram 8 here, which is, I don't think it's, it's sheet five, by the way som ebody likes extra "e' s" in the 9 word "sheet," but sheet five seems to be the diagram I can figure out as to what's going on. And 1 0 perhaps, I'm not sure where that· fits on your diagram. Perhap s you can tell m e where on that 11 diagram the PASCO site is currently. 12 13 Mr. Teresi: So the area that I'm highlighting with the mouse, thatis this PASCO site. This area 14 right here. 15 16 Commissioner Keller: So just if I get you correct it's the triangular parking lot that you've placed 17 between the current Baylands Ath letic Center and Geng Road in th at little trian gular space. 18 That's what we're talking about? 19 20 Mr. Teresi: Yeah. 21 22 Commissioner Keller: Is that correct? 23 24 Mr. De Geus: Yes, that's correct. 25 26 Commissioner Keller: Thank you. I just figured I'd verbally describe it so somebody looking at 27 the minutes would be able to figure out what we're talking about. Thank you very much. 28 29 Chair Martinez: Thank you. Commissioner Panelli. 30 31 Commissioner Panelli: Thank you Mr. Chair. If our esteemed Vice-Chair describes himself as a 32 "duffer" I aspire to be a "duffer." I think I'm more of a "hacker." But having spent a couple 33 years on the Parks and Recreation Commission as well as s orne time on the Infrastructure Blue 34 Ribbon Commission I'm glad to see this finally, we ta lked about this for 'some time and it's nice 35 to see that this come to fruition of course sped up by the JPA project. I have a few questions. 36 First of all do you have any, to go to Comm issioner Keller's question; is there an anticipated site 37 for this possible gymnasium? 38 39 Mr. De Geus: The current concept is at tha t PASCO site that Commissioner Keller pointed out 40 earlier.Th at triangular piece if yo u come down Geng Road and enter the Baylands Athletic 41 Center, right as you enter on the left side, that would be the location. 42 43 Commissioner Panelli: So on this diagram that we're looking at now it would be between the 44 triangular parking lot and Geng Road there's a strip there that? 45 46 Mr. De Geus: It's right here in this area here. 47 48 Commissioner Panelli: Ok. 49 9 1 Mr. De Geus: The other side of Geng Road. 2 3 Commissioner Panelli: Ok. 4 5 Mr. Teresi: I mean if I couldju st clarify, 1 think when the Counc i1 initially was looking at this 6 Plan G the idea of a gymnasium hadn't ente red the discussion yet. Later 'on there was an 7 overture by someone who wanted to maybe make a contribution that would possibly add a gym 8 and that's why we've got it adde d to the scop e of the EIR because that's a po ssibility. It's 9 certainly not a foregone conclusion at this point, but it was kind of a late addition to the idea of 10 these athletic fields. 11 12 Mr. De Ge us: Right and I would say that's true . That is the current thinking of a potential 13 location, but there is still a lot more community outreach that needs to occur about a location and 14 even if a gym is really appropriate for this space. 15 16 Commissioner Panelli: ok. Because I saw one very brief mention in the staff report. I didn't see 17 it on any of the diagrams. So I was just curious about that. 18 19 Can you just from an engineering standpoint just give mean idea, from what I understand part of 20 this renovation is being done to sort of make the course m ore water resistant because it's often 21 either shut down or barely playab Ie when there's even just a little bit of precipitation. Can you 22 tell us when this project is done how much it should be able to handle? How m any additional 23 playable days per year the course could probably accommodate? 24 25 Mr. Richardson: Sure Commissioner, Forrest Richardson again. The infras tructure of the golf 26 course, most of it was replaced or significant amount of work in the late Nineties. So the one 27 element that we're preserving is·the master drainage system, which was installed and paid for by 28 the City. But with the importation of soil we will be creating gradients that allow the golf course 29 to drain. So to your question all of the golf cour se should drain very rapidly, within a 10 to 12 30 hour period whereas now there's a 10 t of standing water on the go If course that com pounds all of 31 the issues that com e with standing water: m ore geese, settling, rutting from golf carts and 32 maintenance equipment, which then leads to more low areas, and the issues go on and on. 33 34 The rest of the infrastructure, the irrigation system and some of the other features and structure 35 of the golf course is past its usef ullife cycle. And justto gi ve you an, idea the irrigation system 36 ' that will be installed will be all High-density Polyethylene (HDPE) long life pipe as opposed to 37 the metal couplings and Polyvinyl Chloride (P VC) that's there today and that's why it' s ,38 deteriorated with the high salts in the soil it's only lasted 12 or 13 years whereas normally we'd 39 like to get 20 or more years out of the irrigation system. 40 41 And to Commissioner Keller's question just real briefly the golf cour se is irrigated with effluent 42 water and it would, we would, by putting in Paspalum grass, which is on the sheet you have 43 there, we would be relying more and more on effluent and not as much on the potable water. So 44 right now it's a blend and that blend will be significantly to the City's favor and the community's 45 favor because the reliance on potable water will go down. Effluent in ratio will go up, but the 46 overall water usage will go down with the im provements. Did I answer your question about the 47 infrastructure and the drainage? ' 48 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Commissioner Panelli: One of the things that I was trying to get attho ugh is, will this pro ject effectively make it, make the course more usable? If I were to describe it in terms of number of days in a year. Mr. Richardson: It will drain as well as any gol f course can, given the am bient rainfall and the environment. So right now if you experience days when it's simply too wet those will go away and play would be able to resume as soon as the.weather's clear. . Commiss'ioner Panelli: Thank you. Question for, the assumption is that it's going to take a' year to do the project so the course will be down for an entire year. Is there an opportunity to keep the practice range open?, Because it seem s like perhaps that might take a lot less work and it might be a way to sort of keep people engage d and to Vice-Chair Michael's question, you know, out of sight out ofm ind, so if at least peop Ie are us ing the range and they see the pro ject advancing and they don't necessarily fully detach. , Mr. De Geus: We haven't developed all of the sequencing yet, but the concept is that we would keep some things open like the range, certainly the restaurant and pro shop and have lessons and those types of things to keep activity going as much as we can. Commissioner Panelli: Thank you. Chair Martinez: Commissioner Alcheck. 24 Commissioner Alcheck: I was going to ask about drainage so that's check. Ok, so m y first 25 question is I guess to the PI anning Department. Would you guys provide a little more 26 background with respect to the at hletic center and proposed gym nasium? I noted in the report 27 that the athletic center and/or gymnasium isn't funded and is antici pated to be com pleted 28 sometime after the golf course reconfiguration. Does that, does approval of this project m ean 29 approval of the gymnasium? Are they going to be so rt of treated together or are they separate? 30 < Would we be reviewing the gymnasium potentially years later? 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Mr. De Geus: Right, they'll be separate project s. You know unless a developer com es forward and says, "We want to help you make this happen and build it within the next year." Then we may bring it back to you at the sam e time, but it's unlikely. Really what we're doing for the most part is carving out land for potential playing fields and a gym nasium sometime in the future. Commissioner Alcheck: So is it sa fe to assume that as we continue to discuss this project over the next three or· four months th e concerns that som e of these residents had about the increased urbanization as a result of this gymnasium essentially unaddressable because it's not really on the table? Mr. De Geus: It probably won't be completely addressable, but it'll be important to hear because we haven't fully developed a concept for what is going to be there and if there is significant concern about a gymnasium or lights or other things then that's going to help inform the concept as it develops. And as our funding stream becomes, comes into sight then that's when we really will get to work on further development at that space. 11 1 Mr. Teresi: I mean I think the purpose of the intent is to kind of in the environmental document 2 to depict the most intense use that could happen so that's kind of-the worst cas e so that we're 3 covered as far as the environm ental document. And then when we actually com e forward with 4 the project for planning review it would be a lot more specific, but the environm ental document 5 would have covered kind of the most intense changes and impacts. 6 7 Commissioner Alcheck: Just a qui ck follow-up. What sort of precipitated the notion fora n ,8 additional athletic facility? Was there sort of a need iden tified or a gymnasium need that there 9 _ was sort of a, there wasn't a lot ofbac kground on the gym nasium component and I sort of -10 wondered where that came from. ' 11 12 Mr. De Geus: Yeah I think I can help respond to this. The City doesn't have any gym nasiums, 13 no community gymnasiums. The only gymnasiums we have access to is the school gymnasium s 14 at some times, which we have to pay for and we have the Cubberley Community Center, which 15 hangs in the balance a little bit as to what the future of Cubberley is. So there's a docum ented 16 need for a gymnasium. We have lots of kids and families going outside of Palo Alto to get 'their 17 volleyball practice and those types of things, so we've known for Some time that it would be 18 great to have or build a gymnasium somewhere in town. So that's I mean something that we've 19 been thinking about for a while. 20 21 And with re gard to the athle tic fields there was a report written about 10 years ago now called 22 "Got Space" where it identified the lack of athletic fields an d playing fields in our sort of built 23 out community. And it indicated I don't rem ember what the num ber was, but a significant 24 deficit in athletic fields. So that allowed us to build the fields on EI Cam inc/Page Mill and so 25 we've done some things to add capacity but it still rem ains a problem. There are insufficient 26 fields to meet the demand of the community. And so the Council is well aware of that and as we 27 presented options to the Council about golf course design several had no athletic fields. It Was 28 just purely golf cour~e. We were instructed to go back and rethink, in fact I think there was one 29 design that had one athletic field and the Council asked staff to go back and maximize the 30 am<!>unt of athletic fields we could build into the design. So we di d that and went back to -31 Council and they liked it. So told us to go forward with that design. 32 33 Commissioner A1check: Ok thank you. That's actually really helpful. I have two more quick 34 comments. There's a golf course in Davis, California called th e Wildhorse Golf Course and it 35 uses signage, low level signage, to sort of pro vi de insight into the surrounding natural landscape 36 and habitat and I've always thought that was sort of special because you're sort of learning about 37 the random rodents that are feet from you and little owls. And they, you know, they sort of give 38 you the scientific, it sort of f eels like you're on a little nature hi ke when you're playing a round 39 there. and this sort of seems like an ideal add ition to this concept plan considering that you're 40 sort of playing into the them e of Bay lands and how the natural landscape, I think it would be 41 interesting if the people who visit our community to play this and also our constituents can "Oh, 42 and that's the that bird that we were trying to save or whatever, that's where they live or 43 whatever." You know? I don't know, I think that would be interesting. 44 45 I alsoJound it surprising that there are' 844 trees on that course. I am also a golfer and I've 46 played that course a number of times and I've always thought it was ridiculously open. And the 47 notion that there are 84 4 trees is s 0 surprising because I feel like ther e are no trees. And I 48 understand that nearly three quarters of those trees are going to be removed. W ill they be 49 replaced in some fashion and is there an alte rnative to provide sort of separation between 12 1 fairway. .. this is going to sound sort of funny, but between fairways and enhance sort of the 2 intimacy of a round of golf there? It sort of feels like you can see every single golfer on the 3 course when you're playing there and I wonder if there's going to be some more separation? 4 5 Mr. Richardson: Those are good questions. Let m e just go back to one comm ent that you had 6 just so that you understand from a planning point of view as the golf course architects when the 7 Council decided to see what area could be carved out we didn't know what would go there. That 8 was very conceptual in Plan G as far as thr ee soccer fields or whatever. But from a land 9 planning point of view just so the Comm issioners understand the process our role becam e not 10 only to see what we could carve ou t, but very importantly what we could preserve in the way of 11 the golf course. W e didn't want to leave a golf' course that wasn't viable. And secondly we 12 heard very loud and clear from both the people that play golf as well as the people that might be 13 using whatever athletic field th at they wanted separation. So . those mounds, that area between 14 Hole 10 and the ten and a half ac res those are w hat we call th ese buffer mounds that are very 15 large, very strong mounds that will create a separation between those two uses. So I just wanted 16 to make sure that you understood that. 17 18 We've just been given a signage scope and I think some of what you've said are things that have 19 been talked about are really good ideas, I'nl not familiar with the Wildhorse project specifically, 20 but if s really a good idea to educate people about the habitat. And as fa r as separation and the 21 trees go many of the trees on that list are inthe perimeter of the project so they're up against the 22 airport or small trees that are on th e Embarcadero property. Just in gene ral there are 200 trees 23 that have been identified on the gol f course, just 180 some trees that will be preserved. Some of 24 the trees are in the way of the creek. Som e of the trees are in the way of top soil importation. 25 Right now the budget calls for approximately 300 trees to be replaced by the golf course project. 26 There will ultimately be trees replaced by the JP A's project and that nu mber hovers between 80 27 and 120 and there will, the project that you'll see in the future for the athletic fields will have its 28 own set of landscape. So I don't know what the exact number is, but the intent of the golf course 29 is to change it to more of a links seaside Baylands environment. So it will be more open and the 30 . trees and the shrubs and the plants will be lower on the landscape. 31 32 And the seclusion between holes will com e from the terrain rather than the vegetation. So right 33 now you see it as an op en landscape because there's not much terrain difference across one side 34 of the course to the other. And in the grading plan that's been created you have 25,28 foot high 35 landforms that go way out onto Hole Twelve a nd then you have som e on Hole Seventeen and 36 Hole Five and then the big mounds along Hole Ten. And in betw een that you have differences 37 of landforms and instead of being flat will be anyw here from four feet to twelve feet at any on e 38 place on the golf course. So they'll be quite a bi t of separation, but it's not the kind you're used 39 to now. You're used to now a few trees. 40 41 Commissioner Alcheck: Well I'm not really used to any trees. Ok, I want to end with just sort of 42 one comment about the noise study, which is wi th all due respect really nobody plays Palo Alto 43 for the quie t of the cour se. Its proximity to th e airport makes certain ho les really, really loud 44 (interrupted) 45 46 Mr. Richardson: Someone told me there was an airport nearby. 47 48 Commissioner Alcheck: Yeah, so I would sort of th ink that the potential noise implications from 49 the fields f or example wouldn't necessarily pos e sort of a sign ificant problem to the golf 13 1 community considering that when they're in the first half ofthei r round they're going. to be next 2 to landing airplanes, which are really loud. But there's som ething to be said for ... I guess what 3 I'm understanding is that those mounds that you're talking about, their purpose is for sound 4 isolation? 5 6 Mr. Richardson: Well they're for the purpose of, yes. They're for the purpose of separating the 7 uses and distinguishing a physical difference between the tw 0 sites anq you have one group of 8 people using the athletic fields that have one use and type of ne~d and then you have the golfers. 9 So, yeah, those mounds to give you an idea they're 30, the highest one I think is 32 feet above' 10 adjacent grades. So you're jalking about anywhere from a three story down to a one and a half 11 story building difference in terms of height between those two uses. The idea was also safety. 12 We wanted to create a physical barrier for anum ber of reasons: landscape aesthetics, safety, and 13 then also keeping the golf carts from going over there and keeping the kids and the patrons from 14 the athletic field from coming over to the golf course, so. ' 15 16 Commissioner Alcheck: Ok. 17 18 Mr. Richardson: And the noise was part of it. That was, I thi nk if you look at the Community 19 Services Department held a ve ry large forum. I think ther e were a couple hundred people or 20 thereabouts and they all broke into workshops a nd the minutes of that are very useful to 21 understand what was on people's mind as things were being contemplated for this 10 acres. 22 23 Commissioner Alcheck: Thank you. I think every golfer in Palo Alto is excited about the notion 24 of a must play golf course in our neighborhood, so I'm excited and thank you. 25 26 Mr. Richardson: I'm surprised you find the trees, I found them all. I don't know why you 27 haven't found them. 28 29 Commissioner Alcheck: No. Well, you know what I mean. It's not quite as dense as you would 30 think with 844. 31 32 Chair Martinez: Ok, thank you. Commissioner Tanaka. 33 34 Commissioner Tanaka: Yes, first of all thank y ou for your work on this it's quite nice. A fe w 35 questions. So first one is do we know like what, who plays at this golf course now? What 36 percentage of them are Palo Alto people versus others? 37 38 Mr. De Geus: W e do know that. It's approxim ately 20 percent of total play is Palo Alto 39 residents, 80 percent is non-residents. 40 41 Commissioner Tanaka: Ok, so most people are driving to this place? Ok. And do we know how 42 this golf course is, I as sume other municipal golf courses, other golf courses in general are also 43 evolving and changing. Do you know how this golf course is going to compare to other nearby 44 golf courses in terms of how they're changing, how that's going to affect the competitiveness of 45 this course? 46 47 Mr. De Geus: We do know something about that. Certainly as staffwe're always looking at our 48 main competitors, Shoreline and Poplar Creek and some of the others. But we had as I 49 mentioned earlier the National Golf Foundation com e out just to study that specifically is how 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 would this redesign preform against the competitors in the local region? And what would tha t mean in terms of how much we could charge a nd the likely patronage we would see? And that was a big part of why the Finance Committee and Council supported this project, because it was quite favorable. So I think that's a positive. Commissioner Tanaka: So the comparison was not against the other golf courses as they are today, but as they will be when this is also completed? Mr. De Geus: Yeah, the com parison was how they are today. I'm not sure that they, I don't think they looked at ok how are th ey going to change over the next 10 years? I don't think that was part of the study. Commissioner Tanaka: I see. Ok. So I also, do you guys know m uchabout the trim e in that area in terms of car breakMins or safety? Is there any data on that? Mr. De Geus: You know I don't have any statistics, but we've hadsom e trouble with crim e in the parking lot. Laptops being stolen out of cars and we've had to put signage up and had the Police Department do sort of a sting operation, ac tually caught some people when we had a real big rash of that. As far as sort of vandalism on the golf course over the years it just doesn't happen often, but occas ionally it'll happen where we'll get like am otorbike or someone get on the course and damage the turf or some of the greens. It's only happened a few times. Commissioner Tanaka: I see. Is it a big enough problem to actually think about it as you guys were designing how to make it a little bit safer for people? Mr. De Geus: It's something that we've talked (interrupted) about a little bit, but maybe Forrest if you Mr. Richardson: Currently there's a fence th at goes on the north and we st portions of the property that separates the current trail system and the levy from the golf course. And then on the east side there's also a fence that separates the airport. Commissioner Tanaka: Isn't there a bridge that goes to East Palo Alto there as well? Mr. Richardson: The bridge, Friends hip Bridge is where, it's being shown there and as part of the creek work that brid ge gets as you can see tu med into an island that connects the trail with the areas to the Northwest. W e have currently been working with the JPA to make sure that the City gets what th ey want in the way of a ba rrier fence rep lacement. And I don't think those details are worked out yet, but I know it's been on everyone's radar scope as far as how to separate the golf from the trail and to prevent unauthorized access to the golf course. I think the good news is that we'll be creating perhaps a lit tle less inviting environment with all the terrain changes. It's no longer just a big park looking area, but it has broken areas that are I think the feeling will be, "Oh, that's a gol f course." Whereas right now maybe the person doesn't realize it's a golf course looks at it and thinks "That looks just like a park." And· so I think that will help a great deaL Commissioner Tanaka: Ok. You know I think that's important too to do especially if you want to have this as an upscale golf course. I actually also appreciate the Vice-Chair's comment about perhaps a conference or hotel center. I think th at's something that on IBRC we actually ta lked 15 1 about and thought about and I don't know if that's too late to consider as part of the EIR, but I 2 would also support that thought. A nd I think that's actually, not necessarily that we're going to 3 do it, but to have it studied and see if that makes sense and can the parking support it? I think 4 that would be som ething interesting to consider. And in tenn s of locations of that, you know, 5 perhaps on existing parking lot. But I think the other thing I'm thinking about is 80 percent of it 6 is from non-residents who are visiting. I would imagine that parking wou Id also have to studied 7 closely to make sure that there's sufficient parking. So if this is a very popular course there are 8 places for people to park. Thank you. 9 10 Chair Martinez: Ok. Developers have a way of making things happen in this town that surpris e 11 us all as We've seen. I think the idea of a developer ~oming forward and offer to build a 12 gymnasium is probably a real pos sibility. Other places not so much. Here it could happen 13 tomorrow. And I go back to som ething that struck me about one of the members of the public 14 that spoke and thought of this as urbanization. And I think before going too far with the idea of a 15 gymnasium here I would look at other places in the C ity where it would be more easily 16 accessible to volleyball players and young people to use it. 17 18 The idea of playing fields is com patible with go If courses. They kind of look the sam e, they 19 have the same irrigation needs, they don't block views, and they provide a resource to a different 20 segment of our population and its incredible ne ed. The idea of a gymnasium wi th a ceiling 21 spring line that's 18 feet high it's a little b it, I want to say it dip lomatically, a little b it 22 incompatible with the Baylands. And so if this goes forward as a consideration in the EIR I want 23 to make sure that it is treated critically. That we don't just say here's are ctangle that could be 24 there and they'll be 20 kids a day com ing there or 100, but that the impact aesthetically, 25 culturally on this precious resource is really, really critically looked at because to me it seems 26 like an unsuitable fit. So I guess I've said enough about that. 27 28 I'd like if we can do like one fi nal round talking a little bit more and Commissioner Keller did a 29 good job on the scoping issues, but talking about some of the item s that concern us. Like, for 30 example, the bay ris e of the bay water leve 1, sea level rise. Is tha t being considered in the 31 Environmental Impact Report? A nd it should be . Is the JP A project the impact of that 32 construction simultaneous or somehow impacting the golf course project? Is that being under 33 consideration? I'd like to make sure the scoping and the EIR address the construction impacts. 34 We've talked about the year or more, two years where the golf course w ill be closed. Cultural 35 resources, there's still some consideration for the Julia Morgan to be moved to the golf course as 36 a clubhouse. I know that's still in debate, but it's still a consideration. I'd like the, that to be part 37 of the scoping as well as the historic buildings that are still onsite. I want to make sure that those 38 are addressed andI'm certain that they will be by our consultant in this. And Commissioners if 39 we can just begin to add to areas of concern for th e, this project that we want to be addressed in 40 the scoping or at least considered, I'd like to have you continue with that. Commissioner Keller. 41 42 Commissioner Keller: Yes. So firstly it's not clear whether Plan G stands for "Golf' or 43 "Gymnasium." So one question is the issue of to the extent that the project is segmented and the 44 golf course is redeveloped and there's land vacated for playing fields, what is the ten1 porary 45 cover of that area that's vacated from the golf course? Because you don't want it to just be 46 muddy and disgusting. So there's go ing to be a cost and som ething involved in that. And that 47 cost might not be that much Ie ss than putting in the p laying fields themselves, so that's an 48 interesting considering. 49 16 1 It was also talked about by several people that th ere would be increased usage of the golf course 2 and as alluded to by Commissioner Tanaka whether there's sufficient parking for the golf Course 3 is an interesting question. Several m embers of the Commission refer to the idea of a . 4 hotel/conference center. There's a n item that will be com ing before us that c arne before us 5 several years ago and that is Mjng's. And that is an opportunity when considering Ming's which 6 is nearby as redevelopment that is a potential hotel. That's cons ideration as to whether that's a 7 hotel/conference ·center. My understanding is that's not what they originally proposed, but it will 8 be coming back. I know this is on our agenda fo r the next meeting, which I also notice is overly 9 full, so. 10 11 And two last things. 0 ne, they are both about the gymnasium. One is I'm wondering whether 12 the Julia Morgan building itself could be a gym nasium. It's certainly a high building and a nice 13 space and·so that's an interestingq uestion. And the second question and this is, I'm not sure 14 how to address this, but there is a school nearby. I think it's called The International School of 15 the Peninsula? Located near the Post Office. And I'm wondering ifpa rt of the reason that 16 there's an interes t in having a gy mnasium near, is that that schoo 1 would like access to a 1 7 gymnasium. And which would then be perhaps used by them part of the time, partly by the City, 18 and then there's a question as to the private use of a public resource. And I'm not sure whether 19 there are strings attached to any donation that would make that happen, but I notice that schools 20 tend to like gymnasiums and I'm wondering ifther e's the question. So I'm just going to bring 21 that up as an open question. I'm not sure how to address it, but the contlic ts of interest have 22 certainly have raised some questions for me. And with that I'll close. Thank you. 23 24 Chair Martinez: Commissioner Panelli. 25 26 Commissioner Panelli: Yeah, thank you Mr. Chair. I'd like to ech 0 the sentiments of Chairman 27 Martinez. I'm, as soon a s I read that just a hi nt of a gymnasium I felt uncomfortable. It doesn't 28 seem like a particu larly compatible use. And frankly I'd rather see a gym nasi urn built 29 somewhere more central in the City that has more access to pUbIlc transit. I'm supportive of 30 including it in an EIR analysis because I understand Mr. Teresi's po int which is sort of see what 31 the worst case scenario is and you can always work back off of th at. I have no problem with 32 that, but I want to echo those sentiments. 33 34 The other thing is the night lighting. I think tha t's going to take a lot of analysis because as I 35 recall from my days on Parks and Rec Comm ission the peak dem and times are six to ten p.m. 36 Monday through Friday. You know that's going to mean lights, at least for three quarters of the 37 year are going to be necessary. And I'm just wondering if you could, we can do our lightening 38 round and then maybe you can address it at the end, but what your thoughts are how to minimize 39 that. Anyway, I'm going to pass on the rest of them. 40 41 Chair Martinez: Thank you. Commissioner Alcheck. 42 43 Commissioner Alcheck: Ok, final few comments. I want to know if the issue of bike and 44 pedestrian safety over 101 is going to be considere d. I mention that because if we enhance this 45 area with an athletic center that'll invite children it's going to mean kids and pedestrians biking 46 and walking across the Em barcadero and that's a pretty unsafe intersection. I don't anticipate 47 that they'll all use the bike bridge to get there and it's a concern because I think both offra mps 48 on the freeway are sort of unprotected and there' s no crosswalks and we want to encourage the 49 use, so. I 17 / 1 2 I also want to suggest or wonder if the course would consider a Palo A Ito resident discount in ' 3 terms of its financial feasibility. I think this would obviously apply only to a minority of current 4 users. And I mention it because it might be a nice way of saying "Thank you" to the City for 5 whatever costs and expenses that are undoubtedly going to be borne by the City. 6 7 And then the last thing, actually two more things. I know when we looked at Rinconada Park we 8 talked about outdoor sand courts , volleyball courts. Maybe that's something that could be 9 considered in the athletic area to kin d of address some volleyball needs if the gymnash,lm is one 10 of the options then maybe sand volleyball courts could be asecond option. 11 12 And then I don't want to suggest that I'm against the gym nasium idea, but I think one of the 13 concerns that I came across in my mind when I read about it was the notion that we were sort of 14 putting a gymnasium on the edge of our City. A nd not that I'm suggesting it's not available for 15 all, but I sort of thought are we building a gy mnasium for East Palo Alto? Because we're 16 essentially putting it adjacen t to the good, what's the name of that br idge? The Friendsh ip 17 Bridge. And I sort of wondered it's sort of the safest access is sort of directly over that bridge 18 and I can't im agine that we're goin g to get a 10 t of attendance to that gymnasium from the far 19 other side of the City and it sort made me pause to think where we were locating an amenity like 20 that. Ok, that's it. 21 22 Chair Martinez: Thank you. Commissioner Tanaka. 23 24 Commissioner Tanaka: So I thi nk Commissioner AlCheck actually brings a good point. I was 25 thinking the same thing so he kind of stole my thunder, but I think that the City is going to incur 26 a lot of expense doing this project and so if we do build facilities there it should be something 27 that the City's residents can access easily through some sort of pedestrian access or perhaps also 28 by vehicular access. I also like the idea of resident discounts for usage of the golf course. Or the 29 other way of looking at it is higher fees for non-residents. I think that makes a lot of sense in my 30 mind. ' 31 32 In general if we can get good access to these facilities I do think about whether it makes sense to 33 have a gym here as well. And I th ink if a gym is here it has to be something that does kind of fit 34 the environment, so. But I think th e purpose for the EIR is still worthwhile to consider like was 35 said earlier, the worst case scen ario so I think havin g a gym, having some sort of 36 conferencelhotel facility or conf erence center makes a lot of sens e so should be considered and 37 look at the worst case scenario and then back off on it if it doesn't make sense. Thanks. 38 39 Chair Martinez: Vice-Chair. 40 41 Vice-Chair Michael: So in the spirit of brainstorming just a few more things to consider. One is, ,42 and this is in no particu lar order, I recen tly heard that the First Tee Open Program which i-s 43 nationwide is particularly succe ssful in Monterey County. They got an award, The Best First 44· Tee Open Program in the country, and they, I hear d what they're doing with the kids they have 45 5,000 kids and it's just really inspirational. So one of the things about getting more people out at 46 the golf course and more kids and develop' life long habits and this is very values oriented, 47 integrity, sportsmanship, respect, and it's a wonderful program and I think if Palo Alto, and I'm 48 not aware that there's a lot of awareness ofth is in Palo Alto or Santa Clara County unlike 49 Monterey County where it's a big deal. So th is might be som ething in term s of community 18 1 services and getting people out to try new thin gs and maybe get excited about the sport of golf 2 and the values of playing it and sort of the with the proper attitude. 3 4 One question and I <;lon't really want an answer now, but I was really surprised recently to see 5 how Shoreline Golf Course had deteriorated over th e last several decades. And I know that they 6 started with great plans and they hired Robert Trent Jones, Junior and built 14 of 18 holes until 7 they ran ou t of money and but when I went back and played most recently it was just awful . 8 Absolutely had fallen apart and they had lost, th ey were lowering the rates to nothing because 9 they couldn't get anybody to pI ay the course. So you might just want to make sure you 10 understand the lessons learned. W hat happened there? I don't know where they went off the 11 tracks, but they definitely lost it. So just be careful. 12 13 The c011.1ments from Emily Renzel and Trish, I forget your last name, about respect for the 14 purpose and goals and the policies of the Baylands Master Plan I th ink are really important. 15 There are a couple of golf course projects which are sort of extraordinary on a national level. 16 One is The Links at Spanish Bay has a links styl e golf course. And when they got their perm it 17 they had an edict that they had to have envi ronmentally sensitive areas which a re kind of a 18 problem because you hit a golf ball and you're not supposed to go get it. But it's beautiful and 19 they make a big, they respect the environm entally sensitive areas. So I wonder if maybe we 20 could when we do the environmental review and whatever conditions there are in the permit or 21 whatnot consider really for mally respecting the environment maybe much like th ey did at the 22 Spanish Bay. And it's a beautiful, beautiful cour se. Attracts a lot of play and it's ju st a 23 wonderful asset for that region. 24 25 Another course that was rem odeled spectacularly was the Monterey Peninsula Country Club 26. shore course, which is now used in the AT&T Pro A m where I was las t week. But, 27 phenomenally beautiful, unbelievably beautiful. And they had to move a lot of dirt. I mean they 28 basically had a flat Ian dscape just going out to the ocean there and it's incredible. And the 29 habitat for birds and wildlife is just magnificent and it's just inspirational. So if you're going to 30 do something nice, think just expand the realm of possibility . You can make it really nice. The 31 Bay and Palo Alto in general is a wonderfulloca tion for this. So just go for it and respect the 32 environment. . 33 34 The gymnasium topic has been addressed I th ink by everybody. But I wonder and I know that 35 Rinconada Park has got a new m aster plan, Mitchell Park is, if you could consider the access to 36 kids on bikes, on foot, c enter of town, Rinconada Park, Mitchell Park, maybe the Lawn Bowling 37 Center has lived out its purpose and you can get mo re use out of changing it, repurposing it for a 38 different generation. 39 40 And on the sea leve 1 rise issue th is is bigge r than the golf course. So I personally think it's 41 happening. You know, the useful life of this golf course isn't as long as we might hope, but it's 42 such a bigger issue. It's going to hit the a irport and it's going to hit the Municip al Services 43 Center and I would really recomm end to the Council that as they think that they're working on 44 infrastructure really start thinking proactively about how this is going to impact not just the golf 45 course, but things which are vita 1 to the Public Works and other operation and safety and needs 46 of the City. 47 48 Chair Martinez: Very nice. Would you care to comm ent about the golf course design and the 49 Vice-Chair's thoughts about that? 19 1 2 Mr. Richardson: Well we're in agreement with you and Mike Strantz, who did the shore course 3 that you mentioned was a terrific guy and we miss him. He passed away as you know a fe w 4 years ago. And m y artificial brother Forrest Fezler bu ilt the course. I've spent a lot of tim e 5 there. It's a beautiful, beautiful site. We're trying to do similar things with the Baylands Golf 6 Facility to take advantage of that B ay and the vi ews and the proximity to the shoreline. I can't 7 address exactly the sea level rise cOncerns that you mentioned tonight, but I will say that the 8 JPA's work resolves a lot of the flooding and the sea level rise will be partofwhat ICF weighs in 9 on their report. 10 11 I was rem iss Chairman Martinez for not saying earlier you had mentioned about the econom ic 12 part of·this project and I was going so fast I didn't mention that th ere is a dedicated youth 13 component to the project which is south of the driving range along Em barcadero, which is 14 intended to be a First Tee like facility and actually has good potential to be, have some dedicated 15 portion of it or use to th e First Tee. And th'at is something that we're working very diligently 16 with the staff to get integrated to the bid documents on this project. We feel it's very important 17 and that would be a stand-alone designated kids learning center that would be right off the 18 driving range to the left of the driving range. . In addition there's a new short gam e area which is 19 north of the driving rang.e and that could also have a com ponent for bringing new players to the 20 game, introducing people to golf, etcetera. So there's been a lot of thought put into bringing 21 people in here. 22 23 There's been discussion of the rates and I'll not get into tha t, but one thing the Comm issioners 24 that are interested in it might want to get from staffwoul d be the National Golf Foundation 25 Report because it addresses so m any of the questions that each of you have had about rates and 26 resident rates, comparison to the other courses. One question cam e up that I can just touch on 27 real briefly. None of the other area courses that are competitive to Palo Alto have any Capital 28 Improvement Projects (CIP) that have been funded or appear to be funded in the n ext decade as 29 we can see it now. And the NGF spent a lot of tim e looking at San Jose and Shoreline and 30 Poplar Creek and all the competitive facilities. You have an advantage with the population base 31 and being sort of in the heart of the 101 corridor here that they don't have. And sol won't get 32 into the details of Shoreline, but there are nuances of all these facilities and even though we have 33 some issues with this site, high salts and everything, we've addressed all of those and will 34 continue to do so as we answer all of these questions. 35 36 Chair Martinez: Ok and I want to thank you. First I'm going to close the public hearing and 37 close with only my last sort of sentim ents. I know in branding that it's im portant to really look 38 to be progressive and such, but I' m not that happy with dropping Pa 10 Alto off the name. So if 39 there's time to consider it to be the Palo Alto Baylands Golf Course we should continue with 40 that. And with that we're going to close this item. Take a 10 minute break. Thank you all very 41 much. 42 43 Mr. Richardson: Thank you. 44 45 Commission Action: Commission provided comments and recommendations to staff 20 2. Use reclaimed water upon completion of the new blending station. Continue to use potable water on greens and tees as long as possible. 3. Improve site drainage through regrading. Rebuild and reshape the aged greens, tees, bunkers and traps in conjunction with the drainage improvements. 4. Address airport safety issues by raising the fence near the sixth fairway and planting additional trees. 5. Install improvements such as repaved cart paths and rest room modifications required by the Americans with Disabilities Act (ADA). 6. Continue with the implementation of the PaloAlto Municipal Golf Course Master Improvement Plan. City of Palo Alto Page 1 =================MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 26====================== Thursday July 18, 2013 REGULAR MEETING - 8:30 AM City Council Chambers, Civic Center, 1st Floor 250 Hamilton Avenue Palo Alto, CA 94301 ROLL CALL: Board members: Staff Liaison: Clare Malone Prichard (Chair) Russ Reich, Senior Planner Lee Lippert (Vice Chair) Alexander Lew Staff: Randy Popp Diana Tamale, Administrative Associate Naseem Alizadeh - absent Jodie Gerhardt, Senior Planner Jason Nortz, Senior Planner Clare Campbell, Planner PROCEDURES FOR PUBLIC HEARINGS Please be advised the normal order of public hearings of agenda items is as follows:  Announce agenda item  Open public hearing  Staff recommendation  Applicant presentation – Ten (10) minutes limitation or at the discretion of the Board.  Public comment – Five (5) minutes limitation per speaker or limitation to three (3) minutes depending on large number of speakers per item.  Architectural Review Board questions of the applicant/staff, and comments  Applicant closing comments - Three (3) minutes  Close public hearing  Motions/recommendations by the Board  Final vote ORAL COMMUNICATIONS: Members of the public may speak to any item not on the agenda with a limitation of three (3) minutes per speaker. Those who desire to speak must complete a speaker request card available from the secretary of the Board. The Architectural Review Board reserves the right to limit the oral communications period to 15 minutes. None. APPROVAL OF MINUTES: June 20, 2013 ARCHITECTURAL REVIEW BOARD MINUTES City of Palo Alto Page 2 Architectural Review Board Action: Board Member Popp moved seconded by Board Member Lippert to approve the minutes as presented by staff. Vote: Approval, 3-0-1-1 (Alizadeh was absent & Chair Malone Prichard was abstained) AGENDA CHANGES, ADDITIONS AND DELETIONS: The agenda may have additional items added to it up until 72 hours prior to meeting time. None. CONSENT CALENDAR: No items for Consent Calendar PUBLIC HEARING ITEMS: POSTPONED BUSINESS: 405 Curtner Avenue [13PLN-00098]: The review of this multi-family residential project was reviewed during the ARB public hearing on June 20, 2013 and was continued to this date; however, the applicant has requested that the review be postponed to the regular ARB meeting of August 1, 2013. CONTINUED BUSINESS: 1. 240 Hamilton Avenue [13PLN-00006]: Request by Ken Hayes of Hayes Group Architects on behalf of Forest Casa Real LLC for Architectural Review of a new four-story, 50-foot, mixed- use building with 15,000 sq. ft. of floor area, proposed to replace a 5,000 sq. ft., two-story commercial building. Environmental Assessment: an Initial Study and Mitigated Negative Declaration have been prepared. Zone District: Downtown Community Commercial with Ground Floor and Pedestrian Shopping combining districts (CD-C) (GF) (P). This item was reviewed during a public hearing on June 6, 2013; the public hearing was continued to July 18, 2013. RECOMMENDATION Staff recommended that the Architectural Review Board (ARB) consider the project and findings for Architectural Review approval and recommend approval of the proposed project to the Director of Planning and Community Environment (Director), based upon the findings in Attachment A and subject to the conditions of approval in Attachment B. Public Comments: Jeff Levinsky, expressed concerns about downtown parking deficit and compliance with the Comprehensive Plan. He also noted how developers can benefitted financially by providing additional parking spaces while also helping the neighborhoods. Elaine Meyer, discussed how the intrusion of parking from the downtown area to the neighborhood is very unfair to the residents. She stated that the proposal violates the ARB charter. Architectural Review Board Action: Board Member Malone Prichard moved seconded by Board Member Lew to approve the project subject to bringing the following details to the ARB subcommittee: City of Palo Alto Page 3 1. Blending of the tile to relate better to the wood siding pattern 2. Findings #13 & #14 modified accordingly Vote: Approval, 3-0-1-1 (Alizadeh was absent & Popp was recused) NEW BUSINESS: Major Items 2. 1875 Embarcadero Road [13PLN-00103]: Request by the City of Palo Alto Public Works Department on behalf of the City of Palo Alto Community Services Division for Site and Design Review of the Palo Alto Municipal Golf Course reconfiguration project. The meeting will serve as a public hearing for the review of the Draft Environmental Impact Report for the Palo Alto Municipal Golf Course Reconfiguration and Baylands Athletic Center Expansion Project. Zone District: PF(D). RECOMMENDATION Staff recommended that the Architectural Review Board (ARB) recommend that the City Council approve the Site and Design Review application for this project, based upon the ARB findings (Attachment A) and the findings and conditions in the Record of Land Use Action (Attachment B). The Planning and Transportation Commission (PTC) also recommends approval of the application. No public comment. Architectural Review Board Action: Board Member Popp moved seconded by Board Member Lippert to approve the plans subject to bringing the following details to the ARB subcommittee: 1. Skylight panels at the restroom roof 2. Inclusion of bottle filling station at the drinking fountain 3. Re-evaluation of the paint colors at the restroom interior 4. Potential addition of bike racks at the club house 5. Re-construct finding #11 to reflect the idea of restoring rather than preserving 6. Materials reflected on the color board be clearly specified on the plans 7. Concrete trail color to improve the initial appearance with spray iron 8. Material used for treating the wood be the most sensitive and least impactful type possible 9. Fencing naturally weather instead of powder or glossy finish 10. In addition to the items above, the following condition to be forwarded to the City Council for further consideration; incorporating the Embarcadero path into the scope of this project and a discussion regarding signage and how it relates to City’s signage standard Friendly Amendment, by Board Member Lippert that if the City Council finds that the sign should follow the City’s signage standard then the item should return to the Board as a consent calendar item. Vote: Approval, 4-0-0-1 (Alizadeh was absent) 3. 537 Hamilton Ave [13PLN-00087]: Request by Korth Sunseri Hagey Architects, on behalf of Smith Equities III LLC, for Architectural Review of revised plans addressing conditions of approval for a previously approved project to allow a new 14,557 square foot two-story City of Palo Alto Page 4 commercial office building. Zone: CD-C(P). Environmental Assessment: Exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15332. RECOMMENDATION Staff recommended that the Architectural Review Board (ARB) approve the proposed project revisions to address the ARB comments and conditions provided at the April 18, 2013 meeting. No public comment. Architectural Review Board Action: Board Member Malone Prichard moved seconded by Board Member Lippert to approve the project as presented by staff. Vote: Approval, 4-0-0-1 (Alizadeh was absent) PRELIMINARY REVIEWS: 4. 1601 California Avenue [13PLN-00234]: Request by Chris Wuthman of Stanford Real Estate on behalf of the Board of Trustees of Leland Stanford Jr. University for preliminary architectural review board review for the demolition of approximately 290,000 square feet of existing R&D/office space to be replaced with 180 housing units which includes 68 detached single family homes and 112 multi-family units as part of the 2005 Mayfield Development Agreement. Zone: RP(AS2). RECOMMENDATION Staff recommended that the Architectural Review Board (ARB) conduct a Preliminary Review of the conceptual plans for the project and provide comments on the design to staff and the applicant. No formal action may be taken at a Preliminary ARB hearing and comments made are not binding on the City or the applicant. Staff has summarized key issues to provide a framework for comments. Public Comments: William Ross, stated that the item should not be heard today because it was not properly noticed and that the CEQA analysis is not adequate. Brent Parker, spoke that he is concerned with the construction traffic and the flow of traffic. Fred Balin, spoke regarding the distribution of the houses by block are not consistent with the existing neighborhood patter and that the new homes should look authentic. Margaret Aramburu, spoke that she is concerned about the lighting glare, and noise as well as concerns over public access to the new park and the fact that no bike lanes are proposed. As a preliminary item, no action is taken. 5. 1730 Embarcadero Road [13PLN-00245]: Request by Alan Cross on behalf of Carrera PRB Company for Preliminary Architectural Review of additions to and renovation of the existing Audi car dealership, including a new 7,380 sf showroom, 3,139 sf drop-off area, and a 1,036 sf City of Palo Alto Page 5 addition to the service area, along with associated site improvements and landscaping changes. Zone District: Planned Community (PC-4846). ECOMMENDATION Staff requested the Architectural Review Board (ARB) conduct a preliminary review of the proposed project and provide comments on the conceptual site design and elevations to staff and the applicant. No formal action may be taken at a preliminary review; comnlents made at a, preliminary review are not binding on the City or the applicant. No public comment. As a preliminary item, no action is taken. BOARD MEMBER BUSINESS AND ANNOUNCEMENTS. 6. Recap of retreat discussion on Colleagues Memo. 7. Formation of subcommittees – nomination of special topics. REPORTS FROM OFFICIALS. ADJOURNMENT OF FULL BOARD MEETING. SUBCOMMITTEE (Currently ARB members Naseem Alizadeh and Randy Popp): 8. 2080 Channing Avenue [10PLN-00198]: Request by John Tze for review of proposed wood fence and trash enclosure at the Edgewood Plaza mixed use project. Zone: Planned Community (PC-5150) zoning district. Environmental Assessment: An Environmental Impact Report was certified for the project in accordance with the California Environmental Quality Act (CEQA). Subcommittee Action: The project was approved. 9. 3445 Alma Street [12PLN-00249: Request for feedback on proposed signs on commercial building at Alma Village. Zone District Planned Community (PC-4956). Environmental Assessment: Exempt from the provisions of CEQA, 15301 (Existing Facilities). Subcommittee Action: The subcommittee provided design feedback 9. California Avenue Streetscape Improvements [13PLN-00211]: Request by the City of Palo Alto Transportation Division for Architectural Review of streetscape improvements on California Avenue, between El Camino Real and the CalTrain Station, including traffic calming treatments, landscape elements with new street trees, street furniture, new street lighting, parking enhancements, and a reduction from four vehicle travel lanes to two lanes. Environmental Review: A Negative Declaration was adopted on November 28, 2011 for the project. Subcommittee Action: The project was approved. City of Palo Alto Page 6 STAFF ARCHITECTURAL REVIEW: Project Description: Landscape & parking modifications Applicant: Richard Ying Address: 200 San Antonio Avenue [13PLN-00067] Approval Date: 6/14/13 Request for hearing deadline: 6/27/13 Project Description: Removal of one regulated 30 inch to 40 inch diameter Redwood tree located between the buildings Applicant: Katie Krebs Address: 2100-2400 Geng Road [13PLN-00183] Approval Date: 6/17/13 Request for hearing deadline: 7/1/13 Project Description: Construction of new 2,753 square foot addition to the two story existing building Applicant: John Suppes Address: 412 Olive Avenue [13PLN-00134] Approval Date: 6/20/13 Request for hearing deadline: 7/3/13 Project Description: Two new non-illuminated brushed aluminum signs to be installed on the non- historic fence posts located at the front of the property Applicant: Dan Kitzmiller Address: 421 Kipling Street [13PLN-00189] Approval Date: 6/20/13 Request for hearing deadline: 7/3/13 Project Description: Replacement signage at the existing financial services business, Wells Fargo Applicant: David Ford Address: 400 Hamilton Avenue [13PLN-00209] Approval Date: 6/24/13 Request for hearing deadline: 7/8/13 Project Description: The scope of the work includes only changing the existing sign color, all lettering and numbering will remain the same Applicant: Thomas Cacioppo Address: 1601 S. California Avenue [13PLN-00241] Approval Date: 6/24/13 Request for hearing deadline: 7/8/13 Project Description: Replacement of the existing deck surround with a code-compliant deck and railing for an existing building at 1610 Sand Hill Road Applicant: Janet Drake Address: 1618 Sand Hill Road [13PLN-00244] Approval Date: 6/26/13 Request for hearing deadline: 7/9/13 City of Palo Alto Page 7 Project Description: Removal of five Monterey pine trees and the replacement of an existing six foot high wood fence with a new high six foot concrete Applicant: Paul J. Reed Address: 535 Arastradero Road [13PLN-00180] Approval Date: 6/27/13 Request for hearing deadline: 7/10/13 Project Description: Two wall signs, new planters, and outdoor dining area for an existing building Applicant: John Adams Address: 401 Lytton Avenue [13PLN-0086] Approval Date: 6/28/13 Request for hearing deadline: 7/11/13 ADA. The City of Palo Alto does not discriminate against individuals with disabilities. To request accommodations to access City facilities, services or programs, to participate at public meetings, or to learn more about the City’s compliance with the Americans with Disabilities Act of 1990 (ADA), please contact the City’s ADA Coordinator at 650.329.2550 (voice) or by e-mailing ada@cityofpaloalto.org. Posting of agenda. This agenda is posted in accordance with government code section 54954.2(a) or section 54956.Recordings. A videotape of the proceedings can be obtained/reviewed by contacting the City Clerk’s Office at (650) 329-2571. Materials related to an item on this agenda submitted to the Architectural Review Board after distribution of the agenda packet are available for public inspection in the Planning and Community Environment Department at 250 Hamilton Avenue, 5th floor, Palo Alto, CA. 94301 during normal business hours. 10 in. Dia. Weathered Pole Metal Suaps _____ , & Hardware 7 in. Metal Cabinet (powder coat) BAYLAN 2.5 in. Reverse Pan Letters Internally Lit wi I in. set-off I in. Metal wI Routed City Logo and Paint Infill C LF LIN K S .75 in. Dimensional Letters wi .S irl. set-off (nOrl-lit) 7 in.Thick Round Cabinet wi Routed Logo Irlternalty Lit BAYLANDS COL F LIN K S TopView West Face East Face Proposed Grourld Lighting (Difused) BAYLANDS GOLF LINKS PALO ALTO GOLF COURSE ENTRY SIGN CITY OF PALO ALTO PROJECT NO. PG-13003 FORREST RICHARDSON!!!. ASSOc. j GOH COURU ARCHIUC U w···I.III· ••• II~.' ... DRAFT January 21, 2014 Draft Minutes 1 ATTACHMENT J 1 2 3 4 MINUTES 5 PARKS & RECREATION COMMISSION 6 SPECIAL MEETING 7 JANUARY 21, 2014 8 CITY HALL 9 250 Hamilton Avenue 10 Palo Alto, California 11 12 Commissioners Present: Stacey Ashlund, Deirdre Crommie, Jennifer Hetterly, Abbie 13 Knopper, Ed Lauing, Pat Markevitch, Keith Reckdahl 14 15 Commissioners Absent: 16 17 Others Present: Council Liaison Greg Schmid 18 19 Staff Present: Daren Anderson, Greg Betts, Catherine Bourquin, Rob de Geus, Hung 20 Nguyen, Walter Passmore, Joe Teresi 21 22 23 ITEM 3. Staff Recommendation on the Tree Mitigation Plan for the Golf Course 24 and Baylands Athletic Center Expansion Project. 25 26 Chair Hetterly: This is an action item. We've got one speaker card for this item, Eileen 27 McLaughlin, and one more coming. 28 29 Public Comment 30 31 Eileen McLaughlin: Good evening. I'm Eileen McLaughlin with the Citizens Committee 32 to Complete the Refuge. I haven't been participating in your committee. I know you've 33 had a committee working in preparing this. I'm glad about that. I'm representing a group 34 that works with the Refuge. We work with the marshes and the Baylands. The Baylands 35 itself is, of course, an integral part of all of these marshes that we're trying to either 36 sustain or develop elsewhere. I look at the idea of this mitigation as more of a restoring 37 the uplands adjoining the wetlands to a condition that is much more valuable to 38 improving the overall habitats of the adjoining marshes. I think that's a big opportunity 39 here to improve the landscape quality of the shoreline for wildlife. I also wanted to 40 mention, I caught a comment in the report that said this kind of vegetation had less 41 environmental benefit. I think you need to look at the landscape. When you look at this 42 DRAFT January 21, 2014 Draft Minutes 2 particular landscape and you're looking at how it helps enrich and balance the marshes 43 which we're trying to both sustain, and especially to the south this whole project is going 44 into Phase 2 to really start restoring those. We have an opportunity here, where we're 45 building those marshes. It's been shown that our tidal marshes have a carbon exchange 46 value that some scientists have equated to that of the rainforest. There's been some 47 differences of opinion, but in fact the more we strengthen the health of our shoreline the 48 more we build the carbon exchange value of those marshes. If you ever go down to that 49 dock at low tide and you see the mud go out, you can just see the algae bubbling and 50 they're a little oxygen factory just sitting there on the exposed mud. Those little pockets 51 are all within those marshes. This is an enormous carbon exchange factory that we can 52 build on the Bay. By your increasing the value of this associated landscape, we can 53 really help bring the benefit there. Further, on the issue of where you can get expertise 54 on this, on the Refuge down in Alviso, there is a big project that's been going on for years 55 now on actually reestablishing this kind of landscape. There's a lot of information and 56 probably a consultant that is somewhere connected there, that might be of specific help 57 here on putting this kind of mitigation in place. Thank you. 58 59 Chair Hetterly: Thank you. Next we have Emily Renzel. 60 61 Emily Renzel: Thank you. I'll probably want to speak on the next item as well, related to 62 the golf course. I participated in the citizens' advisory group that was dealing with the 63 tree mitigation. I have to say staff has been extraordinarily responsive to the various 64 items raised. We had concerns about whether there was enough money to both plant and 65 maintain through time and make sure that the mitigation actually did what it was 66 supposed to do. There was concern about locating more of the mitigation in the 67 Baylands. I think it's been a very good process. I support the recommendation that staff 68 has brought to you, that includes some ongoing money for maintenance to make sure that 69 these mitigations take place. Thank you. 70 71 Chair Hetterly: Thank you. The next speaker is Shani Kleinhaus. 72 73 Shani Kleinhaus: Good evening. Shani Kleinhaus with Santa Clara Valley Audubon 74 Society. I planned to go and get dressed before I get here, but I made it just now and it 75 took me so long to get here just from Sunnyvale. Sorry. I live in Palo Alto, but I didn't 76 have time to stop at home. Audubon has been trying to figure out how do you measure 77 the value of birds. I think that came through throughout the process that we went through 78 in considering the mitigation that was proposed initially, which was let's plant this many 79 trees for each one that is removed. It was how do you measure ecosystem services and 80 later other things. Somehow in all of that we missed the value of the critters that live in 81 the trees. If we're looking to just say, "OK, we have a large tree, let's replace it with three 82 small trees," well it takes a long time for those three small trees to create the habitat that 83 all the critters that we like to see with us need. This comes out in many other ways. 84 DRAFT January 21, 2014 Draft Minutes 3 What we see with sustainability and the way that we're trying to measure what is our 85 impact on the world and how do we mitigate it in terms of energy, water, trees, all these 86 things that we value; we kind of have a very anthropocentric view in general and we 87 forget the living things, the butterflies, the bees, the insects. We come to a place where 88 kids now are afraid of birds, they're afraid of insects. They see a butterfly and they run 89 away. The question of what do we do to bring nature and birds and insects into the 90 equation of mitigation was at the basis of the discussion with City staff which was 91 incredible open to the idea that maybe we need to look close to the place of impact and 92 replace habitat and not just some sort of a picture of how much canopy is measured and 93 how many trees. I think that the process was really informative for all of us. It was 94 really interesting. I hope it moves forward and that there is enough money to create the 95 proper mitigation and enough money to support it over time. I've seen again and again 96 mitigation that somebody does. They put the trees in and after three years they don't have 97 to do anything anymore and the things fall apart. Please do all you can. Thank you very 98 much and thanks to staff as well. 99 100 Commission Discussion 101 102 Chair Hetterly: Rob. 103 104 Rob de Geus: I want to introduce Walter Passmore again, who is the Urban Forester for 105 the City of Palo Alto and thank him for all the work that he's done on this tree mitigation 106 plan and set of strategies. I think we have come a long way. I also want to thank Emily 107 Renzel and Enid Pearson, Shani Kleinhaus, Catherine Martineau and many others that 108 have participated in helping us work through a strategy that's really going to have an 109 impact, a positive impact in Palo Alto. We think we are pretty close at this point. I'm 110 going to ask Walter to share where we ended our last stakeholder meeting last week. 111 112 Walter Passmore: Thank you, Commissioners, for your service and your participation 113 through this process. It has been, I think, a real growth experience for everyone that has 114 participated. We have just a couple of very brief slides to synthesize what has been, I 115 think, a very open discussion, to steal some words away from some of our commenters. 116 It has morphed over time into what we're presenting as a final recommendation this 117 evening. There are several parts to this. One on the mitigation approach is to establish 118 new trees and native or naturally simulated landscape within the golf course. We had 119 some hierarchy of how we thought mitigation should be applied. One is to apply the 120 mitigation as close to the impact as possible. The impact is on the golf course; it should 121 be applied on the golf course first. Two was to apply mitigation near site in a very 122 similar ecosystem, very similar plant species that would naturally occur. That's where we 123 have dedicated the bulk of the funding that we're recommending for the mitigation, is to 124 restore or substantially improve native Baylands spaces near the golf course. Our 125 original estimates were that this process could cost as much as $200,000 an acre. After 126 DRAFT January 21, 2014 Draft Minutes 4 further discussions and fine-tuning, we feel a reasonable approach is with participating 127 partners. We feel like it's more realistic that the cost is going to be somewhere around 128 $100,000 an acre. The mitigation that we're proposing should restore close to 2 acres of 129 Baylands habitat. The exact costs have yet to be determined, but that 2 acres of Baylands 130 habitat is in addition to Approach Item Number 3, which is to protect trees that are 131 naturally established seedlings at the Arastradero Preserve. That's a much lower cost 132 item. By protecting those trees, we allow them to mature instead of being browsed by 133 deer or other animals that may decrease the likelihood that they would ever mature to a 134 full-size tree. These are naturally occurring seedlings that are already there. Obviously 135 they're native to the Preserve. In all we are removing 538 trees from the golf course 136 proper. There's another 83 for the athletic center. A total of 621 trees. The mitigation 137 approach that we are recommending is broken into two parts. The total result is expected 138 to be $500,000 over a 20-year investment period. This does not include 300 new trees 139 that are being planted on the golf course. The mitigation amount is above and beyond 140 new tree planting. There are also about 50 acres of rough area within the golf course that 141 are going to be restored into that native or naturalized habitat. These are things occurring 142 in the golf course, not included in the $500,000. The $500,000 does include about 143 $200,000 in one-time inception costs, so that'll be upfront costs to restore 1-2 acres of 144 Baylands habitat. It will also protect the 500 naturally occurring seedlings so that those 145 will mature into full-size trees one day. Then the additional piece that takes it from the 146 $200,000 initial investment to the $500,000 over 20 years is that there is maintenance 147 commitment pending revenues from the newly renovated golf course to fund that. That 148 money would go from excess revenue with some prerequisites that we've spelled out and 149 fund that long-term maintenance. This is really a strong commitment to a long-term plan 150 that, as Shani Kleinhaus mentioned, is very important so that mitigation will have the 151 greatest chance of success. 152 153 Chair Hetterly: Thank you. Did you have something add? OK. We had an ad hoc 154 committee that did some work on this as well. Do you all have a reaction to the 155 presentation? 156 157 Commissioner Crommie: Are you ready for me to present on our ad hoc committee? 158 159 160 Chair Hetterly: Any questions for Walter before we do that? 161 162 Commissioner Ashlund: One question on the first slide. It wasn't clear on what it means 163 by naturally simulated in number one. Is that natural or is that simulated? I'm not sure. 164 165 Mr. Passmore: There is obviously some debate on what is considered completely natural. 166 What period of time we use would equate to how closely we simulate that naturally 167 occurring environment. Obviously there's been a lot of change in the Baylands over the 168 DRAFT January 21, 2014 Draft Minutes 5 last 300 years. Particularly in the last 100 years there's been some fairly significant or 169 dramatic changes. That's why we chose some fairly broad terms. We're trying to 170 simulate closely what we think would have occurred there perhaps a 100 years before any 171 dramatic impacts occurred. 172 173 Chair Hetterly: Thank you. Other questions? 174 175 Vice Chair Lauing: Yes. On the second slide, you now have listed 1-2 acres of Baylands 176 restoration. I thought the proposal was actually for 2 acres. 177 178 Mr. de Geus: Yes, it is for 2. I was not sure at the time the staff report was prepared, so I 179 had 1-2. I confirmed with Walter it was 2 acres 180 181 Mr. Passmore: We have not pinned down exact costs yet. We have not received cost 182 estimates from vendors, so we did leave that a little bit flexible. Our expectation is that 183 the money that we've dedicated to mitigation will restore 2 acres of Baylands. 184 185 Chair Hetterly: Other questions? Commissioner Reckdahl. 186 187 Commissioner Reckdahl: This is both for the ad hoc and also for Walter. Did we 188 consider planting trees in parks? Was that thrown out early? 189 190 Commissioner Crommie: The first priority is to do the mitigation onsite. If that's not 191 possible, to do it as close as possible to the site. Because we have a large need in the 192 habitat close by, we moved on to that priority. The third priority is anywhere else. We 193 didn't feel that we needed, well, we did get to the third priority in terms of us targeting 194 Arastradero Preserve. We wanted to target natural environment areas. 195 196 Commissioner Reckdahl: This is just for the animals, to try and keep their ecosystem as 197 unaffected as possible? 198 199 Commissioner Crommie: Right and especially what we're mitigating against. We're 200 mitigating against loss of habitat on the golf course and loss of canopy, both things. We 201 have a focus on the habitat. 202 203 Commissioner Reckdahl: When we're looking at the first two areas, either onsite or 204 nearby, the sites that we're selecting, are we looking at them and saying, "Oh, that's a 205 great place for a tree?" or "Well, I guess that will do?" How enthusiastic are we? Are we 206 putting a square peg into a round hole or are we finding good spots for trees? 207 208 Commissioner Crommie: I think if I can give the presentation from the ad hoc 209 committee, you'll have really good questions to ask. 210 DRAFT January 21, 2014 Draft Minutes 6 211 Commissioner Reckdahl: OK. 212 213 Commissioner Crommie: I think we should give that background. 214 215 Vice Chair Lauing: I'm going to pass this out, Deirdre. 216 217 Commissioner Crommie: What Ed is passing out now is our ad hoc committee report on 218 the tree mitigations recommendation for the mitigation. I'm sorry we don't have the 219 ability to put this on an overhead, do we? No, OK. I'm sorry not everyone has a copy of 220 this. 221 222 Vice Chair Lauing: That's because the ink is still wet on this thing. 223 224 Commissioner Crommie: Yeah, the ink is still wet. I'm going to start off the discussion, 225 and then I'm also going to hope that my colleagues on the ad hoc committee, who are 226 Commissioners Knopper and Lauing, will join in at any time they feel the need. Then we 227 will take questions from the Commission and have discussion. I want to start off by 228 saying we engaged in a really good process to come up with this recommendation. It was 229 a lot of hard work. We met many times over the last few months. Many different 230 stakeholders were involved. Some of these stakeholders have spoken today. As a 231 resident of this City, I'm indebted to these leaders and environmental causes who have 232 really allowed us to maintain a healthy enough Bay to support life. That is nothing that 233 any one of us should take for granted. It comes at the cost of a huge amount of work, 234 often hugely uphill battles. People work tirelessly to protect our environment and they do 235 not get enough recognition, nor do they get enough money. When we undertake these 236 mitigations, they're very difficult because they come as an almost perceived by-product 237 of a project, but they are required by law. We need them when there is a deleterious 238 impact as a result of the project. We have negative impacts in the Baylands as a result of 239 the golf course reconfiguration and the potential Baylands Athletic Center expansion. 240 That's what this mitigation is all about. It's to mitigate against that impact. We've 241 worked through a lot of incredibly difficult issues in this committee. We've been well led 242 and well supported by staff and all the participants. Many of the participant groups are 243 listed on the opening sentence of this recommendation. I'm going to say that we started 244 in a place of loss of, we're mitigating against the loss of canopy. The new number today 245 is mitigating against the loss of 621 trees on the golf course. We had to wrestle with how 246 to do that. We cannot replant those trees on the golf course, because of the 247 environmental conditions there and our desire to get toward a more natural environment 248 on the golf course. It will be one of the significant features of the golf course once it's 249 done, is that it is approaching a more natural habitat for that area. We worked toward this 250 idea that we're going to not use trees for the replacement in full. We came up with a 251 hybrid model where we will bring in as many trees as we can onsite. Then when we 252 DRAFT January 21, 2014 Draft Minutes 7 reach that capacity, we're going to move into other kinds of habitat. We want to restore 253 the Baylands and produce a native Baylands habitat. We have expertise within our 254 working groups to guide us in that process. We also are developing some expertise on 255 staff. Daren Anderson has been instrumental in that regard, in terms of really learning a 256 great deal about what's needed and being able to offer expertise and guidance along with 257 our other stakeholder groups. I really, really value his participation in this process. What 258 we have done is we are diverging in our, our recommendation is diverging from the staff 259 recommendation in some significant ways. I see Ed kind of cringing. I guess I should 260 just ... 261 262 Vice Chair Lauing: You said to come in at any time, so I'm going to just [crosstalk]. 263 264 Commissioner Crommie: Oh, sure. OK. 265 266 Vice Chair Lauing: I think the phenomenal aspect is that the constituent committee, as 267 you noted, completely aligned on what should be done which is obviously not put trees 268 up in the Baylands, but to mitigate in alternative ways that really reflected the values that 269 we value as a community and as a Commission. I think we're actually completely 270 consistent as well in agreeing with the approach of the Arastradero tree mitigation and the 271 Baylands habitation improvements. It's just a question of the financial approach and how 272 far we should go. That's the only area of disagreement, which I also think reflects the 273 constituent group in addition to the Parks Commission recommendation. 274 275 Commissioner Knopper: One of the areas of difference is that the tree loss is the 276 equivalent of 6 acres. Instead of a 2-acre restoration, we're suggesting a 3-acre 277 restoration, a 50 percent development of native habitat in the Baylands to augment the 278 loss of canopy. We're also recommending that we work against percentages for tree 279 survival. Instead of mitigating it and having ongoing maintenance that is funded with 280 golf course revenue, what we are suggesting is that that financial piece is decoupled from 281 required revenue and that there's an actual financial commitment saying for the next ten 282 years this is the amount of dollars that will be committed to ensuring survival rates of 283 what we're planting. We're looking for success criteria basically. Because revenue is 284 always tricky, we know exactly what trees need in a native habitat in order to live, so we 285 want the financial commitment to be a line item, instead of just based on golf revenue. 286 Did you want to continue? I'm sorry. 287 288 Commissioner Crommie: Thank you for that input from both of my committee partners. 289 I appreciate it. Ed Lauing did accurately say that we're really on the same page 290 conceptually with everything we're recommending. We worked hard to come to this 291 consensus and we all feel really good about it. What Commissioner Knopper just 292 indicated is that we would like to see more acreage of habitat restoration. We're losing 6 293 acres of trees, and it's hard to establish exactly where we should fall when we do this 294 DRAFT January 21, 2014 Draft Minutes 8 equivalency, because we're not replanting 6 acres of trees. We're doing an equivalency, 295 and we're replacing trees with a native habitat in the Baylands marsh areas and surrounds. 296 The way our ad hoc committee approached it is, well, we felt like 2 acres was too small. 297 We felt that 6 acres was too big. Not because we don't need 6 acres of restoration, we 298 need much more than that in the Baylands. It's just very expensive to accomplish this. 299 We felt like it was probably not within the scope of this mitigation to ask for everything 300 that we need there. We wanted to just come up with some reasonable approach to 301 mitigate for the 6 acres. The best we could come up with, after a lot of discussion, was to 302 aim for these 3 acres. I just want to orient everyone to Number 1. I want to go through 303 the recommendations. Our recommendation has four parts. Number 1 is listed, I believe, 304 on the staff recommendation. Just so everyone understands, the City has already 305 committed itself to adding 300 new trees back to the golf course. I always get confused if 306 we're taking out a net of 621. That's before we put the 300 back, is that right? Or is it a 307 net loss after we put the 300 back? 308 309 Mr. de Geus: 621 are the total trees that will be removed. 310 311 Commissioner Crommie: That are being removed. OK. The total lost are 621, and that's 312 what we're mitigating against. There's a lot of calculations that go into exactly how you 313 do it, even if you're going tree for tree. It's quite complex. If you're taking out 621, you 314 don't put back 621 because you have to replace a certain amount of canopy. It's a 315 complex formula even tree per tree. Then we've had to extrapolate to get to a reasonable 316 conclusion when we're going for trees for Baylands habitat. In this mitigation, Number 1 317 will be 300 trees back to the golf course. That's Number 1 on our recommendation. That 318 has already been funded by the City; both the planting of those trees and the maintenance 319 of those trees are already funded. Number 1 on our list is taken care of. Number 2 has to 320 do with this equivalency of moving on. We're done with the golf course. We're at 321 capacity when we put the 300 there, so we're moving now to the next priority which is 322 proximal, proximal to the site. That has to do with the Baylands. When we get to be 323 proximal to the site, we would like to aim for 3 acres of Baylands habitat. We have heard 324 the cost of doing that restoration has varied somewhat. It's complicated and we've heard 325 quotes from Save the Bay and Acterra. Daren Anderson also is getting a feel for this 326 because he's involved in a CIP to do Baylands restoration. The value that our ad hoc 327 committee settled on was the cost of $130,000 per acre. We think that's what's needed to 328 be successful in planting and caring for that restoration, planning it out, doing all the 329 proper measures that is needed to get that planting done. That might also leave money 330 for some kind of maintenance, but it won't leave enough money for long-term 331 maintenance in order for that habitat to establish itself. That's dealt with later on in our 332 recommendation. Number 3 is that, in addition to the Baylands habitat, we do want to 333 move offsite to get more trees. We know there's a need in Pearson-Arastradero Preserve 334 for some support there for trees. We want to be ecologically sensitive when we go into 335 the Arastradero Preserve, because it currently has a thriving grasslands habitat. We want 336 DRAFT January 21, 2014 Draft Minutes 9 to be mindful of that when we bring trees back in. The stakeholders working together 337 with Walter Passmore and other staff have decided that the best way to approach this is to 338 support saplings that have already germinated in that area and are growing but, without 339 our help, will have a very low survival rate. That's Item Number 3. We recommend that 340 500 naturally growing seedlings in the Pearson-Arastradero Preserve be protected and 341 nurtured with the goal of 80 percent survival. Number 4 has to do with the maintenance. 342 As Commissioner Knopper said, we would like to decouple the commitment and 343 accountability to the maintenance of this mitigation from the financial picture of the golf 344 course. We all hope the golf course does really well financially. A lot of effort's been 345 put in to make that a very successful golf course. We just felt that the funding for the 346 maintenance needs to stand on its own. Part of our thinking there is that we do know of 347 examples where this is just the mitigation. You have all the best goals going in, but 348 without the maintenance things can really fail, especially with something as complex as 349 we're doing here. This is really, I see, a cutting-edge kind of mitigation. I'm very proud 350 to have been part of the process. I think it sets a really high standard for our City and for 351 how we want to protect habitat. It does cost money to do that. One of the things that's 352 often missing in mitigations is this commitment to the maintenance. I think with that 353 we're ready. I'd like to let my colleagues on the ad hoc committee just have the first say, 354 if there's anything I missed, and then open it up. 355 356 Vice Chair Lauing: The only comment that I want to make is on these couple of numbers 357 here. You do the best you can, and we hope we got the numbers right on the golf course. 358 That means it's going to be quite good. As these trees finally grow up, we're going to 359 have a showplace, but that's going to take a while. There's only so much you can do to 360 make the business model work. You can't raise the fees to $100, if you need to do that to 361 try to break even. That's market demand. That's completely unpredictable. What's not 362 unpredictable is that trees need water and maintenance. That's why we need to decouple 363 that for the first ten years and just have a maintenance budget for that, as opposed to have 364 it be dependent on how the golf course happens to perform. A lot of the stuff that's going 365 on, i.e., the Arastradero trees, at that point doesn't have anything to do with the golf 366 course. The second point is that the City estimate, and we know this needs to be fine 367 tuned, is about $20,000 per year for the kinds of maintenance that has to be done. You 368 can multiple that by 10 years or 20 years and come up with a pretty scary number. It's 369 $20,000 a year to maintain a park resource that we've all invested in. The golf one 370 happens to be $8.5 million. At least you would do a net present value of that, but it's a 371 fairly small number. To assign that categorically on an accounting basis all to mitigation 372 just doesn't seem like the right way to do that assignment. The only other thing I want to 373 add is it's been a great process, everybody involved, Walter indefatigable on it. 374 Everybody's that been involved in it has just given it great efforts, great Palo Alto 375 process. 376 377 Chair Hetterly: Any questions about either? 378 DRAFT January 21, 2014 Draft Minutes 10 379 Commissioner Ashlund: Yeah, I have a question. First I wanted to say to all three of you 380 that this is a really incredible set of recommendations. I think it's really well thought out 381 and I appreciate that you did that. The only question of clarification that I had is 382 regarding the 500 naturally growing seedlings at the Arastradero Preserve. Over what 383 time period do we expect that many seedlings to be naturally growing? 384 385 Mr. Passmore: The seedlings are already present on the Preserve. It would be a two-year 386 implementation period to protect all of those. 387 388 Commissioner Ashlund: Thank you. 389 390 Chair Hetterly: Commissioner Markevitch. 391 392 Commissioner Markevitch: In your presentation, it's 500 live oak. Is that still the case 393 with your presentation? It didn't specify what the seedlings were. Are they live oak or 394 are they a different type of tree. 395 396 Mr. Passmore: I can answer that as well. It's actually a mix of native oaks. There are 397 quite a few live oaks. That's actually the most predominant species. There's also a very 398 good representation of valley oak, blue oak and a couple of other native species that we 399 think would be prime candidates to protect. 400 401 Commissioner Markevitch: OK. I had another question and that was in point Number 4. 402 In point Number 4 you say where you don't want the money to come from, but there's no 403 recommendation on where the money's going to come from. Are there any thoughts on 404 that? 405 406 Vice Chair Lauing: Yeah. There are a number of creative models that were actually 407 thrown out at the constituents' meeting. We intentionally don't specify that. It would be 408 basically somehow in the City budget as opposed to a bond measure or charging the 409 golfers more or something like that. 410 411 Chair Hetterly: That's for that $20,000 per year? 412 413 Commissioner Markevitch: This for $20,000 a year? 414 415 Vice Chair Lauing: Yeah. 416 417 Commissioner Markevitch: Did you consider park improvement fees? 418 419 DRAFT January 21, 2014 Draft Minutes 11 Vice Chair Lauing: We basically decided not to consider that at this point, but that the 420 City should consider ... 421 422 Commissioner Markevitch: OK. My other comment on that, and it's my last comment, is 423 when I served on the airport working group, it was determined that when the City of Palo 424 Alto takes ownership of the airport away from the County, that the projected yearly 425 earnings would be $1 million in revenue. Did you look into that pot of money? 426 427 Chair Hetterly: I think that can't be spent outside the airport. 428 429 Commissioner Markevitch: OK. 430 431 Chair Hetterly: Do you guys know anything about that? 432 433 Mr. de Geus: I do know that there is a number of very large capital improvements 434 required at the airport including replacing the runway, which will cost several million 435 dollars of dollars. I'm not sure that there would be a funding stream there. 436 437 Commissioner Knopper: To your point, Commissioner Markevitch, what we didn't want 438 to have happen and which is why we are making that recommendation, to decouple it and 439 make it a line item in the City budget, is because if we restore 3 acres of Baylands and we 440 have these 500 seedlings and we don't care for it because golf revenue isn't where it's 441 supposed to be for any given reason, the plantings and the trees, they don't know the 442 difference. All they know is that they're getting the proper care. It would be a shame 443 basically to go through all this effort and upfront money to do all of this and then just not 444 have a significant survival rate. 445 446 Commissioner Markevitch: I understand that. I'm just saying that you need to show 447 where this money is going to come from. I haven't seen it. 448 449 Vice Chair Lauing: I think you're concerned about the source of funds. 450 451 Commissioner Markevitch: Yeah. 452 453 Vice Chair Lauing: What I'm saying is that I think we found that there would probably 454 be a number of sources. We didn't go into that level of detail relative to this. But it's 455 $20,000 a year. We could figure out a place to get $20,000 a year. If that's an 456 assignment that we get from the City or the Council to look at those and come up with 457 five, six, eight, ten options, I think we would do that. 458 459 Commissioner Markevitch: I understand that. It's just I feel like I’m being asked to 460 make a vote without all the information. That's my point that I was trying to get across. 461 DRAFT January 21, 2014 Draft Minutes 12 462 Vice Chair Lauing: The information, as Abbie said, is that at this point our 463 recommendation is don't be dependent on the golf course for $20,000 a year. It has to 464 come out of the City budget and that we have to find a way to pay for that. It's real 465 money. 466 467 Commissioner Crommie: I just wanted to make a point of clarification. What we feel on 468 the ad hoc committee is that we need a commitment to the whole project for the 469 maintenance, to fund it at least out ten years. I would include the saplings in the 470 Arastradero Preserve. Our recommendation is not to only take care of the saplings for 471 two years, but to also bring that out at least ten years. When we're talking about the 472 funding of $20,000 per year, from the perspective of our subcommittee that is to help 473 with the maintenance of saplings in Arastradero Preserve as well as plantings, habitat 474 restoration in the Baylands. We don't want to lose track of those saplings either. 475 476 Chair Hetterly: Commissioner Reckdahl. 477 478 Commissioner Reckdahl: I'm a little confused here. When I first read this I thought this 479 said that the money was coming out of the golf course regardless of how profitable it 480 was. But you're saying you don't want it to come out of the golf course budget regardless 481 of [crosstalk]. 482 483 Commissioner Crommie: What we're saying here is that the total of $430,000, my 484 perspective again, I'd like my other members of the subcommittee to chime in. My 485 understanding of this is that for the $430,000 that's the cost of the mitigation upfront. 486 487 Vice Chair Lauing: I'll respond to Keith's question. That's correct. That's one of the two 488 points of contrast to the City proposal, which is that is dependent on the golf course 489 performing. We're saying that it can't be dependent on the golf course performing 490 because if it doesn't perform, we're not going to let the trees die. It's also not really 491 coupled. That's what we're saying. Therefore, we do have to find a different way than 492 depending on the golfers to pay more to cover that $20,000 a year. 493 494 Commissioner Reckdahl: So you were thinking it would come out of the golf course 495 budget unless it wasn't doing well, then the City would be responsible for finding another 496 location. 497 498 Vice Chair Lauing: Our only point is that it should not be tied to the golf course. If it 499 goes to City Council and they say, "That's $100,000 a year, let's put it in the bond," they 500 can do that. If they say, "Let's look at some fee that we can add to recover that per year." 501 If they say, "It's $20,000 a year, no problem." Any of those are options. The only 502 DRAFT January 21, 2014 Draft Minutes 13 statement we're making is that we don't see why it should be correlated to golf course 503 revenue performance. 504 505 Commissioner Reckdahl: OK. One thing I’m sensitive to is that the golf course will 506 have a lot of debt. When it comes out, the construction is done, we still have more to do. 507 We have the restaurant that we want to remodel. There's a long wish list here and I'm just 508 leery of throwing any more debt onto Rob. If this money's coming out of the general 509 budget, away from Rob's budget, I think that's probably a good thing. 510 511 Chair Hetterly: That would be for the ongoing maintenance, not the initial investment? 512 513 Commissioner Reckdahl: For the $20,000, correct. [crosstalk] 514 515 Commissioner Crommie: Ed, can we clarify where the—oh, sorry. I just want, before 516 we move on, to clarify where the $430,000. What I'm even confused about sitting on the 517 subcommittee is $20,000 over ten years is $200,000. Then we also have this $430,000 518 value. We’re not lumping them together and saying we want $630,000, which I find can 519 be confusing to people looking at this. Ed, can you just take a minute to clarify that? 520 521 Vice Chair Lauing: It is going to take $630,000. It's still money, absolutely. But it's a 522 future payment stream of ten years times $20,000, which isn't really $200,000. The 523 question is should that be mitigation money or should that be budget money or should 524 there be some fee for that. That's still to be determined. 525 526 Commissioner Crommie: So it's altogether. When we stream this over ten years, are we 527 streaming the $630,000 over ten years? We're getting some upfront. 528 529 Commissioner Knopper: The $200,000 is over ten years. 530 531 Commissioner Crommie: Where does the $430,000 come from? 532 533 Chair Hetterly: The golf course bond. 534 535 Commissioner Knopper: The golf course bond. 536 537 Commissioner Crommie: I'm sorry that I need this clarification. I've even found this part 538 confusing. Staff is recommending that everything be tied to the bond measure for the 539 golf course. Where we're differing here is we're saying tie the $430,000 to that bond, but 540 for the ... 541 542 Vice Chair Lauing: No. No, no, no. Rob, go ahead. 543 544 DRAFT January 21, 2014 Draft Minutes 14 Mr. de Geus: The staff recommendation is $200,000 that would be tied to the revenue 545 bond. Future maintenance funds over and above the $200,000 would be tied to the 546 performance of the golf course. 547 548 Commissioner Crommie: Because the ad hoc committee's recommendation is that–Ed, 549 can you finish that?–$430,000 be tied to ... 550 551 Vice Chair Lauing: $430,000 instead of $200,000. The $20,000 is not necessarily 552 mitigation money but, for lack of a better term right now, City budget. 553 554 Commissioner Crommie: OK. $430,000 is our ad hoc committee recommendation gets 555 tied to the bond. Thereafter, we find funding for $20,000 a year not tied to the revenue 556 for the golf course. 557 558 Chair Hetterly: I have a question. 559 560 Mr. de Geus: I do have some comments. This is the first time staff is seeing this as well. 561 Go ahead and finish your questions. 562 563 Chair Hetterly: As I look at the staff report, your proposal of $200,000 for the initial 564 mitigation was to include planting and tree mitigation, maintenance for up to five years, 565 and then you had proposed that additional $20,000 a year for years 6 to 20. Right? You 566 had 15 years of the ongoing funding. They have 10 years of ongoing funding starting 567 five years earlier. 568 569 Chair Hetterly: Yours is tied to the revenue performance of the golf course. 570 571 Mr. de Geus: Correct. 572 573 Chair Hetterly: If I have that right. In terms of the $200,000 over the first five years, I'm 574 just trying to figure out where the difference is in the numbers. You're talking about 575 $430,000 mitigation upfront versus their $200,000. Your $430,000 doesn't include that 576 five years of maintenance either. It's a little bit bigger distinction between the $200,000 577 and the $430,000. Am I seeing that correctly? 578 579 Commissioner Knopper: Right. For the first year technically it's the $430,000 for build-580 out, for lack of a better way to describe it, plus $20,000. Because once you plant it, you 581 have to start taking care of it. 582 583 Commissioner Reckdahl: $20,000 for five years. 584 585 DRAFT January 21, 2014 Draft Minutes 15 Commissioner Knopper: $20,000 a year. The first year is really $450,000 if you're 586 looking at it that way. 587 588 Chair Hetterly: Right. Their $200,000 builds in that $20,000, so it's ... 589 590 Commissioner Knopper: And then it's $20,000 every year on for the next ten years. 591 We're not saying, "Stop taking care of everything after ten years." We're just saying in 592 this particular plan that we are just looking forward ten years. 593 594 Chair Hetterly: I'm trying to understand if that $200,000 in the staff report is intended to 595 cover the five years maintenance as well as the initial restoration and protection. Then 596 five years at $20,000, that's $100,000 right there. Is that right? You're expecting only a 597 cost of $100,000 to do the initial protection and the initial habitat restoration on 2 acres of 598 habitat. 599 600 Mr. Passmore: The cost estimates on this sheet actually do include that five years of 601 monitoring and maintenance which is the largest chance of success or failure for the 602 project. That's typically what restoration partners do. They commit to that five years. 603 That's rolled into their implementation costs, is that first five years of maintenance? 604 605 Chair Hetterly: Right. I remember you telling us that before. Since we're talking about a 606 $20,000 a year maintenance cost, I don't know if that's a different cost for that first five 607 years or if it's a similar cost for the first five years for each year. I'm trying to figure out 608 where that $200,000 number comes from. If the ad hoc committee is suggesting 609 $130,000 per acre to restore Baylands habitat, if you're planning to do 2 acres, then you're 610 already at $260,000 without counting the first five years maintenance. I'm trying to 611 understand the difference in the numbers and how we figure that out. 612 613 Vice Chair Lauing: Really $300,000 because there's $40,000 budgeted for the 614 Arastradero seedlings out the chute, $40,000 there. If you use the same numbers, it'd be 615 $260,000 for 2 acres and then the maintenance. Yeah, it's over $300,000. That would be 616 a good question. 617 618 Chair Hetterly: I just want to compare apples to apples. 619 620 Vice Chair Lauing: Yeah. It seems like you're getting your work done cheaper than we 621 are and we're all using the same resources. 622 623 Mr. Passmore: I think there are some differences in maintenance costs for Baylands 624 ecosystem as compared to seedlings. On the seedlings, once they reach five years old 625 there's very little chance that they're not going to continue to make it thereafter. So the 626 maintenance cost is very low for the seedlings on the Arastradero Preserve. Whereas, the 627 DRAFT January 21, 2014 Draft Minutes 16 maintenance of the Baylands, there's a lot more of a flexible estimate as to what is 628 actually going to occur there. I don't want to speak for Daren, but I think he said 629 $10,000-$20,000 was a reasonable expectation depending on how solid the first five 630 years of performance was. If we have plants that are doing very well, they really take to 631 the site, we're really looking at a lower cost of continued maintenance that may be more 632 in the range of $10,000. Whereas, if we have a really difficult time, a lot of invasive 633 plants that have to be hand weeded after that five-year implementation phase, then the 634 estimate may be as high as $20,000. There's a lot of flex. Going back to my previous 635 statement, we have not received any really tangible, detailed cost estimates. We're basing 636 this on partners' experience, such as experience from Save the Bay. That organization 637 has done a lot of restoration. They're basing it on what their past costs have been. That 638 doesn't necessarily mean ours are going to be the same. 639 640 Vice Chair Lauing: Right. It's not adding up right now, Chair Hetterly, because basically 641 we used the Save the Bay number that we heard in the last committee meeting just as a 642 placeholder. We all understand that this is going to move around a little bit. We used 643 $130,000. Basically if you take the $40,000 for Arastradero that you've budgeted out of 644 the $200,000, you're spending $160,000 to get 2 acres. We're saying it's going to cost 645 $260,000 to get 2 acres. We're using a number that's an order of magnitude higher, so 646 this delta is really not as big. We ought at least to be using the same number for the 647 Baylands restoration. 648 649 Mr. Passmore: Right. The 2-acre restoration estimate was also based on proximity to 650 Byxbee Park, which allows us to possibly use heavy equipment, staff, have access to 651 water. Those all reduce the cost from the $130,000 to a lower number. That's why we 652 felt that 2 acres was a reasonable target. Even though the cost per acres is less than the 653 $130,000, we felt like those factors would lower the overall cost from $130,000 to maybe 654 around $80,000. 655 656 Vice Chair Lauing: Wouldn't we put the third acre right next to it though and get the 657 same efficiencies? 658 659 Mr. Passmore: Absolutely. 660 661 Vice Chair Lauing: Yeah. I think the ad hoc committee would probably move the 662 number down then to more like, what did we just say? $80,000? 663 664 Chair Hetterly: You said $80,000 an acre. 665 666 Vice Chair Lauing: $80,000 an acre, so it'd be $240,000. 667 668 Commissioner Crommie: Yeah. What I ... 669 DRAFT January 21, 2014 Draft Minutes 17 670 Vice Chair Lauing: But we have this speaker? 671 672 Mr. de Geus: Yes. If we could just take a short interlude. We do have Len Materman 673 here, the Executive Director of the San Francisquito Creek Joint Powers Authority (JPA). 674 We want to give him the opportunity to say a few words about his flood control project as 675 related to the environmental permits that he's trying to get approved to start his project. 676 677 Len Materman: Thanks, Rob. I was asked to come here a few hours ago. Unfortunately 678 I have another commitment that I need to leave for, which is why Rob broke in on that 679 conversation. I'll say a couple of words and then I'd be glad to answer any questions 680 anybody has. I just wanted to highlight a few points. We have a project between the Bay 681 and Highway 101 called the Bay to 101 Project. I'm not sure how familiar you are with 682 it, but it's been in the planning and design and EIR stage for several years. We've 683 certified the EIR on this project. This project, as you may know, protects Palo Alto 684 recreational facilities and businesses and East Palo Alto residents between Highway 101 685 and the Bay. It's an area that flooded in December of 2012, if you're not aware, on the 686 East Palo Alto side. There's a life safety risk. The project also is a necessary first step to 687 protecting Palo Altans and getting Palo Altans out of the Flood Insurance Program 688 upstream of Highway 101 which is where most Palo Alto residences that are at risk are 689 located. The project impacts three golf holes directly and a few more indirectly, which is 690 why we agreed to a mitigation payment with the City of Palo Alto for that direct and 691 indirect impact. There is virtually no flood control benefit to taking more of the golf 692 course land, and we've analyzed that. We've told that to Palo Alto and we haven't asked 693 Palo Alto for more land than the 7.4 acres which our design requires. Finally I'd say that 694 our project did not mandate or assume an entire reconfiguration of the Palo Alto Golf 695 Course. That was a process created by the City separately from our process. I thought it 696 was important to make those points, because I know other points have been made about 697 the projects and the nexus between the golf course and our project. I'd be glad to answer 698 any questions. Again, sorry for the interruption of flow of conversation here. 699 700 Chair Hetterly: Commissioner Crommie. 701 702 Commissioner Crommie: I really appreciate you coming to speak to us tonight. 703 704 Mr. Materman: Sure. 705 706 Commissioner Crommie: We did receive some information about the project. We 707 received a letter from the Water Board dated on January 16th that was written from the 708 Water Board to the City. The question that I have for you as it relates to both your 709 project and our project, what does it mean for you that you don't have a permit yet for 710 your project? I know that you have submitted your own paperwork to the Water Board, 711 DRAFT January 21, 2014 Draft Minutes 18 and you're waiting on that and you're negotiating with them on the work plan. Your 712 mitigation is funding our project. 713 714 Mr. Materman: In part. 715 716 Commissioner Crommie: In part exactly, because we did expand it quite a bit. We're 717 also submitting our paperwork for permitting to the Water Board. I'm a little bit 718 concerned just in terms of timelines. I know there are many levels of concern. I know 719 you want to get your project right. 720 721 Mr. Materman: Yes. 722 723 Commissioner Crommie: You're working hard on that and I'm sure you're negotiating 724 with the Water Board. I want to drill down to whether us getting our permit is contingent 725 on you getting your permit and how that affects the timeline of this project. 726 727 Mr. Materman: Thank you for that question. Certainly we applied to the Water Board 728 last spring, so it was about nine months ago, for the permit. There's been a lot of back 729 and forth, requests for information that we've provided and further requests. In terms of 730 our permit process, we have recently made some changes to our design to address 731 concerns about fish and wildlife impacts and water quality impacts to the Faber Tract 732 north of the creek which is, as you may know, part of the Don Edwards Refuge and it's 733 owned by the City of Palo Alto. We continue in the dialog with the Water Board and the 734 other federal and state agencies that we need regulatory permits from. I can't really speak 735 to the Palo Alto strategy on the golf course permit. We apply for a permit on our project. 736 Palo Alto has submitted materials to the Water Board as well on the golf course project. 737 As far as I'm concerned, those projects are adjacent to each other. Palo Alto's golf course 738 configuration project was inspired by the fact that the creek is moving into the golf 739 course on some level. Those are separate permits, applications for separate projects. I 740 know that we're going to be having conversations with the leadership of the Water Board 741 in less than two weeks. Certainly that exact issue will be part of the conversation. That 742 conversation includes the senior leadership from the City of Palo Alto. 743 744 Commissioner Crommie: Thank you. 745 746 Mr. Materman: Sure. 747 748 Chair Hetterly: Any other questions? Commissioner Reckdahl. 749 750 Commissioner Reckdahl: I have a question about schedule of risk. How does your 751 schedule of risk affect the golf course design and earth construction? I'm not sure if that's 752 a question for you or for Rob. These projects are happening simultaneously. Whenever 753 DRAFT January 21, 2014 Draft Minutes 19 you have two projects happen simultaneously, if one has a problem the other may have an 754 unplanned problem. I'm just worried about that. 755 756 Mr. Materman: We would like nothing better for the golf course reconfiguration to be 757 done irrespective of our work. The golf course reconfiguration assumes that the 7.4 acres 758 of Palo Alto property is now either part of the expanded creek bed or a part of the new 759 levee, the larger, more significant certified levee. What I'm trying to say is it's in both of 760 our interests to decouple anything related to the schedule. Now certainly if you have two 761 major construction projects happening at the same time with different contractors, there's 762 going to be some coordination issues. I'm sure there will be times over the life of both 763 constructions projects that people will get in each other's way. That's not to be avoided. 764 If the golf course is ready to go, it should go. Our project would be the same or better off 765 when the golf course project is done in terms of the golf course activities outside of our 766 project footprint being completed. Rob may want to add something to that. 767 768 Mr. de Geus: It's a good question about the risk of the schedule. That's what we're all 769 concerned about, particularly the JPA and the work they're doing. They are trying to 770 protect lives and property. They want to get that levee built, and they have been working 771 on it for a long time. They want to make it happen. On the golf course side, there's 772 concern operating losses of the golf course, in terms of recovering costs. We're losing 773 money every month if we don't get started. Most importantly we want the golf course to 774 get built so we can essentially get out of the way, so the new levee can be built, so that 775 our East Palo Alto neighbors and not at risk as they are now. 776 777 Commissioner Reckdahl: What is happening first? I was under the impression that the 778 levee is being constructed first and then the golf course is being .. 779 780 Mr. de Geus: Not necessarily. We did think that for a long time, but the golf course 781 project has caught with the levee project at this point. We are at 100 percent design and 782 we are ready to get our own permits to start the project. We may end up moving ahead of 783 the JPA project, which is fine. It works fine for the levee project. 784 785 Commissioner Reckdahl: But won't some of the holes be affected by the JPA 786 construction? 787 788 Mr. de Geus: Not necessarily, no. When the new golf course is built, we essentially 789 vacate the 7 1/2 acres that they need to build their levee. 790 791 Mr. Materman: If I could just finish up on that one point. The work that we've done to 792 date is preliminary work related to utilities. Of course, Palo Alto has started to stockpile 793 soil for the levees. That kind of work can continue, again, irrespective of the activities 794 DRAFT January 21, 2014 Draft Minutes 20 related to the golf course project. There's no reason to think the golf course project has to 795 wait for our project to hit some sort of milestone or vice versa. 796 797 Mr. de Geus: The other point I would make is that the levee project in some ways is a lot 798 more complicated. They're working inside the channel, and they can only work within 799 that area certain months of the year. It's likely to take, Len can answer this better, at least 800 two years to complete the levee project. We're hoping to get the golf course rebuilt in 801 just over a year. Our expectation at this point is that the golf course would be rebuilt 802 before the levees are completely done. 803 804 Chair Hetterly: I'm happy to hear you say there's no flood control benefit to taking more 805 of the golf course space. These letters that we saw today suggest that there may be some 806 benefit to maintaining flexibility to reconfigure the land bank over there in response to 807 whatever revisions you all might need to make to your plan. Do you see that as a 808 possibility or you feel very confident that doing the golf course now is not going to 809 impact your ability to complete your project? 810 811 Mr. Materman: Certainly we need the permits to proceed with most of the construction. 812 As I said, we're doing other construction activities preliminarily without the permits and 813 that's fine. To do the major construction activities like building levees we'll need permits. 814 What I said was there was virtually no, virtually no impact. What I mean by that is by 815 moving the levee out more into the golf course, our hydrological analysis from our 816 consultants says that it would lower the water surface elevation, which is really a key 817 issue here, water surface elevation relative to the height of the levees or flood walls. It 818 would lower the water surface elevation by a few inches. To us that's an immeasurable 819 benefit, let's just say, a couple inches. I don't foresee us moving into the golf course 820 much further than we are if the situation is as it is, which is there's virtually no benefit 821 with a much greater cost. I would feel like it's incumbent upon people that maintain that 822 more of the golf course should be marsh plain to explain their justification for why such a 823 greater cost should be borne by the City and by the JPA entities for no benefit. We're 824 proceeding with this design on the golf course side. The design change we're making is 825 on the other side of the creek with the levee between the creek and the Faber Tract. 826 827 Chair Hetterly: Thank you. 828 829 Mr. Materman: Mm-hmm. 830 831 Chair Hetterly: Commissioner Crommie, did you have something? 832 833 Commissioner Crommie: Commissioner Hetterly pretty much asked my question. I just 834 want to confirm it. What I hear you saying is that you have a design plan that if that 835 design plan goes forward, it won't require any more of our golf course land. 836 DRAFT January 21, 2014 Draft Minutes 21 837 Mr. Materman: Correct. 838 839 Commissioner Crommie: But I also hear you saying that you're not permitted yet, you're 840 in negotiations with the Water Board. I read the Water Board letter which seems like 841 there might be some concerns with your project. It's not only them speaking, but I've also 842 heard other people saying it. I would have to research it more to really understand it all. 843 Can you explain what the sticking point is? You said that you feel like more preservation 844 of the marshlands around the creek is going to cost a lot more without that much more 845 benefit, is your point of view. Is there another point of view that you're still having to 846 argue? Are there people who are in control of your permit putting pressure on you, 847 saying "We're not certain yet. We're still studying." I want to know is there something in 848 process where the answer really hasn't been determined yet. What I mean in process 849 would be these alternatives that do cost a lot more money, do take some more of the golf 850 course land. We're trying to judge how likely that could be. 851 852 Mr. Materman: For anybody that's gone through a regulatory process like this, they 853 know the permitters have a great way of using process to slow down important life safety 854 projects. This is the situation here. There's no question that there are legitimate concerns 855 to be had by these agencies. They basically have three concerns with our projects. One 856 of which I consider completely legitimate and we're making changes to the design to 857 address that. There are other concerns that are unrelated to this project. By the, let's just 858 say, statements of the staff there, this project is comprised of a Joint Powers Authority. 859 It's a regional project. It's important to the entities including the City of Palo Alto and the 860 other cities. This is an avenue for them to acquire commitments by the City of Palo Alto 861 and the other cities on topics unrelated to the creek project. I can't estimate when we'll 862 get our permit, because we're in an environment in which demands on the project are 863 unrelated to our application or the actual physical nature of the design. I'm not going to 864 make a commitment on that. In terms of whether there are justifiable or unjustifiable 865 demands on the project, I would say some of them are justifiable and some of them are 866 perplexing. 867 868 Chair Hetterly: I think the bottom line for us is we don't want to get in the way of your 869 project. 870 871 Mr. Materman: I appreciate that. 872 873 Chair Hetterly: The life saving flood control is far more important than the golf course. 874 That's why this letter raised concerns for us. What I'm hearing from you, however, is that 875 from your perspective we can go ahead and move forward with the golf course and you 876 don't anticipate that having any impact on your project. 877 878 DRAFT January 21, 2014 Draft Minutes 22 Mr. Materman: That's what I recommend. If there are impacts to our project that take 879 more of the golf course, it would significantly delay the golf course project in which case 880 I would be stunned if it happened this year. If we have to go back and redesign and take 881 more of the golf course, that would not only do a complete redesign of our project and, 882 again, for no reason, no actual benefit. It would also require a redesign of the golf course 883 project which would mean there would be no way to construct either project this year. If 884 I were in a position to vote on something or to make recommendations on the golf course 885 project, I would say the project should move forward as quickly as possible, just as we're 886 trying to do the same. 887 888 Chair Hetterly: Thank you very much. 889 890 Mr. Materman: Thank you. 891 892 Chair Hetterly: Any other questions? 893 894 Mr. Materman: Thank you. 895 896 Chair Hetterly: Thank you so much for coming out and fitting us into your schedule. 897 That was really helpful. 898 899 Mr. Materman: Sure, absolutely. Thanks. Thanks, Rob. 900 901 Chair Hetterly: We got a little off track; let's get back to the mitigation plan. I think we 902 were talking about trying to get our numbers the same for the cost of restoration of 903 Baylands acreage. Right? 904 905 Vice Chair Lauing: Right. I was just going to comment. Basically whatever the 906 numbers are, they have to be the same, but let's use yours because it seems like you have 907 a number that says $80,000 per acre roughly. Whatever it is, our only difference in the 908 whole proposal on that is that we'd like to have one more acre. Our increment, our delta 909 is $80,000 in the mitigation, to use the same numbers in this case. If we all use $130,000, 910 then our delta is $130,000. That's the only difference there. We're accepting your 911 numbers entirely on the Arastradero Preserve numbers, and we're very supportive of that. 912 913 Chair Hetterly: What we're talking about, the difference here between the ad hoc 914 recommendation and the staff recommendation is one additional acre of Baylands 915 restoration at either $80,000 or $130,000 or somewhere in between, whatever number we 916 agree on. And decoupling the maintenance from the performance of the golf course. Is 917 that right? 918 919 Vice Chair Lauing: Yeah. 920 DRAFT January 21, 2014 Draft Minutes 23 921 Chair Hetterly: I had one other questions about Items 1 and 3, the 300 new trees on the 922 golf course and the 500 seedlings at Arastradero. The ad hoc committee is 923 recommending survival rates. I vaguely recall you might have had some discussion about 924 that last time you were here. How do their 90 percent and 80 percent compare to your 925 expectations? 926 927 Mr. Passmore: Those are reasonable survival rates. We would expect with proper 928 practices to achieve those. 929 930 Chair Hetterly: OK. 931 932 Commissioner Crommie: I wanted to throw in one more thing. I think you stated the 933 differences really well, that the ad hoc is recommending one additional acre, decoupling 934 the maintenance. We have priced out what an acre costs differently. The other thing is 935 when we look at the maintenance, when I look at the staff recommendation, the way I'm 936 reading it is you don't kick in any extra maintenance money beyond the $200,000 until 937 year 6. 938 939 Chair Hetterly: Right. 940 941 Commissioner Crommie: That's a difference. Not only are we costing out the price per 942 acre as higher, we're adding on money for maintenance starting in year 1 on our proposal. 943 944 Chair Hetterly: So that $200,000, now you've got me confused. You're suggesting there 945 should be an addition. 946 947 Commissioner Crommie: I'm just saying that's the difference when I read what staff has 948 said. 949 950 Commissioner Knopper: If I may interject. The difference is whatever the acreage cost 951 is, $80,000, $130,000, somewhere in between, plus $20,000, our recommendation for 952 maintenance. 953 954 Chair Hetterly: So we're looking for, in your proposal, 3 acres of Baylands restoration, 955 ten years of ongoing maintenance, and ... 956 957 Commissioner Crommie: Starting in year 1. 958 959 Chair Hetterly: Starting in year 1 and $40,000 for the Arastradero trees. 960 961 DRAFT January 21, 2014 Draft Minutes 24 Commissioner Knopper: Right, but we're in agreement with that, with the staff 962 recommendation. That's the same number. 963 964 Chair Hetterly: Right. What we need to do next, I guess, is figure out if the Commission 965 supports that recommendation and then identify next steps for how to move forward. Do 966 you have any more comments on this? 967 968 Chair Hetterly: Thanks. 969 970 Mr. de Geus: Just two thoughts that may help. The ad hoc committee's recommendation 971 doesn't say anything about the additional 50 acres of natural Baylands acreage on the golf 972 course that's part of the project, which is really significant and it's just not part of the 973 equation as far as I could tell. 974 975 Chair Hetterly: That was not included in the staff report proposal either. 976 977 Mr. de Geus: But it's still an important factor. We bring up this important point because 978 the additional 50 acres of natural Baylands acreage designed into the golf course is over 979 and above what we're doing in terms of mitigation and that is really significant. I just 980 think it's an important factor, and we are certainly going to highlight that point to the City 981 Council. I think the Commission, I feel, needs to appreciate that. The other thing is the 982 budget for mitigation. It has to come from somewhere. The idea that we will find the 983 money, I'm not sure that's going to be the case. Tying the mitigation in part to a revenue 984 stream is in some ways a stronger case for actually getting the mitigation money and 985 funding for the maintenance. If the maintenance funding for this mitigation plan, for 986 instance, is put in the CIP budget, the City only funds the CIP one year at a time. So 987 every year you would have to make the case for annual funding. If it's tied to a revenue 988 stream, which we hope and think will be strong particularly after 2018 when we retire 989 one of the major debt services we have on the golf course, it may be a better strategic 990 plan for funding ongoing maintenance for a longer period of time than asking Council to 991 just find the money. 992 993 Chair Hetterly: What we're talking about is an additional $80,000? 994 995 Mr. de Geus: Well, it's more than that. Staff propose $200,000 as the money that we 996 would put forward and any additional would be predicated on the performance on the 997 golf course. 998 999 Commissioner Knopper: The one point you just made was that you hope and think that 1000 revenues will be strong. There's no way to project that. I'm feeling you. I know what 1001 you're saying. If you're going to restore 3 acres of Baylands and commit to improving 1002 our tree canopy and replacing lost trees, we can't hope and think. We need to actually 1003 DRAFT January 21, 2014 Draft Minutes 25 pay to keep this stuff alive. If we're truly going to support mitigation, we have to support 1004 it. We can't just plant it and then just watch it die. That's what I do with my plants at 1005 home. I know they're going to die, so I spend $3.99 on them. If I'm restoring 3 acres of 1006 Baylands, I want it to live and thrive and become an active habitat for critters and all of 1007 the mice and birds and everybody else who lives out there. I can't hope about it. I need it 1008 to happen. 1009 1010 Mr. de Geus: Yes, and we want the mitigation to work too. Staff's perspective is after 1011 the process and everything we have gone through, really relying on Walter's expertise 1012 that $200,000 is the minimum requirement to for tree mitigation. We agree that in the 1013 end if it doesn't feel quite right, and we would like to do more. The “more” however 1014 needs to be funded somehow. That's staff's perspective. Tying it to some reliable, 1015 hopefully reliable, revenue stream is the way we would fund it. I think it would be hard 1016 for us to justify a mitigation payment higher than $200,000 without some way to pay for 1017 it. We could certainly present to Council that the Commission would like to see a higher 1018 tree mitigation payment, but I don't think it's going to be staff's recommendation going. 1019 1020 Vice Chair Lauing: You're on the maintenance issue now? The $200,000? 1021 1022 Mr. de Geus: Just total costs. $200,000 for mitigation funding and then any over-and-1023 above costs would require a revenue stream of some type to pay for it, to justify it. 1024 1025 Vice Chair Lauing: I just don't know what you say to those people who call up five years 1026 from now and say, "All these trees are dying at Arastradero." And you say, "We're not 1027 making as much money as we thought on the golf course." 1028 1029 Mr. de Geus: I don't know that that would happen. I'll have Walter talk about that. In 1030 five years would all of the seedlings that we've been supporting die? 1031 1032 Vice Chair Lauing: It's just the tie specifically to the golf course revenue that is the 1033 objection, because that doesn't necessarily have to do with acres in the Baylands and so 1034 on. As I stated in answer to one of my colleague's questions here, if assigned the task, we 1035 could come up with ways to tie it to some revenue stream. That could be preferred 1036 parking at the golf course. That's kind of cool. Buy a yearly pass for whatever. I think 1037 there's ways to do that, but I just don't know how it gets tied to people playing golf at 1038 some amount of money for this year. Otherwise, we don't water the plants. 1039 1040 Mr. Passmore: What we've strived to do through this whole process is to tie mitigation to 1041 the impact. The impact is coming from the golf course; we should tie the mitigation to 1042 that. That makes a lot of sense as far as a revenue stream, for it to come from the golf 1043 course for the ongoing maintenance of these projects. When we talk about the 1044 predictability, we don't want seedlings to die in five years. It's very unlikely that once 1045 DRAFT January 21, 2014 Draft Minutes 26 they make five years they're all going to die. However, nature is unpredictable and so is 1046 future revenue. You alluded to the fact that we all want the golf course to do well, but we 1047 don't know how well it's going to do. General fund revenue is likewise unpredictable. 1048 We don't know what our sales tax revenue is going to look like in five years, how 1049 competitive our rental market's going to be, and so forth. There's really not a way to have 1050 a completely reliable commitment on revenue or natural survival. We're trying to do the 1051 best we can to tie a secure funding source to long-term maintenance so that we have the 1052 best possible chance of success. 1053 1054 Commissioner Reckdahl: I've got a question. 1055 1056 Chair Hetterly: Yeah, Commissioner Reckdahl. 1057 1058 Commissioner Reckdahl: I support the Baylands restoration, but the thing is gnawing at 1059 me. Let me play devil's advocate and you tell me why the devil's wrong in this case. If 1060 we go away from counting trees and instead go to acreage, the reason we're doing this is 1061 because on the golf course site we cut down some trees. If you now look at the acreage, 1062 the golf course hasn't changed. It's changed from this old, big swath of turf and a lot of 1063 trees to something that's a lot more like the Baylands. The devil's advocate would say we 1064 don't have to do any mitigation because the golf course itself is improved. 1065 1066 Mr. de Geus: I'm going to weigh in on that. We didn't do that and we didn't think that 1067 would work. That could have been an approach. We could have said that the very design 1068 of the golf course, given that we're going from 130 acres of managed turf that's mowed 1069 and irrigated and fertilized to a footprint of only 81 acres of managed turf and adding an 1070 additional 50 acres of native natural areas of golf course is a significant environmental 1071 benefit. To try and really evaluate the value of that new and better habitat would perhaps 1072 more than offset the cost of the loss of trees. We didn't do that, and I'm not suggesting 1073 tha, but I do think that it is a really important factor, because it's part of the golf course 1074 design and it significantly enhances the environment and habitat. 1075 1076 Chair Hetterly: Commissioner Crommie. 1077 1078 Commissioner Crommie: I really do hear what Rob de Geus is saying here about some 1079 improvements on the Baylands golf course. The way I'm viewing this is from sitting 1080 through the stakeholder meetings. The perception is that there's a huge part of it that's 1081 aesthetic, so it's going to be a links course. It's going to have a very different look and 1082 feel. The piece of it that's missing for me is how viable this is as a real ecosystems 1083 habitat. That's why we see these words here that say establish new trees and native or 1084 naturally simulated landscape. Naturally simulated landscape is not an ecosystem that 1085 necessarily has living creatures in it. To really do this right we need to have a very high 1086 standard. We have stakeholders who have been part of this group that have very high 1087 DRAFT January 21, 2014 Draft Minutes 27 standards. It's very difficult work. What I'm hearing back from the stakeholders during 1088 the meetings is that they had some questions on the value of the naturalization for 1089 wildlife habitat. That's not to say it's not better. We're going in the right direction there. 1090 What it really comes down to for me is it's an unknown. For doing a mitigation, I don't 1091 think we can hang our hat on a unknown like that. We have stakeholders who have been 1092 focused on how you do native restoration. I don't see them involved on the golf course 1093 part of this. We don't know exactly how that's unfolding. It really wasn't discussed at 1094 our meetings, who the consultant is, who's planning this out on the golf course. It's also a 1095 golf course. You're never going to have it the same as a non-golf course. Those trees on 1096 that golf course even though there were golfers, they provided habitat for birds and other 1097 wildlife. When you make your simulated native areas there, we don't know what's 1098 coming back to that. We know something was taken away, because we know lots of 1099 animals lived on the golf course and they're gone now. The idea is how we're going to 1100 bring back new habitat. I see what you're saying and I think it's incredibly admirable that 1101 you're going in that direction. I think watching this unfold will give some direction for 1102 the future, because we will be facing these questions again and we can figure out how 1103 well that worked. Right now I just think it's too risky to factor into this mitigation. I feel 1104 like it's a piece of it, but it's not strong enough of a piece. At the Baylands there's this 1105 whole connection between the marsh tidal waters that are very, very important. My 1106 understanding is the golf course doesn't have that. Maybe it can be facilitated, but I don't 1107 see that's the direction of your project, to facilitate that intertidal connection. I think it's 1108 moving in the right direction. 1109 1110 Chair Hetterly: I think we're getting a little off track and we're way behind schedule. 1111 This is an action item. 1112 1113 Commissioner Crommie: Right. I think it's a really important point. It's a weakness in 1114 our ad hoc committee recommendation that we couldn't tie back into what Rob is saying. 1115 We struggled with that and it wasn't a big focus of the stakeholders meetings. 1116 1117 Chair Hetterly: OK. This is an action item. It sounds like there are a lot of different 1118 opinions about it. I think there are a couple of ways we could go. We could entertain a 1119 motion on the staff recommendation or additionally on the ad hoc committee 1120 recommendation or any other motion on this issue. Anybody want to put a motion on the 1121 table? 1122 1123 Commissioner Reckdahl: How tight for schedule are we on this? If we take another 1124 month to work with staff to get it ... 1125 1126 Mr. de Geus: No. 1127 1128 Commissioner Reckdahl: We don't have the ... 1129 DRAFT January 21, 2014 Draft Minutes 28 1130 Chair Hetterly: We have to come out one way or the other. 1131 1132 Mr. de Geus: We're going to the City Council on February 3rd to ask for their approval 1133 of the site and design and hopefully to move quickly thereafter to start the project. 1134 1135 Vice Chair Lauing: I would move to accept the proposal of the ad hoc committee for tree 1136 mitigation. 1137 1138 Chair Hetterly: With any revisions or same numbers? 1139 1140 Vice Chair Lauing: The numbers have to be matched to City estimates so that there's 1141 similarity between both. 1142 1143 Chair Hetterly: OK. Is there a second? 1144 1145 Commissioner Knopper: I second that Motion. 1146 1147 MOTION: Vice Chair Lauing moved and Commissioner Knopper seconded 1148 acceptance of the proposal of the ad hoc committee for tree mitigation. 1149 1150 Chair Hetterly: Would you like to speak to your Motion? 1151 1152 Vice Chair Lauing: As we stated it's very complex. I think we're right on target in terms 1153 of how we're doing the mitigation relative to putting out more trees in the Baylands 1154 which would make no sense. The deltas between this proposal and what staff came back 1155 with have even shrunk in this meeting. In terms of finding sources of ongoing 1156 maintenance, if asked we can commit to do that. I think it's sensible. I think it's OK. I 1157 talked with Rob a little bit earlier today. It's OK if we come up with something to send to 1158 Council that's not identical with staff and it's not miles apart. It's may be even better in 1159 terms of having a debate at Council. That's why I'd support it. I don't think it needs more 1160 time actually, because it's been really vetted in months, months, and months times lots of 1161 people and really great staff participation. 1162 1163 Commissioner Reckdahl: As long as we get the numbers to be consistent with staff 1164 before we go to Council, I don't want to give Council two sets of numbers that don't seem 1165 to agree. That would just add confusion. 1166 1167 Vice Chair Lauing: Yeah, absolutely. 1168 1169 Chair Hetterly: Any other comments? Commissioner Markevitch. 1170 1171 DRAFT January 21, 2014 Draft Minutes 29 Commissioner Markevitch: Overall I like the plan that you put together. A lot of hard 1172 work, but the fact that you don't have a planning source for the mitigation, anything. 1173 You're asking the City to go back, they have a plan and it is tied to revenue. The fact that 1174 you don't have one, this kind of mindset is exactly why we are so far behind in our 1175 infrastructure. It just builds and builds and builds. For that reason, I'm going to vote no 1176 on that. 1177 1178 Chair Hetterly: Commissioner Crommie. 1179 1180 Commissioner Crommie: I see where our sticking points are as a Commission. I feel 1181 that there might be some support for this plan. As a member of the ad hoc committee, I 1182 am willing to try to make our values meet on what we're costing out per acre. I just don't 1183 want to lowball it. I'd rather it land somewhere higher than $80,000 per acre, because I 1184 never heard that number quoted. That's also including maintenance for the first five 1185 years. I really want to be mindful that there is a maintenance cost. That speaks to 1186 Commissioner Reckdahl's point. For Commissioner Markevitch, I've really struggled 1187 with this as well, not having the revenue source. I feel like it's a risky revenue source. I 1188 just want to open it up for discussion if there's any way that we could tie the maintenance 1189 cost, which again are not that large. We are only talking about $20,000 a year here. 1190 1191 Commissioner Markevitch: $200,000. 1192 1193 Commissioner Crommie: Over ten years' time. Again we have to always remember this 1194 is not a lot of money compared to what we're spending. We're spending $1 million to just 1195 landscape the water processing plant. $20,000 a year for all of this work is not that much, 1196 because it relies on a lot of volunteer workforce and that brings the price down. The 1197 thing that bothered me about the staff proposal is the line that says that it's predicated on 1198 the performance of the golf course and its ability to first pay all golf course operating 1199 costs, debt service, funding the golf course infrastructure reserve and City overhead costs. 1200 It just seemed like a lot is predicated on that, and the golf course whole project is just 1201 ballooning in terms of cost, in terms of the goals for that project. Is there any way we 1202 could strike a compromise and tie it to the golf course revenue source without so many 1203 contingencies, where we actually think there's a much higher likelihood of getting this 1204 paltry amount of $20,000 a year? This is not a lot of money. Can we discuss that? 1205 1206 Chair Hetterly: I don't think we're negotiating with City staff on their proposal or our 1207 proposal at this point. I think we have a Motion on the table that we need to take action 1208 on. You could offer a friendly Amendment to the Motion if you'd like. 1209 1210 Commissioner Crommie: OK. I'll offer a friendly Amendment to our Motion on the 1211 table, that we tie our maintenance to the revenue source of the golf course but we define 1212 it such that we have some sense of certainty that we will get this for at least five years. I 1213 DRAFT January 21, 2014 Draft Minutes 30 don't know exactly how to do that, but I'd like to tie it to the revenue with some form of 1214 definition. 1215 1216 Chair Hetterly: I think that's included in the proposal that's on the table. 1217 1218 Commissioner Crommie: No, it's not. 1219 1220 Chair Hetterly: The Motion that's on the table is the ad hoc committee recommendation. 1221 1222 Commissioner Crommie: But our recommendation does not have our funding source tied 1223 to the golf course revenue for maintenance. So I'm amending it and saying I'd like to 1224 explore having it tied to the golf course revenue source with certain stipulations added in 1225 that will ensure a higher likelihood of us getting the money. 1226 1227 Chair Hetterly: Do you have something to add to that, Ed? 1228 1229 Vice Chair Lauing: I don't accept the Amendment. 1230 1231 Chair Hetterly: OK. There you go. 1232 1233 Vice Chair Lauing: I don't accept the Amendment, because I think that's antithetical to 1234 what we're trying to go for. If our assignment is to find $20,000 a year, we'll do it. We'll 1235 do that. If that's the only issue that we're worried about, then we'll do it. That wasn't in 1236 the scope prior to this meeting, but we're happy to do it. We're not saying where it should 1237 come from, as was pointed out. We're saying where it shouldn't come from because of 1238 the vagaries of that. 1239 1240 Chair Hetterly: All right. If there are no other comments—yes. 1241 1242 Commissioner Reckdahl: The whole discussion about how much it costs per acre brings 1243 up the point what do you do about cost overruns. Are we saying we are going to restore x 1244 number of acres regardless of the cost? Or are we saying we will put x number of dollars 1245 towards restoration and do as much as we can with that fixed amount of money? Which 1246 one are we proposing right now? 1247 1248 Chair Hetterly: I thought the latter, but I'll let the Motion maker ... 1249 1250 Commissioner Crommie: My understanding for the proposal on the table is that we stick 1251 by the acreage and make that happen as a priority. 1252 1253 Commissioner Knopper: Yeah. 1254 1255 DRAFT January 21, 2014 Draft Minutes 31 Vice Chair Lauing: Correct. 1256 1257 Commissioner Knopper: Three acres. 1258 1259 Chair Hetterly: Whatever it costs? 1260 1261 Commissioner Knopper: Whatever it costs. I support ... 1262 1263 Chair Hetterly: That seems impractical to me. 1264 1265 Vice Chair Lauing: That doesn't mean that they all have to go in day 1. If that has to be 1266 phased in because of staff time, etc., that can be done. 1267 1268 Commissioner Knopper: That is the goal and the commitment. 1269 1270 Vice Chair Lauing: The commitment for mitigation is 3 instead of 2. That is kind of the 1271 simple difference here. Question? 1272 1273 Chair Hetterly: I would offer an Amendment that we revise that to say our target is 3 1274 acres. This is what we think it will cost and set the number. I think if you say 3 acres 1275 and then wait and see how much it actually costs to do each separate 3 acres, then you 1276 have this uncertainty that just hangs on forever, can balloon, can shrink. 1277 1278 Vice Chair Lauing: But we have an uncertainty right now. We don't have the exact 1279 numbers and they're saying that. Not because they're not trying. There needs to be more 1280 work on it. 1281 1282 Commissioner Crommie: When you put a park plan ... 1283 1284 Vice Chair Lauing: We have almost a 50 percent delta or a 40 percent delta between our 1285 two numbers when they all came out of the same committee. 1286 1287 Commissioner Crommie: When you put a plan in for other parks in the City, our 1288 designer says this is what I'm going to give you. I'm going to landscape everything. 1289 Then you put it out to bid. When you have a design on another park, you set your design. 1290 You establish how many acres you're remodeling and then you set it out to bid. The 1291 person who accepts the bid doesn't get to come back to you and say, "I'm sorry I ran out 1292 of money and so I can't finish it." 1293 1294 Chair Hetterly: But you do have a target budget to start with. 1295 1296 DRAFT January 21, 2014 Draft Minutes 32 Commissioner Crommie: Right and that's why I would argue our target budget has to be 1297 a little higher than what staff is saying. We can't go to the bottom ... 1298 1299 Chair Hetterly: It is higher. 1300 1301 Commissioner Crommie: ... if we're debating between $80,000 and $130,000. I'd never 1302 even heard the number $80,000 until tonight. That's an argument not to go all the way 1303 down to the lowest number. 1304 1305 Chair Hetterly: I have a question about the Motion. You proposed the ad hoc committee 1306 recommendation with the caveat that you come to some agreement on a number. Is that 1307 right? Where do we stand on the number in the Motion? 1308 1309 Vice Chair Lauing: I don't understand the question. 1310 1311 Chair Hetterly: For the per acre cost. 1312 1313 Commissioner Knopper: What the City tells us it costs per acre to rehabilitate an acre. 1314 1315 Chair Hetterly: OK. 1316 1317 Vice Chair Lauing: Right. If it's closer to $60,000 or $100,000, we can change that right 1318 now. These are cost estimates. All numbers to be bid by staff. 1319 1320 Chair Hetterly: OK. 1321 1322 Vice Chair Lauing: It's a quantity that ... 1323 1324 Commissioner Knopper: Right. It says estimated expenditures, because it's estimated. 1325 Just based on our conversations of numbers that have been thrown around. 1326 1327 Chair Hetterly: I think we're ready to vote. 1328 1329 Vice Chair Lauing: Yeah, because if it's their number at $80,000 more than we're 1330 proposing. If it's our number, the one that we picked from the last meeting, it's $130,000 1331 more. That should be trimmed up, I'm sure, by the time it goes to Council. 1332 1333 Chair Hetterly: OK. The Motion is to approve the ad hoc committee recommendation. 1334 All in favor. 1335 1336 Vice Chair Lauing: Six. 1337 1338 DRAFT January 21, 2014 Draft Minutes 33 Chair Hetterly: Opposed. We have six ayes, one nay. 1339 1340 MOTION PASSED: 6-1 1341 1342 Commissioner Reckdahl: Can I make one comment ... 1343 1344 Chair Hetterly: Yes. 1345 1346 Commissioner Reckdahl: ... to explain my vote? I think we're not all the way there, but I 1347 think we're close enough and that's why I voted yes. It makes me nervous that the 1348 numbers don't agree. I think we can rectify that. It also makes me a little nervous that we 1349 don't know for sure how much it's going to cost us. 1350 1351 Commissioner Reckdahl: I think we should be able to get rid of the uncertainty and get 1352 to hard numbers with some work. I'm willing to take that risk and recommend to the City 1353 Council that we do commit to doing 3 acres. 1354 1355 Chair Hetterly: Yes. 1356 1357 Vice Chair Lauing: I'd like to make a comment on something a little bit different: the 1358 issue that we have to continue to make efforts from everywhere, including the press 1359 who's probably here to communicate to constituents why this makes sense. That we're 1360 not replacing trees one for one, that it makes sense to consider community values and 1361 Baylands restoration as a very, very viable mitigation. I'm delighted that I was so badly 1362 misquoted in a January editorial saying that I favored trees on the golf course. It was the 1363 exact opposite. That absolutely was the best thing they could do to underscore my point, 1364 is that there has to be high communication on this. We don't want to put trees on the golf 1365 course and that's a good thing. We need to have our citizens understand that. We all 1366 have to make best efforts to make sure that happens. 1367 1368 Chair Hetterly: Council Member Schmid. 1369 1370 Council Member Schmid: Very interesting discussion. I'd just like to reiterate my point 1371 that the value to the Council is the discussion you just went through. I know there's very 1372 little time between now and the Council discussion of this. If you could get the verbatim 1373 Minutes especially once you started making Motions and make sure that that is available 1374 to the Council the week before the meeting, it would be very helpful. 1375 1376 Mr. de Geus: We can do that, Council Member Schmid. We're having the Minutes done 1377 verbatim with an outside contractor and they can do that within five days. We can 1378 include it in the packet. 1379 Financial Pro Formas and Supporting Analysis for Reconfiguration Options A, D, F, G For Palo Alto Municipal Golf Course Prepared For: City of Palo Alto Rob de Geus, Division Manager Recreation & Golf Services 1305 Middlefield Road Palo Alto, CA 94301 Prepared By: 1150 South U.S. Highway One, Suite 401 Jupiter, FL 33477 (561) 744-6006 April, 2012 Financial Pro Formas and Supporting Analysis for Reconfiguration Options A, D, F, G Palo Alto Municipal Golf Course Table of Contents INTRODUCTION ....................................................................................................................... 1 PALO ALTO MUNICIPAL GOLF COURSE RECONFIGURATION OPTIONS.......................... 2 Goals and Objectives.......................................................................................................... 2 Option A.............................................................................................................................. 3 Additional Work .............................................................................................................................4 Option D.............................................................................................................................. 4 Additional Work .............................................................................................................................5 Option F.............................................................................................................................. 5 Additional Work .............................................................................................................................6 Option G ............................................................................................................................. 7 Additional Work .............................................................................................................................8 Deferment of Certain Improvements ................................................................................... 9 MARKET OVERVIEW ..............................................................................................................10 Demographics Summary....................................................................................................10 Golf Market Overview.........................................................................................................11 National Trends in Golf Demand and Supply..............................................................................11 Local and Regional Golf Supply and Demand Indicators............................................................13 Competitive Golf Market.....................................................................................................15 Summary Information – Primary Competitors.............................................................................16 Summary of Findings – Primary Competitors .............................................................................18 Palo Alto Golf Course Market Positioning Assessment ......................................................19 FINANCIAL PERFORMANCE MODELS FOR PALO ALTO GOLF COURSE.........................20 Recent Historical Palo Alto GC Performance .....................................................................20 Projections Based on “Option A”........................................................................................22 Key Assumptions.........................................................................................................................22 Pro Forma Estimate for ‘Option A’ Scenario – FY2012 – FY2021..............................................26 Projections Based on “Option D”........................................................................................29 Key Assumptions.........................................................................................................................29 Pro Forma Estimate for ‘Option D’ Scenario – FY2012 – FY2021..............................................32 Projections Based on “Option F” ........................................................................................35 Key Assumptions.........................................................................................................................35 Pro Forma Estimate for ‘Option F’ Scenario – FY2012 – FY2021..............................................36 Projections Based on “Option G”........................................................................................39 Key Assumptions.........................................................................................................................39 Pro Forma Estimate for ‘Option G’ Scenario – FY2012 – FY2021 .............................................42 Financial Projections Summary..........................................................................................45 Summary of Options....................................................................................................................45 Summary Results........................................................................................................................46 Justifications for Revenue Projections ........................................................................................47 Other Considerations Regarding Improvement Options.............................................................48 Option “G” Sensitivity Analysis...........................................................................................49 Option “G” Sensitivity Analysis - Summary for 2017...................................................................49 Option G Sensitivity Spreadsheets..............................................................................................50 OTHER ISSUES AND CONSIDERATIONS..............................................................................56 Market Position / Re-Branding Opportunity........................................................................56 Economics of Potential Long-Term / Additional Improvements...........................................58 Cart Storage Building ..................................................................................................................58 Expanded Meeting Space ...........................................................................................................59 Range Performance Center ........................................................................................................59 Management Structure.......................................................................................................60 Long Range Concerns.......................................................................................................61 Potential Economic Development Of The Airport & Golf “Baylands Gateway” Area............64 Private Funding Possibilities ..............................................................................................65 APPENDICES...........................................................................................................................66 Appendix A – Comparative Supply Ratios – Palo Alto GC & Key Municipal Competitors...67 Appendix B – Comparative Scoring of Reconfiguration Options.........................................68 Appendix C – Water & Power Use Discussion & Assumptions...........................................71 Appendix D – Review Of Probable Cost Estimates ............................................................73 Appendix E – Potential Long-Term Master Plan Improvements..........................................75 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 1 Introduction National Golf Foundation Consulting, Inc. was retained by the City of Palo Alto in furtherance of the City’s due diligence relative to the San Francisquito Creek Flood Control Project, which will involve the reconfiguration of six or more holes at the Palo Alto Golf Course. NGF’s objective was to help the City identify the expected financial impact from the improvements related to the reconfiguration work under Plan Options A, D, F, and G. Specifically, NGF has crafted 10-year cash flow pro formas that project the estimated net financial impact of the proposed improvements, allowing the City to evaluate each of the four reconfiguration options under consideration from an objective standpoint. Our analysis includes expected impact on rounds played, fee structure, revenue generation, operating expenses, and capital spending/debt. The pro formas also provide an estimate for lost revenues during the time that the course is impacted and/or closed. Other aspects of the NGF review include: A market overview of the Palo Alto area, with an emphasis on area demographics and key golf demand and supply indicators. A competitive review, including a qualitative assessment of the impact that the potential reconfigurations would have on Palo Alto Golf Course’s market/competitive position. A review of Forrest Richardson’s work regarding the potential implications from the renovation options on facility branding and marketing. NGF will also offer its opinion about the long-term implications and potential financial impact of improvements associated with the longer range master plan, including clubhouse expansion, cart storage, event areas, range performance center, range enlargement, entry/parking, and the youth training area. NGF will evaluate relevant options available to the City of Palo Alto for the continued operation of Palo Alto Golf Course, including (but not limited to) continuing on an as- is basis or outsourcing all management and maintenance to a full-service management company. Viable options will be identified, and a discussion of the costs, benefits, and financial implications of each operating scenario presented. The study effort was managed by NGF Director of Consulting Services Richard B. Singer and Senior Project Director Ed Getherall. Activities conducted in completion of this report included: field research; statistical and financial analysis; meetings with key City staff from the Recreation & Golf Services, Administration, Community Services, and Finance Departments; meetings with the Head Golf Professional, Golf Course Superintendent, and ValleyCrest Area Director; a tour of the golf course; and, interviews with area golfers. Following is the consultants’ report summarizing key findings and recommendations. Throughout this report, we may refer to shortened names for: the City of Palo Alto (“City”), the Palo Alto Municipal Golf Course (“Palo Alto Golf Course”, “Palo Alto GC” or “PAGC”), and National Golf Foundation Consulting, Inc. (“NGF Consulting” or “NGF”). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 2 Palo Alto Municipal Golf Course Reconfiguration Options NGF Consulting was provided four course reconfiguration options prepared by Forrest Richardson, ASGCA. These options were identified by the titles “Option A,” Option D,” “Option F” and “Option G,” and each have unique characteristics. The options represent four possible scenarios for adjusting the course to accommodate the SFCJPA flood mitigation project. Options A, D, F and G were culled from seven proposed alternatives (Options B, C, and E were eliminated prior to our review) as the most viable and potentially opportune for the City. The process for developing options has been thorough, with extensive input from golfers, staff, concessionaires and the public at large. NGF Consulting has reviewed notes and summaries from these meetings to better understand the goals and objectives desired by those who will use and operate the facility following reconfiguration. GOALS AND OBJECTIVES Among the goals and objectives set forth to guide the design process for reconfiguration options, in addition to the fundamental goal to accommodate the flood project, included: Establish a more natural, aesthetic landscape that incorporates a “Baylands” theme Improve tree care and variety via a theme to use appropriate tree selection Find ways to eliminate geese and burrowing animals from ruining the course Improve bunkers (condition, strategy and aesthetics) Improve overall course conditioning (drainage, irrigation, turf, etc.) Adjust yardage so the course is shorter for beginners, women and seniors Create a “wow factor” to remain competitive with other regional facilities Add interest to the course strategy (dog-legs, differentiation of holes, etc.) Find ways to offer player development opportunities (short game area, range, etc.) Additionally, there was a strong desire to address long range issues that face the aging facility beyond those on the golf course itself. The City commissioned its own scope of work to address these issues concurrently with the course reconfiguration planning. These long range areas included the following: Clubhouse planning Entry, parking and signage Practice areas Cart storage and staging On-course restrooms Branding and image Trail connections from the Baylands and existing trails National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 3 The objective of the additional long-range planning was to look beyond the golf course to ensure that reconfiguration options would not preclude improvements to the areas on the above list. Specific goals and objectives included the following: Find ways to bring non-golfers to the facilities (group events, restaurant, etc.) Expand the clubhouse to seat 200 so larger groups can be accommodated Develop areas to hold multiple outings/events simultaneously Improve the arrival experience, entry aesthetics, trail connections and security Develop a cart storage area/facility Make overall improvements to the clubhouse and grounds (exterior and interior) Improve and expand the practice range Create new player development and practice opportunities Plan for upgrading the on-course restroom facility Develop a new brand and image consistent with the reconfiguration goals and design A common thread among the long range planning components was a strong design to return the facilities, with golf course approaching its 60th year and the clubhouse its 30th, to a “Point of Pride” status within the community. Along with this primary objective come the benefits of leveraging the facility for economic development, tourism and as a home to annual and special events. Secondarily, the community has a strong desire to see the golf course be more compatible with the Baylands environment. This goal is echoed by Mr. Richardson in his reconfiguration options, each of which adds more naturalized areas to the golf course. In addition, long range design concepts associated with the clubhouse, entry and image go hand- in-hand with this goal. OPTION A Option A represents the minimum reconfiguration in order to facilitate the San Francisquito Creek realignment as required by the SFCJPA. This option shifts holes laterally from west to east, retaining much of the same routing of the existing course. Golf holes are moved away from the levee on a minimal basis. Improvements are primarily restricted to the holes moved, with the remaining holes largely unchanged. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. The highlights of changes in this option include: 6.5 golf holes relocated 5 new greens constructed Par 72 6,900 / 6,500 / 5,200 yards All bunkers reconstructed and/or new 38.5 acres transformed to naturalized areas (non-managed turf) Revised Hole No. 18 (naturalized hazard) Adjusted Hole No. 12 Adjusted Hole Nos. 13 and 14 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 4 The total projected cost for this option is $3,537,622, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option A. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (13 additional to those covered) Re-turfing of all existing fairways (23.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Projected Cost for Additional Items: $ 3,250,500 Among the additional (alternate) work, Mr. Richardson and NGF recognize that the full replacement of the existing irrigation system will become an eventual necessity. Our understanding is that the existing system, installed in 1998, presents regular issues due to deteriorating pipe fittings. Now entering its 14th year of service, the system is on the decline due to the high salts inherent within the soils. Even if the balance of the system remains in commission for another six years (20 years is a reasonable longevity for irrigation systems) there exists good probability that emergency repairs and costs may escalate. For this reason, we have studied this additional cost ($857,500) as an alternative scope to be considered for Option A. OPTION D Option D represents an enhanced reconfiguration version from Option A. This option facilitates the San Francisquito Creek realignment as required by the SFCJPA. The primary difference from Option A is that Option D realigns holes with more variety, departing from the common parallel routing of the existing course. Golf holes are moved away from the levee, but go beyond Option A to form new views and variation. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. These are more prevalent than that afforded through Option A. The highlights of changes in this option include: 8.5 golf holes relocated 8 new greens constructed Par 72 6,900 / 6,400 / 5,000 yards All bunkers reconstructed and/or new 43 acres transformed to naturalized areas (non-managed turf) New Island Green Hole No. 13 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 5 New Hole No. 18 (par-5 and naturalized hazard) New Hole No. 4 New Hole No. 17 New Hole No. 16 Future space afforded for a new practice green/short game area The total projected cost for this option is $4,118,748, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option D. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (10 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Future development of a new practice green/short game area Projected Cost for Additional Items: $ 3,096,250 As with Option A, we recognize that the full replacement of the existing irrigation system will become an eventual necessity. The same comments apply to Option D as noted for Option A. We have studied the additional cost ($740,000), which is lower for Option D as more of the existing system is covered within areas impacted by the reconfiguration, as an alternative scope to be considered for Option D. OPTION F Option F represents an opportunity to remove land from golf course use and transform it to use for athletic field(s). This option was added to the reconfiguration scope of the golf course architect based on previous studies with the same objective. For Option F, a general constraint placed on the planning work was to retain yardage (6,800 yards) and a par of 72. Safety from the new trail system and within adjoining holes was to be maintained with no compromise to standard guidelines. Option F facilitates the San Francisquito Creek realignment as required by the SFCJPA. The option is primarily distinguished by the removal of approximately 2.5 acres from the golf course parcel. This land area is shown as athletic field use, accommodating a full NCAA sized soccer field or combination of fields and field types of the same proportion and area. This area would have limited room for parking expansion. Option F realigns holes with more variety than in Option A. As with Option D, the reconfiguration departs from the common parallel routing of the existing course. Golf holes are moved away from the levee to form new views and variation. Bunker work and naturalization enhancements are made throughout the course in order to provide a more consistent golf experience and National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 6 landscape. As a result of the “domino effect” of moving holes to make room for the athletic field area, these enhancements are as prevalent as that afforded through Option D. The highlights of changes in this option include: 12.5 golf holes relocated 12 new greens constructed Par 72 6,700 / 6,300 / 5,000 yards All bunkers reconstructed and/or new 43.4 acres transformed to naturalized areas (non-managed turf) New Island Green Hole No. 13 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) Revised Hole No. 18 (naturalized hazard) New Hole No. 4 New Hole No. 17 New Hole No. 16 New Hole No. 3 New Hole No. 3 New Hole No. 15 New practice green/short game area developed along with reconfiguration Temporary preparation of the athletic field area (not field development or improvement) The total projected cost for this option is $5,855,454, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option F. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (6 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Projected Cost for Additional Items: $ 2,530,000 As with Options A and D, we recognize that the full replacement of the existing irrigation system will become an eventual necessity. The same comments apply to Option F as noted for previous National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 7 options. We have studied the additional cost ($425,000), which is lower for Option F (than for A or D) as more of the existing system is covered within areas impacted by the reconfiguration, as an alternative scope to be considered for Option F. OPTION G Option G represents a plan to remove more land from golf course use, transforming this land to use for multiple athletic field and non-golf recreation purposes. This option was added to the reconfiguration scope of the golf course architect based on the direction of the City to investigate whether the viability of the golf course could be preserved while opening more area (than with Option F) for non-golf recreation. The constraint placed on the planning work was to retain a regulation layout with a par of 70 or 71. Safety from the new trail system and within adjoining holes was to be maintained with no compromise to standard guidelines. NGF Consulting was in the very early stages of our consulting work for the City when Option G was put into motion. Among the foremost questions we were asked was whether a significantly shorter course and/or a significantly lower par would be advisable for the City of Palo Alto. Our conclusion was that the Palo Alto market, especially in the City’s situation as a single-course owner, is best served in this locale by a regulation 18-hole golf course with a par of 72 being preferred. This conclusion is based on several factors, including the following: A strong history of this golf course producing annual rounds in excess of 80,000 Stated preferences by the current customer base to maintain length and par Viability to host group golf events “demanding” a full-length course experience Competitiveness to area courses Long term viability to host regional events (qualifying, larger tournaments, etc.) Regional offerings of shorter courses Plan options that accommodate more flexible (shorter) yardages flexibility as part of the reconfiguration work NGF Consulting shared this conclusion with the City and the golf course architect, recommending that Option G should, if possible, preserve a regulation length of about 6,500 yards (back tees) and a par of 72 preferred. If pressed to choose between a reduction in par (to 71) or a reduction in yardage lower than 6,500, we opined that it would be better to preserve yardage at 6,500 and allow par to drop to 71. (Note: A par 71 course measuring 6,500 yards is perceived as more difficult, and can be marketed such, than a course measuring the same yardage but holding a par of 72. This is because the ratio of par to yardage is more challenging.) Option G also facilitates the San Francisquito Creek realignment as required by the SFCJPA. The option involves the removal of approximately 10.5 acres from the golf course parcel. This land area is shown as athletic field use (three full sized NCAA soccer fields or combination of fields and field types of the same proportion and area), and additionally shows areas for a small playground, wetlands park and picnic space, and trails connecting to the San Francisquito Creek levee trails, Baylands and neighborhood. Option G realigns holes with more variety than in Option A. As with Option D and F, the reconfiguration departs from the common parallel routing of the existing course. Golf holes are moved away from the levee to form new views and variation. Bunker work and naturalization National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 8 enhancements are made throughout the course in order to provide a more consistent golf experience and landscape. As with Option F, but to an even greater extent, virtually all areas of the existing course would be reconstructed, enhanced and improved. The highlights of changes in this option include: 18 golf holes relocated 18 new greens constructed Par 71 6,600 / 6,100 / 5,000 yards All bunkers reconstructed and/or new 43 acres transformed to naturalized areas (non-managed turf) Irrigated Turf Reduced from 135 acres to 92 acres New Island Green Hole No. 12 (elevated tee and Bay view) New Double Green Nos. 3 and 15 New Hole No. 5 (elevated green and Bay View) New Hole No. 7 (split fairway) New Hole No. 18 (par-5, naturalized hazard) New Hole No. 4 New Hole No. 14 New Hole No. 10 New Hole No. 17 New Hole No. 16 New Hole No. 3 New Hole No. 3 New Hole No. 15 New practice green/short game area developed along with reconfiguration Full irrigation system replacement (all areas of the 18-hole golf course) Reconstruction and features at the existing practice green area Construction of a new on-course restroom facility Temporary preparation of the field/recreation area (not field development or improvement) The total projected cost for this option is $7,573,262, including all professional fees, project management and contingency. Additional Work Additional (“alternate”) items within the golf course itself may be undertaken by the City concurrently with the development of Option G. These optional items include: Sand capping of new turf areas (new fairways to be constructed) Use (spreading) of imported soil from the Stanford University Medical Center Project Reconstruction of all greens (3 additional to those covered) Re-turfing of all existing fairways (21.5 acres additional) Replacement of the balance of the existing irrigation system National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 9 Projected Cost for Additional Items: $ 1,675,236 Unlike other options, Option G includes full irrigation replacement. This is because there is no viable method of leaving only three golf holes without replacement. Variables include pumping pressure, control zones and other logistics that had to be considered. DEFERMENT OF CERTAIN IMPROVEMENTS Other additional work listed under each option above has not been incorporated to the pro formas prepared by NGF Consulting due to the complexity of attaching incremental rounds, revenues and expenses to these improvements. However, both NGF and Mr. Richardson believe that deferring some or all of the alternative (optional) improvements, including long- range work to the clubhouse building, grounds, entry, practice areas, etc., will likely have a negative affect on revenues and constrain somewhat the City’s ability to “re-brand” Palo Alto GC. Over the years, NGF Consulting has witnessed the implications of rounds and revenues on golf facilities that have deferred maintenance and/or capital improvements. Eventually, golf course conditions and/or the overall golf experience fall to a level where rounds, pricing and, as a result, revenues are constrained, as is the municipality’s ability to effectively market the golf course as anything other than a “value” provider. Golf consumers begin to migrate away from facilities that are not well maintained when there are other proximate facilities offering better conditions and/or equal or even slightly higher price points. Among the optional/alternative improvements associated with Palo Alto Golf Course, we find the most pressing are: Course conditions, especially greens, drainage and turf condition Yardage flexibility (to attract beginners, youth, women and seniors) Geese and burrowing animal intrusion and damage On-course restroom replacement Clubhouse condition and available space Most of the above are well corrected or mitigated though the reconfiguration options. However, replacement of the irrigation system, as an example, is not fully afforded within the base work of Options A, D and F. Especially in the case of A and D, this alternate cost may be prudent to examine closer as conditions cannot dramatically improve course-wide without a plan to replace the system. If the system is allowed to run for a long period without replacement, revenue is bound to drop incrementally as turf conditions decline. In terms of substantive clubhouse improvements, such as expanding the meeting space, improvements are not likely to pay for themselves under the current operating structure whereby only 7% of food & beverage revenue accrues to the City. Yardage flexibility is accommodated in most of the options, but more so as more work is covered. Options D, F and G adequately allow for more flexibility and will therefore have the potential to attract more player types. The geese and burrowing animal issues, according to the golf course architect, will be positively mitigated by all reconfiguration options. Yet, plan options with more area impacted will likely result in more appropriate habitat and areas for these animals to use rather than the turf areas currently intended for golfers. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 10 Market Overview Below, NGF Consulting provides a summary of key “external” factors that characterize the trade area in which the Palo Alto Golf Course operates. We include basic demographic variables that have the potential to affect the economic performance of the golf facility, as well as an analysis of supply and demand indicators in the public golf market. DEMOGRAPHICS SUMMARY Utilizing research materials provided by Applied Geographic Solutions, Inc. (a supplier of demographic research based on U.S. Census results), NGF Consulting has examined relevant characteristics of the local population. In the following tables, NGF Consulting indicates the population, median age, and median household income trends for San Mateo and Santa Clara counties, as well as the 3-, 10-, and 15- mile market rings surrounding the golf course and the total United States. Palo Alto Golf Course 3 mi 10 mi 15 mi San Mateo County Santa Clara County U.S. Summary Demographics Population 1990 Census 94,021 697,234 1,482,687 649,622 1,496,702 248,710,012 Population 2000 Census 100,652 765,828 1,662,257 707,161 1,682,585 281,421,906 CAGR 1990-2000 0.68%0.94% 1.15%0.85% 1.18%1.24% Population 2010 Census 104,099 806,139 1,750,080 718,376 1,781,728 308,699,447 CAGR 2000-2010 0.34%0.51% 0.52%0.16% 0.57%0.93% Population 2016 Projected 105,110 817,407 1,775,178 725,980 1,805,397 325,288,086 CAGR 2010-2016 0.16%0.23% 0.24%0.18% 0.22%0.88% Median HH Inc $94,304 $96,743 $91,334 $88,233 $88,860 $53,908 Median Age 37.5 37.2 37.1 39.4 36.2 36.9 CAGR = Compound Annual Growth Rate From the data collected for this study, NGF Consulting has made the following observations regarding the demographics of Palo Alto and surrounding areas: The 10-mile and 15-mile markets around Palo Alto GC are dense, with 2010 estimates of about 806,000 and 1.775 million residents, respectively, in these two submarkets. The 10-mile market has added more than 40,000 net new residents since 2006, while the 15-mile market grew by nearly 88,000 people. Population growth is projected to be very moderate through 2016. The Median Ages in the subject market areas are generally similar to the national median age of 36.9 years, though San Mateo County overall is significantly higher at 39.4 years. In general, the propensity to play golf with greater frequency increases with age, making relatively older markets more attractive to golf facility operators, all other factors being equal. Median Household Incomes in the area are much higher than the national median. For instance, the 10-mile market exhibits incomes nearly 80% higher than the national median income of $53,908. In general, higher income residents are more likely to participate in golf, and they play more frequently than lower income National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 11 residents. These high figures are mitigated considerably by the very high cost of living in the Bay Area. GOLF MARKET OVERVIEW Below we provide an overview of recent and emerging national trends with respect to golf participation and municipal golf, as well as a summary of golf demand and supply indicators in the local markets for Palo Alto Golf Course. NGF Consulting utilizes predictive models as benchmarks for estimating potential market strength. The methodology for determining the relative strength of the subject market is described in the following section. National Trends in Golf Demand and Supply Participation Golf participation in the U.S. has grown from 3.5% of the population in the early 1960s to about 9.2% of the population today. NGF estimates that the number of golfers fell slightly in 2011 to 26.1 million; it was encouraging news that the number of golfers gained in 2010-11 held steady vs. previous years while the number of lost golfers dropped significantly. For research purposes, a golfer is defined as a person age 6 or above who plays at least one round of golf in a given year. All U.S. Golfers (in millions) 1985 1990 1995 2000 2005 2010 All golfers age 6+ 19.5 27.4 24.7 28.8 30.0 26.1 Source: National Golf Foundation The number of rounds of golf also fell 2.3% during the past year, from 486 million in 2009 to 475 million in 2010 (most recent year NGF has published), corroborating the decline in the number of golfers. In the Pacific Region, which includes California, the statistics are somewhat more favorable: Regional Profile Participation Rate Number of Golfers Percent of Golfers Total Annual Rounds (millions) Pacific Region 7.3% 3,276,000 12.5% 50.4 United States 9.2% 26,122,000 100.0% 475.0 Source:Golf Participation in the U.S., 2011 edition, National Golf Foundation Considering the severity of the recession and its effects on both discretionary income and time, golf has held up rather well. Multiple NGF studies of golfers since 2008 would attribute the gradual decline in golfers and rounds primarily to the impact of lower job security and concern over personal finances, not waning appeal for the game. Over the past 50 years, golf demand grew at about 4% per year while facility supply grew at about 2% per year. However, since 1990, the situation has reversed – demand has grown at only 0.5% per year while facility supply has grown at 1.4% per year. With the increase in supply, National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 12 we are seeing a marked increase in competition, and the supply is greater than the demand in some markets. In addition to increased competition, other factors have contributed to a decline in the number of rounds per course nationally from 2002 to 2011. In the NGF’s most recent survey of core golfers conducted in September 2011, we found that fearful financial outlooks, weak consumer confidence, and negative golfer attitudes have also played a role. The combination of these has caused many golf facilities to become distressed, particularly those that have a high debt load because of higher construction costs and the perceived need to build high-end courses. The number of golf course closings quadrupled from an annual average of 24 courses per year in the 1993-2001 time period to more than 100 courses in 2005.In 2006, there was negative net growth in golf facilities for the first time in six decades, with 146 18-hole equivalents closing and 119.5 opening. In 2007, there were 113 openings and 121.5 closures, and in 2008, 72 golf course openings and 106 closures. In 2009, 49.5 openings minus 139.5 closures equated to a net loss of 90 18-hole equivalents. Closures continue to be disproportionately public, stand-alone 9-hole facilities or short courses (executive or par-3 length) with a value price point. Net growth in supply has been negative now for four consecutive years, with the largest drop of 90 courses in 2009. However, U.S. openings averaged 200+ (net) for 20 years, and total 18-hole equivalent supply is up 5% since 2000, indicating a slow market correction is underway. In October 2011, NGF projected 2011 net growth of about negative 106.5 (openings minus closings), and projected actual closures for 2011 would be closer to 150. NGF estimates that national rounds played experienced an overall drop from 2000 to 2010 of -9.5%. By the end of 2011, rounds had further declined 2.5% in the U.S., but rounds in the Pacific Region had increased 1.2% and California was up 2.3%. On the positive side, the growth in golf course development has slowed considerably nationally and in the majority of local markets, a trend that should help ease some of the competitive pressure. Another positive trend is the aging of America. Baby Boomers are rapidly approaching retirement age when golf activity flourishes. The baby boomers represent not only the largest single demographic in the US, but they also approach retirement age with more disposable income than any previous generation. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 13 Local and Regional Golf Supply and Demand Indicators The following table summarizes some key golf supply and demand measures for the local markets based on NGF research and golf demand predictive models. Palo Alto Golf Course 3 mi 10 mi 15 mi San Mateo County Santa Clara County U.S. Golf Demand Indicators # of Golfing Households 6,989 55,008 116,506 49,136 116,439 21,237,600 Number of Rounds Played 226,453 1,769,537 3,717,852 1,571,308 3,765,371 498,831,616 Golfing Household Index 101 104 103 105 106 100 Rounds Played Index 140 142 141 143 146 100 Golf Supply Summary Total Golf Facilities 2 13 25 14 33 15,902 Public Golf Facilities 2 8 16 6 20 11,633 Private Golf Facilities 0 5 9 8 13 4,269 Total Golf Holes 36 207 378 279 576 268,443 Public Golf Holes 36 117 225 108 342 191,214 Private Golf Holes 0 90 153 171 234 77,229 Household/Golf Supply Indicators Households per 18 Holes: Total 19,132 25,655 29,805 16,754 19,127 7,733 Households per 18 Holes: Public 19,132 45,390 50,073 43,282 32,214 10,856 Households per 18 Holes: Private NA 59,007 73,636 27,336 47,082 26,879 Households Supply Index: Total 242 325 378 212 242 100 Households Supply Index: Public 171 405 447 387 288 100 Households Supply Index: Private 0 221 275 102 176 100 Golf Course Construction Activity 2001-2010 Total holes added past 10 years 0 0 18 0 72 24,318 Public holes added past 10 years 0 0 0 0 54 17,469 Private holes added past 10 years 0 0 18 0 18 6,849 Percent Total Holes Added 0.00%0.00%4.80%0.00%12.50%9.10% Percent Public Holes Added 0.00%0.00%0.00%0.00%15.80%9.10% Percent Private Holes Added NA 0.00%11.80%0.00%7.70%8.90% National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 14 Golf participation rates in the subject markets around Palo Alto GC are very similar to the national benchmark, while rounds demanded per household are about 40% higher than the national figure. The high rounds demanded per household are indicative of the year-round golf climate, the high number of golf courses, and a demographic profile that is generally conducive to high golf demand, particularly as it relates to median household income. There are thirteen total, including eight public, golf facilities (including Palo Alto GC) in the 10-mile market area, while there are 25 total facilities, including 21 public, within 15 miles of Palo Alto GC. As the tables indicates, the subject markets have significantly more households per 18 holes of golf than the nation overall. For example, in the 10-mile market area surrounding Palo Alto GC, there are nearly four times as many households per total 18 holes and 4.5 times as many households per public 18 holes than in the overall U.S. (We contrast these supply ratios to some of Palo Alto’s key competitors in Appendix A). There was a spate of new golf course construction in the Bay Area in the 1990s and early 2000s. For the nine-county Bay Area region, 27 total golf facilities were added between 1997 and 2006. This included 6 private (comprising 90 holes) and 21 public (360 holes) facilities. However, as with the rest of the country, new golf course construction has slowed to a crawl in the subsequent years, and the NGF database reveals no new golf course projects currently in planning or under construction within 15 miles of Palo Alto GC. Palo Alto and the greater Bay Area are home to a large number of major corporate and public employers, including many high-tech and internet companies. These large employers are prime targets for soliciting tournament/outing play, and could be a key element to boosting play levels and revenues at the Baylands GC. Outings are generally sold at the highest green fee, and also expose a number of golfers to the facility for the first time. Visitors to the Palo Alto area have the potential to significantly impact demand at golf courses. Though visitation numbers were not available for Palo Alto specifically, it is estimated that about sixteen million people visit San Francisco alone each year, and the overall Bay Area has considerably more visitors than that. NGF research shows that roughly one-third of all golfers participate in the activity while traveling, playing .557 rounds per day of travel. This supplemental market should be a target of marketing efforts once the improved Baylands Golf Club is opened. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 15 COMPETITIVE GOLF MARKET One of the objectives of this effort is to identify any opportunities that may exist for the improved “Baylands Golf Club” to increase market share, fees and revenues. In this section, we present an overview of the public access golf market in which the current Palo Alto GC operates, with a focus on key competitors. The map below shows the location of these facilities in relation to Palo Alto Golf Course. In the tables that follow, NGF Consulting presents summary operational information for the golf facilities identified as direct competition to the Palo Alto Golf Course. NGF Consulting identified the primary competitors based on a number of factors, including price point, location, NGF experience in this market, and input from both facility management and City staff. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 16 Summary Information – Primary Competitors The table below provides summary information regarding the golf courses we have identified as Palo Alto GC’s primary competitors. Palo Alto Municipal Golf Course Key Competitors – Summary Information Golf Facility Location Type Year Open Par / Slope Front Tee / Back Tee Location Relative to PAGC* Palo Alto Municipal Golf Course Palo Alto MU 18H 1956 72 / 122 5,744 / 6,833 -- Crystal Springs Golf Course Burlingame MU 18H 1924 72 / 127 5,580 / 6,628 16 mi NW Poplar Creek Golf Course San Mateo MU 18H 1933 70 / 115 4,768 / 6,042 14.5 mi NW San Jose Municipal Golf Course San Jose MU 18H 1968 72 / 119 4,200 / 6,700 13 mi SE Santa Clara Golf & Tennis Club Santa Clara MU 18H 1987 72 / 118 5,521 / 6,723 8.5 mi SE Santa Teresa Golf Club San Jose DF 27H 1963 71 / 126 4,011 / 6,742 24.5 mi SE Shoreline Golf Links Mountain View MU 18H 1983 72 / 129 5,437 / 6,996 2.5 mi SE Spring Valley Golf Course Milpitas DF 18H 1956 70 / 113 5,453 / 6,116 15 mi E Sunnyvale Golf Course Sunnyvale MU 18H 1969 70 / 118 5,170 / 5,742 5.5 mi SE *Air miles from subject site, rounded to half-mile; actual driving distances will likely be greater. Type: DF – Daily Fee; MU – Municipal National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 17 The table below shows summary facility information regarding Palo Alto Municipal Golf Course and its primary competitors. Reported rounds for 2007 are from the 2008 Economic Research Associates report to the City. Average green/cart revenue per round for San Jose and Santa Teresa are estimated based on ERA 2007 numbers. Summary Operating Data – Palo Alto Municipal Golf Course and Primary Competitors Golf Facility Total 2007 Rounds Total 2011 Rounds Average Green / Cart Fee per Round 18-Hole Resident Green Fee (WD/WE) 18-Hole Non- Resident Green Fee (WD/WE) Per Person 18-Hole Cart Fee 18-Hole Twilight Green Fee (WD/WE) 18-Hole Senior Resident Green Fee (WD/WE) 18-Hole Super-Twi Green Fee (WD/WE) Palo Alto Municipal GC 76,241 66,740 $30.20 / $4.50 $37/$47 $39/$49 $14 $30/$34 $28/DNA1 $26/$28 Crystal Springs Golf Course 73,654 63,000* $24 / $8 DNA $44/$66 $16 $36/$43 $30/DNA $26/$36 Poplar Creek Golf Course 86,315 70,709 $33.11 / N/A $33$45 $38/$53 $13.50 $27/$33 $22/DNA1 $19/$25 San Jose Municipal GC 86,991 78,000* $32 / $5 DNA $37/$51 $14 $26/$33 $23/DNA $20/$24 Santa Clara Golf & Tennis 87,120 81,000 $26 / $10 $25/$34 $37/$50 $14 $17/$23 res $26/$29 n/r DNA2 $12/$14 res $16/$18 n/r Santa Teresa Golf Club 75,0003 65,000*$29.60 / $5.70 DNA $40/$46/$60 $13.50 $25/$29/$34 DNA $17/$19/$25 Shoreline Golf Links 67,135 50,000 $28 / $5.60 $31/$47 $38/$54 $12 $25/$28 $21/DNA1 $17/$17 Spring Valley Golf Course N/A N/A N/A DNA $37/$55 $14 DNA/$45 $28 M-F $27/$30 Sunnyvale Golf Course 80,513 72,535 $28 / $4.50 DNA/$44 $35/$48 $13.50 $25/$26 res $25/$30 n/r DNA1 $16/$20 KEY *NGF Consulting estimate N/A – Information not available DNA – Does not apply / Not offered Note: For San Jose, Santa Teresa, “afternoon” rates used for twilight and “twilight” for supertwilight; for Spring Valley, “midday” and afternoon used for twi / supertwi. 1 Non-resident seniors pay $33 at Palo Alto, $28 at Shoreline; senior discounts at Poplar Creek are for residents only. 2 Santa Clara offers senior monthly ticket; Sunnyvale offers senior discount card. 3 Rounds listed are for regulation 18-hole course only. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 18 Summary of Findings – Primary Competitors Based on data reported to NGF Consulting by area golf operators, Palo Alto Golf Course is positioned quite similarly to its chief municipal competitors. The reported average green fee revenue per round among the subject municipal facilities in 2011 generally fell between $28 and $32, while average cart revenue per round was most commonly between $4.50 and $5.70. Posted green fees have been generally flat in this market for the last several years, with only periodic marginal increases aimed at cost recovery at some courses. Non-resident green fees fall within a relatively narrow range among Palo Alto GC and its municipal competitors, but NGF did note that Palo Alto is at the low end of the non-resident pricing spectrum, particularly on weekends. We believe that an improved and re-branded Palo Alto facility should be able to absorb $5 to $10 increases for non-resident rounds, depending on the reconfiguration option chosen and varying by fee category. Of the municipal golf courses profiled (leased Santa Teresa excluded), all but San Jose Municipal offered a fee discount for residents (Sunnyvale restricted the discount to weekends). Most people NGF spoke to consider the city of Mountain View’s Shoreline Golf Links Course to be Palo Alto GC’s most direct competitor. Shoreline’s reputation in terms of maintenance standards has reportedly taken a hit in recent years, and the golf course appeared to be in only fair condition during NGF’s visit. Shoreline has dropped about one-third of its rounds since the mid 2000s and was the least active facility among the key competitors in 2011, with a reported 50,000 rounds. Due to its location, Shoreline probably suffers more than most Bay Area golf courses with the Canadian Geese problem. There were also a large number of coots on the course during our visit. As was the case with nearly every golf market NGF examined nationally, average annual rounds played at many Bay Area golf courses dropped by 25% or more between the late 1990s / 2000 and the middle part of the 2000s. Based on rounds reported to NGF as part of this study effort, rounds played among the direct competitive set have continued to decline since the 2006-07 time period, though variations in the most recent years are at least partly attributable to weather variations. Even with the falling activity levels, rounds played per 18 holes among the subject municipal golf courses remain among the highest we’ve observed anywhere in the U.S. Santa Clara Golf & Tennis and San Jose Municipal, at ±80,000 rounds in recent years, are currently the most active among the competitive set. Because of heightened competition and today’s economic realities, fee discounting (e.g., through internal yield management, use of internet wholesalers such as golfnow.com), even among high-end daily fee courses, is now common in the Bay Area golf market. As a result, the lines can become blurred between “rack” rates and what the majority of customers are actually paying for a round of golf. This disparity is not common among the municipal golf courses we surveyed. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 19 PALO ALTO GOLF COURSE MARKET POSITIONING ASSESSMENT NGF has attempted to provide a qualitative, or subjective, review of how Palo Alto GC, under both its current configuration and the alternate reconfiguration options being considered, stacks up against its key competitors as identified above. The objective of this relative assessment is to provide some justification for assuming an increase in market share (and sustainable green fees) for Palo Alto GC, especially with the more intensive renovation options. NGF Consulting has scored the key competitors to the plan options (A, D, F and G) for Palo Alto GC. A baseline score is also provided for the existing Palo Alto golf course and facility. This scoring has been accomplished by looking at the amenities, course quality and reputation associated with each competitive facility. Reliance has been made on available reviews, NGF data, discussions with Bay Area golf writers/course reviewers and our visits to the subject courses. To rank the reconfiguration plans for Palo Also we relied on the schematic planning work developed as of this date, together with our ratings for the plan options. Scores are expressed as A+, A, A-, B+, B, etc. through D-. Because of the options (alternate) work to be considered, no overall “average” grade is provided. Rather, categories of comparisons are provided. Such scorings are both subjective and objective, combining impressions with facts about the facilities, and in this case, proposed plans. Because of the subjective component of this review, personal opinion and disagreement with some of the relative scoring should be expected. As such, the scoring should be used as a method for the reader to form opinions in combination with the other reporting covered within this report. Comparison of Palo Alto GC to Key Competitors Golf Facility Clubhouse Facilities Practice Facilities Consumer Reputation Golf Conditions* Palo Alto (Existing) C- C+ C+ C Palo Alto (Option A) C- C+ B B- Palo Alto (Option D) C- C+ A- B+ Palo Alto (Option F) C- B A A- Palo Alto (Option G) C- B+ A+ A San Jose Golf Course D A- A- B- Santa Clara Golf & Tennis B A- A- C+ Shoreline Golf Links B+ B+ C C- Sunnyvale Golf Course C- D- D- C+ Crystal Springs Golf Course A- B+ B+ B Poplar Creek Golf Course A- D B- B Santa Teresa Golf Club B- B B- B- Spring Valley B- B- C+ C+ *As observed January-February 2012 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 20 Financial Performance Models for Palo Alto Golf Course As part of this study effort, NGF Consulting has prepared an analysis to show what the potential economic performance of Palo Alto Municipal Golf Course could be considering the reconfiguration options presented in this report. In this section, we estimate the facility’s economic performance based on a set of assumptions that may or may not become reality. We feel that these estimates represent the best effort to create a “fair estimate of performance” for this facility based on our understanding of the golf facility operation, its place in the market and the changes proposed in the various renovation options. The Palo Alto Municipal GC performance has been projected under the assumption that the operation is continued ‘as-is’ with three separate contracts for maintenance, pro shop and food/beverage. The basic contract terms in place in FY2012 are assumed to continue through FY2021. The NGF has also assumed a “standard” set of external assumptions for regional economic performance, consumer discretionary income, and weather, with neither severe declines nor increases in any of these measures through 2021. RECENT HISTORICAL PALO ALTO GC PERFORMANCE In order to put the pro forma projections in context, we have summarized the five-year performance history of Palo Alto GC in the table below. Palo Alto Municipal Golf Course Historical Revenue Performance (2008-2011) Revenues FY2008 FY2009 FY2010 FY2011 Green Fees $2,169,230 $2,073,809 $1,958,234 $1,859,473 Cart Fees 345,656 313,224 339,090 302,815 Driving Range 346,447 365,908 399,773 343,878 Monthly Play Cards 161,368 161,544 135,848 154,933 Tournament / League Fees 2,227 2,651 1,921 2,190 Class Program / Other Fees 0 0 0 11,844 Total Golf Course Revenues $3,024,928 $2,917,136 $2,834,866 $2,675,133 Other Revenue Merchandise Sales 718,450 737,050 684,725 663,400 Food Sales 667,000 0 610,725 637,800 Liquor Sales 172,000 0 141,850 149,000 F & B Concession Payments Fixed Lease $0 $43,811 $0 $0 Variable Portion $58,730 $0 $52,680 $55,076 Utility Payment $25,920 $19,440 $28,080 $25,920 Total F & B Concession Payments $84,650 $63,251 $80,760 $80,996 Pro Shop Concession Payments Fixed Lease $0 $0 $0 $0 Merchandise (4%) $28,738 $29,482 $27,389 $26,536 Total Pro Shop Concession Payments $28,738 $29,482 $27,389 $26,536 Total Gross Margin to City $3,138,316 $3,009,869 $2,943,015 $2,782,665 Rounds Played 77,989 75,511 69,791 67,381 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 21 Palo Alto Municipal Golf Course Historical Expense and Net Income Performance (2008-2011) Expenses FY2008 FY2009 FY2010 FY2011 Salaries & Benefits $951,786 $929,335 $721,596 $259,455 Range Fees 138,579 152,745 142,267 130,152 Cart Fees 131,789 127,836 121,630 117,529 Club Fees 6,473 6,198 5,424 5,576 Fixed Lozares Management Fee 373,435 409,989 388,898 381,544 Contract Maintenance ---475,000 Repairs & maintenance 34,791 39,295 33,321 21,943 Advertising & Publish 5,560 6,583 4,299 10,765 Supplies and Materials 129,891 144,037 119,458 43,742 Gen., Rents, Fac. & Equip 5,959 2,736 944 675 Water Expense 279,326 409,132 271,495 361,870 Other Direct Charges 36,998 39,255 38,882 45,263 Indirect Charges 108,641 132,072 110,343 102,571 Total City Operating Expenses $2,203,228 $2,399,213 $1,958,557 $1,956,085 Net Income From Operations (Loss)$935,088 $610,656 $984,458 $826,580 Income from Sale of Property $35,230 D/S Income $33,629 $32,855 $32,200 $0 Total Non-Operating 33,629 32,855 32,200 35,230 Total Income (Incl. Non-operating)$968,717 $643,511 $1,016,658 $861,810 Debt Service $559,795 $555,686 $560,674 $559,539 Payment to General Fund $94,849 $94,849 $47,684 $94,849 Cost Plan Charges $337,590 $318,969 $332,155 $41,455 Total Debt / Other Charges $992,234 $969,504 $940,513 $695,843 Net Income or (Loss)($23,517)($325,993)$76,145 $165,967 Source: City of Palo Alto Rounds played at Palo Alto GC decreased steadily from FY2008 to FY2011, falling by a total of 10,608, or 13.6%. During the same time, both golf revenues and net income from operations declined by 11.6%. Despite the significant decline in rounds and revenues, net income after debt service, general fund payments and cost plan charges improved by nearly $500,000 between FY2009 and FY2011 due to a reduction in operating expenses and a significant decrease in cost plan charges associated with the conversion to privatized golf course maintenance. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 22 PROJECTIONS BASED ON “OPTION A” NGF Consulting has created a cash flow model for the continued operation of Palo Alto Municipal Golf Course (to be re-branded as “Baylands Golf Club) under the assumption of the “Option A” improvements. These improvements assume the basic minimum upgrades needed to improve the facility within the SFCJPA flood mitigation project, with no substantial change to the character of the golf course. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the “Option A” upgrades. The NGF has projected growth to over $2.8 million in total gross facility revenue to the City (from all sources) by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance estimates covers several categories, including rounds activity, green fees, average revenues (carts, range, concessions, etc.), total revenue, expenses, capital and debt. Under all scenarios, we have assumed use of more complimentary and discount rounds in the initial years after reopening for the purposes of gaining back lost customers, stimulating trial, and general promotions. Rounds Performance The rounds activity performance assumptions include: Rounds in FY2012 assume a 3% reduction from FY2011 total rounds based on actual performance in the first 6 months of FY2012 as reported by staff. Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months, then operation on only 9 holes for the last 3 months. During the last three months a reduction of 50% off historical rounds for the corresponding month is assumed. All rounds from April-June 2013 are assumed to be 9-hole rounds. Rounds in FY2014 assume operation on 9 holes for the first 6 months, then operation with an upgraded 18 holes for January-June 2014. All rounds from July- December 2013 are assumed to be 9-hole rounds with a reduction of 50% off historical totals for the corresponding month. Rounds projections assume increases to a stabilized level of 68,200 by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 23 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option A (2012-2021) As-Is 9-Mos. 18-H / 3 Mos. 9-H 6-Mos. 18-H / 6 Mos. 9-H Operate on 18-holes with modest upgrade to the golf course design FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 2,200 5,200 5,300 5,600 Senior Non-Resident 6,300 4,200 2,300 5,850 6,200 6,500 9-Hole 1,500 6,400 11,500 1,500 1,600 1,700 Senior 900 600 500 900 1,000 1,000 Junior 1,400 1,000 600 1,350 1,400 1,500 Early Bird 700 500 300 600 700 700 Twilight 11,300 7,800 4,500 10,800 11,000 11,600 Specials 7,500 5,400 3,500 9,400 7,600 8,000 Junior Card 1,100 800 500 1,050 1,200 1,200 Senior Card 800 600 400 900 1,000 1,000 Non-Resident Senior Card 4,000 2,600 1,500 3,750 4,000 4,200 Sub-Total Weekday 40,900 33,400 27,800 41,300 41,000 43,000 Weekend 18-Hole 10,200 7,000 4,000 8,550 9,800 10,300 9 Hole 1,900 8,700 12,500 1,850 2,000 2,100 Junior 800 600 400 800 900 900 Twilight 6,200 4,100 2,400 5,800 6,000 6,400 Sub-Total Weekend 19,100 20,400 19,300 17,000 18,700 19,700 Complimentary Play 2,500 1,700 1,200 2,500 2,500 2,500 Tournaments 2,200 1,500 1,000 2,000 2,500 3,000 TOTAL ROUNDS 64,700 57,000 49,300 62,800 64,700 68,200 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: There is no change in average fees for FY2012 over FY2011. The only adjustment in FY2013 is for the 9-hole rate, which has been adjusted downward to reflect the various forms of discounting expected to be present when the facility is operating on only 9 holes in the final 3 months of FY2013 and the first 6 months of FY2014. NGF has assumed 9-hole green fee will go as low as $12.00 per round in some discount categories (e.g., late afternoon replay rate). Upon re-opening on 18 holes (assumed January 1, 2014), average fees in each category are increased approximately 5% over FY2012 (rounded). For FY2015 through FY2021, NGF has assumed 1% annual increases in all fee categories. Average Cart fee and driving range revenue per round in FY2012 is based on the actuals in FY2011. For FY2013, average cart / range revenue per round is reduced by 20% (from 2011) to reflect the operation on only 9 holes the last 3 months. For National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 24 FY2014, average cart and range revenue is reduced by 30% (from FY2011) to reflect 6 months on 9 holes. By FY2015, average cart and range revenue is restored at the 2011 level and then increased by 1% per year through 2021. Average merchandise sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 6 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. Average food and bar sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 6 months on 9-holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option A (2012-2021) As-Is 9-Mos. 18-H /3 Mos. 9-H 6-Mos. 18-H /6 Mos. 9-H Operate on 18-holes with modest upgrade to the golf course design FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $39.00 $39.39 $39.78 $40.18 Senior Non-Resident $32.00 $32.00 $33.50 $33.84 $34.17 $34.52 9-Hole $23.00 $18.00 $17.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $29.50 $29.80 $30.09 $30.39 Junior $14.75 $14.75 $15.50 $15.66 $15.81 $15.97 Early Bird $23.00 $23.00 $24.00 $24.24 $24.48 $24.73 Twilight $30.00 $30.00 $31.50 $31.82 $32.13 $32.45 Specials $19.00 $19.00 $20.00 $20.20 $20.40 $20.61 Junior Card $19.70 $19.70 $20.75 $20.96 $21.17 $21.38 Senior Card $23.50 $23.50 $24.75 $25.00 $25.25 $25.50 Non-Resident Senior Card $27.50 $27.50 $29.00 $29.29 $29.58 $29.88 Weekend 18-Hole $47.00 $47.00 $49.50 $50.00 $50.49 $51.00 9 Hole $27.00 $24.75 $25.75 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $16.50 $16.67 $16.83 $17.00 Twilight $34.00 $34.00 $35.75 $36.11 $36.47 $36.83 Tournaments $34.60 $34.60 $36.50 $36.87 $37.23 $37.61 Avg. Cart Fee / Round $4.54 $3.63 $3.18 $4.54 $4.58 $4.63 Avg. Range Revenue / Round $5.15 $4.12 $3.61 $5.15 $5.20 $5.26 Merchandise Sales / Round $9.94 $7.95 $6.96 $9.94 $9.94 $10.14 Food per Round $9.56 $7.64 $6.69 $9.56 $9.65 $9.75 Bar per Round $2.23 $1.79 $1.56 $2.23 $2.26 $2.28 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 25 Other Revenue Assumptions Total green fee revenue includes all discount (10-play) cards and monthly passes. Ancillary revenue per round (carts, merchandise, range, food, bar, other) is derived from total rounds, including complimentary rounds. Concession revenue to the City of Palo Alto assumes the same current contract basics through FY2021,with no minimums after April 2013. The City is assumed to collect: (1) 7% of all F & B revenue; and (2) 4% of merchandise sales. Expense Assumptions Labor expenses are for City oversight only. These include allocations for contract oversight, Parks and Recreation Director, Division manager, etc. The estimate is intended to include both salary and benefits allocation and is increased by 4.5% per year through FY2021. Commissions paid to the pro shop vendor include 38% of driving range gross revenue and 40% of gross cart revenue (as per contract). The pro shop management fee is fixed at $28,775 per month for the full duration of the NGF projection. Reimbursements for merchant fees (mostly credit card fees) are assumed to be 1.4% of total facility revenue. Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012. $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013. $37,500 per month for the first 6 months, then $66,667 per months for the last 6 months of FY2014. $66,667 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Advertising and publishing expense is reduced by 50% during construction and operation on 9 holes, totaling 15% reduction in FY2013. Upon re-opening the golf course this expense is assumed to increase to $45,000 to account for enhanced marketing of the upgraded facility and re-theme as “Baylands GC.” Advertising and publishing expense is then reduced in subsequent years to a “standard” of around $17,000 per year. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 25% reduction during construction 28% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 26 Other direct charges (including electric) are based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions Non-operating revenue attributed to debt service is assumed to continue at 6% of debt service payment as long as payments continue (through FY2019). Debt service payments were provided by the City of Palo Alto. The payment to the General Fund ($94,849) expires after FY2012. There is a new payment of ± $107,000 to the General Fund from FY2015 – FY2019 for repayment of a loan for the difference between the estimated capital cost for Option A and the expected reimbursement from the SFCJPA. The Cost Plan Charges are based on actual 2011 charges with historical 3% growth through the end of FY2021. The NGF has added a new “Operating & Capital Reserve” line to the pro forma beginning in FY2015, set at 10% of green fee revenue. Option A also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $750,000 (real 2012 dollars). Pro Forma Estimate for ‘Option A’ Scenario – FY2012 – FY2021 Utilizing the above assumptions and activity/revenue estimates, NGF Consulting has prepared a pro forma for the next 10 years of operation, including FY2012 (already underway). The table shows that the renovated Baylands Golf Club could produce net income to the City in the range of $690,000 to $950,000 (before debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for debt payments (beginning in FY2020), the facility is expected to produce net income to the City, after all expenses and charges, in the range of ±$620,000, although a one-time expense of $750,000 is projected for 2020 to upgrade the irrigation system. As this is a projection, all figures after FY2012 have been rounded to the nearest $100 for simplicity. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 27 Palo Alto Golf Course Revenue / Expense - Option A Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $1,313,900 $1,967,700 $2,090,000 $2,233,100 $2,255,400 $2,278,000 $2,300,700 $2,323,800 Cart Fees 302,799 293,500 206,900 156,600 284,900 296,500 315,600 318,800 322,000 325,200 328,500 Driving Range 343,911 333,400 235,000 177,800 323,600 336,700 358,500 362,100 365,700 369,400 373,100 Tournament / League Fees 2,196 2,100 1,900 1,600 2,100 2,100 2,200 2,200 2,200 2,200 2,200 Other 11,813 11,500 8,100 6,100 11,100 11,500 12,300 12,300 12,600 12,600 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,656,000 $2,589,400 $2,736,800 $2,921,700 $2,950,800 $2,980,500 $3,010,100 $3,040,400 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $28,500 $51,800 $53,900 $57,400 $58,000 $58,600 $59,200 $59,700 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $54,900 $78,700 $80,800 $84,800 $85,400 $86,500 $87,100 $88,200 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $13,700 $25,000 $25,700 $27,700 $27,700 $28,200 $28,200 $28,800 Total From Pro Shop Concession $26,536 $25,700 $18,100 $13,700 $25,000 $25,700 $27,700 $27,700 $28,200 $28,200 $28,800 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,724,600 $2,693,100 $2,843,300 $3,034,200 $3,063,900 $3,095,200 $3,125,400 $3,157,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 67,600 123,000 127,900 136,200 137,600 139,000 140,400 141,800 Cart Fees 117,529 117,400 82,800 62,600 114,000 118,600 126,200 127,500 128,800 130,100 131,400 Club Fees 5,576 5,700 4,600 4,000 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 23,200 36,300 38,300 40,900 41,300 41,700 42,100 42,600 Contract Maintenance 475,000 750,000 675,000 625,000 800,000 812,000 824,200 836,600 849,100 861,800 874,700 Repairs & maintenance 21,943 22,300 17,800 15,600 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 31,600 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 277,400 207,000 195,000 200,900 204,900 214,100 223,700 233,800 244,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 28 Palo Alto Golf Course Revenue / Expense - Option A Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 32,100 44,700 45,400 46,100 46,800 47,500 48,200 48,900 Indirect Charges 102,571 104,100 83,300 72,900 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,831,700 $1,683,700 $2,024,100 $2,051,000 $2,096,900 $2,133,100 $2,170,100 $2,208,400 $2,247,800 Net Income From Operations (Loss)$828,703 $710,800 $307,500 $40,900 $669,000 $792,300 $937,300 $930,800 $925,100 $917,000 $909,600 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $333,200 $66,600 $694,700 $818,100 $963,200 $956,700 $951,000 $917,000 $909,600 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $432,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $107,600 $107,600 $107,600 $107,600 $107,600 $0 $0 New Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $750,000 $0 Reserve for Replacement $0 $0 $0 $0 $196,800 $209,000 $223,300 $225,500 $227,800 $230,100 $232,400 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $779,300 $795,500 $812,600 $816,400 $819,100 $1,034,200 $288,100 Net Income or (Loss)$168,090 $104,200 ($139,000)($407,700)($84,600)$22,600 $150,600 $140,300 $131,900 ($117,200)$621,500 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 29 PROJECTIONS BASED ON “OPTION D” The NGF cash flow model for operation under “Option D” assumes a more significant upgrade to the facility with a “more dramatic transformation” as described by the golf course architect. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the “Option D” upgrades. The NGF has projected growth to over $3.0 million in total gross revenue (from all sources) to the City by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance match those presented in the projection for Option A,except the following changes noted below: Rounds Performance The rounds activity performance assumptions include: Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months, then operation on only 9 holes for the last 3 months. During the last three months a reduction of 50% off historical rounds for the corresponding month is assumed. All rounds from April-June 2013 are assumed to be 9-hole rounds. Rounds in FY2014 assume operation on 9 holes for the first 7 months, then operation with an upgraded 18 holes for February - June 2014. All rounds from July 2013 through January 2014 are assumed to be 9-hole rounds with a reduction of 50% off historical totals for the corresponding months. Rounds in FY2015 through FY2021 assume increases to a stabilized level of 73,300 by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 30 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option D (2012-2021) As-Is 9-Mos. 18- H /3 Mos. 9-H 5-Mos. 18- H /7 Mos. 9-H Operate on 18-holes with upgraded golf design and more appealing features FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 1,800 5,500 5,800 6,100 Senior Non-Resident 6,300 4,200 2,100 6,200 6,550 6,900 9-Hole 1,500 6,400 11,000 1,600 1,600 1,700 Senior 900 600 300 1,100 1,150 1,200 Junior 1,400 1,000 400 1,350 1,400 1,500 Early Bird 700 500 200 800 850 900 Twilight 11,300 7,800 3,700 11,200 11,750 12,400 Specials 7,500 5,400 3,000 7,550 8,000 8,400 Junior Card 1,100 800 400 1,150 1,250 1,300 Senior Card 800 600 300 1,000 1,050 1,100 Non-Resident Senior Card 4,000 2,600 1,200 3,950 4,200 4,400 Sub-Total Weekday 40,900 33,400 24,400 41,400 43,600 45,900 Weekend 18-Hole 10,200 7,000 3,500 9,900 10,450 11,000 9 Hole 1,900 8,700 11,900 2,000 2,150 2,200 Junior 800 600 300 900 950 1,000 Twilight 6,200 4,100 2,100 6,000 6,350 6,700 Sub-Total Weekend 19,100 20,400 17,800 18,800 19,900 20,900 Complimentary Play 2,500 1,700 1,000 2,500 2,500 2,500 Tournaments 2,200 1,500 800 3,000 3,500 4,000 TOTAL ROUNDS 64,700 57,000 44,000 65,700 69,500 73,300 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: The only adjustment in FY2013 is for the 9-hole rate, which has been adjusted downward to reflect the various forms of discounting expected to be present when the facility is operating on only 9 holes in the final 3 months of FY2013 and the first 7 months of FY2014. Upon re-opening on 18 holes (assumed January 1, 2014), average fees in each category are increased approximately 10% over FY2012 (rounded). Average Cart fee and driving range revenue per round in FY2012 is based on the actuals in FY2011. For FY2013, average cart / range revenue per round is reduced by 20% (from 2011) to reflect the operation on only 9 holes the last 3 months. For FY2014, average cart and range revenue is reduced by 30% (from FY2011) to reflect 7 months on 9 holes. By FY2015, average cart and range revenue is restored at the 2011 level and then increased by 1% per year through 2021. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 31 Average merchandise sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 7 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. Average food and bar sales in FY2012 are based on the actual in FY2011. Average sales are reduced by 20% (from 2011) in FY2013 to reflect 9 holes-only the last 3 months, and 30% in FY2014 to reflect 7 months on 9 holes. By FY2015, average sales are restored to the 2011 level with 1% increases through 2021. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option D (2012-2021) As-Is 9-Mos. 18-H /3 Mos. 9-H 5-Mos. 18-H /7 Mos. 9-H Operate on 18-holes with upgraded golf design and more appealing features FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $41.00 $41.41 $41.82 $42.24 Senior Non-Resident $32.00 $32.00 $35.00 $35.35 $35.70 $36.06 9-Hole $23.00 $18.00 $17.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $31.00 $31.31 $31.62 $31.94 Junior $14.75 $14.75 $16.25 $16.41 $16.58 $16.74 Early Bird $23.00 $23.00 $25.50 $25.76 $26.01 $26.27 Twilight $30.00 $30.00 $33.00 $33.33 $33.66 $34.00 Specials $19.00 $19.00 $21.00 $21.21 $21.42 $21.64 Junior Card $19.70 $19.70 $21.75 $21.97 $22.19 $22.41 Senior Card $23.50 $23.50 $26.00 $26.26 $26.52 $26.79 Non-Resident Senior Card $27.50 $27.50 $30.00 $30.30 $30.60 $30.91 Weekend 18-Hole $47.00 $47.00 $52.00 $52.52 $53.05 $53.58 9 Hole $27.00 $24.75 $27.25 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $17.50 $17.68 $17.85 $18.03 Twilight $34.00 $34.00 $37.50 $37.88 $38.25 $38.64 Tournaments $34.60 $34.60 $38.00 $38.38 $38.76 $39.15 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 32 Expense Assumptions Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012. $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013. $37,500 per month for the first 7 months, then $71,000 per months for the last 5 months of FY2014. $71,000 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 25% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021. Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 30% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions There is a new payment of ± $223,700 to the General Fund from FY2015 – FY2019 for repayment of a loan for the difference between the estimated capital cost for Option D and the expected reimbursement from the SFCJPA. Option D also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $500,000 (real 2012 dollars). Pro Forma Estimate for ‘Option D’ Scenario – FY2012 – FY2021 Utilizing the above assumptions and activity/revenue estimates, NGF Consulting has prepared a pro forma for the next five years of operation, including FY2012 (already underway). The table shows that with a more comprehensive renovation, the Baylands GC could produce net income to the City in the range of $930,000 to $1.27 million (before debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for debt payments (beginning in FY2020), the facility is expected to produce net income to the City in the range of $915,000 per year, although there is a one-time expense of $500,000 for irrigation in 2020. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 33 Palo Alto Golf Course Revenue / Expense - Option D Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $1,213,500 $2,204,500 $2,361,900 $2,522,200 $2,547,500 $2,572,900 $2,598,700 $2,624,600 Cart Fees 302,799 293,500 206,900 139,700 298,100 318,500 339,200 342,600 346,100 349,500 353,000 Driving Range 343,911 333,400 235,000 158,700 338,600 361,700 385,300 389,200 393,100 397,000 401,000 Tournament / League Fees 2,196 2,100 1,900 1,400 2,200 2,300 2,400 2,400 2,400 2,400 2,400 Other 11,813 11,500 8,100 5,500 11,600 12,300 13,200 13,200 13,500 13,500 13,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,518,800 $2,855,000 $3,056,700 $3,262,300 $3,294,900 $3,328,000 $3,361,100 $3,394,800 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $25,400 $54,200 $57,900 $61,700 $62,300 $62,900 $63,600 $64,200 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $51,800 $81,100 $84,800 $89,100 $89,700 $90,800 $91,500 $92,700 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $12,200 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total From Pro Shop Concession $26,536 $25,700 $18,100 $12,200 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,582,800 $2,962,200 $3,169,100 $3,381,100 $3,414,300 $3,449,100 $3,482,900 $3,518,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 60,300 128,700 137,400 146,400 147,900 149,400 150,900 152,400 Cart Fees 117,529 117,400 82,800 55,900 119,200 127,400 135,700 137,000 138,400 139,800 141,200 Club Fees 5,576 5,700 4,600 4,000 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 21,300 40,000 42,800 45,700 46,100 46,600 47,100 47,500 Contract Maintenance 475,000 750,000 675,000 595,800 852,000 864,800 877,800 891,000 904,400 918,000 931,800 Repairs & maintenance 21,943 22,300 17,800 15,600 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 31,600 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 277,400 204,000 161,000 165,800 169,100 176,700 184,700 193,000 201,700 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 34 Palo Alto Golf Course Revenue / Expense - Option D Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 32,100 43,500 44,200 44,900 45,600 46,300 47,000 47,700 Indirect Charges 102,571 104,100 83,300 72,900 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,831,700 $1,635,600 $2,055,500 $2,090,300 $2,138,000 $2,173,500 $2,210,100 $2,247,800 $2,286,400 Net Income From Operations (Loss)$828,703 $710,800 $307,500 ($52,800)$906,700 $1,078,800 $1,243,100 $1,240,800 $1,239,000 $1,235,100 $1,232,000 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $333,200 ($27,100)$932,400 $1,104,600 $1,268,500 $1,266,700 $1,264,900 $1,235,100 $1,232,000 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $223,700 $223,700 $223,700 $223,700 $223,700 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $500,000 $0 Reserve for Replacement $0 $0 $0 $0 $220,500 $236,200 $252,200 $254,800 $257,300 $259,900 $262,500 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $919,100 $938,800 $948,600 $961,800 $964,700 $814,000 $318,200 Net Income or (Loss)$168,090 $104,200 ($139,000)($501,400)$13,300 $165,800 $319,900 $304,900 $300,200 $421,100 $913,800 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 35 PROJECTIONS BASED ON “OPTION F” The NGF cash flow model for operation under “Option F” assumes a more significant upgrade to the facility, with a two-thirds complete renovation the addition of a soccer field and a comparable “dramatic transformation” as proposed in Option D. The NGF estimate shows the Baylands GC revenue performance under Option F over the next 10 years would be comparable to Option D. Key Assumptions The Base assumptions in preparing the projected financial performance match those presented in the projection for Option D,except the following changes noted below: Rounds and Average Fee Performance The rounds activity and average fee performance assumptions are the same as proposed in “Option D,” except: Rounds in FY2014 assume operation on 9 holes for the first 9 months, then operation with an upgraded 18 holes for April - June 2014. All rounds from July 2013 through March 2014 are assumed to be 9-hole rounds with totals reduced by 50% for each corresponding month. Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option F (2012-2021) As-Is 9-Mos. 18- H /3 Mos. 9-H 3-Mos. 18- H /9 Mos. 9-H Operate on 18-holes with nearly complete renovation FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 3,500 1,000 5,500 5,800 6,100 Senior Non-Resident 6,300 4,200 1,100 6,200 6,550 6,900 9-Hole 1,500 6,400 12,800 1,600 1,600 1,700 Senior 900 600 200 1,100 1,150 1,200 Junior 1,400 1,000 300 1,350 1,400 1,500 Early Bird 700 500 200 800 850 900 Twilight 11,300 7,800 2,000 11,200 11,750 12,400 Specials 7,500 5,400 2,200 7,550 8,000 8,400 Junior Card 1,100 800 300 1,150 1,250 1,300 Senior Card 800 600 200 1,000 1,050 1,100 Non-Resident Senior Card 4,000 2,600 800 3,950 4,200 4,400 Sub-Total Weekday 40,900 33,400 21,100 41,400 43,600 45,900 Weekend 18-Hole 10,200 7,000 2,100 9,900 10,450 11,000 9 Hole 1,900 8,700 13,700 2,000 2,150 2,200 Junior 800 600 200 900 950 1,000 Twilight 6,200 4,100 1,000 6,000 6,350 6,700 Sub-Total Weekend 19,100 20,400 17,000 18,800 19,900 20,900 Complimentary Play 2,500 1,700 1,100 2,500 2,500 2,500 Tournaments 2,200 1,500 500 3,000 3,500 4,000 TOTAL ROUNDS 64,700 57,000 39,700 65,700 69,500 73,300 Average green and ancillary fees in “Option F” are identical to those presented for “Option D.” National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 36 Expense Assumptions Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012 $62,500 per month for the first 9 months, then $37,500 per months for the last 3 months of FY2013 $37,500 per month for the first 9 months, then $66,667 per months for the last 3 months of FY2014 $66,667 per month in FY2015, growing at 1.5% annually through 2021. Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 40% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 20% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021 Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 40% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions The NGF has assumed that the $2,855,400 in additional cost needed to complete Option F, over and above the amount estimated to be reimbursed by the SFCJPA, will be funded via the issuance of a new debt program (revenue or General Obligation Bond), with terms of 4.5% interest for 20 years, with payments beginning in FY2015. Option F also assumes that the full irrigation replacement will be completed in FY2020 (or by 2020) at a cost of $250,000 (real 2012 dollars). Pro Forma Estimate for ‘Option F’ Scenario – FY2012 – FY2021 Based on the inputs described above, the pro forma estimate for future performance under “Option F” shows that with this more comprehensive renovation, the Baylands GC could produce net income to the City in the range of $960,000 to $1.34 million (before existing and new debt, cost plan and reserve) through the term of the current debt program. After the City is no longer responsible for its older (1999 issue) debt payments, beginning in FY2020, the facility is expected to produce net income to the City in the range of $720,000 per year, although there is a one-time expense of $250,000 for irrigation in 2020. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 37 Palo Alto Golf Course Revenue / Expense - Option F Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,605,200 $969,500 $2,204,500 $2,361,900 $2,522,200 $2,547,500 $2,572,900 $2,598,700 $2,624,600 Cart Fees 302,799 293,500 206,900 126,100 298,100 318,500 339,200 342,600 346,100 349,500 353,000 Driving Range 343,911 333,400 235,000 143,200 338,600 361,700 385,300 389,200 393,100 397,000 401,000 Tournament / League Fees 2,196 2,100 1,900 1,300 2,200 2,300 2,400 2,400 2,400 2,400 2,400 Other 11,813 11,500 8,100 4,900 11,600 12,300 13,200 13,200 13,500 13,500 13,800 Total Golf Course Revenues $2,677,256 $2,600,600 $2,057,100 $1,245,000 $2,855,000 $3,056,700 $3,262,300 $3,294,900 $3,328,000 $3,361,100 $3,394,800 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $37,600 $22,900 $54,200 $57,900 $61,700 $62,300 $62,900 $63,600 $64,200 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $64,000 $49,300 $81,100 $84,800 $89,100 $89,700 $90,800 $91,500 $92,700 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $18,100 $11,000 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total From Pro Shop Concession $26,536 $25,700 $18,100 $11,000 $26,100 $27,600 $29,700 $29,700 $30,300 $30,300 $30,900 Total Gross to City $2,784,788 $2,705,600 $2,139,200 $1,305,300 $2,962,200 $3,169,100 $3,381,100 $3,414,300 $3,449,100 $3,482,900 $3,518,400 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 89,300 54,400 128,700 137,400 146,400 147,900 149,400 150,900 152,400 Cart Fees 117,529 117,400 82,800 50,400 119,200 127,400 135,700 137,000 138,400 139,800 141,200 Club Fees 5,576 5,700 4,600 3,400 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 28,800 17,400 40,000 42,800 45,700 46,100 46,600 47,100 47,500 Contract Maintenance 475,000 750,000 675,000 537,500 800,000 812,000 824,200 836,600 849,100 861,800 874,700 Repairs & maintenance 21,943 22,300 17,800 13,400 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 9,300 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 21,700 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 280,400 217,600 182,400 187,900 191,700 200,300 209,300 218,700 228,500 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 38 Palo Alto Golf Course Revenue / Expense - Option F Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 22,000 42,500 43,100 43,700 44,400 45,100 45,800 46,500 Indirect Charges 102,571 104,100 83,300 50,000 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,834,700 $1,529,900 $2,023,900 $2,058,500 $2,105,800 $2,141,500 $2,178,200 $2,216,100 $2,254,900 Net Income From Operations (Loss)$828,703 $710,800 $304,500 ($224,600)$938,300 $1,110,600 $1,275,300 $1,272,800 $1,270,900 $1,266,800 $1,263,500 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $330,200 ($198,900)$964,000 $1,136,400 $1,300,700 $1,298,700 $1,296,800 $1,266,800 $1,263,500 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 Additional Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000 $0 New Debt Service $0 $0 $0 $0 $219,500 $219,500 $219,500 $219,500 $219,500 $219,500 $219,500 Reserve for Replacement $0 $0 $0 $0 $220,500 $236,200 $252,200 $254,800 $257,300 $259,900 $262,500 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $914,900 $934,600 $944,400 $957,600 $960,500 $783,500 $537,700 Net Income or (Loss)$168,090 $104,200 ($142,000)($673,200)$49,100 $201,800 $356,300 $341,100 $336,300 $483,300 $725,800 NOTE: Option F would likely include additional revenue from soccer fields of approximately $78,000 per field per year. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 39 PROJECTIONS BASED ON “OPTION G” The NGF projection model for “Option G” represents a significant change from other options presented. This option would involve a complete renovation of the Palo Alto Municipal Golf Course (to be re-branded as “Baylands Golf Club). The project would involve a full closure of the golf course from April 2013 through March 2014, re-opening as a brand new golf course with the highest quality golf features commanding higher fees than any other option presented. The full golf course irrigation system would be replaced and three new soccer fields would be added to the site. Subsequent to the initial draft report, the City Finance Committee recommended that this option include rebuilding of all 18 greens, re-turfing of all fairways, construction of an on- course restroom, and rebuilding the practice green area. These changes should further enhance the product’s marketability and the golfer experience. The NGF revenue estimate has been combined with the present operating structure to provide a full estimate of Baylands GC performance for the next 10 years, assuming successful completion of the proposed “Option G” upgrades. The NGF has projected growth to almost $3.2 million in total gross revenues (from all sources) to the City by 2016. Key Assumptions The Base assumptions in preparing the projected financial performance estimates covers several categories, including rounds activity, green fees, average revenues (carts, range, concessions, etc.), total revenue, expenses, capital and debt. Rounds Performance The rounds activity performance assumptions include: Rounds in FY2012 assume a 3% reduction from FY2011 total rounds based on actual performance in the first 6 months of FY2012. Rounds in FY2013 assume ‘as-is’ operation on 18 holes for the first 9 months. The golf course then closes entirely for the next 12 months (April 2013 –March 2014), re- opening as an upgraded new facility on April 1, 2014. Upon re-opening, rounds are assumed to grow to 67,900 in FY2015, stabilizing at 75,700 rounds by 2017. The overall distribution of rounds by category is shown in the table below: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 40 Palo Alto Municipal Golf Course (Baylands GC) Projected Activity for Option G (2012-2021) As-Is 9-Mos. 18- H / 3 Mos. closed 3-Mos. 18- H / 9 Mos. Closed Operate on 18-holes with maximum renovation and upgrade FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 -2021 Weekday 18-Hole 5,400 4,000 1,000 5,500 5,800 6,100 Senior Non-Resident 6,300 4,700 1,300 6,200 6,550 6,900 9-Hole 1,500 1,100 400 1,550 1,600 1,700 Senior 900 600 250 1,100 1,150 1,200 Junior 1,400 1,000 400 1,450 1,500 1,600 Early Bird 700 500 200 800 850 900 Twilight 11,300 8,400 2,800 11,500 12,150 12,800 Specials 7,500 5,600 2,200 7,650 8,050 8,500 Junior Card 1,100 800 300 1,150 1,250 1,300 Senior Card 800 600 200 1,000 1,050 1,100 Non-Resident Senior Card 4,000 3,000 1,000 4,000 4,300 4,500 Sub-Total Weekday 40,900 30,300 10,050 41,900 44,250 46,600 Weekend 18-Hole 10,200 7,600 2,500 10,050 10,650 11,200 9 Hole 1,900 1,400 500 2,000 2,100 2,200 Junior 800 600 200 900 950 1,000 Twilight 6,200 4,600 1,500 6,050 6,350 6,700 Sub-Total Weekend 19,100 14,200 4,700 19,000 20,050 21,100 Complimentary Play 2,500 1,800 650 3,500 3,500 3,500 Tournaments 2,200 1,600 600 3,500 4,000 4,500 TOTAL ROUNDS 64,700 47,900 16,000 67,900 71,800 75,700 Average Fees / Revenue The average green fees per round by category are shown in the table that follows. Key assumptions driving this estimate include: There is no change in average fees for FY2012 over FY2011. Upon re-opening on 18 holes (assumed April 1, 2014), average fees in each category are increased approximately 15% over FY2012 (rounded). For FY2015 through FY2021, NGF has assumed 1% annual increases in all fee categories. All other ancillary revenue centers mirror estimates made in Options D and F. The average green fees by category and ancillary revenue per round are shown in the table below (assume 1% annual increases for FY2018-2021 as noted): National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 41 Palo Alto Municipal Golf Course (Baylands GC) Projected Average Green Fees for Option G (2012-2021) As-Is 9-Mos. 18- H / 3 Mos. closed 3-Mos. 18- H / 9 Mos. Closed Operate on 18-holes with maximum renovation and upgrade FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Weekday 18-Hole $37.00 $37.00 $42.50 $42.93 $43.35 $43.79 Senior Non-Resident $32.00 $32.00 $37.00 $37.37 $37.74 $38.12 9-Hole $23.00 $18.00 $24.00 $25.00 $25.25 $25.50 Senior $28.00 $28.00 $32.00 $32.32 $32.64 $32.97 Junior $14.75 $14.75 $17.00 $17.17 $17.34 $17.52 Early Bird $23.00 $23.00 $26.50 $26.77 $27.03 $27.30 Twilight $30.00 $30.00 $34.50 $34.85 $35.19 $35.55 Specials $19.00 $19.00 $22.00 $22.22 $22.44 $22.67 Junior Card $19.70 $19.70 $22.50 $22.73 $22.95 $23.18 Senior Card $23.50 $23.50 $27.00 $27.27 $27.54 $27.82 Non-Resident Senior Card $27.50 $27.50 $31.50 $31.82 $32.13 $32.45 Weekend 18-Hole $47.00 $47.00 $54.00 $54.54 $55.09 $55.64 9 Hole $27.00 $24.75 $28.50 $28.75 $29.04 $29.33 Junior $15.80 $15.80 $18.00 $18.18 $18.36 $18.55 Twilight $34.00 $34.00 $39.00 $39.39 $39.78 $40.18 Tournaments $34.60 $34.60 $40.00 $40.40 $40.80 $41.21 Other Revenue Assumptions Total green fee revenue includes all discount (10-play) cards and monthly passes. Ancillary revenue per round (carts, merchandise, range, food, bar, other) is derived from total rounds, including complimentary rounds. Concession revenue to the City of Palo Alto assumes the same current contract basics through FY2021,with no minimums after April 2013. The City is assumed to collect: (1) 7% of all food and beverage revenue; and (2) 4% of merchandise sales. Expense Assumptions Labor expenses are for City oversight only. These include allocations for contract oversight, Parks and Recreation Director, Division manager, etc. The estimate is intended to include both salary and benefits allocation and is increased by 4.5% per year through FY2021. Commissions paid to the pro shop vendor include 38% of driving range gross revenue and 40% of gross cart revenue (as per contract). The pro shop management fee is fixed at $28,775 per month while the golf course is open. No management fees are assumed for April 2013 through March 2014. Reimbursements for merchant fees (mostly credit card fees) are assumed to be 1.4% of total facility revenue. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 42 Contract maintenance expense to the City of Palo Alto assumes: $62,500 per month for FY2012 $62,500 per month for the first 9 months of FY2013 No contract maintenance expense for April 2013 through March 2014 $68,750 per month (fixed) upon re-opening in April 2014 (3 months in FY2014), then $68,750 per month in FY2015, growing at 1.5% annually through 2021 Other expenses such as repairs, maintenance, supplies, club fees, materials and other indirect expenses are all based on actual figures for FY2011 with 20% reduction in FY2013 and 70% reduction in FY2014, returning to FY2011 levels in FY2015 plus 1.5% increases assumed through FY2021. Advertising and publishing expense is reduced by 50% during construction and operation on 9 holes, totaling 15% reduction in FY2013. Upon re-opening the golf course this expense is assumed to increase $45,000 to account for enhanced marketing of the upgraded facility and re-theme as “Baylands GC.” Advertising and publishing expense is then reduced in subsequent years to a “standard” of around $17,000 per year. Water expense has been highly variable and NGF projections are based on the 4- year average (2008-2011), with assumptions of reductions in use as described previously: 60% reduction during construction 32% reduction upon re-opening Annual increases are assumed at 20% for 2013, 15% for 2014, 9% for 2015, 3% for 2016, 2% for 2017 and 4.5% for FY2018 through FY2021 Other direct charges (including electric) are based on actual 2011 totals, based on actual figures for FY2011 with 20% reduction in FY2013 and 70% reduction in FY2014. A slight reduction expected upon re-opening the golf course in FY2015 (as described by the architect). Annual increase of 1.5% is assumed from FY2015 through FY2021. Debt Service and Other Non-Operating Expense Assumptions The NGF has assumed that the $4,570,000 in additional cost needed to complete Option G, over and above the amount reimbursed by the SFCJPA, will be funded via the issuance of a new debt program (revenue or General Obligation Bond), with terms of 4.5% interest for 20 years, with payments beginning in FY2015. Pro Forma Estimate for ‘Option G’ Scenario – FY2012 – FY2021 Based on the inputs described above, the pro forma estimate for future performance under “Option G” shows that with this complete renovation, the Baylands GC could produce net income to the City in the range of $1.07 to $1.42 million (before existing and new debt, cost plan and reserve) through the term of the current debt program that ends in 2019. After the City is no longer responsible for its older (1999 issue) debt payments, the facility is expected to produce net income to the City, after all expenses and other charges, in the range of $740,000 per year. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 43 Palo Alto Golf Course Revenue / Expense - Option G Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $544,300 $2,341,500 $2,510,600 $2,680,900 $2,707,800 $2,734,800 $2,762,200 $2,789,800 Cart Fees 302,799 293,500 173,900 72,600 311,100 332,300 353,900 357,400 361,000 364,600 368,200 Driving Range 343,911 333,400 197,500 82,400 353,400 377,400 401,900 405,900 410,000 414,100 418,200 Tournament / League Fees 2,196 2,100 1,600 500 2,200 2,400 2,500 2,500 2,500 2,500 2,500 Other 11,813 11,500 6,800 2,800 12,000 12,700 13,700 13,700 13,900 13,900 14,200 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $702,600 $3,020,200 $3,235,400 $3,452,900 $3,487,300 $3,522,200 $3,557,300 $3,592,900 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $56,600 $60,400 $64,400 $65,000 $65,700 $66,300 $67,000 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $83,500 $87,300 $91,800 $92,400 $93,600 $94,200 $95,500 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $748,600 $3,130,700 $3,351,200 $3,575,400 $3,610,400 $3,647,100 $3,682,800 $3,720,300 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 134,300 143,400 152,700 154,200 155,800 157,400 158,900 Cart Fees 117,529 117,400 69,600 29,000 124,400 132,900 141,600 143,000 144,400 145,800 147,300 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,800 42,300 45,300 48,300 48,800 49,300 49,800 50,300 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 44 Palo Alto Golf Course Revenue / Expense - Option G Revenues FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $759,400 $2,061,600 $2,097,500 $2,146,000 $2,182,300 $2,219,400 $2,257,900 $2,297,400 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($10,800)$1,069,100 $1,253,700 $1,429,400 $1,428,100 $1,427,700 $1,424,900 $1,422,900 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 $14,900 $1,094,800 $1,279,500 $1,454,800 $1,454,000 $1,453,600 $1,424,900 $1,422,900 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $234,200 $251,100 $268,100 $270,800 $273,500 $276,200 $279,000 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,060,400 $1,081,300 $1,092,100 $1,105,400 $1,108,500 $681,600 $686,000 Net Income or (Loss)$168,090 $104,200 ($123,500)($459,400)$34,400 $198,200 $362,700 $348,600 $345,100 $743,300 $736,900 NOTE: Option G would likely include additional revenue from soccer fields estimated by City at approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 45 FINANCIAL PROJECTIONS SUMMARY Summary of Options Comparative table for options in 2015 and 2020 are shown below: Summary in 2015 Summary in FY2015 Modest Upgrade Option A More significant upgrade / nicer features Option D Nearly complete renovation Option F Maximum renovation Option G TOTAL ROUNDS 62,800 65,700 65,700 67,900 ANNUAL ROUNDS REVENUE $1,967,709 $2,204,512 $2,204,512 $2,341,455 AVERAGE GREEN FEE PER ROUND $31.33 $33.55 $33.55 $34.48 Revenues FY2015 Projected FY2015 Projected FY2015 Projected FY2015 Projected Total Golf Course Revenues $2,589,400 $2,855,000 $2,855,000 $3,020,200 Concessions Total from F & B Concession $78,700 $81,100 $81,100 $83,500 Total From Pro Shop Concession $25,000 $26,100 $26,100 $27,000 Total Gross to City $2,693,100 $2,962,200 $2,962,200 $3,130,700 Expenses Water 195,000 161,000 182,400 225,600 Maintenance Contract 800,000 852,000 800,000 825,000 Total to Pro Shop Contract 618,600 633,200 633,200 646,300 All Other Expenses 410,500 409,300 408,300 407,300 Total City Operating Expenses 2,024,100 2,055,500 2,023,900 2,061,600 Net Income From Operations (Loss)$669,000 $906,700 $938,300 $1,069,100 Total Income (Incl. Non-operating)$694,700 $932,400 $964,000 $1,094,800 Total Debt/Other Charges $779,300 $1,501,100 $914,900 $1,060,400 Net Income or (Loss)($84,600)($568,700)$49,100 $34,400 Footnotes Partial irrigation Partial irrigation Potential for additional $78,000 Soccer revenue Potential for additional $234,000 Soccer revenue National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 46 Summary in 2020 Summary in FY2020 Modest Upgrade Option A More significant upgrade / nicer features Option D Nearly complete renovation Option F Maximum renovation Option G TOTAL ROUNDS 68,200 73,300 73,300 75,700 ANNUAL ROUNDS REVENUE $2,300,746 $2,598,658 $2,598,658 $2,762,185 AVERAGE GREEN FEE PER ROUND $33.74 $35.45 $35.45 $36.49 Revenues FY2015 Projected FY2015 Projected FY2015 Projected FY2015 Projected Total Golf Course Revenues $3,010,100 $3,361,100 $3,361,100 $3,557,300 Concessions Total from F & B Concession $87,100 $91,500 $91,500 $94,200 Total From Pro Shop Concession $28,200 $30,300 $30,300 $31,300 Total Gross to City $3,125,400 $3,482,900 $3,482,900 $3,682,800 Expenses Water 233,800 193,000 218,700 219,500 Maintenance Contract 861,800 918,000 861,800 888,800 Total to Pro Shop Contract 657,900 683,100 683,100 698,300 All Other Expenses 454,900 453,700 452,500 451,300 Total City Operating Expenses $2,208,400 $2,247,800 $2,216,100 $2,257,900 Net Income From Operations (Loss)$917,000 $1,235,100 $1,266,800 $1,424,900 Total Income (Incl. Non-operating)$917,000 $1,235,100 $1,266,800 $1,424,900 Total Debt/Other Charges $1,034,200 $814,000 $783,500 $681,600 Net Income or (Loss)($117,200)$421,100 $483,300 $743,300 Footnotes Partial irrigation Partial irrigation Potential for additional $78,000 Soccer revenue Potential for additional $234,000 Soccer revenue Summary Results The results of the NGF Consulting financial projections for Palo Alto Golf Course, based on the various reconfiguration options and the analysis and assumptions presented in this report, show that the facility will generate, to varying degrees based on the renovation option, improved rounds and revenue performance compared to the base “as is” scenario. In relation to estimating lost rounds and revenues during construction, NGF has assumed for all options under which the facility will remain open for 9-hole play that the City will still be able to provide a quality golf experience that is minimally disruptive to the golfer. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 47 Key observations regarding projected “Baylands Golf Club at Palo Alto” financial performance: NGF has estimated that total revenues to the City will decrease by varying amounts during construction for the four options evaluated. For instance, under Option A, the total two-year cumulative reduction in gross revenue to the City is nearly $1.5 million. This is based on estimated FY 2012 gross revenues. However, because of expense reductions (e.g., range and cart payments, contract maintenance, water, indirect charges) during the time of construction, net income from operations (before debt, other costs) is estimated to decrease by ±$1.08 million over the two-year period, based on actual estimated FY 2012 net operating income. Option G, which involves a 12-month closure of all 18 holes, naturally results in the greatest reduction in revenue, with only $748,600 gross income from operations in FY 2014, when the course is closed for 9 months. The two-year cumulative loss in gross revenue to the City, using FY 2012 as a base, is estimated at nearly $2.7 million, while the loss in net income is estimate at ± $1.1 million. Rounds played, after years of decline, are projected to rebound under all of the reconfiguration options, with options D and F at stabilized total rounds at 73,300, representing a 5,100 round improvement over Option A. Option G – full renovation – results in the highest stabilized activity level, at nearly 76,000 annual rounds. Option D, which is expected to cost ±$600,000 more than base Option A, is projected to produce significantly higher net operating income than Option A, resulting in a quick pay back of the investment. Stabilized Net Operating Income (before debt and other costs such as capital, reserve, and cost plan) is projected to be highest under Option G, with 2021 NOI projected at about $1.42 million. Option F is second with ±$1.26 million, followed closely by Option D at about $1.23 million. After additional debt associated with improvements is considered, Option G is projected to produce overall Net Income to the City that is moderately lower than that of Option D. However, further down the road when the debt for Option G is paid off, it is expected to produce the highest Net Income for the City of Palo Alto. Justifications for Revenue Projections NGF is confident, given the inputs (e.g., expected quality and appeal following improvements) for each option, that the rounds, fees, revenues, and expenses projected under each scenario are reasonable and achievable. The highest stabilized rounds activity we have projected under any scenario was less than 76,000 total rounds, a level that was achieved as recently as 2007- 08 (and was far exceeded in the past) with a product that was inferior to what a reconfigured and re-branded golf course will bring to market. Also, we feel we have been conservative in terms of the fee increases that the improved facility will be able to sustain. Likewise, we believe it is more difficult to estimate the impact on revenues during the time of construction, as there are many variables, not the least of which are golfer behavior and preferences. Pro formas are, by their nature, models based on a set of assumptions that may or may not become reality and which are subject to a number of uncontrollable factors (e.g., weather variations, the economy, quality/quantity of the competition), but NGF believes that our projections represent a “reasonable” estimate of performance for the “Baylands” facility based on the factors discussed in this report. Among the factors considered when crafting our projections for each model are: National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 48 Expected higher quality of the Palo Alto Municipal Golf Course (level of improvement depends on intensity of Reconfiguration Option chosen, level of “additional” work). Re-branding and effective marketing of the “Baylands Golf Club at Palo Alto”, along with more proactive direct selling of larger tournaments and events. Reinventing the product should re-energize the current customer base, resulting in increased frequency of play, and also position the facility to compete more effectively for non-resident rounds. Results of ERA’s 2008 survey revealed that the number one reason Palo Alto GC was not the primary course of respondents was “course quality/play experience”. Maintenance conditions that will position the facility in the mid-to-upper tier of municipal golf courses in this market. Non-resident green fees at Palo Alto, especially on weekends, are at the low end of the price range among the direct municipal competitors. With an improved product, there should be little resistance to modest price increases at the “Baylands”. Maintaining a strong price/value proposition will ensure that the improved golf course remains very competitive in the area market despite expected modest fee increases. Palo Alto Municipal Golf Course is operating at rounds levels that are will below peak levels from 1990s and early-to-mid 2000s. The facility has achieved rounds played levels close to what NGF Consulting is projecting under the most favorable option as recently as FY 2008. The Bay Area remains one of the most active markets for municipal golf in the nation. At the peak of the market, Palo Alto and several of its chief competitors realized annual activity levels approaching, or even exceeding, 100,000 rounds. Though play levels may never approach these extraordinary numbers again, we believe the market has the potential to make a recovery. NGF believes there is a lack of truly outstanding direct competitors to Palo Alto GC. Also, it is likely that no new golf course inventory will be added to this market for the foreseeable future. Potential for regional economic recovery, increased discretionary income, etc. The Bay Area and Silicon Valley have some specific economic attributes that act as natural demand drivers for quality golf courses, including high incomes, an extremely robust corporate presence, and one very high visitation numbers. Other Considerations Regarding Improvement Options Aside from the expected economic impact of the various base Reconfiguration Options, there remain questions that will need to be addressed as the City weighs the reconfiguration options, their respective forecasts in terms of rounds/revenue and what additional work will still be required in the instance of doing less now and deferring certain improvements to later. The overriding decision to be made is plan option (A, D, F or G) to go with and how that fundamental decision will affect future decisions. For example, reconfiguration Option A, while least costly of those to be considered, precludes routing improvements beyond those of the few holes being shifted and places overall restrictions on future improvements to the golf asset. Largely, the golf course would remain the same in its anatomy for the long term under A, but of course the golf course may be in much better condition and may be complemented by better support amenities in the future. The misconnection may be the course itself — much nicer, but as our grading exercise concludes, not to the level of the other options because of their improvements to hole- orientation, variety and excitement. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 49 The success rate for increased revenues, better reputation and the ability to be true to the idea of a transformed golf experience, increases with a more intensive re-working of the golf course. The decision on which option to adopt will need to take into account many factors, together with the financial forecasts prepared. OPTION “G” SENSITIVITY ANALYSIS As noted, pro forma projections have been made under a set of assumptions that may or may not come to fruition. Also, projections are subject to several uncontrollable factors such as yearly weather variations, economic conditions, and the nature of the competition. Therefore, in the interest of conservatism we have prepared a sensitivity analysis for Option G (identified by the City as the preferred option) of two key variables related to revenues – rounds played and average green fee. Specifically, we have run three scenarios that present deviations from the “base” model presented above: (1) Rounds reduced to moderately lower than projected FY 12 performance, continuing downward trend; (2) Average green fee increasing over current by just less than half the 15% projected increase in base model; and (3) Rounds and average green fees both lower, in combination. Because of the virtually limitless number of combinations, other variables, such as fixed operating expenses, remain the same as in the base scenario. The sensitivity scenarios reveal that the lower than projected (base) green fee growth would result in a reduction in net income of approximately 47% over the base case. Reduced rounds result in a ±$500,000 reduction in net income, while the “worst case” – both rounds and green fee increases below the projected base model – produces about $640,000 lower net income. Option “G” Sensitivity Analysis - Summary for 2017 Summary in FY2017 Expected Case Option G Reduced Rounds Option G Reduced Fees Option G Reduced Rounds + Fees Option G TOTAL ROUNDS 75,700 63,100 75,700 63,100 ANNUAL ROUNDS REVENUE $2,680,949 $2,221,879 $2,487,511 $2,062,380 AVERAGE GREEN FEE PER ROUND $35.42 $35.21 $32.86 $32.68 Revenues FY2017 Projected FY2017 Projected FY2017 Projected FY2017 Projected Total Golf Course Revenues $3,452,900 $2,865,400 $3,259,500 $2,705,900 Concessions Total from F & B Concession $91,800 $81,100 $91,800 $81,100 Total From Pro Shop Concession $30,700 $25,600 $30,700 $25,600 Total Gross to City $3,575,400 $2,972,100 $3,382,000 $2,812,600 Expenses Total City Operating Expenses 2,146,000 2,088,800 2,143,300 2,086,600 Net Income From Operations (Loss)$1,429,400 $883,300 $1,238,700 $726,000 Total Income (Incl. Non-operating)$1,454,800 $908,700 $1,264,100 $751,400 Total Debt/Other Charges $1,092,100 $1,046,200 $1,072,800 $1,030,200 Net Income or (Loss)$362,700 ($137,500)$191,300 ($278,800) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 50 Option G Sensitivity Spreadsheets Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 53,150 58,100 63,100 67,900 67,900 67,900 67,900 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $544,300 $1,810,100 $2,013,600 $2,221,900 $2,424,700 $2,448,900 $2,473,400 $2,498,200 Cart Fees 302,799 293,500 173,900 72,600 243,600 268,900 295,000 320,600 323,800 327,000 330,300 Driving Range 343,911 333,400 197,500 82,400 276,600 305,400 335,000 364,100 367,700 371,400 375,100 Tournament / League Fees 2,196 2,100 1,600 500 1,700 1,900 2,100 2,200 2,200 2,200 2,200 Other 11,813 11,500 6,800 2,800 9,400 10,300 11,400 12,300 12,500 12,500 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $702,600 $2,341,400 $2,600,100 $2,865,400 $3,123,900 $3,155,100 $3,186,500 $3,218,600 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $44,300 $48,900 $53,700 $58,300 $58,900 $59,500 $60,100 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $71,200 $75,800 $81,100 $85,700 $86,800 $87,400 $88,600 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $748,600 $2,433,700 $2,699,000 $2,972,100 $3,237,100 $3,270,000 $3,302,000 $3,335,800 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 105,100 116,100 127,300 138,400 139,700 141,100 142,500 Cart Fees 117,529 117,400 69,600 29,000 97,400 107,600 118,000 128,200 129,500 130,800 132,100 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,800 32,800 36,400 40,100 43,700 44,200 44,600 45,100 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 51 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $759,400 $1,995,900 $2,036,000 $2,088,800 $2,146,600 $2,183,300 $2,221,400 $2,260,600 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($10,800)$437,800 $663,000 $883,300 $1,090,500 $1,086,700 $1,080,600 $1,075,200 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 $14,900 $463,500 $688,800 $908,700 $1,116,400 $1,112,600 $1,080,600 $1,075,200 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $181,000 $201,400 $222,200 $242,500 $244,900 $247,300 $249,800 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,007,200 $1,031,600 $1,046,200 $1,077,100 $1,079,900 $652,700 $656,800 Net Income or (Loss)$168,090 $104,200 ($123,500)($459,400)($543,700)($342,800)($137,500)$39,300 $32,700 $427,900 $418,400 NOTE: Option G would likely include additional revenue from soccer fields of approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 52 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 67,900 71,800 75,700 75,700 75,700 75,700 75,700 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $503,800 $2,172,600 $2,329,500 $2,487,500 $2,512,400 $2,537,500 $2,562,900 $2,588,500 Cart Fees 302,799 293,500 173,900 72,600 311,100 332,300 353,900 357,400 361,000 364,600 368,200 Driving Range 343,911 333,400 197,500 82,400 353,400 377,400 401,900 405,900 410,000 414,100 418,200 Tournament / League Fees 2,196 2,100 1,600 500 2,200 2,400 2,500 2,500 2,500 2,500 2,500 Other 11,813 11,500 6,800 2,800 12,000 12,700 13,700 13,700 13,900 13,900 14,200 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $662,100 $2,851,300 $3,054,300 $3,259,500 $3,291,900 $3,324,900 $3,358,000 $3,391,600 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $56,600 $60,400 $64,400 $65,000 $65,700 $66,300 $67,000 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $83,500 $87,300 $91,800 $92,400 $93,600 $94,200 $95,500 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $27,000 $28,500 $30,700 $30,700 $31,300 $31,300 $31,900 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $708,100 $2,961,800 $3,170,100 $3,382,000 $3,415,000 $3,449,800 $3,483,500 $3,519,000 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 134,300 143,400 152,700 154,200 155,800 157,400 158,900 Cart Fees 117,529 117,400 69,600 29,000 124,400 132,900 141,600 143,000 144,400 145,800 147,300 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,300 39,900 42,800 45,600 46,100 46,500 47,000 47,500 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 53 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $758,900 $2,059,200 $2,095,000 $2,143,300 $2,179,600 $2,216,600 $2,255,100 $2,294,600 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($50,800)$902,600 $1,075,100 $1,238,700 $1,235,400 $1,233,200 $1,228,400 $1,224,400 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 ($25,100)$928,300 $1,100,900 $1,264,100 $1,261,300 $1,259,100 $1,228,400 $1,224,400 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $217,300 $233,000 $248,800 $251,200 $253,800 $256,300 $258,900 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $1,043,500 $1,063,200 $1,072,800 $1,085,800 $1,088,800 $661,700 $665,900 Net Income or (Loss)$168,090 $104,200 ($123,500)($499,400)($115,200)$37,700 $191,300 $175,500 $170,300 $566,700 $558,500 NOTE: Option G would likely include additional revenue from soccer fields estimated by City to be approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 54 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds + Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Total Rounds 66,740 64,700 47,900 16,000 53,150 58,100 63,100 67,900 67,900 67,900 67,900 Golf Course Revenues Green Fees (Incl. Cards) $2,016,537 $1,960,100 $1,445,100 $503,800 $1,680,700 $1,869,300 $2,062,400 $2,250,400 $2,272,900 $2,295,600 $2,318,600 Cart Fees 302,799 293,500 173,900 72,600 243,600 268,900 295,000 320,600 323,800 327,000 330,300 Driving Range 343,911 333,400 197,500 82,400 276,600 305,400 335,000 364,100 367,700 371,400 375,100 Tournament / League Fees 2,196 2,100 1,600 500 1,700 1,900 2,100 2,200 2,200 2,200 2,200 Other 11,813 11,500 6,800 2,800 9,400 10,300 11,400 12,300 12,500 12,500 12,800 Total Golf Course Revenues $2,677,256 $2,600,600 $1,824,900 $662,100 $2,212,000 $2,455,800 $2,705,900 $2,949,600 $2,979,100 $3,008,700 $3,039,000 Concession Payments Food and Beverage Concession Variable Portion $55,076 $53,400 $31,600 $13,200 $44,300 $48,900 $53,700 $58,300 $58,900 $59,500 $60,100 Utility Payment $25,920 $25,900 $26,400 $26,400 $26,900 $26,900 $27,400 $27,400 $27,900 $27,900 $28,500 Total from F & B Concession $80,996 $79,300 $58,000 $39,600 $71,200 $75,800 $81,100 $85,700 $86,800 $87,400 $88,600 Pro Shop Lease Merchandise (4%) $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total From Pro Shop Concession $26,536 $25,700 $15,200 $6,400 $21,100 $23,100 $25,600 $27,500 $28,100 $28,100 $28,600 Total Gross to City $2,784,788 $2,705,600 $1,898,100 $708,100 $2,304,300 $2,554,700 $2,812,600 $3,062,800 $3,094,000 $3,124,200 $3,156,200 Operating Expenses FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Salaries & Benefits $259,455 $139,000 $145,300 $151,800 $158,600 $165,700 $173,200 $181,000 $189,100 $197,600 $206,500 Range Fees 130,152 126,700 75,100 31,300 105,100 116,100 127,300 138,400 139,700 141,100 142,500 Cart Fees 117,529 117,400 69,600 29,000 97,400 107,600 118,000 128,200 129,500 130,800 132,100 Club Fees 5,576 5,700 4,600 1,700 5,700 5,800 5,900 6,000 6,100 6,200 6,300 Fixed Lozares Management Fee 345,333 345,300 259,000 86,300 345,300 345,300 345,300 345,300 345,300 345,300 345,300 Merchant Fees Reimbursement 36,211 36,400 25,500 9,300 31,000 34,400 37,900 41,300 41,700 42,100 42,500 Contract Maintenance 475,000 750,000 562,500 206,300 825,000 837,400 850,000 862,800 875,700 888,800 902,100 Repairs & maintenance 21,943 22,300 17,800 6,700 22,300 22,600 22,900 23,200 23,500 23,900 24,300 Advertising & Publish 10,765 10,900 8,700 45,000 30,000 17,000 17,300 17,600 17,900 18,200 18,500 Supplies and Materials 44,417 45,100 36,100 13,500 45,100 45,800 46,500 47,200 47,900 48,600 49,300 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 55 Palo Alto Golf Course Revenue / Expense - Option G (Reduced Rounds + Fees Sensitivity) FY2011 Actual FY2012 Projected FY2013 Projected FY2014 Projected FY2015 Projected FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected FY2021 Projected Water Expense 361,870 246,000 250,900 133,000 183,000 188,500 192,300 201,000 210,000 219,500 229,400 Other Direct Charges (Incl. Electric) 45,263 45,900 36,700 13,800 41,500 42,100 42,700 43,300 43,900 44,600 45,300 Indirect Charges 102,571 104,100 83,300 31,200 104,100 105,700 107,300 108,900 110,500 112,200 113,900 Total City Operating Expenses $1,956,085 $1,994,800 $1,575,100 $758,900 $1,994,100 $2,034,000 $2,086,600 $2,144,200 $2,180,800 $2,218,900 $2,258,000 Net Income From Operations (Loss)$828,703 $710,800 $323,000 ($50,800)$310,200 $520,700 $726,000 $918,600 $913,200 $905,300 $898,200 Non-operating Income from Sale of Property 35,230 D/S Income $0 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Non-operating $35,230 $29,900 $25,700 $25,700 $25,700 $25,800 $25,900 $25,900 $25,900 $0 $0 Total Income (Incl. Non-operating)$863,933 $740,700 $348,700 ($25,100)$335,900 $546,500 $751,400 $944,500 $939,100 $905,300 $898,200 Debt Service $559,539 $499,000 $428,200 $429,000 $428,200 $430,800 $423,200 $432,300 $431,200 $0 $0 Payment to General Fund $94,849 $94,800 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Debt Service $0 $0 $0 $0 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 $351,300 Operating & Capital Reserve $0 $0 $0 $0 $168,100 $186,900 $206,200 $225,000 $227,300 $229,600 $231,900 Cost Plan Charges $41,455 $42,700 $44,000 $45,300 $46,700 $48,100 $49,500 $51,000 $52,500 $54,100 $55,700 Total Debt / Other Charges $695,843 $636,500 $472,200 $474,300 $994,300 $1,017,100 $1,030,200 $1,059,600 $1,062,300 $635,000 $638,900 Net Income or (Loss)$168,090 $104,200 ($123,500)($499,400)($658,400)($470,600)($278,800)($115,100)($123,200)$270,300 $259,300 NOTE: Option G would likely include additional revenue from soccer fields estimated by City at approximately $78,000 per field per year ($234,000 for 3 fields). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 56 Other Issues and Considerations MARKET POSITION / RE-BRANDING OPPORTUNITY NGF Consulting has reviewed the image and brand recommendations made to the City as part of the expanded scope of services to address long range considerations. We conclude that closer integration of the golf course to the Palo Alto Baylands Preserve, “The Baylands”, should positively affect the City’s efforts to brand this area as a destination for Palo Alto residents and visitors alike. Celebrated as an open space and nature preserve area, the Baylands represents a rich and positive locale within Palo Alto and the Silicon Valley Region and will be enhanced with an improved and re-branded golf product. Currently, Palo Alto Municipal Golf Course effectively lacks a brand image, and the facility is very closely associated with the long-time golf concessionaire – so much so that the website address for the golf course is bradlozaresgolfshop.com, and recorded phone messages mention only the golf shop and not the golf course. We believe that a name change to “Baylands Golf Club at Palo Alto” represents a positive move that will have the effect of repositioning the golf course, distancing it from a “muni” layout. Additionally, it will signal a transformation from an older, “worn down” layout to one that has renewed excitement and positive change. The recommendation to retain “Palo Alto” as part of the course image and brand is a good way to connect with the existing name, as well as the City itself. Use of “Golf Club” in lieu of “Golf Course” is an additional signal that the golf experience is not only something new, but at a higher quality. The marketing theme “Public only in price, access and pride”is an excellent message to remind the customer that the golf facility remains accessible, open to the public and priced to provide one of the better golfing values in the Bay Area. This message also reinforces the transformation, ideally a win-win for the golf consumer to receive high quality at a “municipal” price point. Sample magazine ads provided as part of the Marketing and Theme recommendations hit on important concepts, including: Silicon Valley Location Tradition – The design legacy of Billy Bell The Transformation (i.e., the changes) The “Green” Environmental Commitment of the Facility Our belief is that proper implementation (adequate budgets, quality control and proper media placement) of the program will have a dramatic effect on driving new business to the “new” golf facility. Equally important will be the affect that these messages and the new brand will have on existing customers, and residents of Palo Alto and its neighboring communities who currently play golf elsewhere. In essence, the program for re-branding, introducing a new image and theme, and the marketing program, has the potential to have a very positive affect on rounds and associated revenues. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 57 A commitment on the City’s part to becoming certified with Audubon international as a “Sanctuary Golf Facility” is an integral part of the ability to market the course as a “green” aware and operated golf facility. This goal should be undertaken regardless of which reconfiguration option is opted by the City and should be workable given the operation and/or marketing budgets afforded. (Note: Beginning this process now, prior to any reconfiguration work, will help guide the reconfiguration work and will also establish a greater degree of improvement by which to attain the Audubon status for the facility). Plan Option A poses the greatest challenge to be consistent with the image, brand and marketing changes recommended because it does not go as deep into the many areas of the course in terms of new features and reconstructed areas. However, the fact that Plan Option A will dramatically reduce turf through the course-wide work to create native areas and new “Baylands” themed areas should be an adequately appreciated change. Plan Options D, F and G will have no issues aligning with any of the themes and messages recommended. With emphasis on a quality, outstanding golf facility, the City may be able to realize what we have referred to as a “destination” public golf experience. In the Bay area we would point to such courses as Pasatiempo in Santa Cruz and Harding Park in San Francisco as meeting this definition. These two courses are good examples of courses that have attained a reputation through the following attributes: Legacy of the original design Transformation from marginal to excellent conditions Commitment by the municipal owners to reinvest in the assets Quality rebuilding efforts Good marketing of the finished courses and facilities While both of the above examples are classic era designs (Pasatiempo by Alister MacKenzie, and Harding Park by Willie Watson) it is still appropriate to reference their successes relative to what Palo Alto Golf Course could attain. Whether undertaken under one, larger reinvestment project, or carried out over time, the potential transformation of Palo Alto Golf Course is bolstered by a number of factors inherent in the facility: A design legacy that can be leveraged — William P. and William F. Bell, the former responsible for designs such as Stanford, Riviera and Bel-Air A location that sits at the heart of Silicon Valley A seaside setting that has greater potential to take advantage of its natural landscape — the Baylands environment, Bay and adjoining Sanfrancisquito Creek A population base that is robust for golf rounds by non-residents A location that is in one of the top tourist areas in the nation Obviously, undertaking more intensive reconfiguration (such as with Plan G) will transform more of the existing course and is likely to meet this goal on a stronger basis. So, too, may investing in more of the alternate, optional improvements, including many of the long range improvements before the City for consideration. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 58 ECONOMICS OF POTENTIAL LONG-TERM / ADDITIONAL IMPROVEMENTS Forrest Richardson has proposed that the City study the feasibility of certain facility improvements that are in addition to the base improvements recommended within Reconfiguration Options A, D, F, and G (please see Appendix E for summary table of potential improvements and estimated costs). Though NGF believes that many of these improvements would improve the overall quality of the golfer (and non-golf customer) experience, as well as the image of the facility in the eyes of area golfers, it is not practical to assign incremental rounds played and revenue dollars to many of these improvements (e.g., exterior and entry upgrades, signage/parking, rebuilding practice greens, “alternate” golf course improvements, designated youth area). Practically, these improvements, to varying degrees individually and certainly as a sum of their parts, are likely to draw more patrons overall, keep them on-site longer, and increase their propensity to spend while at the golf course. We have confined our break-even analysis to several potential improvements that tie more directly to revenue: (1) The cart storage building; (2) Expanded meeting space; and (3) Range Performance Center. Cart Storage Building At just $4.54 per round in FY 2011, the average gross cart fee revenue per round at Palo Alto Golf Course significantly trails the average of its chief competitive set (see ERA 2008 report for City). While the low cart utilization is partially a function of the “walkability” of the golf course, ridership and revenues have also likely been constrained by the very limited cart storage. Palo Alto GC has only 46 carts available, some of which are older gasoline powered carts stored in open storage outside the clubhouse (fewer than 35 carts can be stored below the clubhouse). A more typical inventory for most regulation length 18-hole golf courses is ±70 carts. We are told that for larger tournaments, additional carts must be leased and brought in from off-site. In summary, NGF believes it is likely that the limited cart inventory and storage space available has constrained ridership and may have actually negatively affected demand for daily fee and, especially, tournament play on occasion. As part of Forrest Richardson’s overall capital improvement plan for Palo Alto GC, he has included construction of a new cart storage building at an estimated cost of $440,000. In the table below, we illustrate the number of years it will take for the City to break even on this investment, assuming different levels of incremental gross cart rental revenue per round, the current rent percentage of 60%, and stabilized rounds activity under Options D and F – 73,300 rounds. Of course, as noted, it is possible that having additional carts will have a positive effect on rounds played as well, but for purposes of conservatism we are illustrating only increases in cart revenue per round. We also assume that all expenses associated with the cart lease and maintenance will remain the responsibility of the vendor, and that there will be no incremental City operating costs associated with the new building. Palo Alto Golf Course Break-Even Analysis for Cart Storage Building Average Gross Cart Revenue Per Round Increase $0.50 $1.00 $1.50 $2.00 $2.50 Incremental Gross Revenue* $36,650 $73,300 $109,950 $146,600 $183,250 Incremental Revenue to City* $21,990 $43,980 $65,970 $87,960 $109,950 Years to B/E* 20.0 10.0 6.7 5.0 4.0 *Assumes $440,000 estimated cost and stabilized rounds played of 73,300 from Options D,F National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 59 Expanded Meeting Space The existing restaurant at Palo Alto GC has limited meeting space that has significantly constrained meeting and banquet business at the facility. Not being able to accommodate larger events of ±250 people precludes the facility from competing for the most lucrative, high margin food & beverage business. As such, expanding the meeting/banquet space is another component of the long range improvement plan prepared for the City by Mr. Richardson. Based on the estimated cost provided of $1.7 million, and assuming the City incurs all of the cost of the improvement, the annual debt service on a 20-year note at 3.5% would be $120,000 (rounded). NGF has calculated that the incremental annual gross food & beverage revenue necessary to generate $120,000 in additional rents to the City to meet the annual debt service is more than $1.71 million. This calculation is based on the current rent percentage of 7%. In its 2008 study, ERA noted: “Based on the experience of similar golf course oriented banquet facilities and the demographics of the area, expanding the clubhouse to accommodate special events with up to 250 attendees would add $600,000 to $700,000 in annual special event revenue. This rental income would justify about one-half of the cost of the improvements.” NGF concurs that achieving this level of incremental gross revenue would likely be an achievable goal, but with updated cost estimates, this level of revenue would justify only about 40% of the investment cost. Therefore, the balance of the City investment in the expanded facility would have to be justified through the incremental rounds and associated revenues attributable directly to the expanded meeting facilities. Based on current and projected average green + cart (City share) fee revenue per round, it would take 2,000 to 3,000 of these rounds to help fund the expanded facilities. Of course, the equation would change markedly if gross revenues accrued to the City under an alternate operating structure. Range Performance Center In the table below, we provide a similar break-even analysis to the one for the cart storage building. Mr. Richardson’s cost estimate for the range performance center, plus the additional 6- bay range expansion (we assume both are undertaken together), is $600,000. In the table below, we illustrate the number of years it will take for the City to break even on this investment, assuming different levels of incremental gross driving range revenue per round (gross per round was $5.15 in FY 11), the rent percentage of 62%, and stabilized rounds activity under Options D and F – 73,300 rounds. Of course, it cannot be determined what percentage of range activity is a function of number of bays as opposed to rounds played, so we have chosen to do a sensitivity analysis by increasing average revenue per round rather than per tee station. Another factor driving this methodology is that the performance center bays will be used for teaching, and will likely have less utilization than the already existing bays. We also assume that all incremental expenses associated with the expanded range remain the responsibility of the concessionaire, and that there will be no incremental City operating costs associated with the new building. Finally, we assume that the City receives no lesson revenue. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 60 Palo Alto Golf Course – B/E Analysis for Range Performance Center + 6-Bay Expansion Average Gross Range Revenue Per Round Increase $0.50 $0.75 $1.00 $1.25 $1.50 Incremental Gross Revenue* $36,650 $54,975 $73,300 $91,625 $109,950 Incremental Revenue to City* $22,723 $34,085 $45,446 $56,808 $68,169 Years to B/E* 26.4 17.6 13.2 10.6 8.8 *Assumes $600,000 estimated cost and stabilized rounds played of 73,300 from Options D,F MANAGEMENT STRUCTURE NGF was told that some City staff would like to further explore - via issuance of an RFP in advance of the Pro Shop and Maintenance agreements expiring in April, 2013 - the implications of changing the operating structure at Palo Alto Golf Course to a management contract. We have been asked to offer our opinion as to whether this type of structure would be more effective, or produce higher net operating income to the City, than the current “hybrid” structure that involves both a management fee and a concession on the golf operations side, privatized maintenance, and a separate food & beverage concession. As Economic Research Associates (ERA) noted in their 2008 Operations Review of the Palo Alto Municipal Golf Course, the current agreement for golf operations evolved due to IRS regulations related to the tax-exempt financing utilized for the late 1990s renovation of the golf course. Specifically, at least 50% of the compensation within a management agreement must be fixed fee in such a case. ERA, after doing the full operations analysis, concluded that the current pro shop deal was “slightly favorable” to the concessionaire. After running cash flow models under various operating scenarios, ERA concluded that City Net Income was maximized with private maintenance (subsequently put in place) and “market rate” concession terms. However, they also noted that “market rate”, which involved lower concession rents to the City and an elimination of the management fee, was not permissible by the IRS without a restructuring of the current debt. ERA concluded that, among the operating models that were permissible within the current debt framework, the structure that is now in place at Palo Alto Golf Course – no change in contract terms, but with private maintenance – produced the highest City Net Income. A full-service Management Agreement produced the second highest City Net Income. Without doing a full operations review, NGF does not have sufficient information to critically evaluate ERA’s analysis or to identify the operating structure that would be the best fit for Palo Alto GC. While there are a number of advantages to the full service management contract structure, it is also true that “no one size fits all”. There are many factors and variables to consider when evaluating options, and it would be unfair to both the City and the current vendors for a consultant to make a recommendation regarding the optimal structure without being retained to do a full facility analysis. Carefully evaluating the value proposition that each of the current vendors brings to the table would be just one component of such an analysis. For instance, the golfer survey that ERA implemented as part of their 2008 study showed that Brad Lozares was rated quite high by golfers, indicating considerable goodwill and “equity” built up in the golf shop. Similarly, NGF has been told of improved maintenance conditions (as well as considerable cost savings) since ValleyCrest was brought on. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 61 Having said that, we do feel confident recommending that the City retain the current structure at least through the completion of the renovation project.However, delaying consideration of a fundamental change in operating structure should not preclude modifying terms. For instance, the City and the golf vendor may come to an agreement resulting in lowering the management fee to reflect reduced responsibilities and concession revenues during renovation (especially under Option G), while still adhering to IRS guidelines.Not only will the project substantially disrupt business, but significant unknowns include the timing of the project and how the newly improved facility will cash flow after being brought back to market and “re-branded”. Also, the food & beverage contract doesn’t expire until 2018, so some of the advantages of the single operator management structure may be lessened unless an early termination to the agreement can be successfully negotiated with the current vendor. Finally, negotiating a new agreement during construction, when proposers themselves will not have full information about how the improved facility will cash flow, may result in the City not entering into the best deal possible. NGF believes that these are just a few of the important variables that make issuing an RFP at this stage less than optimal. We recommend that the City wait until after renovation is completed and the improved facility has been up and running for a year or more before considering a substantive change in structure. This strategy will provide additional information that will put the City in a better position to make an informed decision regarding operating structure (for instance, the City may find that the improved “Baylands Golf Club” has significant upside revenue potential, thus making it relatively more attractive to control all revenues under the management contract structure). LONG RANGE CONCERNS Concerns raised through the public process of reviewing reconfiguration options have included the following long term implications: High salts present in the native soils Intrusion by geese and burrowing animals Potential for the adjacent airport to negatively affect the golf experience In essence, the question raised is: “Can the Palo Alto Golf Course be expected to become a significantly better golf experience given these issues?” NGF Consulting relies on the opinions of professionals associated with individual golf facilities to address certain questions. For example, in the case of the high salts we look to agronomists, the course superintendent and/or the golf course architect. In the case of animal intrusion, because these are often site specific, we look to nearby facilities to see how they have dealt with the issue. High Salts Soils high in salts are not uncommon to golf courses located along coastal waterways and oceans. In the case of Palo Alto the soils are not only affected by the location by San Francisco Bay, but by the poorly draining soil types. Additionally, the use of effluent (recycled) water, which typically has higher salt content, exacerbates the condition. While our work has not included agronomic evaluation, we have endeavored to understand the general situation by comparing outcomes we have observed at other golf operations. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 62 “Links courses,” those layouts along the dunes formed coasts of the British Isles and similar locales around the world, are prone to salty soils. Yet, with their sandy soil basis, these sites support good turf because the salts are leached regularly downward by natural rains. This is the hallmark of links courses, and why their development on these natural, sandy soils were so appropriate. When soils are not sandy and porous, the build-up of salts becomes problematic. This is the case at Palo Alto Golf Course, where management over the years has been to periodically irrigate with fresh water, driving salts downward, and to add gypsum to the soils. Additionally, the most recent remodeling work added a cap of sand and better soil mix to several fairways, making them much easier to manage and support healthy turf. These best practices have resulted in reasonably healthy turf growth despite the salty soil conditions. According to staff, while salts are high, the turf has “learned” to adapt. There is a definite difference between fairways where the sand cap has been placed and areas where drainage is not as good and where older native soils are present. Also, Paspalum turf varieties have flourished at the golf course in a few areas. These areas appear to have much better success rates of healthy growth because the nature of Paspalum grass is to tolerate salts to a significantly higher degree. NGF Consulting posed the question of managing high salts to Forrest Richardson & Associates, specifically asking what additional measures would be afforded through the reconfiguration options to address this issue. The response summary is as follows: Management of existing sand capping and healthy turf rootzone material (the uppermost layers of rootzone) will be managed through the reconfiguration, replacing that material as “topsoil” to new fairway and turf areas; this cost is represented in the probable cost estimates presented to the City for reconfiguration options. New soils will be imported as possible within the budgets, potentially from the Stanford University Medical Center project(s); these additional costs (and revenue potential) have been accounted in probable cost estimates. Paspalum turfgrass will be used to sod all new areas of fairways, roughs and tees (Note: The specific variety is yet to be determined). The irrigation system will provide dual watering capabilities, able to deliver potable water to selected areas and a mix of effluent (higher salt counts) and fresh water; this capability allows flushing (leaching of salts downward) as is being done currently. Significantly improved drainage is afforded in each reconfiguration option, helping to prevent build-up of salts by quicker transportation of surface water away from turf areas and the soil rootzone, and thereby reducing the build-up of salts that occurs when water is allowed to stand and slowly seep into the rootzone. These are prudent measures that are common among golf course sites with high salts present in the soil. Additionally, we understand that the City has a goal to reduce salt counts within its effluent water system, a goal that is not necessarily aimed at improving conditions at the golf course, but will have a definite value to City’s golf operation asset. While the success rate of overall condition improvement cannot be guaranteed, we can look at comparable operations where high salts are effectively managed. There are numerous examples of this throughout California, including the Bay Area. California examples include National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 63 Monarch Bay (San Leandro), Las Positas (Livermore), Metropolitan (Oakland), Olivas Links and Buenaventura (Ventura), and Irvine (Shady Canyon Club). Many courses with salt issues are turning to Paspalum turfgrass as an answer. Some of the example courses cited have moved to 100% Paspalum grass. NGF Consulting notes that this trend is widespread in Florida, the Caribbean, Mexico, South Texas, and Hawaii. In Hawaii, for example, Paspalum varieties have literally transformed the golf landscape from a struggling Bermudagrass region to one that now predominantly uses Paspalum in order to overcome high salts from water, soils and the proximity to the ocean. Even in Monterey we are seeing Paspalum use. At the Monterey Peninsula Club, for example, some areas located on the shore that were never in good condition, have been completely re-planted with Paspalum and are now in excellent condition. Our conclusion is that Palo Alto can enjoy a good success over the long term at the existing golf course site. Managing salts will have a good result, not only through good maintenance practices, but in combination with the reconfiguration work, which should make the City’s efforts to manage salts more productive, less costly and, ultimately, more impacting to a positive golf experience. Our caution is that the plan options (A, D, F and G) each have an associated result that is specific to the investment. Plan A, for example, addresses only a minority of the course turf areas (drainage, rootzone, topsoil management, irrigation, etc.) and will therefore not produce positive results across the full golf course. Plan G, at the other end of the spectrum, resolves virtually all areas. Animal Intrusion Managing Canadian Geese infestation is often dependent on regulations and restriction placed on locales. Our advice to the City is to study available mitigation measures and to carefully note the measures taken by neighboring courses. Geese populations have been successfully managed through the following measures: Trained dogs, such as border collies Reducing standing water and open water (ponds, lakes, swamps) Increasing habitat surrounding the golf course that will appeal to geese populations Implementing noise, reflective or other repellants Sterilization agents to stop generational return of geese to the golf course areas Among the most successful operations in Northern California are the courses of the Monterey Peninsula, notably Pebble Beach Companies and the private clubs in the area. With few exceptions, these operators have used trained dogs to manage geese away from their turf areas. An on-site dog specifically trained to manage geese populations remains the most efficient measure to rid geese infestation from golf courses in the U.S. Not only is this method humane, but it has the benefit of a lower cost than many other measures, and is less interruptive to the golf experience. We understand there is added complexity relative to the adjacent airport operation and the requirements associated with making sure that geese are not diverted to the airport, but away from both the golf course and the airport. For this reason, we recommend that the City take a look at jointly working out a plan for both the golf and airport needs. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 64 With regard to the ground squirrel infestation, we understand that this is being met with ongoing mitigation efforts that are allowed under state guidelines. Also, the increase of naturalized areas afforded by all reconfiguration options will help drive habitat away from turf and in-play areas of the golf course. Airport Effects Many golf facilities are located immediately adjacent to airports, and yet enjoy a good reputation and high quality of golfing experience. We see no undue negative associated with the relatively small private plane airport, especially given that the flight paths do not directly overtop the golf course itself. Moreover, Silicon Valley appears to be utilizing the airport for corporate flights in favor of the larger regional airports that pose delays and complexities due to their scheduled, commercial flight business. This fact may actually prove beneficial to the golf operation should the golf course and its facilities be elevated a “destination” level of quality and reputation. The result with nominal airport use is that more visitors to Palo Alto will know about the golf course and be able to get a firsthand view of its offerings. Summary Based on experience and input from Forrest Richardson, NGF Consulting believes that long- term mitigation of the concerns of this site is workable and worth the premiums required for maintenance and management. In many cases, golf courses are located on degraded land because that land cannot be used for other purposes. We suspect this is the case in Palo Alto and would find it difficult to justify alternate solutions to the renovations that might be considered: (a) continued operation in a declined state; (b) abandonment of the asset in favor of a new location, given land values in the area; or (c) abandonment of the recreation amenity altogether, given its high use and the financial forecasts presented. POTENTIAL ECONOMIC DEVELOPMENT OF THE AIRPORT & GOLF “BAYLANDS GATEWAY” AREA The golf course “corner” and shared entry with the airport are considered a “gateway” to the Baylands Preserve areas. As such, this intersection has great potential to become more than just a golf clubhouse and airport with nominal retail offerings. According to the Community Services Department, forward and creative thinking has been aimed at the potential for this area to become a more user-friendly and service-oriented destination. Thus far, thinking has included whether the area could support a modest collection of cafes, retail shops, and perhaps even a hotel. While no formal plans have been commissioned, the City has discussed a general, long range approach to looking more in depth at this possibility. Such development, especially if it included a small hotel, would add natural demand drivers in immediate proximity to the golf course, thus resulting in increased rounds and revenues. As an example, a 130-room business hotel in a high demand locale may have as many as 28,000 room nights based on an average 60% occupancy rate. Using a multiplier of 1.3 guests per room, this equates to approximately 36,000 guests per year. Using a percentage of 10% golfers and assuming that the golf course could get even 20% of these guests to play, the resulting bump would be near 1,000 additional golfers per year. Also, these golfers would comprise non- residents paying the highest applicable rates, and traveling golfers typically exhibit less price National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 65 sensitivity and would be likely to also spend money on the practice range, pro shop, and/or restaurant. PRIVATE FUNDING POSSIBILITIES Of course, aside from receiving compensatory money from the San Francisquito Creek Joint Powers Authority, the City may have to grapple with how to fund additional money required if Reconfiguration Options D, F, or G is chosen, and/or if any work identified as “additional” or “alternate” in this report it undertaken. One of the mechanisms that would obviously be very preferable to the City is raising private money to fund some, or even all, of the needed money. Based on preliminary discussion held between Forrest Richardson, NGF, and the City, the private funding mechanism may take a combination of the following avenues that the City will have to explore further: Naming rights for some components of the facility (e.g., range performance center, certain holes, tee markers, designated youth area); this may be feasible do to the number of very wealthy individuals in Palo Alto, as well as the very strong corporate (especially high-tech/ internet-based) presence. Grants – for example, the First Tee, which is very active in the area. Lease-Back – some within the City have mentioned the possibility of finding a design/build entity that might be interested in undertaking all of the improvements, including soccer fields if Option F or G is chosen, and restructuring the financing package to get the entire project, including some or all optional master plan improvements, done at one time. In this case, the ±$3 million the City receives from the SFCJPA could be used toward paying off the old debt and a new arrangement put in place for the work to rebuild the golf course. The Stanford Soil Import is a wildcard in the equation. It could bring revenue into the equation, but likely not more than $500,000. This may provide a partial funding mechanism to help pay for some of the miscellaneous suggested work that will not have a revenue stream attached directly to it (entry experience, trails, signage, parking, etc.). National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 66 Appendices APPENDIX A – COMPARATIVE SUPPLY RATIOS – PALO ALTO GC & KEY MUNICIPAL COMPETITORS APPENDIX B – COMPARATIVE SCORING OF RECONFIGURATION OPTIONS APPENDIX C – WATER & POWER USE DISCUSSION & ASSUMPTIONS APPENDIX D – REVIEW OF PROBABLE COST ESTIMATES APPENDIX E – POTENTIAL LONG-TERM MASTER PLAN IMPROVEMENTS National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 67 APPENDIX A – COMPARATIVE SUPPLY RATIOS – PALO ALTO GC & KEY MUNICIPAL COMPETITORS NGF has presented a comparison of some key golf supply measures for Palo Alto GC and its key municipal competitors, with the 5-mile radius around each facility the basis for comparison. We note that all of the subject facilities, except for Santa Teresa, have very high household/supply ratios, which is one of the key factors that explains the very high rounds figures realized per 18 holes among municipal golf courses in this market. Also of note, in its 2009 publication “The Future of Public Golf in America,” NGF hypothesized that the best predictor of a public golf course’s success was the number of golfers per 18 holes within a 10-mile radius, with 4,000 identified as the key number for projected financial stability. As shown in the second table below, all of the subject courses (again with exception of Santa Teresa) exceed this number for the 5-mile market. Golf Facility Supply – 2011 (5-Mile Radius) 5-mile Rings Total No. of Golf Facilities Total No. of Golf Holes Households per 18 holes Households per 18 Hole Index (US=100) Palo Alto Golf Course 4 72 19,836 251 Poplar Creek Golf Course 5 81 17,942 227 San Jose Municipal Golf Course 6 90 31,377 398 Santa Clara Golf & Tennis Club 6 90 21,027 266 Santa Teresa 6 135 7,841 99 Shoreline Golf Links 4 72 24,206 307 Sunnyvale Golf Course 8 126 19,435 246 Source: National Golf Foundation Golfers per 18 Holes (5-Mile Radius) 5-mile Rings Golfing Households Est. No. of Golfers1 Total 18-H Equivalent Golfers per 18 holes Palo Alto Golf Course 14,206 21,309 4 5,327 Poplar Creek Golf Course 14,243 21,365 4.5 4,748 San Jose Municipal Golf Course 30,527 45,791 5 9,158 Santa Clara Golf & Tennis Club 17,855 26,783 5 5,357 Santa Teresa 12,250 18,375 7.5 2,450 Shoreline Golf Links 16,695 25,043 4 6,261 Sunnyvale Golf Course 24,118 36,177 7 5,168 Total U.S. “Threshold” for Successful Public Golf (10-mile Ring) 4,000 1 Golfing Households x 1.5 Source: National Golf Foundation National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 68 APPENDIX B – COMPARATIVE SCORING OF RECONFIGURATION OPTIONS As a useful tool in formulating pro forma projections, NGF has compared the Reconfiguration Options using a “scorecard approach” whereby attributes and benefits are assigned scores (1- 10). This method allows a side-by-side comparison, providing a way to review pluses and minuses associated with each option. We base our scoring on several factors, including the following: Details presented (plans, conceptual images, etc.) Public comments and historical use of the facility (rounds and use) NGF Market Analysis (local and regional trends and golf participation) Competition within the market area Details and other givens regarding the changes to take place (golf design consultant involved, how far along the proposed changes have been studied, budgets, etc.) Long term viability of the changes and market acceptance Known preferences of golfers relative to course conditioning, consistency, etc. Quality of the consultants involved In situations where golf facilities are proposed to be reconfigured, there are both subjective and objective considerations. Additionally, there is often difficulty in verifying to what degree proposed changes will be carried out. Fortunately in the case of the Palo Alto Golf Course, the City and SFCJPA have accommodated a very thorough process and detail so we are able to look at the plans, before and after images, and other documentation that quantify the changes associated with the options. Scoring is one factor considered in estimating potential changes in the financial performance of the golf facility. For example, a golf course with significantly more practice opportunities, especially when such use is in demand, will potentially bring in new use and associated revenue. In the case of a significant transformation of a golf course from an average or below average experience to one with new holes, views and overall landscape improvement, it is likely that an increase in use and/or revenue will be realized. And, where we can see potential to market the facility beyond the immediate area, it is possible to realize an added price-per-round for non-resident use. In this latter example we often cite the ability of golf courses such as Torrey Pines to adopt a green fee structure that holds low rates for residents of the area while charging market rates that are very high for players from out of state. In the case of Torrey Pines, the gap between resident rates and visitor rates are among the widest in the golf business. Though this type of gap will not be realistic for Palo Alto, we do expect that, depending on the reconfiguration option chose, non-residents will effectively be “subsidizing” to some degree a high quality, but still affordable, golf experience for city residents. The following ratings use a 1-10 scale where 1 is the lowest and 10 is the highest. This ranking includes some financial considerations, but is ancillary to the pro forma financial analysis for each option. The rankings here are used to form some of the forecasts within the pro forma analyses. Scoring is based on the base reconfiguration work for each option (i.e., less all optional/alternate work listed). A summary table of rankings is presented following the category descriptions. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 69 The following are categories used to form the scoring: Yardage & Par –Accommodation of yardage (regulation length) for a course and par that will be viable and competitive within the market and region Interruption of Play During Reconfiguration – Ability of the plan to retain some holes (9-hole play) and practice during reconfiguration work Consistency of Bunkers & Hazards – Overall impact of the plan relative to bunker consistency, aesthetics and other hazards Consistency of Greens – Overall result of greens quality and consistency Drainage Improvement – Overall positive impact on drainage; eliminating wet conditions Irrigation Improvement – Overall positive impact on irrigation control, consistency and associated turf quality Pace-of-Play – Degree to which the plan accommodates positive pace-of-play and long range ability to manage for good pace Improved Visual Impact –Overall landscape enhancements (added naturalizes areas and visual impact) Improved Views – Accommodation of more views to the Bay and territorial vistas Improved Golf Experience Impact -Overall plan benefits to strategy, excitement of holes, variation of direction, orientation to wind, etc.) Competitiveness with Area Courses –Ability of the course to compete with courses in the immediate area Competitiveness with Regional Courses –Ability of the course to compete with courses in the region Likelihood for Destination Visits –Ability of the course to attract specific visits expressly to play the course Ability to Leverage “Green” Marketing –Consistency of the plan with a “green” environmental message (Baylands tie-in, more naturalized areas, natural landscape, etc.) Consistency with Long Range Planning –Integration of the plan with future planning (clubhouse, practice, etc.) Turf Reduction (irrigation) –Reduction of managed turf acreage for less water use and reduced pumping Turf Reduction (managed care) –Reduction of managed turf in relation to the ability to shift maintenance emphasis from out-of-play areas to golf features and areas more appreciated by the golfer National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 70 Comparative Scoring of Reconfiguration Options Option A Option D Option F Option G Yardage & Par 8 8 8 6 Interruption of Play during Reconfiguration 5 4 3 1 Consistency of Bunkers & Hazards 7 8 9 10 Consistency of Greens 3 5 6 8 Drainage Improvement 4 6 8 9 Irrigation Improvement 3 6 7 10 Pace-of-Play 5 10 7 7 Improved Visual Impact 4 6 7 8 Improved Views 2 7 7 8 Improved Golf Experience Impact 3 7 8 8 Competitiveness with Area Courses 5 8 8 8 Competitiveness with Regional Courses 2 6 7 8 Likelihood for Destination Visits 1 5 7 7 Ability to Leverage “Green” Marketing 5 7 8 9 Consistency with Long Range Planning 7 9 9 9 Turf Reduction (irrigation) 4 6 8 9 Turf Reduction (managed care) 4 7 8 9 National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 71 APPENDIX C – WATER & POWER USE DISCUSSION & ASSUMPTIONS NGF Consulting was not charged with a full water or power use analysis. However, forecasting costs associated with each reconfiguration option requires reasonable estimates on the affects of a more efficient irrigation system combined with less turf acreage. Our conclusions on water and power use are based on the following assumptions, derived from City Staff and the golf course architect/design team: Current irrigation (managed) turf acreage: 135 New irrigation areas efficiency over/above the existing system: +10% Current irrigation inefficiency due to leaks and breaks (loss): -5% Current power inefficiency: -10% New power efficiency realized with full course better watering times/durations: +15% Annual cost for irrigation repair due to age and condition: $30,000 Using the data and assumptions, NGF Consulting has developed the following forecast for water and power use differences with each reconfiguration option. Option A Total irrigated turf following reconfiguration: 96.5 acres Water use reduction based on new irrigated acreage: 28% Approximate area of reconfigured course with new irrigation system: 35 acres Percentage of irrigated Area with New Irrigation: 36% Water use reduction of new usage based on efficiencies of new system area: 3.6% (10% efficiency x 36% = 3.6%) Water efficiency of new usage gained due to fewer leaks/breaks: 2% (5% efficiency x 36% = 2%) Power efficiency realized with better watering times/duration: +5% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $72,800 (28% x $260,000) Reduced Water Cost Est. (potable efficiencies) $5,645 ([3.6% + 2%] x $100,800) Reduced Power Cost Est. (efficiencies realized) $1,200(5% x $24,000) Total Est. Reduction in Water & Power Cost $79,645 / annual Option D Total irrigated turf following reconfiguration: 92 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 40 acres Percentage of irrigated Area with New Irrigation: 43% Water use reduction of new usage based on efficiencies of new system area: 4.3% (10% efficiency x 43% = 4.3%) Water efficiency of new usage gained due to fewer leaks/breaks: 2% (5% efficiency x 43% = 2%) National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 72 Power efficiency realized with better watering times/duration: +10% Conclusions Reduced Water Cost Est. (effluent) $- 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $7,258 ([4.3% + 2%] x $115,200) Reduced Power Cost Est. (efficiencies realized) $2,400 (10% x $24,000) Total Est. Reduction in Water & Power Cost $92,858 / annual Option F Total irrigated turf following reconfiguration: 91.5 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 58 acres Percentage of irrigated Area with New Irrigation: 63% Water use reduction of new usage based on efficiencies of new system area: 6% (10% efficiency x 63% = 6.3%) Water efficiency of new usage gained due to fewer leaks/breaks: 3% (5% efficiency x 63% = 3%) Power efficiency realized with better watering times/duration: +12.5% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $10,711 ([6.3% + 3%] x $115,200) Reduced Power Cost Est. (efficiencies realized)$ 3,000 (12.5% x $24,000) Total Est. Reduction in Water & Power Cost $96,911 / annual Option G Total irrigated turf following reconfiguration: 92 acres Water use reduction based on new irrigated acreage: 32% Approximate area of reconfigured course with new irrigation system: 92 acres Percentage of irrigated Area with New Irrigation: 100% Water use reduction of new usage based on efficiencies of new system area: 10% (10% efficiency x 100% = 10%) Water efficiency of new usage gained due to fewer leaks/breaks: 5% (5% efficiency x 100% = 5%) Power efficiency realized with better watering times/duration: +15% Conclusions Reduced Water Cost Est. (effluent) $ - 0 - Reduced Water Cost Est. (potable) $83,200 (32% x $260,000) Reduced Water Cost Est. (potable efficiencies) $23,040 ([15% + 5%] x $115,200) Reduced Power Cost Est. (efficiencies realized) $3,600 (15% x $24,000) Total Est. Reduction in Water & Power Cost $109,840 / annual National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 73 APPENDIX D – REVIEW OF PROBABLE COST ESTIMATES NGF Consulting has reviewed the probable cost estimates provided to the City for reconfiguration Options A, D, F, and G. In order to objectively evaluate proposed budgets we look for a baseline of comparison. The best resources are similar public sector golf course projects involving reconfiguration. All golf course projects are unique, as are the conditions of the site, construction costs, availability of construction materials (sand, proximity of sod growing, etc.), and terrain. Additionally, in a situation where the proposed modifications to the course are underway, as in this case, we look to other projects by the same golf course architect. The best comparisons are three projects by Forrest Richardson, ASGCA: Buenaventura Golf Course (City of Ventura, California) Peacock Gap Golf Course (San Rafael, California – privately owned) Olivas Links (City of Ventura, California) The Buenaventura project was undertaken to rebuild an existing 18-hole facility originally designed by William P. and William F. Bell. The scope was to largely retain hole corridors through existing mature trees, but to re-turf all of the golf course. The project involved approximately 88 acres of full re-turfing, greens rebuilding (19), new ponds (3) and complete rebuilding of all features (bunkers, tees and fairways). This project had a stated budget of $4.5 million which also included site work for a new maintenance area, a new maintenance building and improvements to the entry and parking areas. The work was completed in 2005 and was funded by the City of Ventura through a capital bond program. NGF was told that the golf course specific work totaled approximately $3.6 million and the market conditions at that time were very similar to current conditions. The Peacock Gap project was a complete re-build of an 18-hole golf course (also an original design of William F. Bell), associated re-routing work for safety reasons, a new pond, new drainage, full new irrigation system, and all new features including a new practice range. The total acreage involved was approximately 94 acres and included similar naturalized area development as has been proposed for Palo Alto. The project was carried out over two phases beginning in 2004 for a reported investment of $5.1 million. Of note is that topsoil management was very similar to that covered in the Palo Alto Probable Cost Estimates. The Olivas Links project is most similar to Palo Alto among these three examples. This course was originally designed by William P. and William F. Bell and also borders a river at its estuary termination point. The course was prone to flooding and had very poor soil conditions as a result of effluent irrigation and inherent salts by way of its seaside locale. Also a part of the capital bond program of the City of Ventura, this 2006-07 work was contracted at $5 million in terms of direct golf course improvements. These included full re-building using on-site soils. Paspalum grass was used for fairways, with Bentgrass on the greens. Our estimation of the timing of this work was that it fell during the most aggressive contracting time in the past 10-15 years. The work appears to have been publically bid with six qualified bids, each very close to the lowest bid at the $5 million point. The City spent additional funds to relocate and replace their maintenance facility over and above the golf course construction contract. Though there are variables that could affect cost, such as the ultimate timing of the project and a change in regional economic conditions, NGF’s general assessment given our exchanges with Forrest Richardson on this matter is that the probable cost estimates prepared for the City (Options A, D, F and G) appear to cover the scope of the work shown for the options, and are National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 74 conservative in approach. According to representatives of the Golf Course Builders Association of America (GCBAA) the Bay Area represents one of the most costly working locales in Northern California based on available labor, housing and the general cost of fuel, operations and logistics. We note that the architect, recognizing this reality, has included a significant degree of project management and contingency in estimates prepared for the City - important components that we often see omitted at this stage of planning. National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 75 APPENDIX E – POTENTIAL LONG-TERM MASTER PLAN IMPROVEMENTS The tables below summarize some of the long-term and/or optional improvements that have been presented by Forrest Richardson to the City of Palo Alto for consideration. Clubhouse Improvements Exterior Condition & Upgrades - Estimate: $250,000 Aesthetic improvement to facings, color, materials Replace, upgrade landscaping Expand Meeting Spaces - Estimate: $1,700,000 Current Space: 75 in one room + 70 on patio Expand main pavilion room to hold 200 Expand/open patio to hold 100 additional (300 total) Create outdoor wedding garden Reconfigure grill as potential restaurant space (60) Reconfigure bar as pub seating w/ patio for 60 addl. Expand/improve kitchen Expand/screen service yard Expand/open patio to hold 100 additional (300 total) Golf Shop Upgrades - Estimate: $100,000 Expand office/storage Free-up 1,000 s.f. retail space Create Cart Storage Building - Estimate: $440,000 Currently storage for 15 carts; balance kept outdoors and leased temporarily as needed for groups New building for 70 carts Arrival & Entry Improvements New Entry, Signage and Parking - Estimate: $400,000 New entry New signage Resurfaced parking w/ Landscaping & Lighting (expand to 300 spaces) New Entry, Signage and Parking - Estimate: $200,000 New trail connections (to Baylands, etc.) Bike racks, signage, etc. Practice Facility Improvements Range Performance Center - Estimate: $500,000 New building & hitting bays for Instruction Small meeting spaces and offices Range Expansion - Estimate: $100,000 (6) Additional hitting bays (adjusted netting to north) Rebuild Existing Practice Green - Estimate: $180,000 New green complex as short game area Create Designated Youth Area - Estimate: $200,000 Along Embarcadero (2 Acres) Range Performance Center - Estimate: $500,000 New building & hitting bays for Instruction Small meeting spaces and offices National Golf Foundation Consulting, Inc. – City of Palo Alto Report – 76 Other “Alternate” Improvements On-course Restroom Replacement - Estimate: $95,000 New structure and demo existing Replace Balance of Irrigation System (Varies w/ Plan Option)Complete new system & control Rebuild All Greens on Course (Varies w/ Plan Option)Rebuild all greens to USGA specs Resod all Fairways on Course (Varies w/ Plan Option)New and consistent turf variety throughout New Event Practice Green/Area - Estimate: $80,000 Separate event green and area (Plan D only) Sand Plate New Fairways (Varies w/ Plan Option)Sand cap to 6 in. PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS BASE PROJECTIONS GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ACTUALS ADOPTED YEAR TO DATE (Jul - Dec) PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 1,250 3,822 4,000 0 1,760 2,400 2,500 2,500 2,500 2,500 Green fees (Monthly play cards )1,781,405 1,140,250 598,168 900,000 0 1,873,200 2,510,600 2,680,900 2,707,800 2,734,800 2,762,200 Driving range 343,883 253,750 145,087 235,087 82,400 282,720 377,400 401,900 405,900 410,000 414,100 Cart/club rentals 279,795 169,400 110,259 176,259 0 248,880 332,300 353,900 357,400 361,000 364,600 Other fees 24,319 2,800 12,781 15,000 0 1,760 12,700 13,700 13,700 13,900 13,900 Proshop lease 27,248 22,500 12,693 22,500 18,000 21,520 28,500 30,700 30,700 31,300 31,300 Restaurant lease 48,880 58,800 25,383 58,800 58,800 56,600 60,400 64,400 65,000 65,700 66,300 Restaurant Utilities 21,600 22,032 6,480 22,000 20,000 26,900 27,000 27,400 27,400 27,900 27,900 Interest Income - Debt Service 25,700 25,700 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,670,782 914,674 1,459,346 204,900 2,539,240 3,377,200 3,601,300 3,636,300 3,673,000 3,708,700 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 59,623 169,452 169,452 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 5,786 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 29,447 10,580 15,000 10,000 45,100 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 641 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 6,700 22,300 22,600 22,900 23,200 23,500 23,900 Water Expense 381,966 325,849 274,451 325,849 263,834 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 26,496 40,000 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 13,973 40,443 31,200 83,280 105,700 107,300 108,900 110,500 113,900 Subtotal 681,936 634,513 391,550 609,747 510,986 530,780 601,400 615,900 635,600 655,900 679,100 Contract Services Golf Maintenance 808,801 616,974 389,823 661,316 412,422 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 Range fees 130,676 110,173 55,133 89,333 70,040 67,444 75,480 80,380 81,180 82,000 82,820 Cart rentals 112,083 64,785 41,899 70,504 0 49,776 66,460 70,780 71,480 72,200 72,920 Club rentals 5,951 2,975 2,205 2,975 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 248,965 215,083 293,694 30,500 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 93,660 125,530 134,045 135,390 136,740 138,110 Credit Card Fees 38,000 38,000 16,340 18,900 0 39,337 52,723 56,299 56,864 57,431 58,006 Subtotal 1,491,121 1,085,837 720,483 1,136,722 512,962 1,341,441 1,432,925 1,465,149 1,468,659 1,472,216 1,475,801 Total Operating Expenses 2,173,057 1,720,350 1,112,033 1,746,469 1,023,948 1,872,221 2,034,325 2,081,049 2,104,259 2,128,116 2,154,901 Net Income From Operations 381,443 (49,568)(197,360)(287,122)(819,048)667,019 1,342,875 1,520,251 1,532,041 1,544,884 1,553,799 Debt and Other Charges 1998 Debt Service 428,180 429,020 214,510 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 400,000 400,000 400,000 400,000 400,000 400,000 Cost Plan Charges 23,327 25,317 12,659 25,317 25,000 26,250 27,563 28,941 30,388 31,907 33,502 Capital Reserve 0 0 0 0 0 187,320 251,060 268,090 270,780 273,480 276,220 Subtotal - Debt and Other Charges 451,507 454,337 227,169 454,337 453,200 1,044,370 1,101,823 1,129,331 1,132,368 705,387 709,722 Net Income (Loss)(70,064)(503,905)(424,528)(741,459)(1,272,248)(377,351)241,053 390,920 399,674 839,497 844,076 Golf Rounds 58,000 45,000 24,940 35,000 0 67,900 71,800 75,700 75,700 75,700 75,700 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS SENSITIVTY ANALYSIS - REDUCED ROUNDS GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ACTUALS ADOPTED YEAR TO DATE (Jul - Dec) PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 1,250 3,822 4,000 0 1,520 1,900 2,100 2,200 2,200 2,200 Green fees (Monthly play cards )1,781,405 1,140,250 598,168 900,000 0 1,448,080 2,013,600 2,221,900 2,424,700 2,448,900 2,473,400 Driving range 343,883 253,750 145,087 235,087 82,400 221,280 305,400 335,000 364,100 367,700 371,400 Cart/club rentals 279,795 169,400 110,259 176,259 0 194,880 268,900 295,000 320,600 323,800 327,000 Other fees 24,319 2,800 12,781 15,000 0 7,520 10,300 11,400 12,300 12,500 12,500 Proshop lease 27,248 22,500 12,693 22,500 18,000 21,100 23,100 25,600 27,500 28,100 28,100 Restaurant lease 48,880 58,800 25,383 58,800 58,800 44,300 48,900 53,700 58,300 58,900 59,500 Restaurant Utilities 21,600 22,032 6,480 22,000 20,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income - Debt Service 25,700 25,700 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,670,782 914,674 1,459,346 204,900 1,991,480 2,724,900 2,998,000 3,263,000 3,295,900 3,327,900 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 59,623 169,452 169,452 169,452 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 5,786 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 29,447 10,580 15,000 10,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 641 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 6,700 17,840 22,600 22,900 23,200 23,500 18,200 Water Expense 381,966 325,849 274,451 325,849 263,834 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 26,496 40,000 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 13,973 40,443 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 634,513 391,550 609,747 510,986 517,252 601,400 615,900 635,600 655,900 671,700 Contract Services Golf Maintenance 808,801 616,974 389,823 661,316 412,422 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 Range fees 130,676 110,173 55,133 89,333 70,040 55,156 61,080 67,000 72,820 73,540 74,280 Cart rentals 112,083 64,785 41,899 70,504 0 38,976 53,780 59,000 64,120 64,760 65,400 Club rentals 5,951 2,975 2,205 2,975 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 248,965 215,083 293,694 30,500 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 72,404 100,680 111,095 121,235 122,445 123,670 Credit Card Fees 38,000 38,000 16,340 18,900 0 30,410 42,286 46,660 50,919 51,427 51,941 Subtotal 1,491,121 1,085,837 720,483 1,136,722 512,962 1,288,170 1,370,558 1,407,400 1,432,839 1,436,017 1,439,236 Total Operating Expenses 2,173,057 1,720,350 1,112,033 1,746,469 1,023,948 1,805,422 1,971,958 2,023,300 2,068,439 2,091,917 2,110,936 Net Income From Operations 381,443 (49,568)(197,360)(287,122)(819,048)186,058 752,942 974,700 1,194,561 1,203,983 1,216,964 Debt and Other Charges 1998 Debt Service 428,180 429,020 214,510 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 400,000 400,000 400,000 400,000 400,000 400,000 Cost Plan Charges 23,327 25,317 12,659 25,317 25,000 26,250 27,563 28,941 30,388 31,907 33,502 Capital Reserve 0 0 0 0 0 144,808 201,360 222,190 242,470 244,890 247,340 Subtotal - Debt and Other Charges 451,507 454,337 227,169 454,337 453,200 1,001,858 1,052,123 1,083,431 1,104,058 676,797 680,842 Net Income (Loss)(70,064)(503,905)(424,528)(741,459)(1,272,248)(815,800)(299,180)(108,731)90,504 527,186 536,121 Golf Rounds 58,000 45,000 24,940 35,000 0 53,150 58,100 63,100 67,900 67,900 67,900 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS SENSITIVTY ANALYSIS - REDUCED FEES GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ACTUALS ADOPTED YEAR TO DATE (Jul - Dec) PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 1,250 3,822 4,000 0 1,920 2,400 2,500 2,500 2,500 2,500 Green fees (Monthly play cards )1,781,405 1,140,250 598,168 900,000 0 1,738,080 2,329,500 2,487,500 2,512,400 2,537,500 2,562,900 Driving range 343,883 253,750 145,087 235,087 82,400 282,720 377,400 401,900 405,900 410,000 414,100 Cart/club rentals 279,795 169,400 110,259 176,259 0 248,880 332,300 353,900 357,400 361,000 364,600 Other fees 24,319 2,800 12,781 15,000 0 1,760 12,700 13,700 13,700 13,900 19,000 Proshop lease 27,248 22,500 12,693 22,500 18,000 2,700 28,500 30,700 30,700 31,300 31,300 Restaurant lease 48,880 58,800 25,383 58,800 58,800 56,600 60,400 64,400 65,000 65,700 66,300 Restaurant Utilities 21,600 22,032 6,480 22,000 20,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income - Debt Service 25,700 25,700 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,670,782 914,674 1,459,346 204,900 2,385,460 3,196,000 3,407,900 3,440,900 3,475,700 3,514,500 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 59,623 169,452 169,452 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 5,786 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 29,447 10,580 15,000 10,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 641 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 6,700 17,840 22,600 22,900 23,200 23,500 23,500 Water Expense 381,966 325,849 274,451 325,849 263,834 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 26,496 40,000 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 13,973 40,443 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 634,513 391,550 609,747 510,986 517,300 600,400 614,900 634,600 654,900 676,000 Contract Services Golf Maintenance 808,801 616,974 389,823 661,316 412,422 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 Range fees 130,676 110,173 55,133 89,333 70,040 67,444 75,480 80,380 81,180 82,000 82,820 Cart rentals 112,083 64,785 41,899 70,504 0 49,776 66,460 70,780 71,480 72,200 72,920 Club rentals 5,951 2,975 2,205 2,975 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 248,965 215,083 293,694 30,500 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 86,904 116,475 124,375 125,620 126,875 128,145 Credit Card Fees 38,000 38,000 16,340 18,900 0 36,500 48,920 52,238 52,760 53,288 53,821 Subtotal 1,491,121 1,085,837 720,483 1,136,722 512,962 1,331,848 1,420,067 1,451,418 1,454,785 1,458,208 1,461,651 Total Operating Expenses 2,173,057 1,720,350 1,112,033 1,746,469 1,023,948 1,849,148 2,020,467 2,066,318 2,089,385 2,113,108 2,137,651 Net Income From Operations 381,443 (49,568)(197,360)(287,122)(819,048)536,312 1,175,534 1,341,583 1,351,515 1,362,593 1,376,849 Debt and Other Charges 1998 Debt Service 428,180 429,020 214,510 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 400,000 400,001 400,002 400,003 400,004 400,005 Cost Plan Charges 23,327 25,317 12,659 25,317 25,000 26,250 27,563 28,941 30,388 31,907 33,502 Capital Reserve 0 0 0 0 0 173,808 232,950 248,750 251,240 253,750 256,290 Subtotal - Debt and Other Charges 451,507 454,337 227,169 454,337 453,200 1,030,858 1,083,714 1,109,993 1,112,831 685,661 689,797 Net Income (Loss)(70,064)(503,905)(424,528)(741,459)(1,272,248)(494,546)91,820 231,590 238,684 676,931 687,052 Golf Rounds 58,000 45,000 24,940 35,000 0 67,900 71,800 75,700 75,700 75,700 75,700 PALO ALTO GOLF COURSE PRO FORMA AND SENSITIVITY ANAYLSYS SENSITIVTY ANALYSIS - REDUCED ROUNDS AND FEES GOLF COURSE FINANCIAL SUMMARY FY 2013 FY 2014 FY 2014 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ACTUALS ADOPTED YEAR TO DATE (Jul - Dec) PROJECTED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES Tournament fees 1,670 1,250 3,822 4,000 0 1,360 1,900 2,100 2,200 2,200 2,200 Green fees (Monthly play cards )1,781,405 1,140,250 598,168 900,000 0 1,344,560 1,869,300 2,062,400 2,250,400 2,272,900 2,295,600 Driving range 343,883 253,750 145,087 235,087 82,400 214,368 305,400 335,000 364,100 367,700 371,400 Cart/club rentals 279,795 169,400 110,259 176,259 0 273,768 268,900 295,000 320,600 323,800 327,000 Other fees 24,319 2,800 12,781 15,000 0 8,272 10,300 11,400 12,300 12,500 12,500 Proshop lease 27,248 22,500 12,693 22,500 18,000 21,100 23,100 25,600 27,500 28,100 28,100 Restaurant lease 48,880 58,800 25,383 58,800 58,800 44,300 48,900 53,700 58,300 58,900 59,500 Restaurant Utilities 21,600 22,032 6,480 22,000 20,000 26,900 26,900 27,400 27,400 27,900 27,900 Interest Income - Debt Service 25,700 25,700 25,700 25,900 25,900 25,900 25,900 25,900 25,900 Total Revenue 2,554,500 1,670,782 914,674 1,459,346 204,900 1,960,528 2,580,600 2,838,500 3,088,700 3,119,900 3,150,100 EXPENDITURES Operating Expenses Salaries & Benefits 134,948 169,452 59,623 169,452 169,452 169,500 165,700 173,200 181,000 189,100 197,600 Advertising & Publishing 11,307 15,003 5,786 15,003 15,000 30,000 30,000 30,000 30,000 30,000 30,000 Supplies and Materials 3,292 29,447 10,580 15,000 10,000 36,080 45,800 46,500 47,200 47,900 48,600 General Expense 1,014 1,438 641 1,000 1,000 1,000 Facilities Repairs & Maintenance 7,259 6,835 0 3,000 6,700 17,840 22,600 22,900 23,200 23,500 23,900 Water Expense 381,966 325,849 274,451 325,849 263,834 146,400 188,500 192,300 201,000 210,000 219,500 Other Direct Charges 48,448 46,045 26,496 40,000 13,800 33,200 42,100 42,700 43,300 43,900 44,600 Indirect Charges 93,702 40,443 13,973 40,443 31,200 83,280 105,700 107,300 108,900 110,500 112,200 Subtotal 681,936 634,513 391,550 609,747 510,986 517,300 600,400 614,900 634,600 654,900 676,400 Contract Services Golf Maintenance 808,801 616,974 389,823 661,316 412,422 829,552 806,932 817,745 817,745 817,745 817,745 Miscellaneous 18,566 3,965 Range fees 130,676 110,173 55,133 89,333 70,040 53,774 61,080 67,000 72,820 73,540 74,280 Cart rentals 112,083 64,785 41,899 70,504 0 54,754 53,780 59,000 64,120 64,760 65,400 Club rentals 5,951 2,975 2,205 2,975 0 5,700 5,800 5,900 6,000 6,100 6,200 Fixed Management Fees 377,045 248,965 215,083 293,694 30,500 255,972 300,000 300,000 300,000 300,000 300,000 Green Fees to Golf Professional (5%) 0 0 0 0 0 67,228 93,465 103,120 112,520 113,645 114,780 Credit Card Fees 38,000 38,000 16,340 18,900 0 28,236 39,255 43,310 47,258 47,731 48,208 Subtotal 1,491,121 1,085,837 720,483 1,136,722 512,962 1,295,215 1,360,312 1,396,075 1,420,463 1,423,521 1,426,613 Total Operating Expenses 2,173,057 1,720,350 1,112,033 1,746,469 1,023,948 1,812,515 1,960,712 2,010,975 2,055,063 2,078,421 2,103,013 Net Income From Operations 381,443 (49,568)(197,360)(287,122)(819,048)148,013 619,888 827,525 1,033,637 1,041,479 1,047,087 Debt and Other Charges 1998 Debt Service 428,180 429,020 214,510 429,020 428,200 430,800 423,200 432,300 431,200 0 0 New 2014 Debt Service 0 0 0 0 400,000 400,000 400,000 400,000 400,000 400,000 Cost Plan Charges 23,327 25,317 12,659 25,317 25,000 26,250 27,563 28,941 30,388 31,907 33,502 Capital Reserve 0 0 0 0 0 134,456 186,930 206,240 225,040 227,290 229,560 Subtotal - Debt and Other Charges 451,507 454,337 227,169 454,337 453,200 991,506 1,037,693 1,067,481 1,086,628 659,197 663,062 Net Income (Loss)(70,064)(503,905)(424,528)(741,459)(1,272,248)(843,493)(417,805)(239,956)(52,991)382,282 384,025 Golf Rounds 58,000 45,000 24,940 35,000 0 67,900 67,900 67,900 67,900 67,900 67,900 Cost Item Estimated Cost BASE BID COSTS Plan G Construction Costs (Base Bid) $7,296,595 Irrigation Pump Station (Base Bid) $220,000 Fence at Youth Area (Base Bid) $30,000 Path/Landscape along Embarcadero (Base Bid) $45,000 Course Signage & Furnishings (Base Bid) $40,000 Entry Signage (Base Bid) $20,000 Base Bid Subtotal $7,651,595 Change Order Contingency (10)%) $765,160 Base Bid Contract Budget $8,416,755 ADD ALTERNATE BID ITEM COSTS Wire Mesh for Cart Paths $71,400 Class 2 Base Rock for Cart Paths $132,600 Youth Area Upgrades $80,000 Upgrade Hydroseed Mulch $53,200 Use Profile Mix in Greens $150,000 Add Alternates Subtotal $487,200 Change Order Contingency (10%) $48,720 Add Alternates Contract Budget $535,920 SOFT COSTS Construction Stage Services (Forrest Richardson & Assoc.) $108,320 Project Management (Dale Siemens - Site Representative) $184,000 Tree Removal Mitigation Costs $200,000 Testing and Inspection $25,000 Construction Stage Soft Costs Subtotal $517,320 Additional Services (10%) $31,732 Construction Soft Costs Budget $549,052 TOTAL ESTIMATED PROJECT CONSTRUCTION COST $9,501,727 FUNDING Estimated revenue from Soil Import $1,300,000 Estimated mitigation payment from SFCJPA $3,000,000 TOTAL COST TO BE FUNDED BY CERT OF PARTICIPATION (without add alternative bid items)$4,665,807 TOTAL COST TO BE FUNDED BY CERT OF PARTICIPATION (with add alternative bid items)$5,201,727 Prepared on 01/24/2014 Construction Cost Estimate for Palo Alto Municipal Golf Course Reconfiguration Project Mr. J Proje City o Re: D Reco Dear Santa Calif comm Golf Our o see th that m Howe with Pleas Biolo 1. Ne The M found and R prote migra EIRs starlin The p const take o groun imple Joe Teresi ect Manager of Palo Alto Draft Environ nfiguration a Mr. Teresi, a Clara Valle fornia Native ments on the Course Reco organization hat the desig make a since ever, we are compliance se accept the ogical Resou esting Birds Migratory B d in or near t Raptors” - a ction that M atory. We as do. The EIR ngs and hou project propo truction activ of nesting bi nd means tha ementation o o nmental Imp and Bayland ey Audubon e Plant Socie Draft Envir onfiguration s value habi gn for the rec ere effort to h concerned w with the Cal following c urces ird Treaty A the Project s confusing de MTBA law af sk that the Fi R may specif use sparrows oses to remo vities; yet it irds. It must at work mus of protective pact Report ( ds Athletic C Society (SC ety (CNPS) t ronmental Im n and Baylan tats and nati configured g harmonize w with some pr lifornia Envi comments an Act (MBTA) site. The DEI escription to ffords bird sp inal EIR sho fy that the on . ove 621 trees is vague in i be clear that t stop until a e measures. (DEIR) on th Center Expan CVAS) and t thank you fo mpact Repor nds Athletic C ive plants an olf course in with the Bayl roject compo ironmental Q nd suggestion protects all IR uses the d o people who pecies, or wh ould simply s nly bird spec s and involve its descriptio t finding any a biologist se he Palo Alto nsion Project the Santa Cla or the opport rt (DEIR) for Center Expa nd bird speci ncludes nativ land landsca onents and p Quality Act ns: but two of th description “ o may not kn hich species specify “Nes cies not prot es substantia on of mitigat y active bird ets buffers a o Municipal t ara Valley C tunity to prov r the Palo Al ansion Projec ies, and we a ve plants and apes and natu proposed mit (CEQA). he species th “Nesting Mi now the exte s are legally sting Birds” tected by the al grading an tion measure d nest in a tre and directs th Golf Course Chapter of th vide lto Municipa ct (Project). are glad to d landscapes ure. tigations, an hat could be gratory Bird ent of the considered as most e MBTA are nd es to avoid ee or on the he e he al s nd ds SCVAS Letter 2 We wish to caution the City that with the projected removal of hundreds or trees, it is inevitable that some would contain bird nests during the nesting season. This is not to be taken lightly, as an active bird nest may delay the project by several weeks. We strongly recommend that the timeline of project implementation be sensitive to the ecological needs of birds and the requirements of the MBTA, and remove the trees in the window between August and February. Mitigation Measure Bio-3 promises pre-construction surveys “Prior to the start of construction activities” but does not mention tree removal specifically, and does not specify what “prior” means. Please correct: • Mitigation for potential harm to nesting birds should clarify and recommend that trees be removed and grading performed outside of the nesting season. • Birds can build a nest, lay eggs, and start raising young within two weeks, and an entire reproductive cycle may start and end within 30 days. Mr. Dave Johnston, Environmental Scientist, CA Dept. of Fish and Wildlife (CDFW) recommend that pre-construction and pre-vegetation removal surveys should occur no more than 24 hours before work commences. If work in a particular location stops for more than 24 hours (such as over a weekend or holiday), surveys should be done again before work recommences. Surveys should take place at all locations within 300 feet of actual project activity and if the project 'moves" (as with a pipeline), then the buffer and surveys should move as well. Mr. Johnston also recommends a preliminary survey 30 days ahead of time to give the project proponent an idea of what to expect once they are ready to begin work. Operations and management of the new golf course could potentially “take” ground- nesting birds such as burrowing owls, northern harriers, killdeer and waterfowl. Please add a Mitigation Measure to employ: • Surveys for ground-nesting birds should be performed 24-hours prior to mowing, other vegetation management work, or ground disturbance in all areas off the fairways. This includes the rough areas and natural areas on the new golf course. If nests are found, buffers would be set and maintenance work within the buffer areas should be postponed until the nestlings have fledged. If raptors or special status species nests are found, CDFW should be called on to set appropriate buffers. 2. Management of Nuisance Species and Pests • Canada geese and American coots are considered nuisance species on golf courses and playing fields (natural or synthetic turf). Please describe all management tools and activities for these and any other nuisance bird species, (including trapping, hazing, egg addling etc.) and specify all existing and/or required permits for “take” of birds or their eggs on the golf course and the planned playing fields. • Populations of Gulls and Crows have increased in the area in the past decade, and SCVAS Letter 3 the increase is associated with the availability of food from human sources. The project site is adjacent to sensitive habitats in the Palo Alto Baylands, San Francisquito Creek and the Don Edwards National Wildlife Refuge. Thus availability of food to gulls, crows, scavengers and predators can encourage their presence in the area and should be considered a potentially significant, cumulative impact. Please discuss food availability and handling of trash during Project construction and operations, and provide mitigations to reduce this cumulative impact to a less than significant level. • Gophers, ground squirrels, rats and mice: The new golf course is designed in a baylands theme hoping to harmonize with the landscapes and habitats of the Palo Alto Baylands, San Francisquito Creek and the Don Edwards National Wildlife Refuge. The design will also create habitat within the golf course, which is likely to attract native species of birds and mammals and potentially special status species. We applaud this design philosophy, and hope salt marsh harvest mice eventually inhabit the proposed halophite patches, and burrowing owls thrive in the native plant patches. Use of rodenticides (Mitigation Measure Bio-4e) is not compatible with the design vision of the golf course or with the siting of the playing fields near San Francisquito Creek. Rodents are at the base of the food web along the bay, and are preyed upon by native raptors, herons, egrets, grey foxes and other species. Anticoagulant poison bait –both first- and second-generation products – is likely to poison non-target species directly or through secondary poisoning (when a poisoned rodent is consumed by a non-target species). The City of Palo Alto Received the California Department of Pesticide Regulation 2011 Integrated Pest Management (IPM) Innovator Award for its IPM program. This program does not recommend use of rodenticides, and in 2011 and 2012 anticoagulant rodenticides were never used in the City for any rodent control including gophers, ground squirrels, rats and mice. Trapping was effectively used for gophers and ground squirrels in parks, open space and the golf course (http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30594) Other California Counties, Cities, parks and golf courses are taking initiative in developing resolutions, policies, ordinances, Integrated Pest Management Programs and best practice methodology to avoid using rodenticides. For example, under Marin County's Integrated Pest Management Ordinance, the only time rodenticides can be used is if all other methods of IPM have been tried and failed, and the County Health Officer declares a public health emergency. Since 2009, Marin County has successfully controlled the rodent population without the use of any rodenticides in their parks and open space and in buildings in urban and rural environments (http://www.youtube.com/watch?v=ZWf_ftRk88w). The City of San Francisco uses no rodenticides in the city’s buildings, streets, parks and open spaces. Due to the large number of bird and other special status species (including burrowing owls), Shoreline Golf Course in Mountain View does not SCVAS Letter 4 use rodenticides, and instead manages squirrels and other rodents solely by trapping. The DEIR proposes (Mitigation Measure Bio-4e) “Rodenticides containing either chlorophacinone or diphacinone as the main ingredient (e.g., Ditrac All Weather Blox) are optimal for use outside away from buildings and pose the least harm to non-target wildlife species.” In fact, while permitted in some outside areas, use of poisons is not “optimal”: • A comparative study of nine first- and second-generation rodenticides, warn of use of chlorophacinone and diphacinone, due to potential harm to non-target species through direct poisoning and the potential for secondary poisoning (http://pi.ace.orst.edu/search/getDocketDocument.s?document=EPA-HQ- OPP-2006-0955-0005). Page 216 of this study provides “USFWS Jeopardy Determinations for Effects of 8 Rodenticides on Threatened and Endangered Species. The salt marsh harvest mouse (SMHM) is a listed species for which chlorophacinone and diphacinone are "likely to jeopardize" their continued existence. The recommendation is to “Prohibit outdoor use within 100 yards of these species’ occupied habitat unless specific programs for chlorophacinone are approved by the (US Fish and Wildlife) Service and implemented”. • Anticoagulant poisons should not be used on the Project site: SMHM have been found seasonally using grasslands over 100 meters from any wetland edge in tidal marshes. Individual SMHM may occur on the golf course (page3-3.21) and may inhabit some of the habitat islands that are planned for the new golf course (especially islands planted with pickle weed). To avoid unlawful take of SHHM, rodenticides should not be used within 100 meters of suitable habitat in San Francisquito Creek, Don Edwards NWR, Palo Alto Baylands, and habitat islands on the golf course. We ask that anticoagulant rodenticides should not be used at all. We ask that Mitigation Measure Bio-4e be removed. A new mitigation measure should be drafted to prohibit the use of anticoagulant rodenticides. 3. Invasive Species Invasive plant species have modified California’s ecosystems and landscapes, as non- native grasses replace native grasslands. Around the San Francisco Bay, costly efforts to fight the invasive Spartina continue for over ten years. It is thus of concern that the Project proposes to plant a potentially invasive plant species at the golf course: • Seashore Paspalum (Paspalum vaginatum), an American East Coast native grass, was selected to be planted at the golf course because of its salt tolerance and ability to thrive on irrigation with recycled water. These traits may be the reason why in some estuary and marsh habitats Seashore Paspalum has become invasive. SCVAS Letter 5 The Global Invasive Species Database (managed by the Invasive Species Specialist Group (ISSG) of the IUCN Species Survival Commission) warns, quote: “Paspalum vaginatum (seashore paspalum) is a North American grass which now has a pantropical distribution. It has been widely used for landscaping and revegetation and is a common turf grass on golf courses. Paspalum vaginatum has naturalized in coastal salt marshes where it changes the composition of vegetation and in some cases dominates, impacting on fauna communities and estuarine hydrology.” And further, “Seashore paspalum (Paspalum vaginatum) can alter ecosystems in a number of ways. It can form dense monospecific groundcover in brackish marshes and estuaries, and alter the composition of native species [communities]. This can lead to changes in invertebrate communities - in the Galapagos it is associated with a move from aquatic to more terrestrial communities (Siemens, 2005), and this in turn can impact on foraging habitat and food resources for waterbirds. In addition, invasion of P. vaginatum is associated with an increase in sediment accumulation, changing hydrology in New Zealand estuaries (Shaw and Allen, 2003; Graeme, 2005a, b).” The California Invasive Plant Council (Cal-IPC) inventory does not list this species (although it appears on the Cal IPC watch list, attached, line 175, for San Diego County). However, the Jepson Manual of Vascular Plants of California, second edition, identifies it as aggressively invasive in wetlands (Page 1471, attached). A 2008 article (http://naturalcommunity.org/NatCom_Docs/Riefner&Columbus2008.1.pdf) identifies Paspalum Vaginatum as a new threat to wetland diversity in Southern California alerting, quote“preliminary observations, and anecdotal evidence and quantitative data gathered in other countries suggest its impacts to native ecosystems are similar to those of the better-documented nonnative cord grasses (Spartina spp.). Accordingly, the long-term consequences of p. vaginatum invasions could pose a serious threat to native biodiversity and ecosystem function of estuarine wetlands in southern California.” Paspalum invades ecosystems vegetatively, not by seeds. Over time, it has the potential to alter the Bay estuary ecosystems. We believe the precautionary principle must be applied here and this grass should not be used. However, if Seashore Paspalum is to be used, we ask that: o A comprehensive analysis including risk analysis o The mitigation and monitoring plan should include long term monitoring of the San Francisquito Creek tidal marshes and estuary, and the Palo Alto Emily Renzel wetlands. o Funds for eradication programs (should invasion occur) should be set- aside in escrow. o A Permit should be secured from a Federal Agency responsible for regulation of Executive Order 13112 SCVAS Letter 6 • Sea Lavender (Limonium Californicum) is often confused with non-native varieties, and some nurseries sell stocks of invasive sea lavenders. Invasions of non-native sea lavenders have been recorded in the Bay Area (http://www.cal- ipc.org/symposia/archive/pdf/2011/PerlmutterPoster2011.pdf). Please identify the source of Sea Lavender and other native plants that will be planted on the project site. We strongly recommend using the Acterra nursery for procurement of all the native plants for the golf course as they propagate their own plants from local sources. Save the Bay’s nursery can be used as well. 4. Wetlands The final EIR should provide the delineation of jurisdictional wetlands on the project site and identify site-specific mitigation for the permanent loss of 1.655 acres of non-tidal brackish wetlands. We recognize and support the reconfiguration of the Golf Course that would result in the creation and restoration of approximately 12.168 acres of more natural land cover, including wetlands, than currently exists within the Project site. However, we ask that specific wetlands in the “Baylands Native Zones” of the golf course be legally designated mitigation wetlands so that potential future design changes will retain the wetland habitat when memory fails. 5. Trees Of 742 trees on the project site, 621 will be removed. Trees provide shade, shelter, nesting sites, flowers, pollen and nectar, leaf litter, fungi, fruits and nuts that support a wide variety of birds, invertebrates and mammals. We applaud the City for their willingness to compensate for the loss of trees, to recognize that trees are not endemic to the Baylands ecosystems, and to understand that alternatives to planting new trees onsite are desirable. The City of Palo Alto Tree Technical Manual (http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=10751) offers in section 3.15 “Alternatives When Trees Cannot be Replaced on Site for circumstances, crowding or other physical constraints that make it impossible or undesirable to replace a tree of equal value in the same place.” The manual allows spending tree mitigation money to be used in the following order of preference, as approved by the Director: (1) to provide additional trees elsewhere on the site; (2) to add or replace street trees or other public landscaping in the vicinity, or (3) to add trees or other landscaping to other City property. Since trees will not be planted elsewhere on the site, the second preference should be chosen, and public landscaping can be applied to Byxbee Park, in the form of planting native species and restoring upland habitat – the most scarce and threated ecosystem by the Bay. Mitigation Measure Bio-9 proposes to plant trees elsewhere to compensate for the loss of canopy on the project area, and to monitor and replace these trees over a 3-year period. The mitigation would require that “replacements will occur both on site and offsite.” SCVAS Letter 7 The selected offsite locations include the Pearson Arastradero Preserve and/or other locations in the foothills. The proposed Tree Mitigation Plan would plant thousands of trees at Arastradero Pearson Preserve and other areas in the Foothills. This plan drew objections from former council member Enid Pearson, who fought development and secured the preserve for the city of Palo Alto (http://www.youtube.com/watch?v=3GeFB-k7-l8), and from all who are familiar with this and other preserves and parks in the Palo Alto foothills. Mr. Paul Heiple, geologist, native plant expert with the California Native Plant Society, naturalist/steward of California ecosystems over 15 years, and Acterra’s steward of the Enid Pearson Arastradero Preserve for over 4 years explains that planting new trees at Enid Pearson Arastradero Preserve or Foothill Park is inappropriate for ecological and practical reasons. He estimates that the Oak Savannah habitat occupies at most 2/3's to 3/4's of the preserve. Replacement of old or dying trees would mean that 3-6 oaks would need to be replaced each year. Oak saplings are emerging naturally at a rate consistent with replacement needs. The only intervention possibly needed it to provide temporary protection to these naturally occurring saplings. The tree-planting plan offered by the City would plant approximately 7000 trees on land with soil types mapped as Azule fine sandy loam and Los Osos clay loams. For Azule fine sandy loam, the soil survey of Santa Clara County (http://websoilsurvey.sc.egov.usda.gov/app/HomePage.htm) states "The vegetation, when these soils are not cultivated, is chiefly annual grasses and forbs, but a few areas have an oak-grass or brush cover." Mr. Heiple suggests that this soil would not support oak woodland without constant intervention. For Los Osos clay loams, the soil survey of Santa Clara County states, "The vegetation, where these soils are not cultivated, is annual grasses and forbs, oak trees, and brush." Mr. Heiple observed that the trees and brush of oak woodlands are usually found in the swales between the hills and do not form dense forests. The plan to plant thousands of trees at Pearson Arastradero is misguided, as it would try to convert ecologically sensitive grasslands into artificial dense forests where trees would be crowded with no room to grow and thrive, and the native fauna of the grasslands would be excluded. Indeed, the Park Master Plan, adopted by the City Council in 1984, called for Arastrodero Pearson preserve to be "low intensity park, with emphasis on the natural and open space amenities of the land and sensitivity to the fragile foothills ecology" (http://www.cityofpaloalto.org/civicax/filebank/documents/6049/) The soil types indicate the area would naturally be part grassland and part savanna, not a dense woodland. The grasslands and savannas of California are some of the most heavily impacted ecosystems, and species of birds that depend on grasslands are the fastest declining group of birds in the nation (ftp://ftp-fc.sc.egov.usda.gov/WHMI/WEB/pdf/GRASS1.pdf http://www.stateofthebirds.org/habitats/grasslands). Arastradero Pearson preserve is home to many species of birds, amphibians, reptiles and mammals that depend on the grasslands, including sensitive and listed species. Planting thousands of trees within 10 SCVAS Letter 8 years is likely to cause adverse impacts to these species and the proposed mitigation would result in significant environmental damage and no benefit. SCVAS and CNPS expert opinion is that planting more than a few dozen trees at Arastradero and Foothill preserves would cause harm to the environment. We ask that the placement and selection of any trees to be planted at the site be done in collaboration with Mr. Paul Heiple and CNPS. We further ask that the focus of the mitigation should remain close to the impact site at the golf course. We see the tree mitigation as an opportunity to restore the most impacted habitat in the Bay Area – upland grasslands by the Bay. We ask for Mitigation Measure Bio-9 to be modified to better comply with the City of Palo Alto Tree Technical Manual section 3.15, by developing and implementing a native plant grassland and shrub habitat restoration plan for Byxbee park. 6. Burrowing Owls CNDDB records underestimate the numbers of burrowing owls within a 5-miles of the project site (including the populations of Shoreline Park and Moffett Field). Santa Clara Valley Audubon Society 2013 nesting population census show a minimum of 16 pairs of burrowing owls at Shoreline and Moffett, and more than 30 chicks. Burrowing owls have even been observed recently overwintering at Palo Alto Baylands Preserve adjacent to the golf course and nesting has occurred at Palo Alto Baylands Preserve in the past. Burrowing owls occupy grasslands, landfills, golf courses (including Shoreline golf Links, Moffett golf area and the golf course on Tasman Drive) and ruderal habitats in areas that are “historical disturbed and fragmented”. Burrowing owls are at the brink of extirpation from Santa Clara County (Appendix M, N of the Santa Clara Valley Habitat Plan (http://www.scv- habitatplan.org/www/default.aspx), and we are concerned that Mitigation Measure Bio- 4a do not provide enough protection for this species, especially during the nesting season: • Burrowing owls can occupy ground squirrel nests and lay eggs within a 24 hours window. Biologically relevant surveys should be conducted no longer than 24 hours prior to construction activity. • The DEIR proposes Page 3.3-18 Line 21 “a 250-foot no activity buffer will be established” This does not reflect the 2012 CDFW updated Mitigation Protocols for buffer setbacks based on level of disturbance (see page 9 of CDFW 2012 Staff Report on Burrowing Owl Mitigation, http://www.dfg.ca.gov/wildlife/nongame/docs/BUOWStaffReport.pdf). In our comment section “Management of Nuisance Species and Pests” above, we asked that Mitigation 4b be removed. A new mitigation measure should be drafted to prohibit the use of anticoagulant rodenticides. We are concerned that Operation and Maintenance work may impact burrowing owls should they move into the newly designed golf course, and ask for an additional Mitigation Measure: • Burrowing Owls surveys should be performed 24-hours prior to mowing, other vegetation management work, or ground disturbance in all areas off the fairways. This includes the rough areas and natural areas on the new golf course. SCVAS Letter 9 • Page 3.3-26 Construction, Operation and Maintenance 7. Additional Bird Species Please consider revising Table 3.3-3 on pages 1-7 under section “Potential to Occur within Project Footprint”: • Burrowing owl occurrences (see above) • Northern harrier is known to nest in the area, and has been observed at Shoreline every year, foraging and carrying prey to marshes along the levees. • White tailed kite has confirmed nesting in Palo Alto, East Palo Alto, and 3 locations just outside Shoreline (Pond A2, Garcia Road and Shoreline Blvd.) • Great and Snowy Egrets nest in Mountain View Bayshore district (2013), near Stevens Creek and in the Palo Alto Baylands area. • Clapper rails have been recorded in San Francisquito Creek (2012) • Black skimmers nested in the area in the past, and a nest was recorded at Shoreline in 2012. Please consult The Breeding Bird Atlas of Santa Clara County (Bill Bousman, Santa Clara Valley Audubon Society, 2007) for additional nesting records, including black skimmers. 8. Botanical Surveys Eleven special status species have the potential to occur on site. Mitigation Measure Bio- 2a proposes a pre-construction survey for special plant status species, and Table 3.3-4 provides timing for surveying for different species of listed plant species. The DEIR reports only one survey, conducted on December 2, 2012. December is a time when special status plants are dormant, un-identifiable or otherwise undetectable. In public meetings, staff proposed that construction would begin as soon as March 2014. This timeline provides no opportunity for adequate surveying for sensitive plant species prior to grading and construction. Surveys should be conducted in the appropriate times of year in 2014 to identify listed plant species, or “take” may occur. ----------------------------- General CEQA comments 9. Scoping Comments (ES, Chapter 2) Please include scoping comments from the Scoping Public Hearing in Section “ES-3 – ES-4 Potential Areas Of Controversy/Issues To be Resolved”, and in Section “Scoping Meeting” of the DEIR. Please mention specifically Santa Clara Valley Audubon Society, as well as former Palo Alto City Council Members Emily Renzel and Enid Pearson and describe their role in Palo Alto history – it is important to mention in the DEIR that the Pearson-Arastradero Preserve is named after Enid Pearson, and the Renzel Wetlands of Palo Alto Baylands are named after Emily Renzel, since both these preserve may be impacted by the project. SCVAS Letter 10 10. Project Objectives and Alternatives Despite repeated requests from the public and from the Palo Alto Parks and Recreation Committee, the DEIR Project Objectives do not include expansion of sports facilities in other locations, nor the potential for intensification of use of sport facilities at other locations, south/west of US 101. The result is an artificially narrow set of Alternatives offered to the public and decision makers for review. Please analyze alternatives that would allow an increase in the availability of sport fields in Palo Alto without expanding the Baylands Athletic Center, and include in this analysis the compatibility with the Baylands Master Plan. The alternative should examine extending hours of use of existing playing fields, partnership with the Palo Alto Unified School District and private schools, and other feasible solutions that would reduce the significant and unavoidable adverse effects of the project on the environment. In addition, please analyze alternative park uses for the 10.5-acre “land bank”. 11. Project Description and Analysis The description of the proposed Municipal Golf Course Reconfiguration is well developed and allows the public much needed transparency. Golf course reconfiguration is the part of the proposed project that is mandated due to the San Francisquito Creek flood reduction project. The analysis and mitigations for this action in the DEIR provide enough information to allow public participation and review. In contrast, the expansion of the Baylands Athletic Center is not described adequately and the information available and level of analysis are a far cry from the level of analysis required for the “worst case scenario” proposed in the DEIR. This is unfortunate because it is possible that all the significant and unavoidable impacts identified in the DEIR could be reduced to a less than significant level had the City considered not expanding the Baylands Athletic Center, and examined alternatives. We ask that the biological impacts of turf near the San Francisquito Creek be evaluated. If synthetic turf is to be used, please analyze: • Impacts of fill (sand or tire crumbs) and possibility of water contamination in the creek • Potential of rubber crumbs from synthetic fields to enter the food chain in the baylands • Disposal of synthetic turf in view of Palo Alto solid waste reduction policies • Heat generation impacts • Needs of water for washing, especially as related to use by nuisance bird species • Wildlife management practices • Pest control practices • Runoff If natural turf is to be used, please analyze: • Impacts of fill (sand) and possibility of water contamination in the creek • Impacts of fertilization and possibility of eutrophication in the creek • Needs of water for irrigation • Use of potentially invasive grass varieties SCVAS Letter • • In ad 10.5 evalu nestin We a Muni effect We th hesita Linda Cons Calif Santa Wildlife m Pest contr ddition, pleas acres of hab uate impacts ng season of ask that the f icipal Golf C ts that the D hank you for ate to contac a Ruthruff, ervation Com fornia Native a Clara Valle management rol practices se provide de itat, and oth of special ev f endangered final EIR pro Course and 2 DEIR found t r the opportu ct us if you h mmittee Cha e Plant Socie ey Chapter t practices etailed analy her environm vents on wil d species. ovide an anal 2) the Baylan to be signific ---------- unity to prov have question air ety 11 ysis of impac mental effects ldlife through lysis of the r nds Athletic cant and una --------------- vide commen ns. Shan Env Sant cts of noise, s on birds an hout the yea relative cont Center to an avoidable. ------ nts on this P ni Kleinhaus vironmental A ta Clara Val fencing, ligh nd other wild ar, with focu tribution of 1 ny of the env Project. Pleas s, Ph.D. Advocate ley Audubon hting, loss o dlife. Please us on the 1) the vironmental se do not n Society f SCVAS Letter City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐1 January 2014 ICF 00631.12   Responses to SCVAS Letter   (Santa Clara Valley Audubon Society [SCVAS])  Comment SCVAS‐1a  The commenter requests that the text regarding nesting birds be clarified. Response SCVAS‐1a  While many raptor species are protected by the Migratory Bird Treaty Act (MBTA), raptors are also afforded additional protection by California Department of Fish and Game Code (CDFG) Sections 3503.5 specifically calls out raptors from other birds. “Raptors” was mentioned along with “birds” in the EIR to clarify that both were considered and nests of both taxa are protected. No revisions to the EIR are necessary. Comment SCVAS‐1b  The commenter requests that Mitigation Measure BIO‐3 be clarified to state that prior to start of construction includes prior to start of removal of trees. Additionally recommendations for conducting the nesting bird survey are made. Response SCVAS‐1b  Mitigation Measure BIO‐3 (Establish Buffer Zones for Nesting Raptors and Migratory Birds) on page 3.3‐17 of the Draft Environmental Impact Report (DEIR) (Final Environmental Impact Report (FEIR) page 3.3‐13) requires that a survey for active bird nests be conducted by a qualified biologist prior to the start of construction activities and impacts to active nests be avoided through the establishment of an exclusion zone until the nest is determined vacant. Construction activities include any site preparation activities including tree removal. Mitigation Measure BIO‐3 is also required during operations and maintenance activities prior to vegetation maintenance during the bird nesting season. Initial tree removal associated with the project is considered part of the construction activities and Mitigation Measure (MM) BIO‐3 would apply. Regarding buffer widths, MM BIO‐3 states, “Buffer widths may be modified based on discussion with CDFW, depending on the proximity of the nest, whether the nest would have a direct line of sight to construction activities, existing disturbance levels at the nest, local topography and vegetation, the nature of proposed activities, and the species potentially affected.” Therefore, no change to buffer widths is necessary and no changes to the EIR are necessary. Comment SCVAS‐1c  The commenter requests addition of a mitigation measure to avoid “take” of ground‐nesting birds during operation of the golf course Response SCVAS‐1c  No ground‐nesting birds are known to occur within the Project site, but Mitigation Measure BIO‐3 (Establish Buffer Zones for Nesting Raptors and Migratory Birds) on page 3.3‐17 of the DEIR (page City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐2 January 2014 ICF 00631.12   3.3‐16 of the FEIR) requires that a survey for active bird nests be conducted by a qualified biologist prior to the start of vegetation maintenance occurring during the operations and maintenance phase of the project and that impacts to active nests be avoided through the establishment of an exclusion zone until the nest is determined vacant. MM BIO‐3 applies to all legally‐protected migratory bird and raptor species, both tree and ground‐nesting. The footprint of the proposed golf course would be smaller than the existing course, and the proposed golf course would have less trees than the existing golf course to be consistent with the Baylands concept. The use as a golf course would remain the same, but maintenance activities would be reduced due to the smaller area of proposed golf course and lower number of trees. Areas that are actively managed would undergo routine maintenance during golf course operation immediately following the completion of project construction, similar to existing maintenance activities. Golf Course and Athletic Center operation and maintenance activities are not expected to result in increased noise levels and are not anticipated to have a significant impact on nesting migratory birds and raptors. The BIO‐3 Operations and Maintenance section of the FEIR on page 3.3‐17 requires that MM BIO‐3 be conducted when appropriate (i.e., during the nesting season) before tree and vegetation maintenance activities commence. This includes mowing/trimming of vegetation that is not routinely mowed. Therefore, no adverse effects to nesting birds or raptors associated with operation of the course would occur. Comment SCVAS‐2a  The commenter seeks clarification regarding management of nuisance species and pests especially Canada geese and American coots. Response SCVAS‐2a  The City utilizes dog handlers and has used loud noises and other techniques to encourage Canada geese to move from the golf course where they are foraging. The proposed project would not change the existing conditions with respect to management of Canada goose and American coot. No revisions to the EIR are necessary. Comment SCVAS‐2b  The commenter seeks clarification regarding management of nuisance species and pests especially Gulls and Crows. Response SCVAS‐2b  The existing Golf Course is larger than the proposed Project, which is expected to have a similar density of trash receptacles throughout. The smaller size of the proposed Golf Course combined with a similar density of trash receptacles is expected to be easier to maintain and yield less trash generation than the existing Golf Course. Palo Alto Municipal Code 22.04.230 (Litter) states, “No person within any city park or open space lands shall leave any garbage, trash , cans, bottles, papers or other refuse elsewhere than in the receptacles provided therefore” 1. The Municipal Golf Course is                                                              1  http://www.amlegal.com/nxt/gateway.dll/California/paloalto_ca/title22parks*/chapter2204parksandrecreationbuildinguse?f=templates $fn=default.htm$3.0$vid=amlegal:paloalto_ca$anc=JD_22.04.230  City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐3 January 2014 ICF 00631.12   described under “Parks” in the Palo Alto Municipal Code2. Further, the removal of multiple trees that were planted in the existing Golf Course reduces the available perching and nesting substrate for gulls and crows in the Project site. Ultimately, the Project is not anticipated to lead to an increase of trash, in turn, not encouraging gull and crow population growth. No revisions to the EIR are necessary. Comment SCVAS‐2c  The commenter applauds the new golf course’s baylands design hoping to harmonize with the landscape and habitats of the Palo Alto Baylands and surrounding area. The commenter hopes that native species will eventually inhabit the proposed native plant patches. Response SCVAS‐2c  The comment is noted and the commenter’s support of the Project is appreciated. Comment SCVAS‐2d  The commenter seeks clarification regarding use of rodenticides at the golf course. Response SCVAS‐2d  The City's Integrated Pest Management Program guides Golf Course operations related to pest control. The City's program does not permit the use of rodenticides, and the Golf Course does not currently use any rodenticides. The Golf Course’s primary method of control has been the use of live traps and euthanization. It is expected that this practice will continue after reconfiguration of the Golf Course as well. Therefore, the mitigation measure related to rodenticide use has been deleted from the Final EIR. No revisions to the EIR are necessary. Comment SCVAS‐3a  The commenter raises concerns regarding use of potential invasive plant species such as Seashore Paspalum (paspalum vaginatum) Response SCVAS‐3a  Paspalum has been in use at the existing Golf Course for the past 10 years on fairway #5 with no known invasive attributes to the region. The City originally sprigged/planted different Paspalum varieties as a test in the rough between holes 14 and 15 in the early 2000s. There has been no intrusion into the other grasses of holes 14 and 15. In 2004–2005, the City sodded 20,000 square feet of Sea Isle Paspalum, which is a turf type Paspalum in the first half of the fairway on hole number 5. Through the years there have been some other grasses intruding into the Paspalum sodded areas, but Paspalum has not spread outside the area that was sodded. The original sodded areas are still visible when the weather gets a bit cooler.                                                              2  http://www.amlegal.com/nxt/gateway.dll/California/paloalto_ca/title22parks*/exhibitsfortitle22parks?f=templates$fn=default.htm$3.0$ vid=amlegal:paloalto_ca$anc=JD_ExhibitA-20   City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐4 January 2014 ICF 00631.12   The proposed variety (Paspalum Platinum TE) is a hybrid turf type with its predominant propagation being through sod or sprigs. There have been no adverse reports of invasions due to the use of Paspalum turfgrass of the variety proposed. Hybrid turf varieties, including Paspalum vaginatum Swartz, represent those with the most advantageous control due to their proximal nature of growth. There are about 440 species of Paspalum (the genus). Paspalum vaginatum Swartz is only one of those species. Platinum TE is a unique and improved cultivar of Paspalum vaginatum Swartz. Platinum TE does not produce seed even from the few seed heads that are produced. The only way that seed can be produced is by pollination with a completely different Paspalum vaginatum cultivar from a completely different genetic origin. It is statistically improbable that a monoculture planting of Platinum TE will ever produce any seed—the grass does not pollinate by itself. Platinum TE is only vegetatively propagated either from sod or sprigs. It is necessary to change to a turfgrass variety that is specifically suited to the use of reclaimed water and the saline conditions of the Baylands. If a more suitable species of grass is not substituted, turf management at the golf course will use more potable water and more artificial fertilization, and will need constant re‐seeding to establish grass areas. California Invasive Plant Council (IPC) and University of California, Davis, Integrated Pest Management databases were reviewed to find any information on the invasive potential of Paspalum vaginatum. Neither organization currently considers Paspalum vaginatum an invasive species. Comment SCVAS‐3b  The commenter raises concerns regarding use of potential invasive plant species such as Sea Lavender (Limonium Californicum) Response SCVAS‐3b  Sea lavender (Limonium californicum), a native species that is not considered to be invasive by Calflora3 or the California Integrated Pest Council4, will be used in planting palettes. The specific source nursery is not known at this time. Comment SCVAS‐4  The commenter requests that delineation of jurisdictional wetlands be conducted and site‐specific mitigation for permanent loss of non‐tidal brackish wetlands be identified in the Final EIR Response SCVAS‐4  A wetland delineation has been prepared but it has not yet been verified by the Army Corps of Engineers. Unverified wetland data derived from the wetland delineation, specifically project impacts to wetlands, were presented on page 3.3‐24 in the DEIR (FEIR page 3.3‐24) for public review. As mentioned on page 3.3‐24 of the DEIR (page 3.3‐24 of the FEIR), MM BIO‐7 and MM BIO‐ 8 are as follows:                                                              3 http://www.calflora.org/cgi‐bin/species_query.cgi?where‐calrecnum=4839  4 http://www.cal‐ipc.org/paf  City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐5 January 2014 ICF 00631.12   Mitigation Measure BIO‐7: Avoid and Protect Jurisdictional Wetlands during Construction The City will ensure that a qualified resource specialist (biologist, ecologist, or soil scientist) will clearly identify wetland areas to be preserved and wetland areas outside of the direct impact footprint with temporary orange construction fencing before site preparation and construction activities begin at each site or will implement another suitable low‐impact measure. Construction will not encroach upon jurisdictional wetlands identified by the wetland specialist. The resource specialist will use the Project’s wetland delineation (ICF International 2013) to confirm the location of wetland boundaries based on existing conditions at the time of the survey. Exclusion fencing will be installed before construction activities are initiated, and the fencing will be maintained throughout the construction period. No construction activity, traffic, equipment, or materials will be permitted in fenced wetland areas. Mitigation Measure BIO‐8: (Compensate for Impacts to Jurisdictional Wetlands and Waters of the United States prior to Project‐Related Impacts during Construction) The City will develop a wetland/waters of the United States mitigation monitoring plan (MMP), subject to approval by the USACE, that will ensure there is no net loss of wetlands will result from the Project’s impacts. The details of site restoration, monitoring, and adaptive management will be included in the MMP in compliance with the Clean Water Act. The MMP will include success criteria that will be assessed by comparing performance during the monitoring period against objective and verifiable, ecologically‐based success criteria that reflect the goals and objectives of the site. Examples of success criteria may include, but are not limited to: (1) period of inundation similar to other wetlands of the same type in the South Bay region, (2) percent vegetation cover, and (3) plant species composition similar to other wetlands of the same type in the South Bay region, all aimed at replacing the functions and values that were lost in the wetland that was removed. The monitoring period will be a 5‐year period; the success criteria for this period must be satisfied in at least 3 of the 5 years, but if the success criteria are not so satisfied, then the monitoring period will be extended from year to year until the success criteria are satisfied within a consecutive period of 3 years. The City will retain a qualified biologist to conduct annual monitoring to assess establishment of wetland vegetation and wetland function, and if necessary, implement adaptive management actions (including replanting, nonnative species removal, etc.) to ensure that there is no net loss of wetland habitat. Wetland compensation habitat will be set aside and protected in perpetuity through appropriate legal means, consistent with U.S. Army Corps of Engineers’ requirements and as specified in permits. The City will be responsible for all associated costs and logistics. The Project proposes to create and restore existing wetlands within the Golf Course, resulting in a total of 12.168 acres of wetlands. The plan will detail the amount and type of wetlands (based on the Project’s wetland delineation once verified) that will compensate (through preservation, creation, and/or restoration) for Project impacts to existing wetlands/waters of the United States, and outline the monitoring and success criteria for the compensation wetlands/waters of the United States. Once the plan is approved, the City will implement its wetland/waters of the United Statesstate compensation measures prior to the initiation of Project activities. Wetland creation and enhancement activities will be completed concurrent with the completion of the Project, after which Tthe City will retain a qualified biologist to monitor the compensation features per the mitigation planMMP. City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐6 January 2014 ICF 00631.12   The Golf Course reconfiguration has been designed to provide a beneficial impact for natural resources. The existing wetlands (Waters of the U.S.) on the project are low quality and low functioning. The wetlands are very small, narrow, and isolated. Portions of these wetland will be filled during reconfiguration, however approximately 11.74 acres will be created and 0.73 acres will be enhanced. The created and enhanced wetlands will be highly functioning and provide high quality habitat. The increase in wetland will improve stormwater filtration throughout the golf course. Additionally, the reconfigured golf course will reduce the amount of managed turf area by 40%, from 135 acres to 81.3 acres and transformed to non‐turf native grass zones. During construction, nonnative plants and trees would be replaced with native grasses. The decrease in turf area will also improve stormwater filtration throughout the golf course. Per CEQA, the mitigation requirements have been recorded in the Mitigation Monitoring and Reporting Project and will be adopted by the City at the time of approval of the project. The mitigation requirements are being made part of the contract specifications that will need to be followed by the City and its contractors. Comment SCVAS‐5  The commenter requests that the Mitigation Measure Bio‐9 for replacement of loss of trees better comply with the City of Palo Alto Tree Technical Manual by developing a native plant grassland and shrub habitat restoration plan for Byxbee Park Response SCVAS‐5  MM BIO‐9 (text below) was revised in the Final EIR and addresses the concerns about tree density at Pearson Arastradero Preserve by opening tree planting at other locations in the foothills, as well as Byxbee Park. Byxbee Park is one of the options for near‐site mitigation being considered for restoration of native Bay ecosystem habitat. The City is aware of constraints at Byxbee Park caused by its prior use as a sanitary landfill site and will consider that in its decision regarding what type of vegetation to plant at Byxbee Park. Comments received during the public review of the Draft EIR requested that the City look at various options for tree replacement. Suggestions included a recommendation to plant different types of native vegetation (e.g., grasses and shrubs) in lieu of trees and planting replacement trees at various locations. The City created an ad hoc Stakeholder Group (explained in further detail below) to study these options. The City also initiated the preparation of an Ecosystem Services (or Benefits) Calculation Study to quantify the net ecosystem services gained or lost at the Golf Course. Creation of an ad hoc Stakeholder Group: The City created an ad hoc Stakeholder Group to review, prioritize, and provide recommendations for near‐site or off‐site mitigation landscape restoration or tree planting plans. The Stakeholder Group was made up of representatives from the City Community Services Department, members of the Parks and Recreation Commission, and representatives of environmental groups, including Acterra, Canopy, Audubon, and the California Native Plant Society. Ecosystem Services (or Benefits) Calculations Study: Landscaping alternatives, in addition to, or in lieu of, tree planting must be calculated using a defendable scientific approach. The City has employed a consultant to calculate the current value of ecosystem services such as those provided by the trees that have been proposed for removal. In addition, the consultant has provided an estimate of the potential ecosystem services that would be supplied by the reconfigured golf course City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐7 January 2014 ICF 00631.12   landscape, and a monetized difference that would equate to mitigation funding applied to near‐site or off‐site projects (as described in the ecosystem services report provided in Appendix H). The dollar value of the required mitigation calculated by the ecosystem services analysis was $130,000. The mitigation expenditure was increased to $200,000 in order to account for other indirect tree removal impacts (e.g., impacts on wildlife habitat, bird populations, etc.). The $200,000 value was calculated based on the cost of a large‐scale tree replanting required for the proposed tree removals under a traditional mitigation approach. In response to recommendations to plant different types of native vegetation to substitute for the trees removed, the City of Palo Alto Tree Technical Manual (2001) does not prohibit the use of native grasses and shrubs as mitigation for landscaping, but planting native grasses and shrubs as mitigation for tree removal, in lieu of planting trees, is unprecedented in the City. Typically, the methodology for replacing designated trees is focused on tree planting replacement ratios by canopy or appraised value deposited into a tree planting fund. Regarding locations for planting replacement trees, City staff explored additional options for measures to mitigate the Project’s tree removal impacts. Staff examined a number of combinations of on‐site, near‐site, and off‐site locations for tree and vegetation planting. Based on the findings of the Ecosystem Services analysis and input from the Stakeholder Group, staff has identified the following measures to be implemented as mitigation for the removal of trees from the Golf Course: 1) Planting 300 replacement trees (Baylands native species) within the golf course portion of the Project area as part of the Golf Course Reconfiguration Project. 2) Protection and monitoring of 500 naturally‐occurring oak saplings in the Arastradero Preserve (the saplings will be caged to prevent browsing by deer until the trees have matured adequately to ensure their long‐term survival). 3) Restoration of one acre of native bay ecosystem habitat at a site or sites in Byxbee Park near the Golf Course Project site. Accordingly, Mitigation Measure BIO‐9 has been revised as follows: Mitigation Measure BIO‐9: Compensate for Loss of Protected Landscape Trees by planting both On‐Site and Off‐Site, Consistent with Applicable Tree Protection Regulations Regulated trees that are removed will be replaced through a combination of on‐site replacement with native Baylands‐appropriate trees, protection of naturally‐generated oak saplings in the Arastradero Preserve and/or other Foothills locations, and restoration of native Bay ecosystem areas to a total of 1 acre in close proximity to the Project. with native oaks (Quercus spp.) and/or other appropriate native tree species based upon the selected planting locations The landscaping plan for tree mitigation replacements will specifically identify the locations where replacement trees, oak sapling protection, and native Bay ecosystem restoration areas are to be planted; replacements mitigation will occur both on‐ site and offsite. Offsite locations include Baylands locations near the Project site, the Arastradero Preserve and/or other locations in the foothills. The on‐site tree replacement will consist of the planting of 300 native trees on the reconfigured golf course as part of the Project. The off‐site tree protection will consist of the placement of protective cages around 500 naturally‐occurring oak saplings on the Arastradero Preserve in order to prevent browsing by deer until the trees have matured adequately to ensure their long‐term survival. The off‐site native Bay ecosystem restoration will consist of the planting of 1 acre City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐8 January 2014 ICF 00631.12   or more of native grasses and shrubs at a site or sites within the Baylands in close proximity to the Project site. The final mitigation landscaping plan will be subject to review and approval by the City. Tree removals within the City will be compensated according to size of tree canopy removed. Full replacement of the amount of canopy removed will occur within 10 years. Replacement will be calculated based on tree size and number at time of planting, anticipated growth, survival rates, watering, and maintenance. These details will be included in the landscaping plan. Newly planted trees, protected saplings, and restored native Bay ecosystem areas will be monitored by the City staff and/or a contactor at least once a year for 3 years. Each year, any vegetation trees that does not survive will be replaced consistent with the City of Palo Alto Tree Technical Manual. Any vegetation trees planted as remediation for failed plantings will then be monitored for a period of 3 years in the same manner, and any trees and/or native plant material that does not survive will be replaced and monitored for an additional 3 years. Subsequent to publication of the Final EIR, the City continued discussion with the Stakeholder Group regarding the mitigation for Project‐related tree removals and has subsequently proposed to modify Mitigation Measure BIO‐9 as follows: 1. Increase the area of native Bay ecosystem habitat restoration at Byxbee Park to two acres. 2. Increase the duration of maintenance and monitoring of the new trees and restored native ecosystem areas to twenty years, predicated on the performance of the Golf Course and its ability to first pay for all Golf Course operating costs, debt service, Golf Course Infrastructure Reserve funding, and internal support costs. These proposed revisions to Mitigation Measure BIO‐9 will be presented to the City Council for approval at the February 3, 2014 public hearing regarding certification of the Final EIR. Comment SCVAS‐6  The commenter requests additional mitigation measures for the protection of burrowing owls. Response SCVAS‐6  Burrowing owl pair exhibit intraannual nesting burrow site fidelity prior to laying eggs, as is documented by nesting burrow adornment5 and displays at the nesting burrow before egg laying occurs. Additionally, the March 7, 2012 California Department of Fish and Game Burrowing Owl Staff Report recommends that an initial take avoidance (preconstruction) survey be conducted no more than 14 days prior to initiating ground disturbance activities using the recommended methods of owl detection specified in the “Detection Surveys” section of the Staff Report6. MM BIO‐4a on page 3.3‐19 of the DEIR states that “[s]urveys will follow the protocol outlined by the California Burrowing Owl Consortium (CBOC) (1993) and the 2012 CDFW staff report.” Therefore, non‐ breeding and/or breeding survey methods, determined by the appropriate time of the year surveys                                                              5 http://www.prbo.org/calpif/htmldocs/species/desert/burrowing_owl.htm 6 http://www.dfg.ca.gov/wildlife/nongame/docs/BUOWStaffReport.pdf City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐9 January 2014 ICF 00631.12   are initiated, will be used during owl surveys and take avoidance (preconstruction) survey methods will be used during the owl preconstruction survey. The 2012 CDFW Burrowing Owl Staff Report used the Scobie, D., and C. Faminow study to recommend buffers around owl burrows. This study (Development of standardized guidelines for petroleum industry activities that affect COSEWIC Prairie and Northern Region vertebrate species at risk) took place on Northern Prairie Region in Edmonton, Alberta, Canada (Scobie and Faminow 2000), which is very different from the San Francisco Bay Area. Owls in northern prairie regions likely have much larger home ranges than owls in California, as is shown by the estimated home range of 45 hectares7 in the Imperial Valley, California8 compared to 240 hectares7 in Saskatchewan9. The 250‐foot no‐activity buffer around nests in MM BIO‐4a is adequate to prevent impacts to active owl nest burrows and consistent with the Santa Clara Valley Habitat Plan. The City's Integrated Pest Management Program guides Golf Course operations related to pest control. The City's program does not permit the use of rodenticides, and the Golf Course does not currently use any rodenticides. The Golf Course’s primary method of control has been the use of live traps and euthanization. It is expected that this practice will continue after reconfiguration of the Golf Course as well. Therefore, the mitigation measure related to rodenticide use has been deleted from the Final EIR. No change to the EIR is required. Comment SCVAS‐7  The commenter requests adding additional bird species to the list of potential to occur within Project Footprint. Response SCVAS‐7  A CNDDB database search was conducted to identify special‐status bird species that have been observed in the Project area (see Table 3.3‐3 of the Draft and Final EIR). Although the database search only covers special‐status bird species, all migratory bird species and raptor nests are protected under the Migratory Bird Treaty Act (MBTA) and California Department of Fish and Wildlife (CDFW) Code 3503 and 3503.5. Impacts on non‐listed bird species and common migratory bird nests would be avoided through the implementation of Mitigation Measure BIO‐3. No revisions to the EIR are necessary. Comment SCVAS‐8  The commenter requests that plant surveys be conducted during appropriate time frames of the year.                                                              7 http://www.blm.gov/pgdata/etc/medialib/blm/wy/wildlife/animal‐ assessmnts.Par.52462.File.dat/WesternBurrowingOwl.pdf 8 Rosenberg, D. K. and K. L. Haley. 2004. The ecology of burrowing Owls in the agroecosystem of the Imperial Valley, Califronia. Studies in Avian Biology. Cooper Ornithological Society. Available: http://people.oregonstate.edu/~rosenbed/articles/desante%20et%20al%20densitydis.pdf 9 Haug, E. A. and L. W. Oliphant. 1990. Movements, activity patterns, and habitat use of Burrowing Owls in Saskatchewan. Journal of Wildlife Management 54: 27‐35.  City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐10 January 2014 ICF 00631.12   Response SCVAS‐8  The purpose of the December 2, 2012 survey was purely a reconnaissance‐level survey to determine the type and quality of habitat that occurs within the Project site. MM BIO‐2a (Conduct Preconstruction Botanical Surveys) on page 3.3‐13 of the DEIR requires that surveys for each of the plant species with potential to occur be conducted according to CNPS Botanical Survey Guidelines during species‐specific survey windows. MM BIO‐2a also mentions that only one season of surveys is expected to be necessary, given the historic and recent routine disturbance that occurs on the Project site. A focused survey for special‐status plant species was conducted on August 7, 2013 as part of the surveys required by MM BIO‐2a. During this survey no special‐status plants were observed. Additional surveys are planned to occur prior to construction activities including any tree removal activities. Therefore, no revisions to the EIR are necessary. Comment SCVAS‐9  The commenter requests that scoping comments be included in the section on Potential Areas of Controversy/Issues to be Resolved and Santa Clara valley Audubon Society, as well as former Palo Alto City Council members Emily Renzel and Enid Pearson be mentioned specifically. Response SCVAS‐9  All scoping comments are provided as Appendix A in the Draft and Final EIR. The Executive Summary provides a summary of issues raised during the public hearings and is not a comprehensive list of each and every comment. No revisions to the EIR are necessary. Comment SCVAS‐10  The commenter requests that other alternatives be considered for location and intensity of use of the Baylands Athletic Center expansion. Response SCVAS‐10  In light of the comments received during the public review of the Draft EIR, the Final EIR has been modified to eliminate construction of the gymnasium from the Project scope. This would reduce the significant and unavoidable impact to Greenhouse Gas Emissions. There is no specific project identified in the City’s 5‐Year Capital Improvement Program for the design or construction of recreational improvements on the 10.5 acres for expanding the Athletic Center nor is there any funding allocated for such a purpose at this time. However, in order to address the maximum possible environmental impacts, the project description includes a scenario with intensive use of the 10.5 acres. Prior to implementation, any specific project to implement recreational improvements on the 10.5 acres would go through an intensive public vetting process, as well as review by the Parks and Recreation Commission and other advisory Boards and Commissions. Appropriate uses and design of the 10.5‐acre parcel will be considered during the upcoming City‐wide Parks and Open Space Master Planning Study. The SCVAS and other stakeholders will be invited to participate with other interested stakeholders in the development of this long range study. The project would need to be reviewed and approved through the Site and City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐11 January 2014 ICF 00631.12   Design review entitlement process. Parking for any enhancements proposed would be provided onsite, and 255 additional spaces would be required for the most intensive use. One of the basic objectives of the proposed Project is to increase the inventory of athletic fields to address shortage of these facilities in the City. Therefore, any alternatives that do not include the athletic center expansion were not considered because they would not be consistent with this basic objective. Additionally, the City Council endorsed Plan G on July 23, 2012, which included 10.5 acres of athletic center expansion. The EIR analyzed a reasonable range of alternatives in addition to the planning that was undertaken by the design team prior to the EIR preparation. The alternatives in the EIR include the No Project (required by CEQA), Phased Construction Alternative (to keep part of the golf course open to avoid full closure of the golf course), Limited Athletic Center Expansion (no nighttime lighting and gymnasium), and Limited Reconfiguration Alternative (partial redesign of holes affected by SFCJPA’s project). Comment SCVAS‐11a  The commenter states that the Baylands Athletic Center is not described in adequate detail to consider ‘worst‐case’ impacts and City should have looked at other alternatives to reduce impacts Response SCVAS‐11a  In light of the comments received during the public review of the Draft EIR, the Final EIR has been modified to eliminate construction of the gymnasium from the Project scope. This would reduce the significant and unavoidable impact to Greenhouse Gas Emissions. There is no specific project identified in the City’s 5‐Year Capital Improvement Program for the design or construction of recreational improvements on the 10.5 acres for expanding the Athletic Center nor is there any funding allocated for such a purpose at this time. However, in order to address the maximum possible environmental impacts, the project description includes a scenario with intensive use of the 10.5 acres. Prior to implementation, any specific project to implement recreational improvements on the 10.5 acres would go through an intensive public vetting process, as well as review by the Parks and Recreation Commission and other advisory Boards and Commissions. The project would need to be reviewed and approved through the Site and Design review entitlement process. Parking for any enhancements proposed would be provided onsite, and 255 additional spaces would be required for the most intensive use. Five athletic fields were considered in the EIR to represent the worst‐case scenario and the maximum number of fields that the site can accommodate. Comment SCVAS‐11b  The commenter requests that biological impacts of using synthetic turf be analyzed as suggested by the commenter. Response SCVAS‐11b  There would be no direct stormwater discharges from the Athletic Fields to San Francisquito Creek. All runoff would be collected in an underground storm drain pipeline network that would be pumped via two storm water pump stations to a slough that drains directly to the Bay. City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐12 January 2014 ICF 00631.12   Consistent with the design and installation of artificial turf at the Cubberley Community Center fields and the Stanford/Palo Alto Playing Fields park, the type of material and infill materials will be carefully analyzed by City staff and consultants to ensure the highest level of environmental and field user safety. Comment SCVAS‐11c  The commenter requests that biological impacts of using natural turf be analyzed. Response SCVAS‐11c  There would be no direct stormwater discharges from the Athletic Fields to San Francisquito Creek. All runoff would be collected in an underground storm drain pipeline network that would be pumped via two storm water pump stations to a slough that drains directly to the Bay. Overall, there would be a reduction in water need for irrigation from the project site once the proposed Project (golf course and athletic fields) is implemented because of the reduced size of the proposed Golf Course and more efficient irrigation techniques compared to the existing Golf Course. Please see page 3.15‐7 of the FEIR for existing and projected water use from the site. Comment SCVAS‐11d  The commenter requests impacts of noise, fencing, lighting, loss of 10.5 acres of habitat and other environmental effects on birds and other wildlife related to the Athletic Center expansion be examined. Response SCVAS‐11d  Operation noise, fencing, and lighting would be no greater than current existing use of the Project site now. Potential impacts to nesting birds and wildlife from construction noise are evaluated and mitigated to a less‐than‐significant level in the Biological Resources (Section 3‐3) section of the DEIR. Comment SCVAS‐11e  The commenter requests an explanation of relative contribution of the golf course and athletic center on any significant and unavoidable impacts identified in the EIR. Response SCVAS‐11e  In light of the comments received during the public review of the Draft EIR, the Final EIR has been modified to eliminate construction of the gymnasium from the Project scope. This would reduce the significant and unavoidable impact to Greenhouse Gas Emissions. The following impacts were found be significant and unavoidable in the Final EIR. 1) Aesthetics. The Athletic Center would create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area during Project operation. This impact would only occur for the Athletic Center (fields) expansion. City of Palo Alto    Comments and Responses   Palo Alto Municipal Golf Course Reconfiguration and  Baylands Athletic Center Expansion Project Final EIR SCVAS‐13 January 2014 ICF 00631.12   2) Air Quality. The Project would violate an air quality standard or contribute substantially to an existing or projected air quality violation during Project construction. This impact would occur for the grading phases of the golf course construction.