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HomeMy WebLinkAbout2025-03-24 City Council Agenda PacketCITY COUNCIL Special Meeting Monday, March 24, 2025 Council Chambers & Hybrid CITY OF 5:30 PM PALO Amended Agenda ALTO Amended agenda items appear below in RED Palo Alto City Council meetings will be held as "hybrid" meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone: 1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff's presentation or as determined by the Chair. Written public comments can be submitted in advance to city.council@CityofPaloAlto.org and will be provided to the Council and available for inspection on the City's website. Please clearly indicate which agenda item you are referencing in your subject line. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to city.clerk@CityofPaloAlto.org at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB's or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. TIME ESTIMATES Listed times are estimates only and are subiect to chance at any time. includine 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. March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. CALL TO ORDER SPECIAL ORDERS OF THE DAY (5:30 - 8:05 PM) Interview Candidates for the Boards and Commissions Spring Recruitment — Architectural Review Board, Human Relations Commission, and Utilities Advisory Commission; CEQA Status - Not a Project. AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (8:05 - 8:35 PM) Members of the public may speak in -person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (8:35 - 8:40 PM) Members of the public may not speak to the item(s). CONSENT CALENDAR (8:40 - 8:45 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 2. Approval of Minutes from March 10, 2025 Meeting 3. Nonprofit Partnership Workplan: Phased Approach 4. Approval of General Services Contract No. C25192791 with Synagro-WTT, Inc for Sludge Hauling Services for a Term of Three Years in an Amount Not to Exceed $2,584,756, for the Regional Water Quality Control Plant; CEQA Status — Not a Project 5. Approval of General Services Contract No. C25193187 with Universal Security Company in the Amount of $220,752 for Security Services at the Municipal Service Center and the Regional Water Quality Control Plant for a Period of Nine Months; CEQA status - Categorically Exempt under Sections 15301 and 15302 6. Adoption of a Resolution Authorizing MuniServices LLP, Hinderliter de Llamas & Associates, and Appropriate City Staff to Examine Sales and Use Tax Records from the California Department of Tax and Fee Administration (CDTFA); Adoption of an Ordinance Amending the Municipal Code to Update References to CDTFA; CEQA Status — Not a Project 7. Approval of Professional Services Contract C25187148 with Innovative Claims Solutions (ICS) in an Amount Not -To -Exceed Amount of $760,886 to provide Third -Party Administration of Workers' Compensation Benefits for a Period of One Year with an Option to Renew for up to Five Years Term. CEQA status - Not a Project March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. 8. Approval of Contract Amendment Number 2 to Contract Number C22183462 with Macias Gini & O'Connell LLP (MGO) to Add $415,071 and Extend the Term for Two Years for External Financial Audit Services; CEQA Status -- Not a Project. 9. Approval of Audit Reports for Grant Management And Utility Billing as Reviewed by Policy and Services Committee; CEQA: Not A Project 10. Approval of an Amended Funding Agreement with the Santa Clara Valley Transportation Authority (VTA) for 2016 Measure B Bicycle and Pedestrian Education and Encouragement Program Funding; CEQA status — not a project. 11. SECOND READING: Ordinance of the Council of the City of Palo Alto Creating New Chapter 10.66 (Pedestrian Only Streets and Community Streets) in Title 10 (Vehicles and Traffic) (FIRST READING: March 10, 2025 PASSED 7-0) BREAK (15 MINUTES) ACTION ITEMS (9:00 - 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters. AA1. Potential Support or Sponsorship of a Senate Bill 457 (Becker) Regarding Housing Accountability Act Reforms New Item Added ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting's agenda. 12. City of Palo Alto's Energy Risk Management Report for the second half of Fiscal Year 2024 (January 1, 2024 - June 30, 2024) CEQA Status — Not a Project. OTHER INFORMATION Standing Committee Meetings this week Public Comment Letters Schedule of Meetings March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. AMENDED AGENDA ITEMS AA1. Potential Support or Sponsorship of a Senate Bill 457 (Becker) Regarding Housing Accountability Act Reforms New Item Added March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1. Written public comments may be submitted by email to city.council@cityofpaloalto.org. 2. For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3. Spoken public comments for agendized items using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom -based meeting. Please read the following instructions carefully. o You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. o You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. o When you wish to speak on an Agenda Item, click on "raise hand." The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. o When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4. Spoken public comments for agendized items using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City's ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A "license, permit, or other entitlement for use" includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A "party" is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A "participant" is a person who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of "financial interest" in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council's actions. If you qualify as a "party" or "participant" to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments. March 24, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas. Item 1 Item 1 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: SPECIAL ORDERS OF THE DAY Lead Department: City Clerk Meeting Date: March 24, 2025 Report #:2502-4162 TITLE Interview Candidates for the Boards and Commissions Spring Recruitment — Architectural Review Board, Human Relations Commission, and Utilities Advisory Commission; CEQA Status - Not a Project. DISCUSSION The City Council provided direction at the March 10, 2025 City Council meeting to interview all fifteen (15) candidates for the vacancies on the Architectural Review Board, Human Relations Commission, and Utilities Advisory Commission. Architectural Review Board (Full Term): 5:35 PM David Hirsch 5:45 PM Sema Yavuz 5:55 PM Yingxi Chen Human Relations Commission (Partial Term): 6:05 PM Sridhar Karnam 6:15 PM Jonake Bose 6:25 PM Aji Oliyide 6:35 PM Sean Patrick King (pending) 6:45 PM Sunanda Amishra 6:55 PM Jessica Nelson Utilities Advisory Commission: 7:05 PM Criag Barney 7:15 PM Olga Tanriverdi 7:25 PM Rachel Croft 7:35 PM Barry Wolf 7:45 PM Phil Metz 7:55 PM Claude Ezran Item 1: Staff Report Pg. 1 Packet Pg. 7 of 309 Item 1 Item 1 Staff Report Board/Commisslion Seat # Number of Applicants Term Start Term End Architectural Review Board 1, 2, 5 3 (2 incumbents) 4/1/2025 3/31/2029 Human Relations Commission 7 6 4/1/2025 10/31/2025 Utilities Advisory Commission 1, 4 6 (2 incumbents) 4/1/2025 3131/2029 Membership Requirements Appointment requirements for each Board and Commission are listed below. • Architectural Review Board — At least three members shall be architects, landscape architects, building designers or other design professionals (PAMC 2.21.0102) o This requirement is currently satisfied by Commissioners Mousam Adcock, Kendra Rosenberg, David Hirsch and Yingxi Chen. David Hirsch and Yingxi Chen's terms are expiring, and their seats are included in this recruitment. All applicants satisfy the requirements. • Human Relations Commission — Current Palo Alto residency. (PAMC 2.22.0103) All applicants satisfy the requirements • Utilities Advisory Commission — Each member of the commission shall be a utility customer or the authorized representative of a utility customer. Additionally, Palo Alto residency is required at all times for at least six members of the commission (PAMC 2.23.010 4). o This requirement is currently fulfilled by six Commissioners; Commissioner Meagan Mauter resides outside of Palo Alto. All applicants satisfy the requirements ATTACHMENTS Attachment A: Architectural Review Board Applications — Redacted Attachment B: Human Relations Commission Applications — Redacted Attachment C: Utilities Advisory Commission Applications - Redacted APPROVED BY: Mahealani Ah Yun, City Clerk Item 1: Staff Report Pg. 2 Packet Pg. 8 of 309 Submitted on Receipt number Related form version I Personal Information 23 February 2025, 2:52pm 69 15 Name Yingxi Chen Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Yes Address City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Architectural Email from the City Review Board? Other: Current sitting Vice Chair - reapplying for position 1 of 3 Item 1: Staff Report Pg. 3 Packet Pg. 9 of 309 Item 1 Attachment A - Architectural Review Board Applications - Consent to Publish Personal Information on the City of Pal Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration If describing work experience, please include company/employer name and occupation. (621 characters max) Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. (1311 characters max) Please select all that apply to you. I Application Questions 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? (1449 characters max) 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. (1449 characters max) Archived video meetings are available from the Midpen Media Center. I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Architect Licensed Architect in the State of California LEED Accredited Professional Work Experience: Y. Chen Architect, Principal, 2017 - present Williams + Paddon Architects + Planners, Job Captain, 2011- 2017 Collaborative Design Studio, Architectural Intern, 2008- 2011 CHORA Architecture and Urbanism, Researcher and Designer, 2007 Education: Master of Architecture, University at Buffalo, The State University of New York, 2008 Study Abroad Program - Henry Van de Velde Institute in Antwerp, Belgium, 2007 Bachelor of Architecture, Beijing University of Technology, Beijing, China, 2006 Currently Vice Chair on the Palo Alto Architecture Review Board Committee member, AIA (American Institute of Architects) Silicon Valley 2018 Design Awards Committee member, AIA Silicon Valley 2018 and 2019 Home Tour Architect, landscape architect, building designer, other design professional To me, buildings represent a lasting commitment. As architects, we bear the responsibility of designing quality spaces where people live, work, and thrive. The role of the ARB is even more significant in this context, and I am eager to contribute to shaping a better community. Before starting my own practice, I gained valuable experience working with two architectural firms, where I had the opportunity to participate in a diverse range of projects from schools to hotel resorts, from ski lodges to car dealerships. With this experience, I hope to continue making a meaningful impact and help create environments that enrich our community. Given the housing crisis we are facing, I am especially interested in finding a balance between supporting a healthy, growing city and preserving its unique character. One of the key challenges is addressing onsite circulation issues while also alleviating the pressure on road traffic across the city. 2 of 3 Item 1: Staff Report Pg. 4 Packet Pg. 10 of 309 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? (1587 characters maxi 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. (1035 characters maxi Item 1 Attachment A - Architectural Review I would like to see the ARB take an rge-scale urban planning for specific areas. Pr Board Applications - s and guidelines before the start of projectk Redacted ial. Our city is home to many quality buildings, and one of my favorites is the Junior Museum and Zoo. It serves as a great example of an inspiring and interactive space for children. Architecturally, the gable roof and clean forms offer a contemporary interpretation of the surrounding neighborhood. 5. Architectural Review Board Members work with the I have reviewed all of these documents during my time on ARB documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. (1173 characters max) Palo Alto 2030 Comprehensive Plan (2017) Zoning Code El Camino Real Design Guidelines El Camino Real Master Plan Study (2007) Area Plans such as the South of Forest Avenue (SOFA) 1 (2000) and 11 (2003) Plans California Environmental Quality Act Permit Streamling Act Density Bonus Law Secretary of the Interior's Standards Downtown Urban Design Guidelines (1993) Other documents listed on this website as well. If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Yes Commissions Handbook. View the Boards and Commissions Handbook. Signature Name of signatory: Yingxi Chen Date Completed 02/23/2025 3 of 3 Item 1: Staff Report Pg. 5 Packet Pg. 11 of 309 Submitted on Receipt number Related form version I Personal Information Name Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address 4 February 2025, 9:52pm 72 15 David Hirsch Yes City Palo Alto Postal Code 94301 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse own real property in Palo Alto? No No How did you learn about the vacancy on the Architectural Community Group Review Board? Email from the City Item 1: Staff Report Pg. 6 1 of4 Packet Pg. 12 of 309 Item 1 Attachment A - Palo Alto Weekly LArchitectural Review City Website Board Applications - Redacted I Consent to Publish Personal Information on the City of Palo Alto Website Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration If describing work experience, please include company/employer name and occupation. (621 characters max) Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. (1311 characters max) Please select all that apply to you. I Application Questions 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? (1449 characters max) I give permission for the City of Palo Alto to post to the City's website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Retired Architect Harvard College BA- Philosophy; The Cooper Union- Architecture-- non degree; Harvard Grad. School of Design - M Arch. Registered Architect; New York State and Connecticut; Senior Urban Designer; NYC Mayor's Office of Development (MOD) Partner in several NYC Architectural Firms and founding partner of Urban Architectural Initiatives (UAI) from 1997 to 2016 responsible for many, varied residential projects, educational facilities, community facilities, and commercial street improvements. Pre- Palo Alto: Renovated Brownstone in Park Slope neighborhood of Brooklyn, NY.; Active in block association, then Park Slope Civic Council for various neighborhood improvements; board member Prospect Park Environment Center including overseeing renovation of historic tennis house;; participant in application to Landmarks Commission to qualify Park Slope as first NYC designated historic neighborhood. Palo Alto: Assistant to consultants during community involving study of Cubberley to create a coordinated new community facility and (future) school; ARB member for two 3 -year periods. Architect, landscape architect, building designer, other design professional I request the opportunity to serve a final term on the ARB. I believe my experience as the founder of an architectural firm in New York, responsible for numerous significant housing projects (mostly for affordable tenants), civic buildings, educational facilities, historic structures, small commercial buildings, street improvements has provided me with a deep understanding of the design and construction process. The two terms on the ARB have broadened this experience, through the addition of group consensus. One special additional professional experience in NYC was as a senior urban designer for the Mayor's Office of Development, which effectively created opportunities for the restoration of failing commercial areas of the city. Peter Baltay and I agree that a development office would benefit Palo Alto by coordinating the appropriate players to pro -actively encourage the potential, major housing opportunities and appropriate neighborhood needs in response to the Housing Element. 2 of 4 Item 1: Staff Report Pg. 7 Packet Pg. 13 of 309 2. Please describe an issue that recently came before the Board that is of particular interest to you and describe why you are interested in it. (1449 characters max/ Archived video meetings are available from the Midpen Media Center 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? (1587 chara cters mars 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. (1035 characters max/ 5. Architectural Review Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. (7 173 characters marl Palo Alto 2030 Comprehensive Plan (2017) Zoning Code El Camino Real Design Guidelines El Camino Real Master Plan Study (2007) Area Plans such as the South of Forest Avenue (SOFA) 1 (2000) and 11 (2003) Plans California Environmental Quality Act Permit Streamling Act Density Bonus Law Secretary of the Interior's Standards Downtown Urban Design Guidelines (1993) Other documents listed on this website as well. Item 1 Attachment A - Architectural Review A ten unit townhome development i ction of the parking lot adjacent to Town and Co Board Applications - A separately owned parcel including t Redacted ng lot and the original T&C property is leased by the owners of T&C from a single land owner.. During a presentation of the townhomes I voiced my concern that this was too small a project given the large size of the entire parking lot; that there should be one project with many more units (especially considering the city's Housing Element requirements). The other board members disagreed and voted for the project. It is scheduled for this weeks meeting (Feb. 6, 2025). The owner of T&C wrote a letter reaffirming their interest in creating one unified project design. If Palo Alto had a development coordinator' perhaps this opportunity would have been feasible. Given the choice, I imagine that T&C would have preferred a less prominent design more appropriately integrated with its neighbor. Our responsibility is often fairly simple, many quality architects are willing to suffer the complexity of the approval process to build here. But if we are conscientious and concerned about the RHNA numbers relative to their impact (25 buildings X 250 apartments = 6,250 total units x 2.3 ay. family = 14,375 new Palo Alto'ans which equals about 22% increased population which means) we need to plan for more related parks, local commercial facilities, transportation, utilities etc. This is not a one-off, this requires major urban planning and the ARB ought to be part of the equation. Stanford University - The original rusticated stone buildings and landscaping (Henry Hobson Richardson - Architect; Frederick Law Olmsted - Landscape Architect) The Canter Art Museum - (Polshek and Partners - Architects) Ramona Street - Hamilton to University - Pedro de Lemas; Birge Clark and others - Architects Bio-X - Stanford - (Norman Foster - Architect) Office Building - University at Alma - (Joseph Bellomo - Architect Hizashi - Multiple Housing Unit - (Architect unknown) The Comp Plan and Zoning Code are an integral part of our analysis and that of the Department of Planning prior to receiving packet. The zoning is provided in each architects submission as well. The Comp Plan is especially important to understand the quality of the Palo Alto community. The El Camino planning is in flux and the Design Guidelines are fairly dated. CEQA is normally carefully addressed by Planning, Density Bonus is critical now for the Housing Element. Downtown is the latest study along with El Camino and San Antonio Road. I am very familiar with the Historic regulations. Objective Standards and SB9 Standards are also important. I am fairly well informed about most of these. 3 of 4 Item 1: Staff Report Pg. 8 Packet Pg. 14 of 309 If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Item 1 Attachment A - Architectural Review Board Applications - Redacted Yes Name of signatory: David L Hirsch 02/05/2025 4 of 4 Item 1: Staff Report Pg. 9 Packet Pg. 15 of 309 Submitted on Receipt number Related form version I Personal Information 25 January 2025, 9:44am 71 15 Name Sema Yavuz Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94301 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Architectural Palo Alto Weekly Review Board? 1 of 3 Item 1: Staff Report Pg. 10 Packet Pg. 16 of 309 Item 1 Attachment A - Architectural Review Consent to Publish Personal Information on the City of Pal Board Applications - Redacted Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. (521 characters max/ Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. (1311 characters max) Please select all that apply to you. I Application Questions 1. Why are you interested in serving on the Architectural Review Board and what experience would you bring to the position? (1449 characters max) I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Architect and Urban designer USGBC LEED certified CA architectural license 20 year experience as an architect and urban planner Worked for Hillier, EYP up at East coast and had my own architectural firm in San Diego 2007-2013 Designed cities, office campuses, schools, homes, tenant improvement projects in US and internationally I have been focusing on affordable housing investment, development and operations in Indiana since 2012 to present I am mostly concerned and pationate about about affordability of housing to the young generation all in all through out the country New to the community. Moved from San Diego end of December 2024 lived in Palo Alto 2018 to 2021 Architect, landscape architect, building designer, other design professional Advocating affordable home. Sustainable urban and building practices also working and enhancing the urban design guidelines for downtown 2. Please describe an issue that recently came before the Affordable housing homes for everyone, mitigation of wild fires Board that is of particular interest to you and describe why you are interested in it. (1449 characters max) Archived video meetings are available from the Midpen Media Center. 3. If you are appointed, what specific goals would you like to see the Architectural Review Board achieve, and how would you help in the process? (7587chars cters mar( 4. Please identify a project (or projects) that you find to be examples of good architecture, and explain why. You may include samples, identify project addresses, or provide links. (7035 characters max) Affordable housing, enhancing urban design guidelines with business success and affordability to all in mind. Promote diversity Affordable housing using Modular's and prefabricated components projects with mixed use component that promotes revitalization with sustainability in mind 5. Architectural Review Board Members work with the I have experience developing/ designing Design guidelines, master documents listed below. If you have experience with any of planning Item 1: Staff Report Pg. 11 Packet Pg. 17 of 309 2 of 3 these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board. (1173 characters maxi Palo Alto 2030 Comprehensive Plan (2017) Zoning Code El Camino Real Design Guidelines El Camino Real Master Plan Study (20071 Area Plans such as the South of Forest Avenue (SOFA) 1 (2000) and 11 (2003) Plans California Environmental Quality Act Permit Streamling Act Density Bonus Law Secretary of the Interior's Standards Downtown Urban Design Guidelines (1993) Other documents listed on this website as well If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Item 1 Attachment A - Architectural Review Board Applications - Redacted Yes Name of signatory: Sema Yavuz 01/23/2025 3 of 3 Item 1: Staff Report Pg. 12 Packet Pg. 18 of 309 Submitted on Receipt number Related form version I Personal Information 21 February 2025, 5:17pm 48 12 Name Jonake Bose Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? (Partial Term expiring October 31, 2025) Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Human Relations Community Group Commission? 1 of 3 Item 1: Staff Report Pg. 13 Packet Pg. 19 of 309 Item 1 Attachment B- Human Relations Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Independent College Consultant Please list your relevant education, training, experience, I have been an independent college counselor (paid and probono certificates of training, licenses, and professional registration. practice) since 2020. My college counseling website is If describing work experience, please include www.jonakebose.com company/employer name and occupation. I am a professional member of the IECA (College Counseling prof. organization) I received my College Counseling Certificate from UC Berkeley in 2020 I was the Executive Director and served on the Board of Dream Catchers 2018-2020 I received my MA in International Relations & Economics from U of S. Carolina Served on Site Council for Ohlone Elementary, JLS Middle School, Palo Alto High School For additional information related to my professional career in banking please view my Linkedln profile: www.linkedin.conVin/jonakebose/ Please describe your involvement in community activities, I was the Board member on Youth Community Service 2014-2016 volunteer and civic organizations, including dates and any Board member and Finance Comm. Chair for Sage - Education travel offices held. organization Vestry member St. Marks - 2 terms - most recent term started in 2024 Board member of Woodstock School - Oldest international residential school in the Himalayas - since 2020. Chair of Audit and Advancement committee I Application Questions 1. Why are you interested in serving on the Human Relations Commission and what experience would you bring to the position? 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center Having come to the US on a full scholarship and benefited tremendously from that opportunity, I have always volunteered striving to pay it forward to those who are marginalized and don't have access to the resources many in this community do. As the executive director of a small non- profit serving low income middle school students in Palo Alto, I realized that many in this community are not aware that there are people living among us struggling to make ends meet. I would like to serve in a way so as to bring more equity to this disenfranchised group and increase awareness among Palo Alto residents so that we listen and learn from each other. I believe my experience working closely with this marginalized community has increased my awareness and understanding which will allow me to contribute positively to the work of this commission. There are two issues that I believe came up before HRC that are interest to me: 1. Providing assistance to support the unhoused community members - (RV dwellers, those living in the cars).. I have learned about this as I have engaged through our church with Life Moves and Hotel de Zink. I have had a chance to see how hard working these people are and would like to support them in finding more stability and ways for them to connect with the community they work in. 2. The other issue that is close to me is mental health issues affecting 2 of 3 Item 1: Staff Report Pg. 14 Packet Pg. 20 of 309 Item 1 Attachment B- Human the youth in our community. With th Relations Commission of screen usage, there is a lot more anxiety a youth. I believe the HRC could work on reco Applications Redacted our youth in ways they can connect with each other and have a sense of belonging within the community thereby feeling less lonely and less anxious. 3. If you are appointed, what specific goals would you like to I do not have specific goals that I would like to see the HRC achieve, but see the Human Relations Commission achieve, and how would I would like to actively support the goals the committee has put forward you help in the process? making sure we are listening to all stakeholder voices and being as inclusive as possible. Residents should feel safe and know that their voices are heard. There might be new issues that surface given the current political climate. It is important that we listen as issues arise and adapt accordingly if necessary. 4. Human Relations Commission Members work with the I do not have any particular experience with any of the above mentioned documents listed below. If you have experience with any of documents. these documents, please describe that experience. Experience with these documents is not required for selection. Human Services Needs Assessment (2020) Muni Code 9.72 I Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Yes Name of signatory: Ms. Jonake Bose 02/21/2025 3 of 3 Item 1: Staff Report Pg. 15 Packet Pg. 21 of 309 From: To: Clerk. City Subject: Application for the Human Relations Commission Date: Wednesday, February 26, 2025 9:36:07 PM Attachments: hrc-aoalication-Sridhar Karnam.odf Item 1 Attachment B - Human Relations Commission Applications - Redacted CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links. Sridhar Karnam Palo Alto, CA 94036 2/26/2025 City Clerk's Office City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Subject: Application for the Human Relations Commission Dear City Council Members, I am honored to apply for a position on the Human Relations Commission (HRC) to contribute toward fostering equity, inclusion, and social justice in Palo Alto. My professional and volunteer experiences align closely with the Commission's mission to advocate for underrepresented communities, address discrimination, and promote diversity and inclusion. I have been actively involved in mentorship, advocacy, and community -building for many years. From 2005-2010, I raised funds in India to support high school education for underprivileged students from marginalized backgrounds, and I worked with an orphanage to provide schooling and boarding for girls in need. In 2014-2016, I volunteered with the Aga Khan Foundation, organizing fundraising events and walkathons to bridge interfaith communities and provide resources for underserved populations. In my professional career, I have championed diversity and inclusion in cybersecurity at HP and Salesforce, working with Women in Security groups to organize events that promoted hiring and career development for women in tech. Additionally, I have mentored underrepresented students in STEM, supported local nonprofits with digital security guidance, and led discussions on cybersecurity awareness, ensuring equitable access to technology and career opportunities. If appointed, I would apply a Listen -Learn -Act Framework to support the HRC's mission: • Listen: Conduct community listening sessions to understand the challenges of marginalized groups. Item 1: Staff Report Pg. 16 Packet Pg. 22 of 309 Item 1 Attachment B - Human Relations Commission Learn: Analyze insights to develop data -driven policy recommen Applications - Redacted SS equity gaps. Act: Implement awareness campaigns, advocacy programs, and diversity initiatives to drive systemic change. As a long-time Palo Alto resident, I am deeply invested in creating a welcoming, inclusive, and fair community for all. I look forward to the opportunity to serve and contribute meaningfully to the HRC's vital work. Thank you for your time and consideration. I welcome the opportunity to discuss how my experience and passion can support the Commission's efforts. Sincerely, Sridhar Karnam Item 1: Staff Report Pg. 17 Packet Pg. 23 of 309 Item 1 Attachment B - Human Relations Commission Applications - Redacted CITY OF PALO ALTO Human Relations Commission Application Palo Alto welcomes volunteers, and we appreciate that you are taking the time to apply. Completion of this application provides valuable information to the City Council. If you have any questions or concerns, please contact the City Clerk's Office at (650) 329-2571 or City.Clerk(c cityofpaloalto.org. To receive email updates on open positions, sign up for the Board & Commission Recruitment and Vacancy Email List. Authority of Commission: • To foster public awareness and understanding of human relations problems by any means of disseminating information including, but not limited to, educational programs and printed and electronic media, • To facilitate resolution of problems or improvement of conditions within the jurisdiction of the commission by encouragement, persuasion and mediation and by pointing out private or public agencies which might provide assistance, • To make such studies which, in the judgment of the commission, might aid in affecting matters within the jurisdiction of the commission, • To recommend local legislation or other action to the Council and to encourage the Council to support or oppose state or federal legislation or regulation relating to matters within the jurisdiction of the commission, • To coordinate programs of the commission with similar programs by private and public agencies and organizations, and • To recommend or oppose legislation other than that of the City, provided that the City Council has not taken an official position with respect to such legislation, and provided further that any communication, whether oral or written, from the commission concerning such legislation clearly indicates that such recommendation or opposition is that of the commission and is not necessarily that of the City Council. Please see Palo Alto Municipal Code Sections 2.16 and 2.22 for more detailed information. The Human Relations Commission consists of seven members. Members must not be Council Members, officers, or employees of the City. Palo Alto residency is required to apply. Terms of Commissioners will be for three years and a term limit of nine consecutive years. The Human Relations Commission meets on the second Thursday of each month at 7:00 P.M. In addition, Commissioners may be asked to participate on at least one sub- committee. Sub -committees may hold additional meetings. Review the Boards and Commissions Handbook and the HRC Workplan for information and expectations on serving. 06128/2021 Item 1: Staff Report Pg. 18 Packet Pg. 24 of 309 Please email all completed applications to City.Clerk c@Cityof Item 1 Attachment B - Human Human Relations Commission R I ions Address: eli Phone ome Icbffice Phone: E-mail: Are you a Palo Alto Resident?®YesQNo Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members?()Yes ®No Are you available and committed to complete the term applied for? Yes ONo California state law requires appointed board and commission members to file a detailed disclosure of their financial interests (Fair Political Practices Commission, Conflict of Interest, Form 700). Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? Yes®No Excluding your principal residence, do you or your spouse own real property in Palo Alto?OYes�No Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, "No state or local agency shall post the home address or telephone number of any elected or appointed official on the Intemet without first obtaining the written permission of that individual." This consent form will not be redacted and will be attached to the Application and posted to the City's website. For the full code, review the California Government Code Section 6254.21 Read the code, and check only ONE option below: I give permission for the City of Palo Alto to post to the City's website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. I am providing the following alternate information and request that they use the following contact information instead. Address: Cell Pho J-lome QOffice Phone: E-mail: SRIDHAR KARNAM Item 1: Staff Report Pg. 19 Page 1 Human Relations Commission Packet Pg. 25 of 309 Item 1 Attachment B - Human How did you learn about the vacancy on the Human Relations Commission? Relations Commission Applications - Redacted Community Group ❑ Daily Post Email from the City ❑ City Website Palo Alto Weekly ❑ Flyer Other: Referred by Lori Meyers List relevant education, training, experience, certificates of training, licenses, or professional registration: (621 characters) I have a strong background in leadership, advocacy, and inclusion, aligning with the HRC's mission. With an MS in Engineering Management (Santa Clara Univ.) and an MBA in Marketing, I have led diverse teams in security, cloud, and product management at Salesforce, Oracle, and HP. My expertise in public communication, strategic leadership, and cross-cultural collaboration enables me to drive awareness and fairness. As a Palo Alto resident, I am committed to fostering equity, inclusion, and civil discourse in the community. Employment �✓ Current Employer ❑ Last Employer Employer: Salesforce Occupation: Product Manage Describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held: (1242 characters) I have been actively engaged in community -building, mentorship, and advocacy, aligning with the HRC's mission. From 2005 to 2010, I raised funds in India to support the education of underprivileged children from marginalized caste and religious backgrounds and worked with an orphanage providing schooling and boarding for high school girls. From 2014 to 2016, I volunteered with the Aga Khan Foundation Bay Area chapter, organizing fundraising events and walkathons. As the only Hindu volunteer in this Muslim -led initiative, I aimed to bridge communities and encourage broader support for a shared cause. I believe all humanity is one and that everyone deserves equal opportunities regardless of race, gender, or religion. At HP and Salesforce, I worked with Women in Security groups, organizing events to promote and hire women security professionals. I am passionate about youth education and diversity in STEM, mentoring underrepresented students and supporting local nonprofits with digital security guidance. As a long-time Palo Alto resident, I am committed to fairness, inclusion, and equity in our community and eager to serve the HRC's mission. SRIDHAR KARNAM Item 1: Staff Report Pg. 20 Page 2 Human Relations Commission Packet Pg. 26 of 309 Item 1 Attachment B - Human 1. Why are you interested in serving on the Human Relations Commission Relations Commission nce would you bring to the position? (1518 characters) Applications -Redacted I am passionate about equity, inclusion, and social justice, and I believe in fostering a community where everyone has equal opportunities, regardless of race, gender, or background. Serving on the Human Relations Commission aligns with my lifelong commitment to advocacy, mentorship, and community engagement. My experience spans fundraising, mentorship, and leadership in diversity -focused initiatives. From 2005 to 2010, I raised funds in India to support underprivileged children from marginalized communities and worked with an orphanage for high school girls. From 2014 to 2016, I helped organize fundraising events and walkathons for the Aga Khan Foundation, fostering interfaith collaboration. In my professional career, I have worked at HP and Salesforce to promote diversity in cybersecurity, helping organize events to hire and support women in security. I also mentor underrepresented students in STEM and support local nonprofits with digital security guidance. As a long-time Palo Alto resident, I am committed to creating a fair and inclusive community. My diverse experiences in advocacy, leadership, and cross-cultural collaboration equip me to contribute meaningfully to the HRC's mission. 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived videos available from the Midpen Media Center. (1449 characters) The community listening session on Local Muslim, Palestinian, and Arab Experiences in the Face of Rising Islamophobia and Anti -Arab Hate (December 2023) deeply resonated with me, as I strongly believe that listening is the first step to understanding complex social issues and fostering meaningful change. This session highlighted the challenges faced by marginalized communities in times of heightened discrimination and underscored the importance of open dialogue, empathy, and community support. It reminded me of my own experience working with the Aga Khan Foundation in the Bay Area from 2014 to 2016, where I was the only Hindu volunteer in a Muslim -led initiative. I actively helped organize fundraising events and walkathons, believing that interfaith collaboration can bridge communities and create shared opportunities for support and understanding. Participating in this work reinforced my conviction that all humanity is one and that every individual, regardless of race, religion, or ethnicity, deserves equal opportunities and dignity. I deeply appreciate the HRC's commitment to giving a platform to underrepresented voices, as true progress begins with listening, acknowledging lived experiences, and working together to build a more inclusive and equitable society. SRIDHAR KARNAM Page 3 Human Relations Commission Item 1: Staff Report Pg. 21 Packet Pg. 27 of 309 Item 1 Attachment B - Human 3. If you are appointed, what specific goals would you like to see the Human Relations Commission ion achieve, and how would you help in the process? (1656 characters) Applications -Redacted I would apply a Listen -Learn -Act Framework to help the HRC drive equity and inclusion in Palo Alto. 1. Listen — Understand Community Needs (0-6 months) • Host listening sessions with underrepresented groups (e.g., minorities, immigrants, women in tech). • Use surveys and town halls to identify key challenges in discrimination, housing, and employment. • Partner with local organizations and interfaith groups to elevate diverse perspectives. 2. Learn — Develop Policy Recommendations (6-12 months) • Analyze insights from listening sessions to create an HRC Equity Report identifying systemic barriers. • Study best practices from other cities to inform policy improvements. • Work with officials to refine anti -discrimination policies and increase resource accessibility. 3. Act — Implement Initiatives for Long -Term Impact (12+ months) • Launch awareness campaigns on racial and religious discrimination. • Develop a Community Ally Program for peer -led advocacy and inclusion. • Advocate for diverse hiring practices in city offices and businesses. As a community leader and advocate, I bring experience in fundraising for marginalized students in India, promotinq women in cybersecurity, and interfaith collaboration with the 4. Human Relations Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection, but will help you better understand the work of the board (690 characters) Human Services Needs Assessment Muni Code 9.72 — Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) I have experience working with anti -discrimination policies, diversity initiatives, and inclusion programs in both professional and volunteer settings. At HP and Salesforce, I helped organize events to promote and hire women in security, addressing gender diversity in tech. My work with the Aga Khan Foundation involved interfaith collaboration and fundraising for marginalized communities, aligning with the HRC's mission. Additionally, I have mentored underrepresented students in STEM and supported local nonprofits, giving me insight into equity, access, and policy advocacy. SRIDHAR KARNAM Page 4 Human Relations Commission Item 1: Staff Report Pg. 22 Packet Pg. 28 of 309 5. Please confirm that you have read the Boards and Commissions Handbook: Item 1 Attachment B - Human Relations Commission Applications - Redacted Yes J No Signature: (Please type or sign) Sridhar Karnam Date:2/2512025 SRIDHAR KARNAM Item 1: Staff Report Pg. 23 Page 5 Human Relations Commission Packet Pg. 29 of 309 Submitted on Receipt number Related form version I Personal Information 2 February 2025, 7:52pm 43 12 Name Sean Patrick King Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? (Partial Term expiring October 31, 2025) Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Human Relations Other: Friend Commission? 1 of 3 Item 1: Staff Report Pg. 24 Packet Pg. 30 of 309 Item 1 Attachment B- Human Relations Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Administrative Assistant Please list your relevant education, training, experience, Administrative Assistant in the PAU Office of Registrar. certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, None. volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Human Relations I am interested in serving on the Human Relations Commission to Commission and what experience would you bring to the promote equity, inclusivity, and data -driven decision -making in our position? community. As a Palo Alto native with a background in economics and business analytics, I bring expertise in data analysis and policy evaluation to assess community programs and inform strategic decisions. 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If you are appointed, what specific goals would you like to see the Human Relations Commission achieve, and how would you help in the process? A recent issue before the Human Relations Commission that particularly interests me is the presentation on hate crimes by the Federal Bureau of Investigation's Civil Rights Unit in September 2022. This topic is of great concern to me because understanding and addressing hate crimes is crucial for fostering a safe and inclusive community. By analyzing data on such incidents, we can identify patterns and implement targeted interventions to prevent future occurrences. If appointed, I would like to see the Human Relations Commission achieve measurable progress in promoting social equity, enhancing community engagement, and using data -driven insights to address issues like discrimination, housing insecurity, and public safety. Specifically, I would advocate for improved data collection and analysis to assess disparities in access to resources and inform policy recommendations. I would also support initiatives that foster dialogue between diverse community groups and local government to ensure that all voices are represented in decision -making. 4. Human Relations Commission Members work with the I do not. documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Human Services Needs Assessment (2020) Muni Code 9.72 I Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) If you'd like to provide any additional documents, please Resume_January_2025.pdf upload below. 2 of 3 Item 1: Staff Report Pg. 25 Packet Pg. 31 of 309 Item 1 Attachment B - Human Relations Commission SEAN PATRICK K ILppcatos:Rec'acteciJ M -S BUSINESS ANALYTICS CALIFORNIA POLYTECHNIC STATE UNIVERSITY - SAN LUIS OBISPO CONTACT L Palo Alto, CA. SKILLS • Programming Languages: Proficient in Python, R • Database Management: Proficient in SQL, MongoD6 • Cloud Computing: Proficient in AWS Cloud Services, Snowflake Cloud • Tools: Proficient in Tableau, Power BI, Microsoft Office Suite, Excel EDUCATION M.S Business Analytics California Polytechnic State University - San Luis Obispo 2023-2024 B.A Economics Minor in Applied Computing for Social and Behavioral Sciences San Jose State University 2020-2023 AWARDS • Honorable Mention - Best Paper Competition, San Jose Stale University, Department of Economics, July 2021. • Best MSBA Capstone Project - AT&T, California Polytechnic State University, June 2024 LANGUAGES English SUMMARY Results -driven Data Analyst with expertise in Python, R, SQL, business intelligence tools, and cloud computing. Skilled at using advanced analytical techniques to solve complex problems, optimize processes, and uncover actionable insights. With a strong foundation in economics and business analytics, I aim to leverage data - driven strategies to enhance decision -making and drive measurable business outcomes. WORK EXPERIENCE Marketing Analytics Consultant- Intern (Capstone Project) AT&T April 2024- June 2024 • Analyzed the impact of smartphone promotions during competitive periods using Python and SQL. Delivered data -driven recommendations that informed AT&T's strategic planning decisions for future campaigns. • Participated as part of a team of four to compete against other project teams, securing the "Best Capstone Project" award by developing predictive models that provided actionable insights for improving market share during promotional periods. Data Analytics Consultant- Intern (Capstone Project) SalesForce January 2024 - March 2024 • Performed data cleaning and transformation on employee chum data using Python and SQL. • Developed machine learning models to predict customer churn, enabling Salesforce to implement retention strategies to reduce employee churn rate + Built dynamic visualizations using Python and Tableau, communicating key insights to non -technical stakeholders to improve decision -making processes. Instructional Student Assistant San Jose State University, Department of August 2021 - January 2022 Economics • Facilitated the teaching of Introduction to Microeconomics to over 60 students in a 'hi-flexlearning environment. • Provided support in grading, lecturing and answering student questions. Assistant Stanford University, Department of July 2018 - September 2018 Psychiatry and Behavioral Sciences • Supported the CNtX high school summer program, assisting in the delivery of lectures on psychiatry and behavioral sciences to over 20 students. • Conducted data analysis using Excel. Item 1: Staff Report Pg. 26 Packet Pg. 32 of 309 Item 1 Attachment B - Human Relations Commission Please confirm that you have read the Boards and Yes l.pplications - Redacted Commissions Handbook. View the Boards and Commissions Handbook. Signature Name of signatory: Sean Patrick King Date Completed 02/02/2025 3 of 3 Item 1: Staff Report Pg. 27 Packet Pg. 33 of 309 Submitted on Receipt number Related form version I Personal Information Name Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address 19 February 2025, 6:07pm 50 12 Sunanda Mishra Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? (Partial Term expiring October 31, 2025) Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Human Relations Community Group Commission? 1 of 3 Item 1: Staff Report Pg. 28 Packet Pg. 34 of 309 Item 1 Attachment B- Human Relations Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Homemaker Please list your relevant education, training, experience, MAIS: Masters of arts and Interdisciplinary studies, Oregon State certificates of training, licenses, and professional registration. University. If describing work experience, please include B.S, Computer Science and Engg, NIT Rourkela. company/employer name and occupation. Computer software professional in the bay area for 11 years (1996-2007) Please describe your involvement in community activities, Parent volunteer at Fairmeadow Elementary School, science lab and art volunteer and civic organizations, including dates and any lab coordinator (2011-2018) offices held. Volunteered for Ravenswood school district elementary schools for a semester.( reading helper for Belle Heaven Elementary school) 2016. Volunteer at an international charity (Vibha Inc) that supports underprivileged children. (1996 -present): Marketing and outreach coordinator and Graphic designer. I Application Questions 1. Why are you interested in serving on the Human Relations Commission and what experience would you bring to the position? 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. I grew up in India in an educated middle class home. While I had a great childhood I was acutely aware of the needs of people that are less fortunate, and with that I joined the non profit Vibha to help raise awareness about the underprivileged children in India. In my last few years I have been fortunate to understand the issues like homelessness and mental health problems in our communities. While most people that I meet in palo alto seem to be highly educated, many lack awareness and empathy for the marginalized community. What I hope to bring to HRC is my enthusiasm to educate our community to be part of the solution. Be it mental health issues, unhoused population in palo alto or gender diversity in our schools, I wish to help our community overcome the fear and stigma and come together to find solution that uplifts us all. Nov 2024 had a discussion on services for the unhoused. During pandemic I was keen on helping those who were unable to afford housing and were parked in their vehicles. While a local church was willing to provide some unhoused folks parking spots in the night, I saw how local residents opposed it with fearful rhetoric that was based on negative stereotype of the poor and homeless. It was particularly hard to see veteran residents of our community being scared for no reason. I wish to educate people to overcome fear so that they can come our and support solutions to problems rather than sit out in fear. 3. If you are appointed, what specific goals would you like to Make our community more tolerant towards people who are marginalized see the Human Relations Commission achieve, and how would and undeserved via awareness campaigns and sensitize our community you help in the process? to the diversity and equity needs of our future. I would like to help with promoting the work of HRC via seminars and flyers and by getting out there in front of our busy tech savvy population that seems to have a blinders sometimes for everything humanitarian. 4. Human Relations Commission Members work with the No. documents listed below. If you have experience with any of 2 of 3 Item 1: Staff Report Pg. 29 Packet Pg. 35 of 309 Item 1 Attachment B - Human these documents, please describe that experience. Experience Relations Commission with these documents is not required for selection. Human Services Needs Assessment (2020) Applications - Redacted Muni Code 9.72 1 Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Yes Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Name of signatory: Sunanda Mishra 02/19/2025 3 of 3 Item 1: Staff Report Pg. 30 Packet Pg. 36 of 309 Submitted on 7 February 2025, 4:33pm Receipt number 45 Related form version 12 I Personal Information Name Jessica Nelson Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94306 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? (Partial Term expiring October 31, 2025) Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? No Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Human Relations Email from the City Commission? 1 of 3 Item 1: Staff Report Pg. 31 Packet Pg. 37 of 309 Item 1 Attachment B- Human Relations Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Human Relations Commission and what experience would you bring to the position? 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. 3. If you are appointed, what specific goals would you like to see the Human Relations Commission achieve, and how would you help in the process? I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Community Manager, Entrepreneur & Non -Profit Founder CA Realtor License ID:2107508 Member of the Santa Clara Realtor Association Foundation Board of Directors. I have attended local events that support local business and my teen has served with YCS (Youth Community Service). In my occupation I serve the community by providing assistance to settling expats in navigating the city and finding the support they need to adjust to living in a new city. I am interested in serving on the Palo Alto Human Relations Commission because I am passionate about fostering inclusive communities. With over 10 years of experience as a community manager and realtor, I have built strong relationships across diverse groups and understand the importance of collaboration. As a board member of the Santa Clara Realtor Association Foundation, I am committed to improving community well-being. Through my nonprofit, Pinnacle Coast Global, I have led initiatives focused on empowering vulnerable populations, particularly in housing and social services. My experience in real estate, nonprofit management, and community outreach will allow me to contribute meaningfully to the commission's mission of building a more inclusive Palo Alto. A recent issue that caught my attention was the Commission's discussion on affordable housing and its impact on vulnerable communities. As someone who works in real estate and manages housing solutions for underserved populations, I am deeply concerned about the lack of affordable housing options for low-income residents in Palo Alto. The increasing housing costs have made it increasingly difficult for families, students, and other vulnerable groups to find stable housing. This issue is of particular interest to me because my work with Pinnacle Coast Global focuses on providing housing solutions for people facing these challenges. I believe the Commission's efforts to address this issue align with my own mission of promoting equitable access to housing and resources. I am eager to contribute to finding sustainable solutions that ensure all residents can thrive in our community. If appointed, I would like to see the Human Relations Commission focus on advancing affordable housing initiatives, promoting inclusivity, and strengthening community outreach programs. One goal would be to create more opportunities for affordable housing that can help support vulnerable groups, including students, families, and low-income individuals. I would also like to see more initiatives that foster cross- cultural dialogue and understanding among Palo Alto's diverse communities. My background in real estate, nonprofit leadership, and 2 of 3 Item 1: Staff Report Pg. 32 Packet Pg. 38 of 309 Item 1 Attachment B- Human community engagement would allow Relations Commission Gating for policies that prioritize inclusivity in h s. Additionally, I would leverage my co Applications Redacted nizations to collaborate on projects that address the needs of underserved residents, ensuring that everyone in Palo Alto has access to the resources they need to thrive. 4. Human Relations Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Human Services Needs Assessment (2020) Muni Code 9.72 I Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Although I have not yet worked directly with the specific documents listed, my experience in community management and nonprofit leadership has prepared me to quickly understand and engage with similar strategic planning materials. As the founder of Pinnacle Coast Global, a nonprofit in its early stages, I am deeply focused on assessing the needs of vulnerable populations and designing programs to address gaps in housing, social services, and community development. Although my nonprofit is new, I aspire to contribute to policies and initiatives that promote equitable access to resources. Additionally, my work on the Santa Clara Realtor Association Foundation Board has involved reviewing community plans, helping me develop skills to analyze and contribute to community -focused documents. I am eager to expand my knowledge and actively engage with these documents to further the commission's work. Yes Name of signatory: Jessica Nelon 02/07/2025 3 of 3 Item 1: Staff Report Pg. 33 Packet Pg. 39 of 309 Submitted on Receipt number Related form version I Personal Information 23 February 2025, 8:39pm 52 12 Name Aji Oliyide Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? (Partial Term expiring October 31, 2025) Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Human Relations City Website Commission? 1 of 3 Item 1: Staff Report Pg. 34 Packet Pg. 40 of 309 Item 1 Attachment B- Human Relations Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Human Relations Commission and what experience would you bring to the position? 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. Archived video meetings are available from the Midpen Media Center. I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Senior Program Manager BS Mechanical Engineering - Georgia Institute of Technology MBA - Duke University Chief Operating Officer Certification Program (in progress) - M.I.T Employer: Google for 9+ years Previous: SFCASA Board Member (3 years) Current: Global Glimpse (2+ years), Board Member & Vice Chair I am interested in this position for several reasons but the most compelling is related to: having a vested interest in acting as an agent of change and fairness for the people of Palo Alto. This is core to my ethics and how I operate in my professional and personal life. I have been at Google for 9+ years but a working professional for many more. I am consistently sought after as a mentor/coach and advisor, particularly in situations where colleagues are seeking guidance in difficult/challenging situations. I bring many years of insight from various industries and public service on nonprofit boards. City services and resources for the unhoused during periods of inclement and cold weather including warming centers: as a global citizen, the plight of unhoused people deeply concerns me. I'm very interested in not only supporting temporary solutions which provide immediate protections/care but also thoughtful longterm solutions so that people can benefit from a feeling of stability and dignity. 3. If you are appointed, what specific goals would you like to In addition to several other goals, I would love to deep dive into issues see the Human Relations Commission achieve, and how would related to youth. The two Boards of which I have served (SFCASA) and you help in the process? Global Glimpse deal with youth in the foster care system and underrepresented youth travel, respectively. Vulnerable populations are of particular interest to me to support. I am a 15+ year program manager and an expert in execution of programs. I can lend this expertise in any way that provides value to the city. 4. Human Relations Commission Members work with the N/A - I do not have direct experience with the documents listed. documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Human Services Needs Assessment (2020) Muni Code 9.72 I Mandatory Response Program Community Services Element of the Comprehensive Plan (2017) If you'd like to provide any additional documents, please 2 of 3 Item 1: Staff Report Pg. 35 Packet Pg. 41 of 309 upload below. Please confirm that you have read the Boards and Yes Commissions Handbook. View the Boards and Commissions Handbook. Signature Name of signatory: Aji Oliyide Date Completed 02/23/2025 Item 1 Attachment B - Human Relations Commission Applications - Redacted 3 of 3 Item 1: Staff Report Pg. 36 Packet Pg. 42 of 309 Submitted on Receipt number Related form version I Personal Information 25 February 2025, 3:24pm 60 11 Name Craig A Barney Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory Palo Alto Weekly Commission? 1 of 3 Item 1: Staff Report Pg. 37 Packet Pg. 43 of 309 Item 1 Attachment C - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I give permission for the City of Palo Alto to post to the City's website the attached Board and Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. Environmental Manager Please list your relevant education, training, experience, B.S. Chemistry; UC Berkeley certificates of training, licenses, and professional registration. MSEM: Master of Science Environmental Management; USF If describing work experience, please include Environmental Manager 40 years experience company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions Previously on the CPA Compost Committee CPA CBDG 1998 Peninsula Industrial Business Association, President 1996 Leadership Palo Alto, Member 1997 1. Why are you interested in serving on the Utilities Advsory As I am nearing retirement after over 40 years in the environmental field, Commission and what experience would you bring to the I am intereste=d in using my skills locally. As a PA resident, I am very position? concerned about increasing our green energy portfolio. 2. Please describe an issue that recently came before the Fiber to the home Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting, you can view archived videos from the Midpen Media Center. Archived videos are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Utilities Advisory Commission achieve, and how would you help in the process? 4. Utilities Advisory Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. The Utilities Strategic Plan (2018) The Long Term Electric Acquisition Plan (2012) The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) Ten -Year Electric Enerav Efficiency Plan and Ten -Year Natural Gas Enerav Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. Improving all utilities and their delivery. Smart Meters are new and would like to understand them. Solar Power at home. Battery storage at home Volunteered for Fiber to Home working group. Yes 2 of 3 Item 1: Staff Report Pg. 38 Packet Pg. 44 of 309 View the Boards and Commissions Handbook. Signature Name of signatory: Craig A Barney Date Completed 02/25/2025 Item 1 Attachment C - Utilities Advisory Commission Applications - Redacted 3 of 3 Item 1: Staff Report Pg. 39 Packet Pg. 45 of 309 Submitted on Receipt number Related form version I Personal Information 16 January 2025, 10:18am 50 8 Name Rachel Croft Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94306 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? No Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory Other: current commissioner Commission? 1 of 3 Item 1: Staff Report Pg. 40 Packet Pg. 46 of 309 Item 1 Attachment C - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Utilities Advsory Commission and what experience would you bring to the position? I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Consultant, Marketing and Strategy in Healthcare industry - Current member of Utilities Advisory Commission (22 months). - For the last 8 years I worked for a company applying behavior change models for quitting smoking. As employee #4 I led early development of the product, working with smoking cessation experts to select and implement behavior change models through use of an FDA cleared biometric sensor plus behavior change app. Through data collection and iteration we learned about what works to help people quit smoking. I hope to apply this experience at UAC as we help residents and businesses adopt energy / water efficiency and modify use patterns achieve the City's sustainability goals. - Prior to that I spent 18 years in the medical device industry in business functions: strategic marketing and business development, working in compliance with FDA and EU regulations. - Prior to that I spent 5 years in investment banking. BS Industrial Engineering , Stanford MBA in Finance, Wharton U Penn Current UAC Commissioner (22 months) Recently joined the Palo Alto Climate Protection Working Group (June 2024) Greene Elementary: Current PTA Secretary (2 years) Escondido Elementary: Safe Routes to School rep (2 years), VP Communication (2 years) I worked actively in Southgate over the last 10 years to keep residents informed and provide input to Palo Alto regarding Grade Separation at the Churchill crossing. Nextdoor: neighborhood lead for Southgate I am interested in sustainability and I view utilities as key actors that can enable communities to reduce their climate impacts. This was my main reason for wanting to participate on the UAC. I am interested in bringing my experience applying behavior change models to advise CPAU as it seeks to influence resident and business usage patterns to achieve our SCAP objectives. Now that AMI is almost completely rolled out we have data to share with customers that has the potential to change behaviors if we use it effectively. I'm inspired by CPAU's opportunities and challenges and I hope to continue work on the commission for another term. 2. Please describe an issue that recently came before the I'm particularly interested in time of use rates and their potential to Commission that is of particular interest to you and describe impact usage patterns, in line with my interest in behavior change. I why you are interested in it. If you have never been to a would like to see CPAU set rates that incentivize people use energy in Commission meeting, you can view archived videos from the ways that help us achieve clean power while maintaining reliability and Midpen Media Center. resiliency. Archived videos are available from the Midpen Media Center. 2 of 3 Item 1: Staff Report Pg. 41 Packet Pg. 47 of 309 3. If appointed, what specific goals would you like to see the Utilities Advisory Commission achieve, and how would you help in the process? 4. Utilities Advisory Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. The Utilities Strategic Plan (2018) The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) Ten -Year Electric Energy Efficiency Plan and Ten -Year Natural Gas Energy Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Item 1 Attachment C - Utilities Advisory Commission I would like to see the UAC continud for activities that will help us to achieve our SCA Applications - Redacted ve continued tracking of metrics (for example: 80% by 2030, penetration of electrification, HPWH uptake, etc.) and achievement against them. I also hope the UAC can advise the city on decisions that affect rates which have been increasing at a higher rate lately, with a goal of bringing the year/year increases down while still achieving reliability, service and SCAP goals. I have reviewed the SCAP plan in detail as it has evolved,so that I am familiar with the City's goals, especially the items that are relevant to CPAU. I have reviewed any plans that are relevant to discussions at UAC as the discussions arise. Yes Name of signatory: Rachel E Croft 01/16/2025 3 of 3 Item 1: Staff Report Pg. 42 Packet Pg. 48 of 309 Submitted on Receipt number Related form version I Personal Information Name Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address 13 February 2025, 5:19pm 57 11 Claude Ezran Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? No Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory Email from the City Commission? 1 of 4 Item 1: Staff Report Pg. 43 Packet Pg. 49 of 309 Item 1 Attachment C - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Retired Executive • Retired high-tech marketing executive, 30+ years of experience in Silicon Valley companies such as Intel, 3Com, Adobe, and start-ups, mostly at the Director and VP level. • Director of Marketing for Oorja Fuel Cells, a clean energy company(2015-2016). • Extensive experience working collaboratively in teams. • Member of the Board of Directors of Cable Co-op (1992-1998).. Subscribers -owned cable TV company serving Palo Alto households. Very similar to a publicly owned utility. • MBA, Harvard Business School. • MSEE, Ecole Superieure d'Electricite (France). Studied electricity generation and transport. • BS. Advanced mathematics and physics • Human Relations Commission, including Vice -chair and Chair:2008- 2014. • Founder and Organizer of Palo Alto World Music Day: 2009-2019 • Member of the Board of Directors, Palo Alto Recreation Foundation (PARF): 2010-2020 • Graduate of the Palo Alto Citizen Police Academy: 2019 • Member of the Community Advisory Group to the Police Chief: 2010- 2012 • Member of Steering Committee for Measure A (school parcel tax): 2005 • Treasurer of the Palo Alto PTA Council: 2004-2007. • Member of the Board of Directors, Cable Co-op: 1992-1998. 1. Why are you interested in serving on the Utilities Advsory Three examples regarding my life-long strong interest in energy and Commission and what experience would you bring to the utility issues: position? Director of Marketing for Oorja Fuel Cells (2015-2016). Oorja was a clean energy company that manufactured power systems based on methanol fuel cells. These systems reduced operating costs and greenhouse gas emissions in a wide variety of applications such as wireless telecommunications and materials handling. Member of the Board of Directors of Cable Co-op (1992-1998) Cable Co-op was a cable TV company serving 28,000 households around Palo Alto. It was owned by its subscribers. In many ways its mission and its functioning were very similar to those of a publicly owned utility. MSEE, Ecole Superieure d'Electricite (France). My engineering School was partially funded by EDF (Electricite de France), a state-owned utility which is one of the largest utilities in the world. I studied electricity generation and distribution in great detail and visited many different types of power generation plants. 2 of 4 Item 1: Staff Report Pg. 44 Packet Pg. 50 of 309 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting, you can view archived videos from the Midpen Media Center. Archived videos are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Utilities Advisory Commission achieve, and how would you help in the process? 4. Utilities Advisory Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. The Utilities Strategic Plan (2018) The Long Term Electric Acquisition Plan (2012) The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) Ten -Year Electric Enerav Efficiency Plan and Ten -Year Natural Gas Ener Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Item 1 Attachment C - Utilities Advisory Commission Reliability and Resiliency Strategic FIApplications - Redacted ortant issue for the Commission that I am very interested in. We need to look at what can be done to decrease the frequency and duration of power outages by looking at all the factors that impact reliability: equipment quality, equipment placement, redundancies, risk management, human factors, etc. Grid Modernization Project. As we increasingly move away from combustion engine cars and gas appliances, and increase our population with mandated housing, the demands on the electric grid will substantially increase above and beyond what the current grid can accommodate. This is a critical issue for the future of Palo Alto. I would put to use my analytical and problem solving skills to look at: The progress already achieved with the deployment of our Advanced Metering Infrastructure (AMI) and how that improves conservation of water and energy, as well as how our customers are using the information provided to better manage their consumption. Are we now getting tangible benefits from AMI besides labor savings? Improving reliability and resiliency of the electric grid. Look at the entire chain of factors that impact them. How can we combine grid modernization with improvements in reliability? Continue the focus on: clean energy, reducing greenhouse gas emissions, transition from gas to electricity, and improving sustainability. Continue to improve recycling rates, but focus also on reducing waste in the first place. Energy conservation programs, green building codes, etc I read some of these documents in the past and will definitely spend more time on them if selected for the position. I participated in a community workshop for the update of the Strategic Plan, in 2017. I do, also, closely follow news about the City utilities, mostly through the Palo Alto Weekly. Yes Name of signatory: Claude Ezran 3 of 4 Item 1: Staff Report Pg. 45 Packet Pg. 51 of 309 Date Completed Item 1 AttachmentC- - Utilities Advisory Commission 02/13/202:. Applications - Redacted Item 1: Staff Report Pg. 46 Packet Pg. 52 of 309 4 of 4 Submitted on Receipt number Related form version I Personal Information 10 February 2025, 11:53am 53 11 Name Phil Metz Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94306 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? No Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory Email from the City Commission? 1 of 4 Item 1: Staff Report Pg. 47 Packet Pg. 53 of 309 Item 1 Attachment C - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Retired researcher, consultant, and business executive. Education: • PhD in physics • MBA in marketing Experience: • Commissioner, Utilities Advisory Commission (2021 -present) • Co-founder, Director, and Vice President, BioPhysical Economics Institute (2020-2024) • Research Fellow, Project Drawdown (2018-2019) • 11 years as sustainability consultant and researcher • 10+ years of R&D in energy efficiency and renewable energy, including electric heat pumps, cool / green roofs, solar, and community energy systems • 16 years consulting for energy -related businesses, including electric utilities • 6 years as renewable energy business development executive • 3 years as Palo Alto emergency services volunteer, both as BPC and as CERT Since 2017, my full-time focus has been energy and environmental sustainability research, advocacy, and writing. Commissioner UAC (2021 -present) BioPhysical Economics Institute (BPEI) (2020-2024): Together with a group of scientists, economists, and executives, I co-founded BPEI and served as Director and Vice President. BPEI, a non-partisan non-profit, works to bring the natural sciences into economic analysis and financial decision making. Project Drawdown (2018-2019): I served as a Research Fellow, focusing on heat pumps, district heating, and cool roofs to help the world reach "Drawdown" of atmospheric greenhouse gases. Emergency Services Volunteer (ESV) (2017 -present): Both a block preparedness coordinator (BPC) and a community emergency response team (CERT) volunteer. International Rescue Committee (IRC) volunteer (2018 -present): Since 2018 1 have volunteered as a mentor with the IRC to help immigrants obtain jobs in the US. 1. Why are you interested in serving on the Utilities Advsory I want to help CPAU become a leader in all its utilities to benefit the Palo Commission and what experience would you bring to the Alto Community and as a model for others: position? • Grid Modernization: CPAU plans to spend $300M+ but lacks a detailed 2 of 4 Item 1: Staff Report Pg. 48 Packet Pg. 54 of 309 Item 1 Attachment C - Utilities plan for how the grid would address Advisory Commission tions, and SCAP needs. Applications - Redacted • Emergency preparedness: CPAU h operations in an emergency, but not for electricity. • Fiber to the home (FTTH): I was proud to help get FTTH off the ground but there's much more to do. • Commercial energy / data centers strategy: "Commercial" represents 80% of CPAU's electric load and, due to Al, datacenters may become giant new loads. CPAU needs a plan for these changes. • Operational improvement: Esp. how to learn from mistakes and not repeat them. Relevant experience I bring to UAC includes 4 years as a UAC commissioner, and expertise in physics, especially energy and renewable energy systems; biophysical economics; the utility industry; building energy systems; and executive mgmt. 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting, you can view archived videos from the Midpen Media Center. Archived videos are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the Utilities Advisory Commission achieve, and how would you help in the process? 4. Utilities Advisory Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. The Utilities Strategic Plan (2018) The Long Term Electric Acquisition Plan (2012) The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) Ten -Year Electric Energy Efficiency Plan and Ten -Year Natural Gas Energy Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) The #1 issue is modernizing the CPAU distribution grid. I am interested because of the cost — $300M+ CAPEX — and because implementation will determine Palo Alto's contribution to renewable energy worldwide. But CPAU has not articulated its goals, strategy for achieving those goals, a detailed roadmap for what will be done when, and ways to reduce expenditures. I'm especially concerned that we address: 1. New technologies: The future grid will be fundamentally different from today's grid. So, Grid Mod needs to anticipate those changes, for example, local distributed energy resources (DER) such as solar + storage; microgrids; demand side management (DSM); electric vehicles (EVs), and advanced metering (AMI). 2. SCAP: Delivering the energy called for by the City's SCAP plan? 3. Resilience: During normal operations and during emergencies. 4. Other exogenous factors, esp. energy supply, regulations, and demand shifts, such as proliferation of large data centers. I would like to help CPAU reestablish its leadership in the utility industry: 1. Get Grid Mod on track: Develop a detailed strategy and plan, addressing (as outlined above) new transformational technologies, SCAP needs, resilience, and other exogenous factors, including energy supply, new regulations, and demand shifts. 2. Emergency preparedness across all utilities. For electricity, CPAU assumes a worst -case emergency of 24-48 hours. That is inconsistent with the Palo Alto Office of Emergency Services (OES) which recommends that we prepare for 1-2 weeks of no electricity, no water, and no help. CPAU needs to develop its emergency preparedness consistent with the OES "design emergency" and in collaboration with OES. 3. Make FTTH a success. As a member of UAC's FTTH subcommittee, I was proud to play a role in getting FTTH off the ground — after decades of effort. I think we arrived at a good solution. And now we need to implement. As a UAC commissioner since 2021, I am very familiar with and have contributed to all of the CPAU-related plans listed and their subsequent revisions. Some of the contributions I'm most proud of include: • Utilities strategic plan and Grid Mod: Commissioner Memos articulating improvements with commissioners Johnston and Phillips. • Emergency preparedness: Commissioner Memos setting direction with commissioners Bowie and Gupta. In addition, I have served on the Palo Alto S/CAP Ad Hoc Working Group, so I am very familiar with and have contributed to the S/CAP plan as it has evolved. 3 of 4 Item 1: Staff Report Pg. 49 Packet Pg. 55 of 309 If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Item 1 Attachment C - Utilities Advisory Commission Applications - Redacted Yes Name of signatory: Phil Metz 02/07/2025 4 of 4 Item 1: Staff Report Pg. 50 Packet Pg. 56 of 309 Submitted on Receipt number Related form version I Personal Information 8 February 2025, 8:56pm 56 11 Name Olgu Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94306 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices No California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory City Website Commission? 1 of 3 Item 1: Staff Report Pg. 51 Packet Pg. 57 of 309 Item 1 AttachmentC- - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Data Scientist/Software Engineer Please list your relevant education, training, experience, I have worked for SCE and PG&E almost 10 years where I certificates of training, licenses, and professional registration. led/participated in various RFO proposals and their evaluations as well If describing work experience, please include as various gas and electric forecast/strategy/procurements. company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Utilities Advsory Commission and what experience would you bring to the position? Currently, I am the VP of merchandise at Gunn High School Sports Boosters as well as the coach for my daughter's Girls Scout's Robotics team. I am interested in serving on the UAC because I am passionate about ensuring that our community has access to safe, reliable, cost efficient, and sustainable utility services. I believe that thoughtful utility planning is essential for economic growth, environmental responsibility, and the well- being of residents. I will bring a strong background in engineering/data/strategy with experience in energy management & development & procurement to advise the board and the City Council. In my previous roles at SCE and PG&E, I evaluated RFOs and procurements for various products/resources which gave me insight into the challenges and opportunities in utility management. I am confident that my ability to analyze current challenges, engage with stakeholders, and develop practical solutions will contribute to informed decision - making on the commission. I look forward to collaborating with fellow members to enhance the efficiency and sustainability of our community's utilities. 2. Please describe an issue that recently came before the Grid modernization project would be one that particularly interest me. As Commission that is of particular interest to you and describe I worked on modeling various parts of the CA grid and forecasted hourly why you are interested in it. If you have never been to a nodal prices in CA, I will utilize my expertise to help contribute to UAC. Commission meeting, you can view archived videos from the Midpen Media Center. Archived videos are available from the Midpen Media Center 3. If appointed, what specific goals would you like to see the I would like to see a robust system where an informative UAC that will Utilities Advisory Commission achieve, and how would you guide and work with City Council effectively to accomplish the common help in the process? goal of providing safe, reliable, cost efficient, and sustainable utility services to the city. I will utilize my utility background from SCE and PG&E to contribute and be a part of that robust system. 4. Utilities Advisory Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. The Utilities Strategic Plan (2018) The Long Term Electric Acquisition Plan (2012) The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) I have experience in utility strategy, short/long term electric and gas procurement planning & execution, and grid changes needed to support electrification. 2 of 3 Item 1: Staff Report Pg. 52 Packet Pg. 58 of 309 Ten -Year Electric Energy Efficiency Plan and Ten -Year Natural Gas Energy Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Commissions Handbook. View the Boards and Commissions Handbook. Signature Date Completed Item 1 Attachment C - Utilities Advisory Commission Applications - Redacted Resume_Olgu_Tanriverdi. pdff Yes Name of signatory: Olgu Tanriverdi 02/08/2025 3 of 3 Item 1: Staff Report Pg. 53 Packet Pg. 59 of 309 Ol!u Tanriverdi Palo Alto, CA Item 1 Attachment C - Utilities Advisory Commission Applications - Redacted Summary of Experience Doctorate in EE with 20 years experience in software/finance/marketing. Looking to lead/build teams & programs to design/develop/deliver features/products to improve/optimize short/long term outlooks of P&L/MAUIKPIICLVIRDI Professional Experience PlayStation — San Mateo, CA May'22 - Present Senior Staff Data Analyst/Scientist, Global Marketing • Lead strategy, design, & execution of P1ayStation(FS) Stars loyalty program with over xxM MAU (Dct24) on PS's mobile app • Lead overall financial health ($xM) & monetization of the program by designing & evaluating program offerings via AIB tests as well as building forecast models for future enrollments, monthly active users (MAU), point accruals & redemptions, & breakage ■ Set program's strategic goals & pivot as needed by consistently evaluating/redesigning features to ensure to achieve the goals ■ Utilized propensity score matching (PSM), a wrapper of DoWhy Python package, to show the incremental revenue and game play hours generated by the loyalty program via control and treatment matching pairs with the similar propensity scores ■ Structure & build campaigns with corresponding target audiences to meet the engagement KPIs of PS Plus & PS Store teams ■ Utilize Snowflake task scheduler to ETL gameplay & game sales data to build propensity models in Databricks • Build Demo dashboards to show various KPIs, Stars campaigns performance metrics, and randomized control trial test results Deviation Games — Santa Monica, CA Oct '19 — May '22 Data Scientist/Lead Engineer, Gameplay Engineering • Built Azure PlayFab Analytics infrastructure to telemetry gameplay data for feature extractions used for data science models ■ Built Unreal Engine 4&5 blueprint and C++ models for various gameplay fu nctionalities such as dropping/collecting energy ■ Automated Jira creation with specific fields and attachments by building WPF UT that uses Python to call Confluence REST API Pacific Gas & Electric - San Francisco, CA Expert Quantitative Analyst, Market Credit Risk Management • Led cross functional teams to design, develop, calibrate, test, deploy, and release full -stack least cost dispatch optimization models to forecast the performance of large portfolio of various types of financial contracts valued over $xB and energy generating physical assets, consisted of fossil fuel, hydro, nuclear, electric storage, and renewable energy • Built financial models and run 10K trial Monte Carlo simulations to forecast the distribution of company's future risk exposure to various commodity prices and market conditions by using over lB simulation data points • Built solar paired electric storage profit maximizing LP model in Fortran to evaluate product utilization in various configurations • Developed neural network models to forecast hourly energy prices to strategize company's long term RFOs over $xB • Exhibited multi class text classification data science project to automate one of companies manual processes May '15— Oct `19 General Electric - Greenville, SC Jul '10 — May '15 Senior Member of Research Staff, Integrated Performance • Software owner and developer of various types of real-time, transient, and steady state jet engine math models, integrated in Control Simulation platforms such as EASY5, Simulink, and HYSYS for open and closed control loop performance analysis • Developed and released simulation models for performance and efficiency evaluations of the next-gen engine in R&D phase based on specifications from global design and marketing teams prior to introduction of new products • Built neural network models using engine sensor data to predict and prevent various engine failure modes via maintenance • Mentored junior team members and interns on their research projects in jet engine diagnostics from exhaust stream Southern California Edison - Rosemead, CA Sep '07 - Jul '10 Portfolio Manager, Energy Supply & Management • Led a team of portfolio analysts to develop neural network, regression, and time series forecast models to provide future energy and ancillary service prices used in the evaluations of company's current and future portfolio from request for offers • Collaborated with market design and new product teams to build company's bidding strategy of virtual bids in MRTU Western Digital Corporation - Lake Forest, CA Apr '07 - Sep '07 Firmware Engineer • Developed embedded firmware for 2.5" Mckinley drive features and devised compatibility analysis of complex customer features Item 1: Staff Report Pg. 54 Packet Pg. 60 of 309 Item 1 Attachment C - Utilities Tanriverdi Real Software Systems - Woodland Hills, CA Advisory Commission 06 - Apr '07 Technical Consultant Applications Redacted • Worked in a fast -paced startup to design and develop contract management software that calculates rights, royalties, and profit participation for media giants such as SONY, MGM, Activision, EA, BBC etc. based on clients' business requirements University of California, Los Angeles (UCLA) Sep '00 - May '06 Research & Teaching Assistant, Flight System Research Center • Conducted research with NASA, NREL, and DOE on mathematical modeling of horizontal axis wind turbines and developed nonlinear pitch and torque control algorithms to operate them on their optimal max generation point. • Lectured in Numerical Analysis, Probability, Physics, Systems & Signals, Electronic Circuits, and C++ Programming Patents & Trade Secrets • O Tanriverdi, inventor; Gas Turbine Engine Controller with Event Trigger (US Patent No: 9,002,617; Issued Date April 12, 2015) • O Tanriverdi, inventor; System and Method to Measure 3D Flow (US Patent No: 9,030,667; Issued Date May 12, 2015) Conference Papers • O. Tanriverdi, "Ancillary Service Price Forecast in Metrix ND," Envision 2009 Itron Conference, Phoenix, AZ, September 2009 • O. Tanriverdi and A.V. Balakrishnan, "Maximize Wind Turbine Power Output in Transient Region," Proc. A WEA (American Wind Energy Association), Windpower 2006 Workshop, Pittsburgh, PA, June 2006 • O. Tanriverdi and A.V. Balakrishnan, "Pitch & Torque Control to Maximize Wind Turbine Power Output in Partial Load Region," Proc. EWEC (European Wind Energy Conference), Business Science Technology, Electrical System Design, Integration and Control/Technical Track, Athens, Greece, February 2006 Professional Licenses & Certifications • Coursera Machine Learning, Neural Networks & Deep Learning, Improving Deep Neural Networks • FAST.AI Deep Learning Part I & II • Certified Lean Six Sigma Green Belt DFSS • Certified Mediator by CA Dispute Resolution Program and LA County Community and Senior Services Volunteer Services & Activities • VP Merchandise Gunn High School Sports Boosters • VP Scholarship NuEnergy Employee Resource Group, Diversity&Inclusion at PG&E • VP Events Asian Pacific American Forum Affinity Group at GE • Member of IEEE Control Systems and Computer Science Societies LACBA Dispute Resolution Services - West Hollywood, CA • Analyzed the dispute and provided resolution to community residents seeking Mediation Services Education University of California, Los Angeles • Ph.D. (all but unfinished thesis) in Electrical Engineering, major in Control Systems. Minors: Digital Signal Processing and Engineering Optimization • Engineer in Electrical Engineering • Master of Science in Electrical Engineering Yildiz Technical University - Istanbul, Turkiye • Bachelor of Science in Electronics and Communications Engineering Awards May '24 - Present Oct '16 —Jan '18 Mar'13 - May'15 Mar '00 - Present Mar '07 - Sep '07 May'06 Jun '03 Jun '02 Jun '98 • Graduate Student Fellowship from the Electrical Engineering Department at UCLA Sep '00 - Mar '06 • Dean's Special Young Alumni Award: Received Bachelor of Science degree at age of 20 Jun '98 • Placed 6th in 1997 Best Model of Turkiye Competition Aug '97 Computer Skills • C++, Python, Fortran, C#, Google OR -Tools, SQL, Scikit-leam, TensorFlow, CPLEX, .NET, Matlab, Databricks, PySpark, SVN, Git, Perforce, Azure Functions, Kusto, REST APIs, Domo, Tableau, MicroStrategy, Adobe Analytics, Airflow, DoWhy, PSM Item 1: Staff Report Pg. 55 Packet Pg. 61 of 309 Submitted on Receipt number Related form version I Personal Information 23 February 2025, 1:12pm 58 11 Name Barry Wolf Cell Phone Number Home Phone Number Email Address Are you a Palo Alto resident? Address Yes City Palo Alto Postal Code 94303 Do you have any relatives or members of your household who No are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? Are you available and committed to complete the term applied Yes for? Fair Political Practices California state law requires board/commission members to file a disclosure of financial interests (Fair Political Practices Commission, Conflict of Interest. Form 700). Do you/your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to: 1. Engage in business with the City; 2. Provide products or services for City projects; or 3. Be affected by decisions of this Board or Commission? No Excluding your principal residence, do you or your spouse No own real property in Palo Alto? How did you learn about the vacancy on the Utilities Advisory Email from the City Commission? 1 of 3 Item 1: Staff Report Pg. 56 Packet Pg. 62 of 309 Item 1 Attachment C - Utilities Advisory Commission Consent to Publish Personal Information on the City of Pal Applications Redacted e Read the code, and check only ONE option below: I Personal and Job Experience Occupation Please list your relevant education, training, experience, certificates of training, licenses, and professional registration. If describing work experience, please include company/employer name and occupation. Please describe your involvement in community activities, volunteer and civic organizations, including dates and any offices held. I Application Questions 1. Why are you interested in serving on the Utilities Advsory Commission and what experience would you bring to the position? I request that the City of Palo Alto redact my home address, phone numbers, and email address from the attached Board and Commission Application prior to posting to the City's website. Research Scientist Biochemical engineer with 26 years of experience in the biotechnology industry and academia: • 21 years optimizing mammalian cell culture processes for protein production • 2 years investigating the regulation of a transcription factor gene • 3 years designing and validating biopharmaceutical processes EDUCATION Ph.D. Chemical Engineering 2001 M.S.E. Chemical Engineering 1996 University of Michigan, Ann Arbor, Michigan B.S. Mechanical Engineering, B.A. Biology / Philosophy minor 1992 Rutgers University, New Brunswick, New Jersey Acterra EV Ambassador (volunteer), approximately 5 years As an EV enthusiast and engineer (who only owns EVs), I am aware of the rapid electrification of transportation and buildings and understand the need for utility planning to meet the needs of increased electricity demand while also accounting for rooftop solar/BESS at C&I and homes in Palo Alto. I am acutely aware of the effects of climate change on our water supply, our aging water supply infrastructure, and appreciate the importance of high quality water and high quality water service to Palo Alto residents. 2. Please describe an issue that recently came before the I am interested in how microgrids comprised of solar PV and BESS can Commission that is of particular interest to you and describe improve the resilience, reliability, and cost effectiveness of the delivery of why you are interested in it. If you have never been to a electricity to all users in Palo Alto. I also believe the Palo Alto Airport Commission meeting, you can view archived videos from the should be a pioneer in electric aviation. Midpen Media Center. Archived videos are available from the Midpen Media Center. 3. If appointed, what specific goals would you like to see the I am especially interested in helping to promote home electrification, EV Utilities Advisory Commission achieve, and how would you ownership, planning for V2H and potentially V2G in Palo Alto, ensuring help in the process? adequate transformer resources and reliability transmission lines to accommodate the growing electrification of homes and businesses, while also realizing that private investment in rooftop solar and BESS can work in synergy with the Palo Alto Utilities infrastructure to keep costs low for all stokeholds. 4. Utilities Advisory Commission Members work with the I am not familiar with these documents but am planning to read the documents listed below. If you have experience with any of documents relevant to electricity. these documents, please describe that experience. Experience 2 of 3 Item 1: Staff Report Pg. 57 Packet Pg. 63 of 309 Item 1 Attachment C - Utilities with these documents is not required for selection. Advisory Commission The Utilities Strategic Plan (2018) The Long Term Electric Acquisition Plan (2012) Applications - Redacted The Gas Utility Long-term Plan (2017) Urban Water Management Plan (2021) Ten -Year Electric Energy Efficiency Plan and Ten -Year Natural Gas Energy Efficiency Plan (2012) Sustainability and Climate Action Plan (SCAP) Fiber -to -the -Premise Master Plan (2015) If you'd like to provide any additional documents, please upload below. Please confirm that you have read the Boards and Yes Commissions Handbook. View the Boards and Commissions Handbook. Signature Name of signatory: Barry F. Wolf Date Completed 02/23/2025 3 of 3 Item 1: Staff Report Pg. 58 Packet Pg. 64 of 309 Item 2 Item 2 Staff Report CITY OF PALO ALTO TITLE Approval of Minutes from March 10, 2025 Meeting City Council Staff Report Report Type: CONSENT CALENDAR Lead Department: City Clerk Meeting Date: March 24, 2025 Report #:2503-4349 RECOMMENDATION Staff recommends that the City Council review and approve the minutes. ATTACHMENTS Attachment A: March 10, 2025 Draft Action Minutes APPROVED BY: Mahealani Ah Yun Item 2: Staff Report Pg. 1 Packet Pg. 65 of 309 Item 2 Attachment A - March 10, 2025 Draft Action CITY COUNCIL Minutes CITY OF PALO DRAFT ACTION MINUTES ALTO Regular Meeting March 10, 2025 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M. Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely: Absent: Special Orders of the Day 1. Establish Interview Selection Process, Review Applicants, and Select Candidates to Interview for the Upcoming Board and Commission Vacancies. CEQA Status — Not a project. NO ACTION Agenda Changes, Additions and Deletions Public Comment Council Member Questions, Comments and Announcements Study Session 2. Review of the Community Services Recreation Division 2025 Special Events Work Plan NO ACTION Page 1 of 4 Item 2: Staff Report Pg. 2 Packet Pg. 66 of 309 Item 2 Attachment A - March 10, DRAFT ACTION MINUT N U T 2025 Draft Action Minutes Consent Calendar MOTION: Councilmember Stone moved, seconded by Councilmember Reckdahl to approve Agenda Item Numbers 3-5. MOTION PASSED: 7-0 3. Approval of Minutes from February 24, 2025 Meeting 4. Approval of a Revenue Agreement with Santa Clara County to Provide up to $447,849 in Funding through September 15, 2026 to enable the County to Expand Its Operating Agreement with Move Mountain View for Expanded Safe Parking Operations at 2000 Geng Road; Approve FY 2025 Budget Amendment in the General Fund and PLHA Fund; and Authorize Reallocation of PLHA Activity (6) Funds Accordingly; CEQA status — categorically exempt. 5. Approval of a Professional Services Contract Number C25191402 with Rami and Associates in an Amount Not to Exceed $1,979,902 for Development of San Antonio Road Area Plan for a Period of Three Years. CEQA Status: Exempt under CEQA Guidelines 15262. City Manager Comments Ed Shikada, City Manager Action Items 6. Adoption of an Interim Urgency Ordinance Amending Palo Alto Municipal Code (PAMC) Section 18.40.160 to Allow for Early Demolition or Deconstruction on Contaminated Sites. CEQA status — exempt under CEQA Guidelines Section 15061(b)(3). MOTION: Councilmember Stone moved, seconded by Vice Mayor Veenker to adopt the Interim Urgency Ordinance amending PAMC Section 18.40.160 to Allow for Early Demolition or Deconstruction on Contaminated Sites. MOTION PASSED: 7-0 7. Adoption of Resolutions Amending the Comprehensive Plan to Re -Classify Portions of Ramona Street and California Avenue as Car -Free Streets and Closing those Streets to Vehicular Traffic; and Adoption of an Ordinance Allowing the City Manager to Create Page 2 of 4 City Council Meeting Draft Action Minutes: 03/10/2025 Item 2: Staff Report Pg. 3 Packet Pg. 67 of 309 Item 2 Attachment A - March 10, DRAFT ACTION M I N UT 2025 Draft Action Minutes Regulations for these Streets, Setting Speed Limits for Bicycles on California Ave., and Implementing Ramona St. as Pedestrian Only (First Read); CEQA Status - An Addendum to the Comprehensive Plan Environmental Impact Report (EIR) (SCH#2014052101) Has Been Prepared. MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to: 1. Consider the Addendum to the previously adopted Comprehensive Plan 2030 Environmental Impact Report (SCH# 2014052101); 2. Adopt the Resolution amending the Comprehensive Plan Transportation Element and Glossary; 3. Adopt the Resolution approving the closure of designated sections of Ramona St. And California Avenue to vehicular traffic; and 4. FIRST READ: Adopt an ordinance creating new Chapter 10.66 in Title 10 (Vehicles and Traffic) to allow the City Manager to create regulations to control vehicular access to these streets, set speed limits for bicycles at 8 mph on California Ave, and implement Ramona St. as pedestrian only by prohibiting bicycle and skateboard riding; and 5. Direct staff to incorporate additional ADA parking on side streets and alleys, as well as very short-term drop-off/pick-up parking. MOTION PASSED: 7-0 8. Approval of the 2025 City Council Priority Objectives, as well as Committee Objectives and Workplans. CEQA Status -- Not a Project. (Item Continued from February 24, 2025 City Council Meeting) MOTION: Mayor Lauing moved, seconded by Councilmember Reckdahl to: 1. Approve Economic Development & Retail Vibrancy, and Climate Action and Adaptation & Natural Environment Protection sections of the 2025 City Council Priority objectives with the following adjustments as discussed and to come back to Council for final approval; and 2. Revert the Cubberley Committee to a non -Brown Act Ad Hoc; and 3. Adjust the Climate Action & Sustainability Committee to broaden the scope to include Sustainability and the RRSP. MOTION PASSED: 7-0 Page 3 of 4 City Council Meeting Draft Action Minutes: 03/10/2025 Item 2: Staff Report Pg. 4 Packet Pg. 68 of 309 Item 2 Attachment A - March 10, DRAFT ACTION M I N UT 2025 Draft Action Minutes Adjournment: The meeting was adjourned at 11:03 P.M. ATTEST: APPROVED: City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC) 2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section 2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City's website. Item 2: Staff Report Pg. 5 Page 4 of 4 City Council Meeting Draft Action Minutes: 03/10/2025 Packet Pg. 69 of 309 Item 3 Item 3 Staff Report CITY OF PALO ALTO TITLE Nonprofit Partnership Workplan: Phased Approach City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Manager Meeting Date: March 24, 2025 Report #:2503-4241 RECOMMENDATION The Policy and Services Committee recommends that Council approve a phased approach to enhancing nonprofit partnerships, beginning with process improvements to nonprofit requests for funding through the FY 2026 Budget process that fall outside currently established funding processes. The City of Palo Alto's Nonprofit Partnership Workplan proposes a phased approach to enhance the City's partnerships with nonprofit organizations, focusing on improving funding processes, accountability, and alignment with community priorities. This responds to recommendations from a 2022 City Auditor report, which identified risks and inefficiencies in current nonprofit agreements and processes. In the initial phase, the Policy and Services Committee recommends immediate process improvements for nonprofit funding requests submitted through the FY 2026 budget that fall outside of existing City grant programs. This pilot would utilize $185,000 in available funding for one-time funding requests, open to all 501(c)(3) nonprofit organizations that provide services to Palo Alto residents. This initial phase will guide the second phase of the Nonprofit Partnership Workplan, expected to begin in the summer, to strengthen nonprofit partnerships based on the guiding principles of impact -oriented focus and accountability, service alignment, fairness and inclusion, and flexibility to respond to special circumstances. BACKGROUND In June 2022, the Policy and Services Committee received a report from the City Auditor focused on identifying risks related to nonprofit agreements and provided corresponding recommendations for improvement.1 Key recommendations included defining clear service 1 June 14, 2022, Policy and Services Committee Meeting: https://cityofpaloaIto.primegov.com/Public/CompiledDocument?meetingTemplateld=6282&compileOutputType= Item 3: Staff Report Pg. 1 Packet Pg. 70 of 309 Item 3 Item 3 Staff Report level expectations and performance management and evaluation on all nonprofit and lease agreements, as well as quantifying non -monetary support to determine appropriate compensation for nonprofits' use of City -owned properties. The City of Palo Alto's nonprofit partnerships play a vital role in delivering essential community services, yet the existing policies and processes for managing these relationships would benefit from enhanced consistency, transparency, and accountability. The absence of standardized service level agreements, performance metrics, and predictable funding processes has resulted in inefficiencies and unclear expectations for both the City and nonprofit partners. Additionally, the need for flexibility in funding emerging needs must be balanced with long-term stability for nonprofit organizations. The nonprofit partnership workplan seeks to establish a clear framework that aligns nonprofit partnerships with Council priorities, ensures fairness and inclusion in resource allocation, and strengthens financial and performance accountability while maintaining the agility to respond to evolving community needs. On October 28, 2024, the Council held a study session to provide feedback on a framework for strengthening the City's practices in nonprofit partnership engagement, funding, support, and evaluation.2 The framework laid out a set of foundational principles that reflect fundamental goals and values that guide the establishment and pursuit of partnerships. Through their discussion, the Council provided feedback on principles presented, revised accordingly here: 1. Impact -oriented Focus and Accountability: Partnerships will identify intended outcomes and prioritize unmet needs, and incorporate appropriate measures and reporting, while reflecting the nature of the engagements and avoiding unnecessary administrative processes. 2. Service Alignment: Programs and services should align with the Council's priorities and identified community needs. 3. Fairness, Open Access, Equity, and Inclusion: The City will maintain visibility and consistency in its partnership processes, to both the nonprofit community and public at large. Resource allocations will consider and prioritize accessibility of the resulting services to all community members, with particular attention to underserved and vulnerable populations. 4. Flexibility for Special Circumstances: The City Council will need the ability to act quickly when needed to respond to special circumstances. As discussed at the study session, next steps would include returning to Council with recommendations for policy adjustments and new process and procedures. The Council referred refinement of the principles to the Policy and Services Committee. 2 October 28, 2024, council Study Session: https://cityofpaloaIto.primegov.com/Portal/Meeting?meetingTemplate Id=14449 Item 3: Staff Report Pg. 2 Packet Pg. 71 of 309 Item 3 Item 3 Staff Report Given that developing and implementing the workplan will take time, staff recommended a phased approach with a near -term goal of establishing an initial process improvement in time for the FY 2026 budget process. On February 11 and March 11, 2025, the Policy and Services Committee discussed and refined this phased approach, now recommended for City Council approval. ANALYSIS The recommended initial phase consists of process improvement for handling nonprofit requests for funding in the FY 2026 City Budget that fall outside currently established funding processes. The Policy and Services Committee recommends a process of evaluating such requests in parallel with the overall City budget, using funds allocated for this purpose in last year's budget. Each year, the Council receives a handful of nonprofit funding requests through the City's annual budget. Unlike grants requested through the City's Human Services Resource Allocation Program (HSRAP) or Community Development Block Grant (CDBG) processes, requests to the City's budget have varying levels of clarity and justification. Further, there is currently no method for evaluating or reviewing such requests beyond ad hoc consideration at the Finance Committee and/or full City Council. To address this gap, the Nonprofit Partnership Workplan Phase 1 (NPW Phase 1) recommends a first step toward the overall goals of clarity in nonprofit partnerships by establishing a process through which any nonprofit funding provided through the FY 2026 budget would adhere to the principles stated above. The remainder of this report details how this can be accomplished. For ease in reference, this proposal is referred to as the "Nonprofit Partnerships Workplan Phase 1" or NPW Phase 1. Should the City Council agree to proceed with this approach, staff can develop a more intuitive title for this program. A key dimension of NPW Phase 1 would be to require that any nonprofit request for funding through the City budget process be submitted in a form and timeframe that would enable transparent and timely review. Recognizing that the FY2026 budget process will occur within the next few months, the proposed Phase 1 process would consist of the following elements: 1. Funding Availability - Determine and communicate the total funding expected to be available, as well as funding sources to the extent affecting eligible uses. 2. Eligibility and Criteria - Define any qualifications required to be eligible for funding. 3. Application and Evaluation Process and Timeframe — Establish and communicate a clear process for submitting and reviewing requests that nonprofits can reasonably participate in. 4. Monitoring and Reporting - Set as applicable any requirements for tracking use of funds, outcomes, and associated responsibilities. Item 3: Staff Report Pg. 3 Packet Pg. 72 of 309 Item 3 Item 3 Staff Report The following reflects Policy and Services Committee's recommendations in each of the grant elements. 1. Funding Availability While recognizing that a specific funding target for nonprofits has not yet been set by the City Council, action from last year's budget process3 provides a starting place for NPW Phase 1 funding availability: A "City Events and Programming" line item was established with ongoing funding of $235,000. These funds have not been committed to specific nonprofits for FY 2026 or beyond, though a portion has been envisioned to support community event contribution requests. This funding would be allocated in two parts: • $185,000 would be available for nonprofits under NPW Phase 1. • $50,000 would be available for community events up to $5,000 per event. The community event funding would be allocated on a first -come -first -served basis to community members or local organizations (not limited to nonprofits) for community -wide events. This will be similar to Know Your Neighbors grants (which continues to be a line item in the budget). The Community Services Department is developing a grant process to distribute these funds. 2. Eligibility and Criteria Eligibility. The Policy and Services Committee also discussed applicant eligibility. Historically, requests for funding have come from a range of organizations including educational institutions and grassroots groups, many of which are nonprofits but not necessarily so. For FY 2025, the funding proposed to be used for NPW Phase 1 was allocated to one-time funding for the following organizations: United Nations Association Film Festival ($45,000), 3rd Thursdays ($40,000), Magical Bridge ($150,000), and Environmental Volunteers Foothills Nature Preserve ($11,000). Under NPW Phase 1, ALL requests for direct funding through the City budget will be required to follow the submittal process described here. In evaluating equity and access to funding, the Committee discussed best practices and considerations when addressing the question of balance between new and prior recipients. This included ensuring fairness and access for new applicants -allowing for innovative programs and service delivery- while also considering sustainability and continuity for existing grantees, 3 FY 2025 Budget Adoption June 17, 2024: https://cityofpaloaIto.primegov.com/meetings/ItemWithTemplateType?id=5334&meetingTemplateType=2&comp iledMeetingDocumentld=10470 Item 3: Staff Report Pg. 4 Packet Pg. 73 of 309 Item 3 Item 3 Staff Report especially if the new funding allowed an organization the opportunity to leverage funds toward other funding opportunities. In its inaugural implementation year, the Committee felt it did not want to restrict eligibility and instead re-evaluate after the first year. Criteria. Community grants are often evaluated by the expected service and value to the community, often referred to as public benefit; however, public benefit can be subjective and challenging to define and measure. The Committee recommends that grant requests should mostly align with Council Priorities, however wanted ensure flexibility in supporting programming that could fall outside of the four identified Priorities. The adopted 2025 Priorities are: • Implementing Housing Strategies for Social & Economic Balance • Climate Action and Adaptation, & Natural Environment Protection • Economic Development & Retail Vibrancy • Public Safety, Wellness & Belonging Other criteria to be used in evaluating applications are: • Community reach- such as the number of Palo Alto residents served • Equity impact- assess whether the organization serves underserved or underrepresented groups, if applicable. In addition, consider the cost of service to the client. • Program/service delivery- assess the nonprofit's capacity to deliver on program/service goals. • Existing City grant program- is there an established City program/process in place that could accommodate the request? And if so, wanting to understand why the organization did or did not apply. This information will be helpful to understand the organization's circumstances. • Grant funding use- should the grant be considered for start-up seed money, overhead and staffing, capital projects, or limited to established programs or services? The Committee expressed wanting to be open to all circumstances and would instead, evaluate request impact. Attachment A includes a draft application that identifies the information required from applicants in order to evaluate the relative impact of each application to meet the stated criteria. A template grant agreement will be added. 3. Application and Evaluation Process and Timeframe Application. Establishing NPW Phase 1 in time for the FY 2026 budget cycle will require expedited action by the Committee and City Council in order to provide clear guidance to nonprofit organizations enabling them to provide the information required, then ultimately City Item 3: Staff Report Pg. 5 Packet Pg. 74 of 309 Item 3 Item 3 Staff Report Council approval of funding allocations by June 2025. As envisioned at this point, funding would be available for the period July 1, 2025 — June 30, 2026. While this timeframe may not be ideal for all requests, it would establish a baseline process that could be expanded on in the future. Evaluation. Recognizing the compressed timeframe to implement this program, staff will provide support in screening and evaluating applications for the Committee's review. In the future, the Committee would like relevant Commissions to weigh in on recommendations, such as the Human Relations Commission. The Policy and Services Committee would then make recommendations for Council approval. The following rubric will be used to score applications. In the first year of implementation, the scoring would be relative to other requests. In the second year of the program, with a better sense of application requests, staff could recommend improvements to the rubric. Criterion Description Weight 1. Community Reach Measures the number of Palo Alto residents served and the significance of the services. 30% 2. Equity Impact Assesses whether the organization serves underserved or underrepresented groups. 30% 3. Alignment with Goals Evaluates alignment with the Council's Priorities 20% 4. Program Sustainability Assesses the nonprofit's capacity to deliver and sustain its programs effectively. 20% Timeframe. In order to integrate with the FY 2026 budget calendar, the following timeframe will be pursued. This is an ambitious timeframe, which reinforces the importance of a streamlined process to the extent possible. Action Date P&S recommendation to proceed with NPW Phase 1 March 11 City Council approval to proceed with NPW Phase 1 March 24 City release of a Notice of Funding Availability to local Nonprofits April 1 Proposals for funding due from Nonprofits May 9 P&S review and recommends awards June 10 City Council budget adoption includes funding appropriation and grantees June 16 The recommended timeframe provides nonprofits a 39 -day application period, and award by FY 2026 Budget adoption timeframe of June. When surveyed, a total of 6 nonprofits, one of which includes the Chamber of Nonprofits with membership of about 30 nonprofits, supported and Item 3: Staff Report Pg. 6 Packet Pg. 75 of 309 Item 3 Item 3 Staff Report agreed with the timeframe. Only one nonprofit preferred a longer application period with a late August award timeframe. 4. Monitoring and Reporting One of the areas identified for improvement by the 2022 Nonprofit Audit Report is how the City measures nonprofit partnership effectiveness through monitoring and reporting requirements. Considering the nature of NPW Phase 1, a scaled approach to service outcomes and reporting requirements is being recommended, as this would affect the level of detail expected on applications and responsibilities of grantees. It is considered a best practice to require expenditure reporting for all grant funding, including one-time small grant awards, particularly if the goal is to ensure accountability and transparency. Having grantees report on how the funds were used and the outcomes achieved can help track its community impact, ensure the funds were spent as intended, and provide insights for future funding decisions. However, the reporting requirements can be scaled down to match the size and scope of the grant to avoid undue burden on grantees. Requests up to $5,000 • Brief annual report (1-2 pages) summarizing key activities and basic financial and community impact highlights. • Financial reporting will consist of a self -certification of compliance with grant terms, which could include requesting financial reports. $5,000-$25,000 • Annual report on service outcomes and performance metrics. • Independently prepared compilation report or CPA reviewed financial statements or IRS Form 990. $26,000-$100,000 • Semi-annual reporting including service outcomes and performance metrics. • Depending on risk*, recommend a CPA -prepared or reviewed financial statements Requests of $100K+ • Quarterly service outcomes, performance metrics, and a year-end impact report. • Depending on risk* recommend an CPA -prepared or reviewed financial statements. *Associated risks could include funding size and dependency (lack of diversified funding portfolio), fiscal stability and performance history, type of service and impact on vulnerable populations and nonprofit governance and operational capacity, to name a few. Consistent with the Nonprofit Audit, staff will also review the City's administrative responsibilities associated with these grants to ensure adequate resourcing and expectations. Item 3: Staff Report Pg. 7 Packet Pg. 76 of 309 Item 3 Item 3 Staff Report Next Steps: Should the Council approve the Policy and Services Recommendations and authorize proceeding with NPW Phase 1 implementation, staff will communicate the new funding availability through its email distribution list and various City communication platforms. The next phases of the Nonprofit Partnership Workplan will include subsequent Committee and City Council consideration of the applicability of nonprofit partnership principles to other grants, as well as service and lease agreements. This would be initiated in the summer. Staff envisions that this may include recommending appropriate policy adjustments and programs that modify existing nonprofit partnerships over time to ensure alignment with the NPW principles. FISCAL/RESOURCE IMPACT Subject to City Council approval to fund the proposed NPW Phase 1 in the FY 2026 budget, the Citywide Events and Programming appropriation established by Council would be impacted. Of the ongoing $235,000 budgeted annually to fund citywide events and programming, $185,000 of the total will be dedicated to the implementation of the NPW Phase 1 grant program starting in FY 2026. The other $50,000 will be available for citywide events planned by community members or local organizations for the benefit of the entire community at up to $5,000 per event. Funding would be allocated to qualifying proposers on a first -come -first -served basis, and the Community Services Department is currently developing a grant process to distribute these funds. As part of the FY 2025 budget wrap-up meeting with the Finance Committee, discussion of administrative responsibilities for developing a funding process for these cultural events, including reviewing applications, invoices, receipts, and processing payments, would be managed by staff within the Community Services Department. No additional resources were added for FY 2025; however, if the City Events and Programming program expanded in future years, additional staff resources may be required to sustain the increased workload, assuming 1.0 Administrative Associate III at a cost of approximately $125,000 annually. STAKEHOLDER ENGAGEMENT Stakeholder engagement is underway with nonprofit partners through dedicated listening sessions to gather feedback on the principles of the nonprofit framework and the NPW Phase 1 grant program. To ensure ongoing transparency and participation, the City will launch a dedicated webpage to provide updates, highlight key developments, and share upcoming opportunities for nonprofits to engage and provide input. Item 3: Staff Report Pg. 8 Packet Pg. 77 of 309 Item 3 Item 3 Staff Report ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA). CEQA Guidelines section 15378(b)(2). ATTACHMENTS Attachment A: Draft Nonprofit Workplan Phase 1 Grant Application APPROVED BY: Ed Shikada, City Manager Item 3: Staff Report Pg. 9 Packet Pg. 78 of 309 () CITY OF PALO ALTO Item 3 Attachment A - Draft TA Nonprofit Workplan hase 1 Grant Applicatio Nonprofit Workplan Phase 1 Grant Application ORGANIZATION INFORMATION Are you a 501 (c)(3) nonprofit organization? ❑ Yes ❑ No Organization Name Year Funded EIN (Tax ID#) Contact Person Title Email Address Phone Number Mailing Address Website ABOUT YOUR ORGANIZATION What is the mission of your organization? Number of Employees ❑ Full -Time Staff Part -Time Staff ❑ Volunteers In the last two years, have you been awarded a grant or other direct funding by the City? If so, explain. Are you qualified to apply for the Human Services Resource Allocation Program (HSRAP), Community Development Block Grant (CDBG), or Emerging Needs grant programs? If so, did you apply? Explain why or why not. PROGRAM & COMMUNITY IMPACT Name of Program: Grant Request Amount: $ Please provide a narrative describing your proposed program: Total Number of people estimated to be served by this program: Total number of Palo Alto residents estimated to be served by this program: Total number of Palo Alto residents estimated to be served by your agency: Total number of unduplicated Palo Alto residents estimated to be served by the requested funding amount: EQUITY IMPACT Does your organization serve historically underrepresented or underserved populations? If yes, please describe. (ex. Number or percent of demographic populations) What measures does your organization take to promote services to underserved populations? ❑ Social Media ❑ Website ❑ Location of program/services ❑ Direct mail Other: (Please describe) What fees will be charged for proposed services, if any? Will subsidized or fee waivers be offered to clients? ALIGNMENT WITH CITY COUNCIL PRIORITIES Briefly describe how your request supports one or more of the City Council Priorities (2-3 sentences). If not relevant indicate with "N/A." Climate Action and Adaptation & Na Item 3: Staff Report Pg. 10 Packet Pg. 79 of 309 Item 3 Attachment A - Draft TA Nonprofit Workplan hase 1 Grant Applicatio Economic Development and Retail Vibrancy: Implementing Housing Strategies for Social & Economic Balance: Public Safety, Wellness & Belonging: PROGRAM GOALS Please use the template below to list up to 3 goals related to the program(s) you are proposing with requested funding. For each goal identify 1-3 strategies your organization will implement to achieve this goal. For each strategy, provide an objective and an outcome. Attach your Program Goals. Example: Goal: A general statement about the desired long-term impact. Example: "Enhance STEM education access for underrepresented middle school girls in underserved areas." Strategy: The overall approach or method used to achieve the goal. Example: "Partner with local schools to develop and deliver hands-on STEM workshops led by female science professionals." Objective: Specific, measurable actions that need to be completed to reach the goal. Example: "Train 20 female STEM professionals to facilitate workshops reaching 100 middle school girls per year." Outcome: The positive change or result that occurs as a direct consequence of the project activities. How will you know that the strategy is successful? Example: "An increase in the number of girls expressing interest in pursuing STEM careers post -workshop participation." Describe your organization's plan for evaluating the program's effectiveness? Include any specific measurement tools to be used such as surveys or other tools. PROGRAM SUSTAINABILITY What amount and percent % of your organization's budget is currently funded by the following: ❑ Government Grants$ , _% I Membership Fees$ ,% E Private Donations$ % ❑ Fees for service$ , % ❑ Fundraising$ ,% J Other$ What percentage of your organization's annual budget does the grant request represent? • Annual Budget: $ • Grant Request Amount: $ • Percent of Budget: (Grant request/Annual Budget) x100 = If awarded, will the contribution be used to leverage other funding opportunities? Explain (1-2 sentences). Describe specifically how the requested funding will be used. REQUIRED ATTACHMENTS (Section in development) • Program Goals • IRS Determination Letter (501 (c)(3) status proof REPORTING REQUIREMENTS — (Section in development) Requests of up to $5,000- brief annual report (1-2 pages) summarizing key activities and basic financial and community impact highlights. Financia reporting will consist of a self -certification of compliance with grant terms. Requests >$25,000- Requests $25,000-$100,000- Requests $100,000+ -Annual report on service outcomes -Semi-annual reports on service -quarterly service outcomes and and performance metrics, outcomes and performance metrics, performance metrics, and a year-end -CPA-prepared or reviewed financial - CPA -prepared or reviewed financial community impact report. statements, or statements. - CPA -prepared or reviewed financial -IRS Form 990 ctat Item 3: Staff Report Pg. 11 Packet Pg. 80 of 309 Item 4 Item 4 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Public Works ALTO Meeting Date: March 24, 2025 Report #:2409-3501 TITLE Approval of General Services Contract No. C25192791 with Synagro-WTT, Inc for Sludge Hauling Services for a Term of Three Years in an Amount Not to Exceed $2,584,756, for the Regional Water Quality Control Plant; CEQA Status — Not a Project :ZX��]�II►IhhU7_'IJ[9LI Staff recommends that Council approve and authorize the City Manager or their designee to execute Contract No. C25192791 with Synagro-WTT, Inc for Sludge Hauling Services for the Regional Water Quality Control Plant (RWQCP) for a term of three years, in an amount not to exceed $2,584,756. EXECUTIVE SUMMARY Since 2019, the City has relied on contracted services to meet the sludge hauling needs of the RWQCP. The existing sludge hauling services contract, C22183016A, ends on March 31, 2025. A formal solicitation of bids was conducted through a request for quotation. Following this competitive solicitation process, staff recommends that Synagro-WTT, Inc (Synagro) be awarded the contract for sludge hauling services at the RWQCP. This contract is only for hauling sludge from the City to the two different locations that treat the sludge; the RWQCP has two separate contracts for treatment of biosolids. BACKGROUND The City Council approved retiring the City's two 46 -year -old sewage sludge incinerators as a measure to reduce carbon dioxide emissions by over 12,000 metric tons annually.' The incinerators operated from 1972 until their replacement in March 2019 with a new sludge dewatering and truck loadout facility. Since March 2019, the sludge has been hauled to two 1 City Council, December 11, 2017; SR #8487; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=78307 Item 4: Staff Report Pg. 1 Packet Pg. 81 of 309 Item 4 Item 4 Staff Report different regional treatment facilities. To prepare for hauling and treatment, the City solicited requests for proposals for sludge hauling and treatment services in 2017. Council approved a contract with Denali Water Solutions, LLC (Denali) in an amount not to exceed $2,181,000 for hauling services through March 31, 2022.2 Council approved a second contract with Denali in an amount not to exceed $2,427,084 through March 31, 2025.3 As part of a corporate acquisition, the Denali contract was reassigned to Synagro on September 4, 2024. A new contract is needed to begin three more years of hauling services beginning April 1, 2025. Five-year contracts for sludge treatment services with Lystek International Limited (Lystek) and Synagro were originally approved with a term through March 31, 2024.4 The current contracts with Lystek and Synagro on expire March 31, 2029.5 ANALYSIS Staff recommends award of the sludge hauling contract to Synagro. Hauling unit prices relate to distance and route logistics from RWQCP to the treatment facility (e.g., bridge tolls, weigh stations, traffic, driver start/end location, drive time restrictions per driver, etc.). A breakdown of total contract cost is shown in Table 1. Dates .•rzi.. Cost Estimated Maximum Sludge Production Comment 4/1/25 — 3/31/26 $826,735 21,424 1 4/1/26 — 3/31/27 $857,571 22,281 2 4/1/27 — 3/31/28 $900,450 25,089 2, 3 Note 1: 15,624 wet tons * $38.94 / wet ton to Synagro CVC = $608,398.56 5,800 wet tons * $35.92 / wet ton to Lystek International = $208,336.00 safety program expenses in year one only = $10,000 2 City Council, June 18, 2018; SR #8913; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=75660 3 City Council, January 24, 2022; SR #13520; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81685 3 Fully Executed Reassigned Sludge Hauling Contract, September 4, 2024; www.cityofpaloalto.org//files/assets/public/v/1/public- works/rwgcp/contracts/synagro denali as fullyexecuted 20250226180956.446 x.pdf 4 City Council, June 18, 2018; SR #8913; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=75660 5 City Council, February 12, 2024; Agenda Item #4, SR#2309-2048; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82685 Item 4: Staff Report Pg. 2 Packet Pg. 82 of 309 Item 4 Item 4 Staff Report Note 2: Annual increase assumed to be a 5% Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco -Oakland -San Jose Area per Contract Section 6 Note 3: Additional sludge production is expected with upgraded Secondary Treatment system, which is expected to produce an estimated 34% additional waste activated sludge or about 10% additional total sludge production beginning in June 2027 The recommended contract, not to exceed $2,584,756, is based on a combination of the unit prices per wet ton and the annual increase assumed to be 5% per Contract Section 6. Additional sludge production is anticipated in contract year 3. The unit prices from Synagro for hauling to each treatment site are shown in Table 2. Current Contract New Contract Exhibit C Rates 4/1/24 - 3/31/25 4/1/25 - 3/31/26 To Lystek $32.62 $35.92 To Synagro $36.67 $38.94 The hauling services involve three years of daily loadouts and hauling commencing April 1, 2025, one day after the end of the term of the existing contract with Synagro on March 31, 2025. Pricing reflects current market conditions as they relate to inflation, diesel prices, and prices for truck drivers, including rising costs for diesel fuel and drivers that commenced during the last contract term. Solicitation Process On October 24, 2024, a request for quotation (RFQ) for Sludge Hauling Services was posted on OpenGov, the City's eProcurement platform. The bidding period was 40 calendar days. Quotes were received from three contractors on December 3, 2024. Project Bid Name/Number Sludge Hauling Services for the Regional Water Quality Control Plant/RFQ192791 Proposed Length of Project 36 Months Number of Bidders Notified 3346 Number of Bid Packages Downloaded 28 Public Link to Solicitation https://procu rement.opengov.com/portal/pa 10-a Ito - ca/projects/123220 Total Days to Respond to Bid 40 days Item 4: Staff Report Pg. 3 Packet Pg. 83 of 309 Item 4 Item 4 Staff Report Mandatory Pre -bid Meeting Tuesday, November 13, 2024 at 9:00 a.m. PST Number of Providers at Pre -bid Meeting Five Number of Bids Received Three Base Bid Price Range $810,000 to $1,026,506.80 Staff reviewed the bids submitted and initially recommended Burton and Son Trucking LLC because they were the lowest bid with a Year One total of $810,000. On January 9, 2025, Burton and Son Trucking formally requested to withdraw their bid for unknown reasons. The second lowest bidder, Synagro-WWT, Inc. was issued a notice of intent to award on January 21, 2025. Contingency for Force Maieure Situations A force majeure may limit sludge disposal options (e.g., damaged roadways, earthquake damage, process breakdowns, new regulatory constraints, etc.). In using multiple treatment contracts with Synagro and Lystek, Palo Alto is benefiting from diversified disposal options, as well as two landfill sites identified by Burton and Son Trucking LLC. In the event sludge deliveries must be suddenly increased to one of the two treatment facilities, notification timelines for each agency are constrained. The RWQCP's 24/7 production of sludge requires a disposal option to be activated and available within one to two days, depending on RWQCP's available onsite storage. The contracted hauler, Synagro, can deliver sludge to two landfills as an emergency backup should the two treatment facilities be unavailable. Since the commencement of hauling services in 2019, emergency use of a landfill has not been required, with both Lystek and Synagro providing reliable daily treatment services. Synagro and Lystek's reliability is expected to continue during the term of the hauling contract. In the event of a potential future emergency requiring use of a landfill, every effort will be made to limit landfill use. Use of landfills is problematic because it conflicts with City zero waste policies; landfill disposal prices are not guaranteed; there are operational and regulatory constraints against using a landfill for sludge disposal; and the landfill would only consider sludge disposal acceptable in short-term emergency situations due to limited ongoing capacity and regulatory limitations to landfilling biosolids. Ongoing Regulatory Concerns The City has participated in regional studies6 to analyze pollutants in the sludge, including Per - and Poly- Fluoralkyl Substances (PFAS), a family of chemicals found in consumer and industrial products that are known as "forever chemicals". PFAS in biosolids are a concern because they are used as an agricultural soil amendment. California has no regulatory limits for PFAS in biosolids, and PFAS levels monitored in RWQCP biosolids are below the lowest regulatory limits 6 Bay Area Clean Water Agencies PFAS Documents; bacwa.org/pfas-(inks/. Item 4: Staff Report Pg. 4 Packet Pg. 84 of 309 Item 4 Item 4 Staff Report set by Michigan, New York, Wisconsin, and Colorado. In addition, Palo Alto's biosolids are applied only to land used for rangeland, not edible, crops. Long Range Facilities Plan Update to Look at Future Options for RWQCP Biosolids Treatment Lystek and Synagro continue to provide an efficient and cost-effective solution for biosolids treatment; however, there may be other future options to better serve the City. A long-term biosolids treatment solution was established with the October 2014 Biosolids Facilities Plan. That plan was re-evaluated in a Biosolids Facilities Plan Update in October 2019, which was completed six months after startup of the new sludge dewatering and truck loadout facility.' The 2019 Biosolids Facilities Plan update continued to show that offsite treatment was the best option in the interim. The Long Range Facilities Plana (LRFP) was approved in 2012.9 The RWQCP is in the process of updating the LRFP. City Council approved a contract with Carollo Engineers for an LRFP Update including an update to the Biosolids Facilities Plan.10 The LRFP Update includes a task to develop an updated Biosolids Facility Plan. Development of the draft Plan and review by a Council committee is one of the Council Priority Objectives for 2025, with approval of the Plan expected in early 2026. The results of the evaluation will inform the future efficiency, environmental benefit, and cost effectiveness of sludge hauling and offsite sludge treatment services. As requested by City Council at the August 21, 2023 meeting on property acquisition adjacent to the RWQCP, the evaluation will include an analysis of the need for the Measure "E" site adjacent to the RWQCP.11 FISCAL/RESOURCE IMPACT Funding for April through June 2025 of this contract is available in the Wastewater Treatment Fund Fiscal Year 2025 Adopted Operating Budget. The last nine months of the first year of the contract and the first three months of second year of the contract are included in the FY 2026 Proposed Operating Budget, and the remaining funding for the contract will be subject to Council approval as part of the annual budget development process. Palo Alto Regional Water Quality Control Plant Biosolids Facility Plan Update; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/water-quality-control-plant/sludge- dewatering-building/finaldraft palo alto bfp update.pdf?t=47012.05 8 The Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/water-quality-control-plant/irfp-final-report- 08-2012.pdf 9 City Council, July 2, 2012; SR #2914; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=78611 10 City Council, June 10, 2024; Agenda Item #6, SR #2405-2993 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82887 11 City Council, August 21, 2023; Agenda Item #7, #SR 2304-1389; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82411 Item 4: Staff Report Pg. 5 Packet Pg. 85 of 309 Item 4 Item 4 Staff Report Palo Alto RWQCP treats the combined wastewater from Palo Alto, Los Altos, Los Altos Hills, Mountain View, Stanford University, and the East Palo Alto Sanitary District. Palo Alto's cost share is approximately 37% and the other five agencies' share is approximately 63%. STAKEHOLDER ENGAGEMENT This service is part of the RWQCP's operating budget funded by Palo Alto and the five partner agencies who use the RWQCP for wastewater treatment. The five partner agencies are regularly updated on the need for wastewater treatment services. Updates are provided each year at an annual meeting and at other periodic meetings, as needed. With respect to Palo Alto itself, the open meetings on the budget process serve as the main vehicle for engaging the community on both projects and services, and the associated rate impacts. ENVIRONMENTAL REVIEW Council action on this item is categorically exempt from review under the California Environmental Quality Act (CEQA) in that awarding a contract for sludge hauling services review involves the operation of an existing facility with negligible or no expansion of use. CEQA Guidelines section 15301. ATTACHMENTS Attachment A: Synagro Contract C25192791 APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 4: Staff Report Pg. 6 Packet Pg. 86 of 309 Item 4 Attachment A - Synagro Contract C25192791 CITY OF PALO ALTO CONTRACT NO. C25192791 GENERAL SERVICES AGREEMENT THIS AGREEMENT made and entered into on the 24th day of March, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and SYNAGRO-WWT, INC., a corporation, located at 435 Williams Court, Suite 100, Baltimore, MD 21220, Telephone Number: 510-890-7833 ("CONTRACTOR"). In consideration of their mutual covenants, the parties hereto agree as follows: 1. SERVICES. CONTRACTOR shall provide or furnish the services (the "Services") described in the Scope of Services, attached at Exhibit A. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement: ® "A" - Scope of Services ® "A-1" — Palo Alto Sludge Characteristics ® "B" - Schedule of Performance ® "C" — Schedule of Fees ® "D" - Insurance Requirements ® "E" - Performance Bond ® "F" — Subcontractor Listing Form CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED. 3. TERM. The term of this Agreement is from April 1, 2025 to March 31, 2028 inclusive, subject to the provisions of Sections R and W of the General Terms and Conditions. 4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the schedule set forth in the Schedule of Performance, attached at Exhibit B. Time is of the essence in this Agreement. 5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not -to -exceed compensation for the full performance of the Services and reimbursable expenses, if any: — The total maximum lump sum compensation of dollars ($ ); OR — The sum of dollars ($ ) per hour, not to exceed a total maximum Item 4: Staff Report Pg. 7 Packet Pg. 87 of 309 Item 4 Attachment A - Synagro Contract C25192791 compensation amount of dollars ($ ); OR r A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Eight Hundred Twenty -Six Thousand Seven Hundred Thirty -Five dollars ($826,735) for year one, which includes $10,000.00 for safety training, which includes Respiratory Protection Program costs, regarding sludge hauling. CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. CITY has set aside the sum of ($) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR's proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. 6. COMPENSATION DURING ADDITIONAL TERMS. CONTRACTOR'S compensation rates for each additional term shall be the same as the original term; OR E. CONTRACTOR's compensation amount outlined in Exhibit C, hourly rates, or fees, whichever is applicable as set forth in Section 5 above, is inclusive of an annual Consumer Price Index adjustment effective immediately following the first year of active hauling services (April 1, 2026) adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco -Oakland- San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR's compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any further adjustment to CONTRACTOR's compensation rates shall be Item 4: Staff Report Pg. 8 Packet Pg. 88 of 309 Item 4 Attachment A - Synagro Contract C25192791 reflected in a written amendment to this Agreement. 7. CLAIMS PROCEDURE FOR "9204 PUBLIC WORKS PROJECTS". For purposes of this Section 7, a "9204 Public Works Project" means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. Public Contract Code Section 9204 mandates certain claims procedures for Public Works Projects. r This project is a 9204 Public Works Project and is required to comply with the claims procedures set forth in Appendix _, attached hereto and incorporated herein. OR ? This project is not a 9204 Public Works Project. 8. INVOICING. Send all invoices to CITY, Attention: Project Manager. The Project Manager is: Andrew Lee, Assistant Plant Manager, Dept.: Public Works, Regional Water Quality Control Plant (RWQCP), 2501 Embarcadero Way, Palo Alto, CA 94303 Telephone: 650- 566-4542; Email: rwgcp.invoices@cityofpaloalto.org and andrew.lee4@cityof paloalto.org. Invoices shall be submitted in arrears for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of services performed during the invoice period, which are subject to verification by CITY. Invoices must be accompanied by supporting documentation that verifies the services performed and substantiates the charges. Invoices must also clearly list the correct purchase order number. CITY shall pay the undisputed amount on the invoices within 30 days of receipt of a complete and correct invoice. GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includes and is limited to the terms and conditions set forth in sections 1 through 8 above, these general terms and conditions and the attached exhibits. B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the services described in Section 1 of this Agreement, entitled "SERVICES," and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on CONTRACTOR's representations regarding its skills, knowledge, and certifications. CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations. Item 4: Staff Report Pg. 9 Packet Pg. 89 of 309 Item 4 Attachment A - Synagro Contract C25192791 C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by CONTRACTOR shall at all times be considered an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement. D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for work performed by approved subcontractors and for any compensation due to subcontractors. The subcontractors authorized by CITY to perform work on this Project are: J&L Trucking — DOT #2461583 Reyes Trucking — DOT #1930207 Yellowstone Transport, LLC — DOT #2762132 CONTRACTOR bears the sole responsibility for CONTRACTOR's and subcontractors' costs incurred in the performance of services under this Agreement, including any of CONTRACTOR's administrative and overhead expenses. CONTRACTOR shall provide City with a hauling schedule so the City will know what days each subcontractor will hauling. CONTRACTOR shall notify Program Manager in advance of any change to the selected subcontractor(s) and hauling schedule in advance of any such change CONTRACTOR shall provide City with updated contact information for each subcontractor if at any time different from the information provided on Exhibit F SUBCONTRACTOR LISTING FORM, as well as an updated hauling schedule as appropriate. In the first year of this contract, there is an allowance of up to $10,000 designated for the Respiratory Protection program. This allowance applies solely to CONTRACTOR. CONTRACTOR will be responsible for ensuring that the subcontractors perform initial and recurring qualitative or quantitative respirator fit testing and obtain the qualified medical clearance for employees. Subcontractors shall adhere to the same terms outlined in the contract including all regulations associated with Sludge Hauling. CONTRACTOR is responsible for ensuring that all subcontractors can meet these requirements prior to utilizing their service. Should a subcontractor fail to comply with the provisions outlined in this contract or is unable to fulfill the obligation of transporting the plants' sludge for any reason, the City of Palo Alto reserves the right to deny the use of that subcontractor and CONTRACTOR shall have the Item 4: Staff Report Pg. 10 Packet Pg. 90 of 309 Item 4 Attachment A - Synagro Contract C25192791 responsibility of ensuring that there is no disruption in service. CONTRACTOR shall ensure that all subcontractors comply with the insurance requirements set forth in Exhibit D INSURANCE REQUIREMENTS. CONTRACTOR expressly assumes all liability for property damaged caused by any subcontractor. These obligations are independent from, and in addition to, CONTRACTOR's obligations under paragraphs H, N, and O of this section. E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR's business. F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws, ordinances, regulations, and orders. G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONTRACTOR shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONTRACTOR shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR's performance of the Services. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR's performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR's request. When the grounds described above are removed, payment shall be made for amounts withheld because of them. I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR expressly warrants that all materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any material or service not in compliance with these warranties, including incomplete, inaccurate, or defective material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from Item 4: Staff Report Pg. 11 Packet Pg. 91 of 309 Item 4 Attachment A - Synagro Contract C25192791 completion of the Services and shall survive the completion of the Services or termination of this Agreement. J. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONTRACTOR's work is completed in a satisfactory manner and complies with the provisions of this Agreement. K. CITY'S PROPERTY. Any reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR's records pertaining to matters covered by this Agreement. CONTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement. M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement. N. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described at Exhibit D. Insurance must be provided by companies with a Best's Key Rating of A -:VII or higher and which are otherwise acceptable to CITY's Risk Manager. The Risk Manager must approve deductibles and self -insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the Risk Manager. CONTRACTOR shall provide certificates of such policies or other evidence of coverage satisfactory to the Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and endorsements to the Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall Item 4: Staff Report Pg. 12 Packet Pg. 92 of 309 Item 4 Attachment A - Synagro Contract C25192791 not operate to limit CONTRACTOR's liability or obligation to indemnify CITY under this Agreement. O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section N relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney's fees, courts costs and costs of alternative dispute resolution), arising out of, or resulting in any way from or in connection with the performance of this Agreement. CONTRACTOR's obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that CONTRACTOR shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Agreement. P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. Q. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services. R. TERMINATION. The City Manager may terminate this Agreement without cause by giving ten (10) days' prior written notice thereof to CONTRACTOR. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager may terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination is for cause, CITY may deduct from such payment the amount of actual Item 4: Staff Report Pg. 13 Packet Pg. 93 of 309 Item 4 Attachment A - Synagro Contract C25192791 damage, if any, sustained by CITY due to CONTRACTOR's failure to perform its material obligations under this Agreement. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection with this Agreement. Such materials shall become the property of CITY. S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written consent of CITY. No amendments, changes or variations of any kind are authorized without the written consent of CITY. T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Agreement. CONTRACTOR further covenants that, in the performance of this Agreement, it will not employ any person having such an interest. CONTRACTOR certifies that no CITY officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with CONTRACTOR has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. CONTRACTOR agrees to advise CITY if any conflict arises. U. GOVERNING LAW. This Agreement shall be governed and interpreted by the laws of the State of California. V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. W. NON -APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONTRACTOR shall comply with CITY's Environmentally Preferred Purchasing policies which are available at CITY's Purchasing Division, which are incorporated by reference and may be amended from time to time. CONTRACTOR shall comply with waste Item 4: Staff Report Pg. 14 Packet Pg. 94 of 309 Item 4 Attachment A - Synagro Contract C25192791 reduction, reuse, recycling and disposal requirements of CITY's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONTRACTOR shall comply with the following zero waste requirements: • All printed materials provided by CONTRACTOR to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double -sided and printed on a minimum of 30% or greater post -consumer content paper, unless otherwise approved by CITY's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post - consumer material and printed with vegetable based inks. • Goods purchased by Contractor on behalf of CITY shall be purchased in accordance with CITY's Environmental Purchasing Policy including, but not limited to, Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division's office. • Reusable/returnable pallets shall be taken back by CONTRCATOR, at no additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Z. PREVAILING WAGES This Project is not subject to prevailing wages. CONTRACTOR is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the Agreement is not a public works contract, if Agreement does not include a public works construction project of more than $25,000, or the Agreement does not include a public works alteration, demolition, repair, or maintenance (collectively, 'improvement') project of more than $15,000. OR ❑ Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the Agreement for this Project from the Director of the Department of Industrial Relations ("DIR"). Copies of these rates may be obtained at the Purchasing Division's office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the Item 4: Staff Report Pg. 15 Packet Pg. 95 of 309 Item 4 Attachment A - Synagro Contract C25192791 provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. AA.DIR REGISTRATION. In regard to any public work construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONTRACTOR without proof that CONTRACTOR and its listed subcontractors are registered with the California Department of Industrial Relations ("DIR") to perform public work, subject to limited exceptions. City requires CONTRACTOR and its listed subcontractors to comply with the requirements of SB 854. CITY provides notice to CONTRACTOR of the requirements of California Labor Code section 1771.1(a), which reads: "A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the Agreement is awarded." CITY gives notice to CONTRACTOR and its listed subcontractors that CONTRACTOR is required to post all job site notices prescribed by law or regulation and CONTRACTOR is subject to SB 854 -compliance monitoring and enforcement by DIR. CITY requires CONTRACTOR and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONTRACTOR and its listed subcontractors, in connection with the Project. The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONTRACTOR and its listed subcontractors, respectively. At the request of CITY, acting by its project manager, CONTRACTOR and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of CITY's request. Item 4: Staff Report Pg. 16 Packet Pg. 96 of 309 Item 4 Attachment A - Synagro Contract C25192791 ❑ [For state- and federally -funded projects] CITY requests CONTRACTOR and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. If the certified payroll records are not produced to the project manager within the 10 -day period, then CONTRACTOR and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONTRACTOR. Inform the project manager of the location of CONTRACTOR's and its listed subcontractors' payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the case of any conflict between the terms of this Agreement and the exhibits hereto or CONTRACTOR's proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONTRACTOR's proposal, the exhibits shall control. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager or Designee Approved as to form: City Attorney or Designee SYNAGRO-WWT, INC. By Name Title Telephone: Item 4: Staff Report Pg. 17 Packet Pg. 97 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT A SCOPE OF SERVICES BACKGROUND AND PURPOSE a. The work is for services to daily load and haul sludge from the City of Palo Alto's sludge dewatering facility. CONTRACTOR (referred to herein as the "Hauler") shall transport sludge to disposal sites as listed in this scope of services. b. This work requires backup treatment facilities. The Hauler's backup treatment sites areas listed in this scope of services. 2. 3. PICKUP ADDRESS Palo Alto Regional Water Quality Control Plant ("RWQCP") Attn: Operations Shift Supervisor or Senior Operator 2501 Embarcadero Way Palo Alto, CA 94303 650-329-2598 - phone PALO ALTO SLUDGE CHARACTERISTICS a. The material covered under this Agreement is a mix of raw, dewatered wastewater sludge and scum (hereafter, collectively referred to as "sludge") that has not yet been stabilized. The wastewater sludge is collected as waste sludge from activated sludge tanks (about 29% of total content) and primary sludge settling tanks (about 71% of total content). This blend is then thickened in gravity thickeners to 3% to 4% solids. The sludge blend is processed through grinders before being sent to a blend tank. The sludge is kept blended with mix pumps and aerated by a blower in a 100,000 gallon mix tank, is pumped to a belt filter press, is treated for odors in -line with a sodium hypochlorite solution, and is then dewatered using a high molecular weight cationic polymer solution on a belt filter press. Upstream preliminary treatment processes include grit removal and mechanically raked barscreens using 3 " spacing at the headworks. c. Primary tank scum is pumped through a grinder, sent to a scum concentrator, and thickened to about 50% solids. This scum will be added to the 20% plus sludge cake screw conveyors that feed into sludge cake bins. d. Solids content of filter press cake will have a solid content of not less than 20%. e. Except as stated herein, the City cannot guarantee condition or quality of the material. Therefore, notice is hereby given that the content and nature of the sludge and scum may change depending on RWQCP process control changes, treatment plant changes, influent characteristics, or treatment plant effectiveness. f. The City will certify that the wastewater sludge and scum pollutant concentrations are at or below the metal concentration limits established in 40 CFR 501.13, Table 1 and Table 3. g. Hauler is aware that wastewater sludge contains pathogenic microorganisms and does not meet all 40 CFR 503 regulations for final disposal. The City declares, and Hauler acknowledges, that: i.The sludge does not meet the pathogen reduction requirements of 40 CFR 503.32(B)(3) ["PRSP"]. Item 4: Staff Report Pg. 18 Packet Pg. 98 of 309 Item 4 Attachment A - Synagro Contract C25192791 ii. The sludge does not meet the vector attraction reduction requirements of 40 CFR 503.33(b)(1). h. Furthermore, sludge and scum quality data is included as Table A-1 at end of this Exhibit for the Hauler's reference. Hauler shall verify, by analyzing the data provided and making inquiries, as needed, as to the characteristics of the wastewater sludge/scum mix and their ability to haul to and process the wastewater sludge at the treatment/disposal site(s). At no time during the term of this Agreement shall the City make available to the Hauler, nor shall the Hauler be obligated to handle, any wastewater sludge which is designated a hazardous waste under applicable law, rule, or regulation, and nothing herein shall relieve the City of liability or responsibility with respect to any sludge generated at its facilities which is a hazardous waste. 4. SLUDGE PRODUCTION ESTIMATES a. This scope of services covers the disposal, including loading, transportation/hauling, delivery, and unloading of approximately 25,089 annual wet tons of raw wastewater sludge. The City produces wastewater sludge twenty-four (24) hours per day, seven (7) days per week, resulting up to 25,089 wet tons annually by end of term. A breakdown is included Table A-2 for historical sludge production by the new sludge dewatering and loadout facility, which began operation March 18, 2019. The Hauler's transport system must have the capacity to handle the maximum levels of wastewater sludge during peak production periods (esp. after large storms that bring in extra solids). c. Production rates may be varied or stopped to match RWQCP operational needs. Operation may also be interrupted occasionally for maintenance or repair. Advance notice of temporary interruption will be given to the Hauler whenever possible. d. The wastewater sludge shall become the property of the Hauler at the time the material is deposited in the Hauler's trailer. Therefore, it is the Hauler's responsibility to make any and all arrangements for disposal at the treatment/disposal sites identified and approved by the City (referred to herein as the "treatment/disposal sites"). e. The amount of biosolids to be hauled is an estimate only. Therefore, notice is hereby given that the quantity, content, and nature of the material may change depending on RWQCP process control changes, process upsets, plant upgrades, repairs, maintenance, operational improvements, belt press dewatering schedule, day of week, holidays, seasonal changes, storm -induced increases in produced solids, changes in community population, treatment plant changes, and so forth. No minimum wastewater sludge generation rate is guaranteed. However, the Hauler will be required to dispose of 100% of all wastewater sludge that the City designates for disposal pursuant to this Agreement even if the total quantity exceeds the estimate. 5. GENERAL RESPONSIBILITIES a. The Hauler shall know, follow, comply with, and stay updated on all federal, state, and local laws, regulations, statues, ordinances, orders, decrees, and permits that affect this work. This includes loading and unloading, treatment site operation and maintenance, monitoring and reporting, processing and disposal of sludge, USDOT, transportation, driver and operator certifications, environmental and pollution regulations, noise control, and inspections by authorized representatives as required by such requirements. Hauler shall provide documentation of specific permits, orders, decrees, registrations, and so forth upon request. Item 4: Staff Report Pg. 19 Packet Pg. 99 of 309 Item 4 Attachment A - Synagro Contract C25192791 All costs associated with obtaining such permits and licenses shall be considered as included in the unit price. Federal Regulations, including 40 CFR Parts 257, 258, 403 and 503, provide specific requirements for biosolids disposal and must be complied with by Hauler. The Hauler agrees to furnish all information as required by the City in order to fulfill the responsibilities of the City for reporting on compliance with wastewater sludge rules and regulations as well as for accurate payment. c. Transportation shall be by a USDOT licensed, registered hauler. d. The Hauler will be required to furnish to City and update, as necessary, a list of telephone numbers and names of responsible parties to be called on a 24 -hour, 7 days per week basis in the event of an emergency or unusual operating conditions. The Hauler's designated representative must be available to respond to City staff within a mutually acceptable time span (within three to four hours). It will be mandatory to have dedicated business cell phones and email for supplementary communications. The Hauler shall coordinate and cooperate with staff at the RWQCP and disposal site owners/operators (in consultation with the City) to fulfill their respective requirements. e. Prior to initiating services under the Agreement, the Hauler's operational team will meet with RWQCP management, operations management, and accounts payable team members at the RWQCP. Raw sludge contains micro-organisms from the wastewater treatment process that include pathogens. Precautions are required. The Hauler is to follow an Exposure Control Plan for Blood Borne Pathogens pursuant to Cal OSHA rules and California Code of Regulations, Title 8, Section 5193. The Exposure Control Plan is to be on file for review, if requested. i. Hauler shall provide proper training to all drivers before their first pickup and on a recurring basis, as needed. ii. PPE shall include latex or nitrile gloves, safety shoes, eye protection, available hard hat, full length pants, and any required face coverings/respirators. This PPE shall be worn at both City site and any treatment plant site. iii. Hauler shall have provisions for washing hands with soap, and access to potable drinking water and OSHA approved first aid kits. g. Raw sludge releases odors during loadouts. Some loadouts produce hydrogen sulfide at levels that may require respiratory protection. Precautions are required. The Hauler is to develop and follow a written Respiratory Protection Program pursuant to Cal OSHA rules and California Code of Regulations, Title 8, Section 5144. The Respiratory Protection Program is to be on file for review, if requested. i. An allowance of $10,000 is authorized per Exhibit C for development of a written respiratory protection program, required respiratory protection equipment, initial and recurring qualitative and/or quantitative fit testing of respirators, initial medical clearance checks for each company driver to wear a respirator, and other required components of the program. ii. Hauler shall provide proper training to all drivers before their first pickup and on a recurring basis, as needed. iii. Respiratory protection shall include respirators provided at no cost to drivers and fitted to each driver. Freelance drivers contracted by the hauler will be made fully aware of the respiratory protection program requirements in this section. iv. Respirators will be fitted with cartridges and rated by NIOSH as capable of treating "HS" for acid gases containing hydrogen sulfide. v. Properly fitted respirators with cartridges for hydrogen sulfide shall be worn by each driver (either company driver or contracted driver) from the time a loadout is started Item 4: Staff Report Pg. 20 Packet Pg. 100 of 309 Item 4 Attachment A - Synagro Contract C25192791 until the driver leaves the building, and as directed by Palo Alto. vi. Respirators, masks, and/or face coverings shall be worn as required by governing agencies or Palo Alto, as necessary as it relates to pandemics and public health orders. h. The Hauler shall attend periodic meetings, as needed, to discuss items such as: operational requirements at RWQCP and treatment site(s), performance reviews, safety/spill response planning, and strategies for common benefit. Input and constructive feedback to improve all aspects of this Agreement is expected during the Agreement term. Meetings will be one -hour annual (or as needed) meetings held at RWQCP, treatment sites, a mutually agreeable location, or by telecon/virtually. The wastewater treatment plant is an essential public service. The Hauler is also providing an essential service and will coordinate on continuity of operations during declared emergencies, governmental orders related to essential services, local or global pandemics, and so forth. 6. LOADING REQUIREMENTS a. Prior to start of work, Hauler shall visually observe the truck loadout facility and verify that the Hauler's equipment can safely operate at the RWQCP. b. The processed wastewater sludge is conveyed to a cake storage bin for trailer loading. Vertical clearance loading access below the bypass chute's lowest point of discharge is approximately 12'-5" above the floor, per field measurement. Hauler is to field verify vertical clearance for their own or contracted trucks prior to start of work; Hauler is not to dispatch trucks that will not fit inside the Loadout Bay. c. The City owns and maintains the RWQCP, the sludge dewatering equipment, and the truck loadout facility. The Hauler shall only provide trucks and trailers compatible with the existing system. Trucks shall be empty upon arrival for loading at the RWQCP. d. The Hauler will have free and easy access to the site pursuant to the security and entry protocols established by the City, as needed. Whether working in auto mode or manually, the Hauler will be responsible for opening and closing the RWQCP entrance and exit gates as well as the sludge dewatering building truck loadout bay's roll -up doors. Any damage to City property, including landscaping, building systems, loadout chutes, entry systems, bin gates and screws, and roll -up doors caused by the Hauler shall be promptly repaired by the Hauler at no cost to the City. Hauler shall observe traffic signs and RWQCP speed limit of 5 MPH. e. The Hauler will load all wastewater sludge into the Hauler's trailers. The trailer will be positioned directly under the cake hoppers for loading. The cake hoppers distribute the dewatered raw sludge in the hauler's trailer via cake loadout chutes. During the trailer loading process, a computer program is used to track the total weight of the dewatered sludge loaded into the trailer. The Hauler will be responsible for monitoring the total weight entering the trailer, load distribution in the trailer and ensuring the load does not exceed the "Full Load" established by the Hauler for each trailer. Overweight tickets are the responsibility of the Hauler. f. Only sludge will be added into the Hauler's trailers. Latex gloves and other debris is not to be added into the trailer. All drivers will be trained on this provision as it may lead to rejected loads at the treatment site. g. The Hauler shall bring problems with the loadout system to the attention of RWQCP management, supervisory staff, and the designated -operator -in -charge immediately. h. Once the Hauler's trailer is full, Hauler shall cover the load with the tarp that is on each trailer to minimize release of odors and avoid spillage from the dewatered raw sludge while the trailer is in transport to the final treatment site. The tarp shall be placed over the trailer inside the Item 4: Staff Report Pg. 21 Packet Pg. 101 of 309 Item 4 Attachment A - Synagro Contract C25192791 loadout bay (not outside) and before roll -up doors are opened. The truck shall be promptly driven from the RWQCP site directly and out the back gate and on to the treatment/disposal site. No unnecessary parking inside the RWQCP or on Embarcadero Road is authorized. All drivers shall be trained on entrance and exiting procedures at the facility and odor minimization rules for the truck when onsite. The Hauler shall make a proper effort to take full loads of at least 21 wet tons. Hauler's driver should not leave the RWQCP until a full load is received. Drivers are to be trained on the proper quantity to take. City shall not be responsible for Hauler failing to take a minimum loadout if the sludge bins have adequate sludge for the minimum loadout. City will not normally dispatch for anything but full loads (e.g., an exception to empty a partially full bin for special maintenance activities, in which case the minimum load charge may apply). The Hauler's trucks shall be cleaned and free of any foreign matter/contamination (from any pre -hauling or back -hauling operation) such that only dewatered sludge will be transported to the treatment/disposal site(s). k. The City reserves the right to set a loading target below the CaIDOT road limit (e.g., 2000 pounds less) to account for errors in weight readings and uncertainty caused by loadout bin weight calculations by the City's PLC. It is the Hauler's responsibility to pay overweight limit fines. There are no onsite zones or facilities at the RWQCP for unloading excess material to return a Hauler's truck to a legal weight limit. There is no separate weigh scale onsite to aid the Hauler in how much material to remove. I. The RWQCP is not a staging/storage site. Hauler shall not store or stage equipment at the RWQCP. m. The Loadout Bay is not long enough for trucks with "sleeper" cabs unless the exit door is left open, which reduces the effectiveness of the odor control system of the Loadout Bay. Except in emergencies, no trucks will be dispatched with sleeper cabs in order to allow loadouts with maximum odor control. n. Odor Control Best Practices i. The misting system to neutralize odors shall be started before the driver enters Loadout Bay. The odor neutralizer is on a timer and is to be left running after the driver leaves for 60 minutes. ii. Entrance and exit roll -up doors are to be closed before commencing a loadout to reduce offsite odors. iii. After loadout completion, trucks are to be tarped inside the Loadout Bay before opening the exit roll -up door. iv. The driver is to return to the building to close the exit roll -up door before promptly leaving the site through the back gate. v. Onsite City restroom facilities should be used prior to loading a trailer so that a fully tarped trailer is not parked unnecessarily onsite. vi. All drivers are to be trained on odor minimization protocols as part of their initial training and as needed. o. The Loadout Bay bin discharge gates and screws must be operated safely. All drivers are to follow the City's standard unloading procedures to operate switches for gates and screws to prevent jamming, damage, motor overloads, motor drive damage, and so forth. Failure of a driver to follow procedures will be the responsibility of the Hauler. Standard procedure will be provided at driver initial training. Hauler is to notify new drivers not to unload without proper training by a Plant operator assigned by the designated -operator -in -charge. Item 4: Staff Report Pg. 22 Packet Pg. 102 of 309 Item 4 Attachment A - Synagro Contract C25192791 7. HAULING SCHEDULE a. The Hauler shall receive and haul wastewater sludge daily and must have the capability to haul up to six trailers a day, seven days a week from the RWQCP. The City reserves the right to make modifications in this schedule to meet the needs of the City. b. Loading, unloading, and treatment may be required on both a daily scheduled and as -required basis, according to the requirements of the City. The Hauler shall develop, for approval, a pickup and delivery schedule with the Project Manager. The Hauler shall be required to respond to all requests for service within twenty-four (24) hours. The RWQCP operates year round, and it is mandatory that the Hauler be available to perform the work all 365 days of the year. c. If the Hauler coordinates with the City in advance, it may be possible to store sludge onsite at the RWQCP in the sludge cake bins and upstream sludge tanks for a short period over specific and limited number of holidays (e.g., Easter, Thanksgiving, Christmas, and New Year's). It is the Hauler's responsibility to coordinate with treatment sites to see if they are open on specified holidays before taking a load to a specific treatment site. d. The RWQCP designated -operator -in -charge will normally dispatch its requested number of next -morning loadouts via email between 2:00 and 3:00 p.m. This estimate would normally be based on what is on hand in the three sludge cake bins to provide for full and time -efficient loadouts of about 25 wet tons per trailer. e. When dispatching up to three loads a day, all loads shall be completed by 6:00 a.m. When four or more loads a day are dispatched (uncommon), loads may be scheduled for after 6:00 a.m. If a Hauler wishes to use a single driver for up to two loads, it will be the Hauler's responsibility to work with treatment sites about receiving hours. The City makes no guarantee about operating hours for treatment sites or treatment site charges for modifying operating hours outside of what is listed in Section 10.b. 8. HAULING REQUIREMENTS a. The Hauler will be responsible for the Sludge when the material is deposited in the Hauler's trailer. Hauler shall not commingle sludge from another facility prior to delivery, final treatment, and disposal. b. Hauler shall comply with all applicable regulations including but not limited to 40 CFR 503, CARB's Advanced Clean Fleet (ACF) regulations, and any relevant county ordinances that impact land application activities. In particular, Hauler is subject to Section 2013 of the CARB ACF regulations that govern the City's medium- to heavy-duty fleet vehicles of gross vehicle weight rating (GVWR) greater than 8,500 lbs. ii. Reporting: Upon request by the City, the Contractor shall provide the City within 14 calendar days with information sufficient for completion of regulatory reports including, but not limited to, the EPA annual report for compliance with 40 CFR 503, quarterly AB 901 reports, and records showing compliance with CARB's ACF. The Contractor shall confirm annually that they are either listed as compliant on CARB's ACF webpage or provide a signed statement noting that they are not subject to the High Priority and Federal Fleets regulations. iii. The Contractor shall notify the City within 24 hours after receiving any notice of violation, legal, or enforcement action. c. The Hauler shall be responsible for all transportation, holding, and unloading. The Hauler shall ensure that trailers are completely empty when they arrive at the RWQCP. The Hauler shall further ensure that the exterior of the truck and trailer is clean prior to leaving the RWQCP and the treatment/disposal site destination. The Hauler shall be responsible for coordination with appropriate authorities to conduct acceptable unloading operations to meet both City and the Item 4: Staff Report Pg. 23 Packet Pg. 103 of 309 Item 4 Attachment A - Synagro Contract C25192791 treatment/disposal site's requirements. d. Emergency / Spill Response Plan: The Hauler must submit to the City an Emergency / Spill Response Plan within three (3) weeks of Agreement award. The Hauler will ensure that their drivers are properly trained to carry out this Plan in the event of a spill and maintain copies within each truck for use during such situations. No hauling will be permitted until the Plan is received and approved by the City. e. Emergency / Spill Response: Hauler shall ensure that Haulers are trained on the approved Emergency / Spill Response Plan and that it is implemented. The Hauler shall provide immediate cleanup of any spill during the transportation of the wastewater sludge. The Hauler shall be fully responsible for all costs associated with the cleanup or mitigation of spills during the transportation of wastewater sludge. If the Hauler does not clean the spill, the City may clean the spill and back -charge the Hauler for all costs. A "spill" as used herein includes tracking of residuals onto public roads. In addition to any other required notifications, the Hauler shall immediately notify the City by telephone at (650) 329-2598 of any spillage of wastewater sludge along the haul route and the estimated time for cleanup to be completed. The Hauler shall provide a written report within five (5) days describing any spillage incident, including at a minimum, the date, time, and location of the spill, the amount of material spilled, the methods used to clean up the spill, the cause of the spill, steps taken to prevent reoccurrence of a similar spill, and certification that the spill has been cleaned up to the satisfaction of any and all agencies having jurisdiction. Hauler shall report any significant hauling incidents, including but not limited to spills, accidents and substantial delays, to the City's project manager within three (3) hours of an occurrence. The Hauler must make all reasonable attempts to contact the City immediately following an incident. Regardless of contact being made with the City, the Hauler is expected to use best management practices for immediate corrective action. Upon notification of the City, incidents will be investigated. If required, Hauler shall resolve the incident. City may also identify problems such as contaminated or misplaced loads. If the incident is not resolved, the Hauler may receive a formal warning. Significant incidents include, but are not limited to, such things as: i. Delays of loading, hauling, or dumping of 48 hours or more; ii. Spills of any size (including any tracking of sludge onto public roads); iii. Traffic accidents; iv. Damage to equipment, persons, or property; and v. Any other incidents outside normal operations f. Hauler is to have in place a 24/7 on -call emergency services agreement with a large truck mechanic(s) to deal with any truck mechanical breakdowns at the RWQCP or on other roads to and from the RWQCP. Mechanical breakdowns shall be communicated to the RWQCP. g. h. The Hauler must have and maintain for the term of the Agreement all hauling permits needed for the work under this Agreement. The Hauler must furnish only experienced and skilled operators and other personnel as required. Hauler must ensure that employed workers have proper and valid licenses and/or certifications. The Hauler shall, at the request of the City, supply proof of these licenses and/or certifications. The Hauler shall be responsible for controlling and abating any odor, spillage, insect, vermin, or any other nuisance arising from the operation. Item 4: Staff Report Pg. 24 Packet Pg. 104 of 309 Item 4 Attachment A - Synagro Contract C25192791 k. City shall provide plant process water (nonpotable, aka W4 at 90 psi) and a wash down area in the truck loadout bay, which is to be used by the Hauler to keep the loading site at the RWQCP and trucks clean and free of spillage before leaving the RWQCP. The City will provide two 1.5" nonpotable (W4) water stations with 1.5" hoses in the truck loadout bay. One is at the front of the loadout bay and one on the back side, both on the passenger side of the truck. After use, the Hauler is to put hoses away on hose stations before leaving. Any spillage or discharge of material to City or public roads shall be cleaned up promptly by the Hauler. If the City is required to clean up any spillage or discharge, all costs incurred including direct and administrative costs shall be reimbursed by the Hauler or withheld from Hauler payments. The Hauler shall provide water for all vehicles used in hauling wastewater sludge to complete wash down before leaving the treatment/disposal site. The interior of trailers, as well as all exterior surfaces, including tires and mud flaps shall be completely hosed down to minimize tracking of wastewater sludge off of the treatment/disposal site. m. It is further the Hauler's responsibility to be cognizant of all the factors involved in furnishing labor and equipment to dispose of raw sludge including transportation, hauling, delivery and unloading of wastewater sludge from the RWQCP. Such factors include, but are not limited to, complete familiarity with the layout of the City's facilities. The Hauler shall have complete familiarity with all access roads to the RWQCP facility, including difficulties involved in maneuvering large vehicles in confined areas. Hauler shall have available an adequate number of vehicles and trained, knowledgeable drivers to haul sludge and be able to keep a close liaison with City staff concerning scheduling or any problems related to production rates. Drivers must ensure that all trucks have tailgate pins, chains, and alternate/secondary locking mechanisms in place while loaded and before leaving any site. Hauler shall use public highways and designated truck routes, ensuring that laden trucks are not left parked in high - traffic areas for extended periods of time. Hauler shall understand truck routes and traffic conditions along routes. Hauler is responsible for freeing any incapacitated truck, traffic delays, weather impacts, and road conditions. 9. HAULING EQUIPMENT a. Hauler must operate and maintain trucks per USDOT regulations. b. The Hauler's truck fleet must be California Air Resources Board (GARB) compliant including a truck fleet with engines that are 2010 or newer engine model year. c. Hauler's trailers must hold 21 tons minimum. d. Hauler is to provide leak -proof aluminum or stainless steel trailers with seals, tailgate seals, and wide splashguards as a requirement for hauling wastewater sludge. Each trailer shall be appropriate for wastewater sludge containment and equipped with covers (canvas or suitable alternative material) that can be securely fastened to reduce odors and contain wastewater sludge in case the trailer overturns. There shall be no gaps in the covering tarp that release odors from off -gassing, wind, and so forth. Any damages to the tarp shall be repaired immediately. e. All hauling trucks shall be equipped with a back-up alarm consisting of a warning horn or beep that will activate any time the truck is in reverse. Each vehicle shall be equipped with scraper, shovel, broom, and other tools as necessary to allow the driver to clean vehicle and respond to drips or small spills. f. The Hauler shall be solely responsible for the condition of its equipment. All equipment shall Item 4: Staff Report Pg. 25 Packet Pg. 105 of 309 Item 4 Attachment A - Synagro Contract C25192791 be properly maintained. Only equipment in good working condition as judged by the City is acceptable. The City may reject pieces of equipment found to be in unsatisfactory condition or performing unsatisfactory work. In the event of any rejection by the City, the Hauler must remove the unsatisfactory equipment and replace it with good and acceptable equipment immediately. g. The Hauler shall provide the City with a list of identification numbers and maximum legal load limit for all wastewater sludge hauling trailers being utilized under this Agreement. Hauler shall conspicuously mark each trailer unit with the maximum legal weight of the unit when loaded and a corresponding "full load" indicator inside the trailer to guide loading. h. The City will not be responsible for loss or damage of any equipment or property owned or operated by the Hauler, its agents, or employees on or off City property. i. Hauler shall ensure that gas/oil/hydrocarbon spill -containment kits are kept on each truck and/or piece of equipment in use, and drivers are trained in their use. Each truck is to have potable water and a first aid kit. j. Trucks with sleeper cabs are not authorized due to length requiring exit door to remain open. 10. UNLOADING REQUIREMENTS AT TREATMENT SITE a. If the Hauler must use an emergency backup alternative because a primary treatment/disposal site (as identified in subsection (b) below) is not available, the Hauler must consult with the City prior to deposit at the backup alternative. The City reserves the right to refuse "landfill disposal" as an alternative to other emergency backup options that may cost more; the City may elect to dispose at the landfill or pay the higher hauling and disposal cost for another site, at its own discretion. b. Sludge shall be hauled to treatment sites contracted by the City for sludge treatment and disposal. As of this writing, contracted sites are specified below and current contracted quantities are to be determined by the City (these sites are the primary treatment/disposal sites). No sludge shall be hauled to any other location without written approval from the City ahead of time. Lystek International Limited Organic Material Recovery Center on the site of Fairfield - Suisun Sewer District (FSSD) 1010 Chadbourne Rd, Fairfield, CA 94534 1. Operating Hours 0400 - 2000, 7 days per week 2. Receiving Hours 24 / 7 3. 5,800 tons per year minimum, which is the City's contracted minimum obligation with Lystek 4. Annual contract year target for Lystek will be 5,800 tons per year 5. 4,500 wet tons during May through October 1, 1 truck per day, 7 days per week (excluding holidays Hauler is not operating); 1,300 wet tons during November through April, 2 trucks per week ii. Synagro Central Valley Compost Facility (CVC) 13757 Harmon Rd, Dos Palos, CA 93620 1. Operating Hours 0600 - 1700, 7 days per week 2. 10,000 tons per year minimum, which is the City's contracted minimum obligation with Synagro 3. Annual contract year target for Synagro will be all tons beyond the 5,800 tons per year to Lystek and 10,000 contracted tons with Synagro d. The Hauler shall coordinate with the listed site(s) to ensure their availability to receive the wastewater sludge at all times in accordance with provisions of the treatment/disposal site(s) Item 4: Staff Report Pg. 26 Packet Pg. 106 of 309 Item 4 Attachment A - Synagro Contract C25192791 permit. Provisions shall be made to accept the wastewater sludge during wet -weather periods as well as dry -weather periods. e. The City is not responsible for any delays at the treatment/disposal site. All additional charges are the responsibility of the Hauler. Hauler is to follow the procedures, safety practices, and rules established by any treatment/disposal site used, including the treatment and backup disposal sites listed in this section. Prior to the start of the services under this Agreement, Hauler shall have an approved permit and/or agreement in place with the treatment/disposal sites for the term of the Agreement. Hauler shall have needed training completed prior to the start of service. The Hauler shall meet insurance requirements of the treatment/disposal facilities, including, but not limited to, additional insured requirements. g. The split of loads between Lystek, Synagro, and any future addition or deletion of treatment site(s) during the term of the Contract shall be as established in Section 1 0.b above. The splits to each treatment site will be actively managed and coordinated directly by the Hauler to meet the requirements of Section 10.b. 11. SAFETY REQUIREMENTS AND TRAINING Hauler shall provide initial training, in the presence of RWQCP operations staff, for all new drivers for the purpose of safe and proper operation of the loadout equipment. At a minimum, drivers shall learn proper procedures for check -in, communication, paperwork, safe loading and use of switches to control gates and screws in proper sequence, expectations on full loadouts and movement of truck between bins, trailer contamination prevention, safety PPE at RWQCP, odor control best practices, entry and exit door use, tarping practices, orientation to bathroom facilities, clean-up, spill response, and safe driving routes and speeds in and out of the RWQCP and on Embarcadero Road. Hauler shall provide documentation of this training to the City's Project Manager for each driver and shall be responsible for all costs associated with this training. 12. PAYMENT AND PRICING CONDITIONS a. See Contract, Section 8, Invoicing. b. Payment for work is to be made on a wet tonnage basis as determined by weight tickets at the Treatment Facility. The Treatment Facility will generate a legible, licensed weigh master's certificate showing gross weight, tare weight, and net weight of each truckload of material. Weight will be based on a certified scale owned, operated, and maintained by the Treatment Facility. The weight tickets shall be provided to the Hauler by the Treatment Facility, used by Hauler for invoicing City, and kept on file by Hauler for review by City as needed. c. Full compensation for completing Agreement work is included in the unit prices paid for the various items of work and no separate payment will be made therefor. d. If Hauler's owned or leased sludge trailers that are damaged by the City, the Hauler may repair and invoice City at a quoted hourly rate for labor and parts invoiced at no more than cost plus 30%, provided that: (i) Hauler provides City with notice of damage immediately upon discovery, (ii) Hauler submits to City documentation of damage within two business days of discovery, (iii) Hauler provides City with an opportunity to inspect the damage prior to repair, and (iv) City approves the claim for damage including estimated repair cost. e. If during the course of the proposal, a new treatment site is identified, the Hauler shall be requested to provide pricing per wet ton to haul sludge to that treatment site using the same terms and conditions as in this contract. This additional pricing will be incorporated through amendment to the contract at the time the City Council approves the new treatment site (e.g., through a new RFP or some other measure). Item 4: Staff Report Pg. 27 Packet Pg. 107 of 309 Item 4 Attachment A - Synagro Contract C25192791 13. DOCUMENTATION, PERMITS, AND INSURANCE a. The Hauler shall maintain all required permits to perform the services during the term of this Agreement. b. The Hauler shall, at all times during the transportation, storage, and disposal of sludge to be managed under this Agreement, know the location, condition and status of each item being managed. 14. GUARANTEE. The Hauler warrants and guarantees that equipment used are of the type and quality specified herein. If in the opinion of the City, the equipment is found to be imperfect or of a grade inferior to that set forth in the requirements or are found to be deficient against any other standard set forth in the Agreement, they will be rejected and must be replaced without expense to the City. a. The Hauler understands that prompt pickup and disposal of sludge is critical to RWQCP operations. The Hauler warrants and guarantees to meet requirements set forth in this Agreement, including this scope of services. b. In the event of failure to comply with the above mentioned conditions within a reasonable time after notice, the City will take all necessary steps to dispose of the sludge, at the expense of the Hauler, who agrees to pay the costs and charges therefore immediately upon demand. c. The signing of the Agreement by the Contractor shall constitute execution of the above guarantees. 15. GOODS TO BE SUPPLIED AND WORK TO BE PERFORMED. The Hauler shall perform all work necessary to complete the Agreement in a satisfactory manner. Unless otherwise provided, the Hauler shall furnish and provide all materials, equipment, tools, labor and incidentals necessary to transport, haul, deliver and unload per these specifications. END OF SECTION Item 4: Staff Report Pg. 28 Packet Pg. 108 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT "A-1" PALO ALTO SLUDGE CHARACTERISTICS 2022 Average Annual Wastewater Sludge Quality Data: 40CFR603 Sludge RegulationTrace Metal Analysis on Sludge Trace Metals Dry -Weight Units 501.13 Ceiling Concentration Table I 501.13 Pollutant Concentration Table 3 2022 Average Annual Result 2017 Single Results Arsenic (As) mg/kgmg/kg 75 41 DNC 1.29 Antimony (Sb) mg/k N[) -c19° Barium (Ba) me/k 50.2° Beryllium Be mg/kg — — <0.21 — Cadmium Cd mg/kgmg/kg 85 39 DND 0.46 — Chromium Cr mg/kg — — 12-D — Cobalt Co mg/kg — — — ND -2° Copper Cu mg/kgmg/kg 4300 1500 254 — Cyanide (CH) mglkg — — 0-T7 — Iron (Fe) mg/kg — — — 26503 Lead Pb mg/kgmg/kg 840 300 7-08 — Mercu(Hg) mg/kgmg/kg 57 17 0A54 — Molenum Ma mg/kgmg/kg 75 n)a 5-27 — Nickel (Ni) mg/kgmg/kg 420 420 1t4 Selenium (Se) mg/kgmg/kg 1130 100 4-83 Silver mg/k 1.7 Thallium mg/kg— - — — ND -c13' Vanadium mg/kg -- — — 5.9T° Zinc (Zn) mg/kgmg/kg 7500 2800 4.' — Total Solids % 2' ° Sampled 219117 an 27% sludge cake February 17, 2017 Scum Quality Data: 40CFR503 Sludge Regulation Trace Metal Analysis on Scum Trace Metals Dry -Weight Units 501.13 Ceiling Concentration Table 1 501.13 Pollutant Concentration Table 3 Result Arsenic (As) mg/kgnig/kg 75 41 ND Beryllium Be m ND Cadmium (Cd) mg/kg 85 39 0-14 Chromium Cr m 3.1 Copper Cu) m 4300 1500 30 Lead Pb) m 840 300 1-28 Mercury H m 57 17 .:0-0397 M denum Mo m 75 n/a 1.7 Nickel Ni m 420 420 1.9 Selenium (Se) m 100 100 <0-83 Zinc m 7500 2800 104 Total Solids % 30-0 General Raw Sludge Characterization Trace Metals Dry -Weight Units Result Sample date, comment Total Kjeldahl Nitrogen (TKN) mg/k9 0 44,0d00; Od 2/7117(25% cake); 2/9117 O anic Nitrogen (25% sludge cake) mg/kgmg/kg 36000 2/7117 Ammonia-Nitroen (25% sludge cake) mg/kgmg/kg 5,600 2/7117 Grit Analysis: total residual solids in 30% sludge cake % 0-52% 219117 dried at 103-I0SC) Piirriary sludge ualatile solids concentration % 89% 2/7113 Waste activated sludge (WAS) volatile solids concentration % 80% Typical value Ratio Prima ! Total Sludge % 71— 78% 2013 value Ratio WAS f Total Sludge % 22-29% 2013 value Pnmaiy Sludge BTU Content — D BTUAb 80(10 8)21112 ASTM D5865 -07a WAS BTU Content — BTUAb 7400 8F21112 ASTM D5865 -07a Item 4: Staff Report Pg. 29 Packet Pg. 109 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT B SCHEDULE OF PERFORMANCE CONTRACTOR shall perform the sludge treatment and disposal services in Exhibit A (Scope of Services) in accordance with Section 7 and 1 of Exhibit A. Item 4: Staff Report Pg. 30 Packet Pg. 110 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT C SCHEDULE OF FEES CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts set forth in Sections 5 and 6 ofthe Agreement. Any services provided or hours worked for which payment would resultin a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. Bid Unit Price2 Total Item Quanta ' Units For $JWT'(S) 1 15,624 5 800 WT WT _ Hauling to Synagro CVC $38.94 $608.398.56 2 Hauling to Lystek International Limited $35 92 $208 336 00 , Organic Material Recovery Center Allowance for Respirator Protection 3 1 Sum Program per Bid Schedule Miscellaneous -- $10,000 Note "h' below Total of Bid Items 1 to 3 in $ 826,734.56 4 1 WT Hauling to Portrero Hills Landfill -- -- 5 1 WT Hauling to Portrero Hills Landfill & -- Disposal 6 1 WT Hauling to Altamont Landfill -- 7 1 WT Haulirg to Altamont Landfill & Disposal -- -- Bid Schedule Notes Sludge production estimate for bid purposes only (see scope of services Section 4 for more information) Unit prices shall be listed for service year 1, which runs from April 1. 2025 to March 30. 2026, future contract year increases to the unit price bid herein will be based on CPI -U per Contract Section 6 "Compensation During Additional Terms" 3 WT — US wet tons Pricing: Unit prices will be in US dollars and are price per wet ton for a term of contract. The unit price per wet ton includes all fees, taxes, and surcharges. Maximum Compensation Per Contract Year as set forth in Section 6 of the Agreement. Contract Year 1 2 3 Total Base Bid $826,735 $857,571 $900,450 $2,584,756 Additional Services $0 $0 $0 $0 Total Base Bid + Additional Services $826,735 $857,571 $900,450 $2,584,756 Item 4: Staff Report Pg. 31 Packet Pg. 111 of 309 Item 4 Attachment A - Synagro Contract C25192791 MISCELLANEOUS a. Year 2 and Year 3 increases shall be on contract year anniversary date. Contract year anniversary date is defined as April 1, 2026 and April 1, 2027 for year 2 and 3, respectively. b. Truck washout charges are to be included in the pricing. c. In case of price increase due to new regulatory fees, Hauler must notify the City of Palo Alto in writing before any additional fees will be allowed. d. Demurrage will not be charged for pickup of sludge up to and including 60 minutes of loading time. After 60 minutes, the demurrage charge of $95/hour will apply if the City causes the delay. e. Demurrage will not be charged for delays caused by the Hauler not having proper paperwork at the time of arrival at the RWQCP site. f. A California No. 2 diesel ultra -low sulfur fuel surcharge is to be added to Hauler or credited to Palo Alto on a monthly basis. The monthly average cost of diesel fuel will be adjusted each month as determined from the California Energy Information Administration (EIA) website (www.eia.gov). The baseline amount of $4.733/gallon will be used from the weekly value of diesel fuel (effective 9/16/24). A Hauler fleet fuel efficiency of 5.5 miles per gallon and a truckload of 25 tons will be used for purposes of calculation. To Lystek International: Surcharge/Credit = (EIA monthly average cost of diesel in California - $4.733) * 162 miles round trip * 1 / 5.5 miles per gallon * 1 / 25 tons Synagro Central Valley Composting: Surcharge/Credit = (EIA monthly average cost of diesel in California - $4.733) * 228 miles round trip * 1 / 5.5 miles per gallon * 1 / 25 tons g. If a minimum load of 21 wet tons, compliant with the terms of Exhibit A Section 6.i, is not met, then Hauler is authorized to invoice for a charge of a full load of 21 wet tons. An allowance of up to $10,000 is authorized in Bid Schedule Item 3 on a reimbursement basis to develop a written respiratory protection program, perform initial and recurring qualitative or quantitative respirator fit testing, and obtain initial qualified medical clearance for employees to wear a respirator. This allowance can be used for new company drivers that are added to provide loadouts at the RWQCP. The vendor's cost of maintaining the written respiratory protection program after the $10,000 allowance is reimbursed will be provided to Palo Alto at no cost. Item 4: Staff Report Pg. 32 Packet Pg. 112 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT D INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A -:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION STATUTORY YES EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY $1,000,000 $1,000,000 LIABILITY DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 - EACH PERSON $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, - EACH OCCURRENCE $1,000,000 $1,000,000 YES INCLUDING ALL OWNED, HIRED, PROPERTY DAMAGE $1,000,000 $1,000,000 NON -OWNED BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, NO INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT YES ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. INSURANCE COVERAGE MUST INCLUDE: A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" City of Palo Alto General Services Agreement 1 Rev. March 29, 2018 Item 4: Staff Report Pg. 33 Packet Pg. 113 of 309 Item 4 Attachment A - Synagro Contract C25192791 A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE EMAILED TO: PURCHASINGSUPPORT(a CITYOFPALOALTO.ORG City of Palo Alto General Services Agreement 2 Rev. March 29, 2018 Item 4: Staff Report Pg. 34 Packet Pg. 114 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT E BONDS PERFORMANCE SURETY BOND REQUIRED City of Palo Alto General Services Agreement 3 Rev. March 29, 2018 Item 4: Staff Report Pg. 35 Packet Pg. 115 of 309 Item 4 Attachment A - Synagro Contract C25192791 EXHIBIT F SUBCONTRACTOR LISTING FORM CALIFORNIA NAME/BUSINESS ADDRESS CONTRACTOR LICENSE NUMBER AND DIR PORTION OF WORK CONTACT/TELEPHONE/EMAIL REGISTRATION NUMBER J&L Trucking DOT #2641583 613 Sunset Blvd. Hayward, CA 94541 50% Jorge Lopez 510-860-3135 aIexIopez2live.com.mx 2 Reyes Trucking DOT #1930207 2430 Heartland Dr. Riverbank, CA 95367 Jose Reyes 50'- 209-324-5497 jgreyes23@yahoo corn 3• Yellowstone Transport, LLC r DOT #2762132 111 Clayton CI Los Banos, CA 93635 916-708-6979 We would utilize them as a backup. yellowstonetransportllc26 ac gmail.com 4 - City of Palo Alto General Services Agreement 4 Rev. March 29, 2018 Item 4: Staff Report Pg. 36 Packet Pg. 116 of 309 Item 5 Item 5 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Public Works Meeting Date: March 24, 2025 Report #:2411-3808 TITLE Approval of General Services Contract No. C25193187 with Universal Security Company in the Amount of $220,752 for Security Services at the Municipal Service Center and the Regional Water Quality Control Plant for a Period of Nine Months; CEQA status - Categorically Exempt under Sections 15301 and 15302 RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or their designee to execute Contract No. C25193187 with Universal Security Company for security services at the Municipal Service Center (MSC) and the Regional Water Quality Control Plant (RWQCP) for a nine -month term in the amount of $220,752, including $190,512 for basic services and $30,240 for additional services. BACKGROUND For the past five years, Universal Security Company has provided security services at MSC and RWQCP under contract C20176003 which expired on October 7, 20241. In January 2020, City Council approved Amendment No. 1 which expanded contract's scope of work to include security services at RWQCP2. In 2024, while the Public Works Department (PWD) was in the process of finalizing solicitation documentation for a new contract, the City began discussing service needs at City Hall. The finalization of solicitation documents was paused while needs at City Hall were evaluated. Ultimately, staff pursued in-house public safety support as needed for City Council meetings allowing the RFP for services at other facilities to continue. 1 City Council, October 7, 2019; SR #10574; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=80455 z City Council, January 13, 2020; Agenda Item #3; SR #10735; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=80655 Item 5: Staff Report Pg. 1 Packet Pg. 117 of 309 Item 5 Item 5 Staff Report ANALYSIS The recommended contract (Attachment A) maintains uninterrupted security services at the MSC and RWQCP with two staff positioned at each location respectively. Each guard will work eight hours per day, excluding City holidays, at a pay rate of $31.50 per hour. The contract also includes a provision for overtime hours to address unplanned events requiring additional security coverage. The contract will cover the period from February 1, 2025, to October 31, 2025, allowing time for the solicitation process. The total cost for the nine -month contract is $220,752. A sum of $30,240 has been set aside for additional services to allow for 640 hours of unplanned/ overtime services. The base labor hourly rate in the interim contract increased by $9.10, from $22.40 per hour in the final year of the previous five-year contract to $31.50 per hour in the interim contract. During the previous contract term, the service provider -maintained a below - market hourly rate of $22.40 without any annual increases to account for inflation or rising labor costs in the San Francisco Bay Area for the full contract term. PWD staff conducted a market analysis for unarmed security guard services in the region and determined that the current market rate ranges from $34.00 to $39.00 per hour. Therefore, while the interim contract reflects an increase of $9.10 per hour, the new rate remains below the prevailing labor market costs for this geographic area. To optimize resources and maintain service continuity, the City is using the existing service provider for the interim contract until the solicitation process for a new security contract is completed. FISCAL/RESOURCE IMPACT The security services contract will be funded through contributions from the Public Works Department General Fund, Wastewater Treatment Fund, and the Utilities Department Fiscal Year 2025 adopted operating budgets. Contract funding (base and overtime hours) will be allocated by funding source as follows: Funding Source Contract Amount Wastewater Treatment Fund $110,376 General Fund (PWD contract services) $110,376 (via the cost allocation plan, utilities enterprise funds reimburse costs of $25,386) TOTAL CONTRACT $220,752 STAKEHOLDER ENGAGEMENT Departments and groups contributing funding for the security services at the MSC and RWQCP have been apprised of funding requirements for the contract and the projected costs of the new contract in developing their Fiscal Year 2026 operating budgets. Item 5: Staff Report Pg. 2 Packet Pg. 118 of 309 Item 5 Item 5 Staff Report ENVIRONMENTAL REVIEW This contract is categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15301 and 15302 of the CEQA guidelines as an alteration to an existing facility and no further environmental review is necessary. ATTACHMENTS Attachment A: Contract with Universal Security Company; C25193187 APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 5: Staff Report Pg. 3 Packet Pg. 119 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 CITY OF PALO ALTO CONTRACT NO. C25193187 GENERAL SERVICES AGREEMENT THIS AGREEMENT made and entered into on the 1st day of February, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and UNIVERSAL SEMICONDUCTOR, INC. dba UNIVERSAL SECURITY COMPANY, a California corporation, located at 1925 Zanker Road, San Jose, CA 95112, Telephone Number: 408-234-4797 ("CONTRACTOR"). In consideration of their mutual covenants, the parties hereto agree as follows: 1. SERVICES. CONTRACTOR shall provide or furnish the services (the "Services") described in the Scope of Services, attached at Exhibit A. ® Optional On -Call Provision (This provision only applies if checked and only applies to on -call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY's Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 5 of this Agreement. CONTRACTOR shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 5. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement: Exhibit "A" - Scope of Services Exhibit "A-1" — On -Call Task Order (Optional) Exhibit "B" - Schedule of Performance Exhibit "C" — Compensation and Schedule of Fees Exhibit "D" - Insurance Requirements Exhibit "E" - Performance and/or Payment Bond CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED. 3. TERM. The term of this Agreement is from February 1, 2025 to October 31, 2025 inclusive, subject to the provisions of Sections R and W of the General Terms and Conditions. City of Palo Alto General Services Agreement 1 Rev. March 29, 2018 Item 5: Staff Report Pg. 4 Packet Pg. 120 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the schedule set forth in the Schedule of Performance, attached at Exhibit B. Time is of the essence in this Agreement. 5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not -to -exceed compensation for the full performance of the Services and reimbursable expenses, if any: — The total maximum lump sum compensation of dollars ($ ); OR — The sum of dollars ($ ) per hour, not to exceed a total maximum compensation amount of dollars ($ ); OR A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Two Hundred Twenty Thousand Seven Hundred Fifty -Two dollars ($220,752.00). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. CITY has set aside the sum of Thirty Thousand Two Hundred Forty dollars ($30,240.00) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY's request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR's proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. 6. COMPENSATION DURING ADDITIONAL TERMS. City of Palo Alto General Services Agreement 2 Rev. March 29, 2018 Item 5: Staff Report Pg. 5 Packet Pg. 121 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 CONTRACTOR'S compensation rates for each additional term shall be the same as the original term; OR CONTRACTOR's compensation rates shall be adjusted effective on the commencement of each Additional Term. The lump sum compensation amount, hourly rates, orfees, whichever is applicable as set forth in section 5 above, shall be adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco -Oakland- San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR's compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR's compensation rates shall be reflected in a written amendment to this Agreement. 7. CLAIMS PROCEDURE FOR "9204 PUBLIC WORKS PROJECTS". For purposes of this Section 7, a "9204 Public Works Project" means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. Public Contract Code Section 9204 mandates certain claims procedures for Public Works Projects, which are set forth in "Appendix _n/a_ Claims for Public Contract Code Section 9204 Public Works Projects". L This project is a 9204 Public Works Project and is required to comply with the claims procedures set forth in Appendix _, attached hereto and incorporated herein. OR EThis project is not a 9204 Public Works Project. 8. INVOICING. Send all invoices to CITY, Attention: Project Manager. The Project Manager is: Ivan Zhang, Dept.: Public Works, Telephone: 650-. Invoices shall be submitted in arrears for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of Services performed during the invoice period and are subject to verification by CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt. City of Palo Alto General Services Agreement 3 Rev. March 29, 2018 Item 5: Staff Report Pg. 6 Packet Pg. 122 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includes and is limited to the terms and conditions set forth in sections 1 through 8 above, these general terms and conditions and the attached exhibits. B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the services described in Section 1 of this Agreement, entitled "SERVICES," and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on CONTRACTOR's representations regarding its skills, knowledge, and certifications. CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations. C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by CONTRACTOR shall at all times be considered an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement. D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors. E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR's business. F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws, ordinances, regulations, and orders. G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, City of Palo Alto General Services Agreement 4 Rev. March 29, 2018 Item 5: Staff Report Pg. 7 Packet Pg. 123 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 CONTRACTOR shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONTRACTOR shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR's performance of the Services. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR's performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR's request. When the grounds described above are removed, payment shall be made for amounts withheld because of them. I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR expressly warrants that all materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any material or service not in compliance with these warranties, including incomplete, inaccurate, or defective material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from completion of the Services and shall survive the completion of the Services or termination of this Agreement. J. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONTRACTOR's work is completed in a satisfactory manner and complies with the provisions of this Agreement. K. CITY'S PROPERTY. Any reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. City of Palo Alto General Services Agreement 5 Rev. March 29, 2018 Item 5: Staff Report Pg. 8 Packet Pg. 124 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR's records pertaining to matters covered by this Agreement. CONTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement. M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement. N. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described at Exhibit D. Insurance must be provided by companies with a Best's Key Rating of A - :VII or higher and which are otherwise acceptable to CITY's Risk Manager. The Risk Manager must approve deductibles and self -insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the Risk Manager. CONTRACTOR shall provide certificates of such policies or other evidence of coverage satisfactory to the Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and endorsements to the Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit CONTRACTOR's liability or obligation to indemnify CITY under this Agreement. O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section N relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney's fees, courts costs and costs of alternative dispute resolution), arising out of, or resulting in any way from City of Palo Alto General Services Agreement 6 Rev. March 29, 2018 Item 5: Staff Report Pg. 9 Packet Pg. 125 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 or in connection with the performance of this Agreement. CONTRACTOR's obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that CONTRACTOR shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Agreement. P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. Q. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of Califor- nia which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services. R. TERMINATION. The City Manager may terminate this Agreement without cause by giving ten (10) days' prior written notice thereof to CONTRACTOR. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager may terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination is for cause, CITY may deduct from such payment the amount of actual damage, if any, sustained by CITY due to CONTRACTOR's failure to perform its material obligations under this Agreement. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection with this Agreement. Such materials shall become the property of CITY. City of Palo Alto General Services Agreement 7 Rev. March 29, 2018 Item 5: Staff Report Pg. 10 Packet Pg. 126 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written consent of CITY. No amendments, changes or variations of any kind are authorized without the written consent of CITY. T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Agreement. CONTRACTOR further covenants that, in the performance of this Agreement, it will not employ any person having such an interest. CONTRACTOR certifies that no CITY officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with CONTRACTOR has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. CONTRACTOR agrees to advise CITY if any conflict arises. U. GOVERNING LAW. This Agreement shall be governed and interpreted by the laws of the State of California. V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. W. NON -APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONTRACTOR shall comply with CITY's Environmentally Preferred Purchasing policies which are available at CITY's Purchasing Division, which are incorporated by reference and may be amended from time to time. CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal requirements of CITY's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or City of Palo Alto General Services Agreement 8 Rev. March 29, 2018 Item 5: Staff Report Pg. 11 Packet Pg. 127 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 composting waste. In particular, CONTRACTOR shall comply with the following zero waste requirements: • All printed materials provided by CONTRACTOR to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double - sided and printed on a minimum of 30% or greater post -consumer content paper, unless otherwise approved by CITY's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post -consumer material and printed with vegetable based inks. • Goods purchased by Contractor on behalf of CITY shall be purchased in accordance with CITY's Environmental Purchasing Policy including, but not limited to, Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division's office. • Reusable/returnable pallets shall be taken back by CONTRACTOR, at no additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Z. PREVAILING WAGES This Project is not subject to prevailing wages. CONTRACTOR is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the Agreement is not a public works contract, if Agreement does not include a public works construction project of more than $25,000, or the Agreement does not include a public works alteration, demolition, repair, or maintenance (collectively, 'improvement') project of more than $15,000. OR ❑ Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the Agreement for this Project from the Director of the City of Palo Alto General Services Agreement 9 Rev. March 29, 2018 Item 5: Staff Report Pg. 12 Packet Pg. 128 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 Department of Industrial Relations ("DIR"). Copies of these rates may be obtained at the Purchasing Division's office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. AA.DIR REGISTRATION. In regard to any public work construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONTRACTOR without proof that CONTRACTOR and its listed subcontractors are registered with the California Department of Industrial Relations ("DIR") to perform public work, subject to limited exceptions. City requires CONTRACTOR and its listed subcontractors to comply with the requirements of SB 854. CITY provides notice to CONTRACTOR of the requirements of California Labor Code section 1771.1(a), which reads: "A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the Agreement is awarded." CITY gives notice to CONTRACTOR and its listed subcontractors that CONTRACTOR is required to post all job site notices prescribed by law or regulation and CONTRACTOR is subject to SB 854 -compliance monitoring and enforcement by DIR. CITY requires CONTRACTOR and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONTRACTOR and its listed subcontractors, in connection with the Project. City of Palo Alto General Services Agreement 10 Rev. March 29, 2018 Item 5: Staff Report Pg. 13 Packet Pg. 129 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONTRACTOR and its listed subcontractors, respectively. At the request of CITY, acting by its project manager, CONTRACTOR and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of CITY's request. ❑ [For state- and federally -funded projects] CITY requests CONTRACTOR and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. If the certified payroll records are not produced to the project manager within the 10 -day period, then CONTRACTOR and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONTRACTOR. Inform the project manager of the location of CONTRACTOR's and its listed subcontractors' payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the case of any conflict between the terms of this Agreement and the exhibits hereto or CONTRACTOR's proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONTRACTOR's proposal, the exhibits shall control. City of Palo Alto General Services Agreement 11 Rev. March 29, 2018 Item 5: Staff Report Pg. 14 Packet Pg. 130 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO UNIVERSAL SEMICONDUCTOR, INC. dba UNIVERSAL SECURITY COMPANY Officer 1 City Manager By: Name: APPROVED AS TO FORM: City Attorney or designee Title: Officer 2 By: Name: Title: City of Palo Alto General Services Agreement 12 Rev. March 29, 2018 Item 5: Staff Report Pg. 15 Packet Pg. 131 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT A SCOPE OF SERVICES Scope of Work for Municipal Service Center (MSC) CONTRACTOR shall supply all labor, materials, equipment and incidentals necessary to provide unarmed security guard services at the Municipal Service Center (MSC) facility at the City of Palo Alto. The general performance criteria shall include but not be limited to provide unarmed security guard services to: 1. CONTRACTOR shall provide a security sweep and inspection of the entire MSC facility. The sweep shall occur at 9:15 am after he/she takes their morning break and again at 1:30 pm before morning guard leaves at 2:30 pm. 2. Security sweeps and inspections shall be continuous while there are two guards are present. Inspections shall include perimeter fence lines, building exterior doors, storage containers, employee parking lots, and all vehicle and pedestrian gates. 3. The front vehicle gate shall be open from 7:00 am. to 4:30 pm. 4. The 15t guard shall work from 6:00 am to 2:30 pm and will open front vehicle gate at 7am. 5. The 2nd guard shall work from 8:30 am to 5:00 pm and will close front vehicle gate at 4:30 pm. 6. On a quarterly basis, the Contractor will send the City's Project Manager a proposed schedule of the officers on duty, which will include the name of each security personnel, working hours, and emergency contact number for each employee. The City of Palo Alto understands that the staffing schedule submitted may be subject to change. 7. All non -City vehicles and pedestrians will be stopped at the gate before entry. a. All visitors must have an appointment with staff on site. City Staff will send an email or call the security guard shack to notify the security officers of who the visitor/s will be and what time to expect them. City of Palo Alto General Services Agreement 13 Rev. March 29, 2018 Item 5: Staff Report Pg. 16 Packet Pg. 132 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 b. Security officer shall call the City staff when the visitor arrives to authorize the entry of the visitor. Visitor is not allowed entry until contact is made with City staff. c. Security officer shall log visitor's name, driver license number, company name, date, and time. d. Visitors shall be given a visitor badge and a parking pass if they are parking in the yard. A parking pass is not required if the visitor parks outside of the yard in visitor parking. e. Security officer must retrieve the guest passes and parking pass when visitors exit. f. All non -city vehicles will be checked visually prior to exiting the MSC. This will not include checking secured vehicle areas such as trunks or enclosed truck boxes, but a brief visual inspection of the interior of the vehicle and/or open truck bed. 8. Stores Shipping and Receiving hours are from 7:00 a.m. to 3:00p.m. a. No deliveries are allowed inside the yard outside of the Stores' hours. b. Regular deliveries such as UPS, FedEx, DHL, Amazon, etc. do not need to be checked in or out. Security officers shall direct them to the Building A Stores loading docks. c. It is the responsibility of the second guard to monitor these deliveries to verify the drivers stay near the loading dock area. 9. Other vendors and contractors that are not required to be checked in and out. a. Garbage trucks that are picking up garbage or fueling with CNG. b. Palo Alto School District buses fueling with CNG. c. Debris box trucks. d. Street sweeper contractor. e. Tow trucks dropping off or picking up City vehicles. f. Material supplier delivery trucks such as Home Depot, Grainger, Ferguson, Pinecone Lumber, etc. 10. Perform inspections, detection, and investigation of all security -related incidents, violations of City regulations and City employee safety, and report to appropriate authorities and the Project Manager. 11. Respond promptly and appropriately to all security -related emergencies. City of Palo Alto General Services Agreement 14 Rev. March 29, 2018 Item 5: Staff Report Pg. 17 Packet Pg. 133 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 12. Patrol the entire facility to provide a visible presence to discourage vandalism or unauthorized entry throughout the day. 13. Notify the appropriate law enforcement agency and Project Manager of any unlawful activity. 14. Immediate threats must be reported immediately to public safety officials and in person or by phone to the City's Project Manager or Assistant Director Public Works for Public Services, or the Facilities Dept Helpdesk (in that order). Non - urgent issues must be reported by next business day via email to the City's Project Manager. 15. Contractor shall issue parking tickets for parking violations such as illegal parking, not parking within designated lines, not displaying parking permit, etc. Officer Check In/Out Procedure: 1. Officers shall badge in through the employee person gate at the front of the yard at the beginning of each shift. 2. Officers shall badge out through the employee person gate at the front of the yard at the end of each shift. 3. The City will only pay for hours that are actually staffed by the security officers. The contractor may not bill for hours when an officer did not show up for work or was late for work. Personnel Requirements: 1. Officer Uniforms a. All security officers must always wear a security uniform. b. The uniform must have the word "Security" on the front and back of the uniform, in conformance with the State of California requirements. c. The name of the individual officer shall be on the front of the uniform. d. All uniforms (collar shirts and pants) shall be cleaned and pressed regularly. e. All collar shirts shall be tucked in neatly with dark color slacks and shoes. City of Palo Alto General Services Agreement 15 Rev. March 29, 2018 Item 5: Staff Report Pg. 18 Packet Pg. 134 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 f. High visibility apparel and/or reflective vest is recommended due to the requirement of working in vehicle traffic situations. g. All uniforms shall be approved by the City's Project Manager prior to wearing them onsite. 2. Officer Qualifications: a. Be able to communicate effectively in both written and oral English. b. Possess a valid California Driver's License or Identification. c. Be a legal resident of the United States of America. d. Have successfully completed the educational requirements and successfully passed the examinations required by the State of California, Department of Consumer Affairs. e. Be capable of performing the assigned tasks. f. Passed background check and have no disqualifying criminal conviction record as determined by City. g. Must ensure that at least one person every day has a working knowledge of the MSC. h. Possess a current security guard card. 3. Code of Conduct a. Security staff shall always stand and greet every vehicle (even City marked vehicles) as it arrives to make their presence known to arriving visitors. b. Communications should be firm but polite with all visitors and staff. c. Violators of the security Standard Operating Procedure shall be identified to the Project Manager immediately. d. No security staff is allowed on the premises outside of the assigned hours of this Agreement unless authorized by the City's Project Manager. e. The City Guard shack will always be properly maintained. f. Computer, phone, and radio issued by the City shall be kept in good condition. g. Security staff shall only park in assigned parking spaces. h. Security staff is not allowed to have visitors while on duty. i. Security staff shall not leave the site without notifying the Project Manager 4. Equipment: City of Palo Alto General Services Agreement 16 Rev. March 29, 2018 Item 5: Staff Report Pg. 19 Packet Pg. 135 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 a. Contractor shall furnish all equipment necessary to perform the work as described herein. b. All equipment shall be kept in good condition. Required equipment shall include but not be limited to: i. Flashlights and two-way radios/smart phones. ii. Appropriate winter and summer wear for staff meeting guidelines in the "Personnel" section above. Reports 1. Security Officers shall be responsible for the following reports. a. Daily visitor log sheets. b. Contractor shall submit to the City's Project Manager an Incident Report for any security related issue. c. Contractor may use their own forms, subject to prior approval from the City's Project Manager. All reports should be submitted via email. All reports prepared during the term of this Contract shall become the property of the City. Officer Wages 1. Contractor must follow the federal, state, and local minimum wage law each year of the contract. Invoicing 1. Contractor shall invoice monthly and it shall only include staff hours worked. 2. Contractor shall include time sheets for each staff that worked during the billing cycle. Replacement of Security Guards 1. City reserve the right to refuse or reject any personnel under this agreement, who, in the City's belief, fails to meet the minimum requirements set forth. Scope of Work for Regional Water Quality Control Plant (WQCP) CONTRACTOR shall supply all labor, materials, equipment and incidentals necessary to provide unarmed security guard services at the Regional Water Quality Control Plant at the City of Palo Alto. City of Palo Alto General Services Agreement 17 Rev. March 29, 2018 Item 5: Staff Report Pg. 20 Packet Pg. 136 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 The general performance criteria shall include but not be limited to provide unarmed security guard services to: 1. Contractor shall provide security sweeps and inspections of the entire WQCP. The sweep shall occur as required throughout the day. 2. Inspections shall include perimeter fence lines, building exterior doors, storage containers, employee parking lots, and all vehicle and pedestrian gates. 3. The front vehicle gate shall be open from 5:30 a.m. to 4:00 p.m. 4. At least one officer shall be at the guard shack from 5:30 a.m. to 4:00 p.m. 5. On a quarterly basis, the Contractor will send the City's Project Manager a proposed schedule of the officers on duty, which will include the name of each security personnel, working hours, and emergency contact number for each employee. The City of Palo Alto understands that the staffing schedule submitted may be subject to change. 6. All non -City vehicles and pedestrians will be stopped at the gate before entry. a. All visitors must have an appointment with staff on site. City Staff will send an email or call the security guard shack to notify the security officers of who the visitor/s will be and what time to expect them. b. Security officer shall call the City staff when the visitor arrives to authorize the entry of the visitor. Visitor is not allowed entry until contact is made with City staff. c. Security officer shall log visitor's name, driver license number, company name, date, and time. d. Visitors shall be given a visitor badge and a parking pass if they are parking in the yard. e. Security officer must retrieve the guest passes and parking pass when visitors exit. f. All non -city vehicles will be checked visually prior to exiting the MSC. This will not include checking secured vehicle areas such as trunks or enclosed truck boxes, but a brief visual inspection of the interior of the vehicle and/or open truck bed. 7. Stores Shipping and Receiving hours are from 6:00 a.m. to 2:00p.m. City of Palo Alto General Services Agreement 18 Rev. March 29, 2018 Item 5: Staff Report Pg. 21 Packet Pg. 137 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 a. No deliveries are allowed inside the yard outside of the Stores' hours unless approved by plant employees in advance. b. Regular deliveries such as UPS, FedEx, DHL, Amazon, etc. do not need to be checked in or out. Security officers shall direct them to the Building A Stores loading docks. c. It is the responsibility of the second guard to monitor these deliveries to verify the drivers stay near the loading dock area. 8. Other vendors and contractors that are not required to be checked in and out. a. Garbage trucks that are picking up garbage. b. Debris box trucks. c. Street sweeper contractor. d. Tow trucks dropping off or picking up City vehicles. e. Material supplier delivery trucks such as Home Depot, Grainger, Ferguson, Pinecone Lumber, etc. 9. When two guards are present, escort delivery drivers or other visitors to their destination, if RWQCP staff are unable to assist and the visitor might get lost. 10. Issue clean bottles to identified Septic Haulers for the Septic Haulers to use in collecting a sample. Guards are not expected to handle or be exposed to wastewater samples. Turn away Septic Haulers during periods of temporary shutdowns of the discharge location and/or when specific haulers are no longer in good standing as identified by the City's Project Manager. 11. Perform periodic security checks on exterior roadways surrounding the RWQCP, reporting any issues to an authorized RWQCP supervisor or designated operator in charge. 12. If requested in future when technology provisions are changed at the RWQCP, do the following: (a) use city provided computer to authorize entry by approved back gate entrants via the back gate camera feed and a remote entry access authorization on guard shack's phone keypad; and (b) monitor RWQCP camera feeds for security issues on city provided computer, reporting any issues to an authorized RWQCP supervisor or designated operator in charge. 13. Perform inspections, detection, and investigation of all security -related incidents, violations of City regulations and City employee safety, and report to appropriate authorities and the Project Manager. City of Palo Alto General Services Agreement 19 Rev. March 29, 2018 Item 5: Staff Report Pg. 22 Packet Pg. 138 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 14. Respond promptly and appropriately to all security -related emergencies. 15. Patrol the entire facility to provide a visible presence to discourage vandalism or unauthorized entry throughout the day. 16. Notify the appropriate law enforcement agency and Project Manager of any unlawful activity. 17. Immediate threats at the WQCP must be reported immediately to public safety officials and in person or by phone to the onsite Operations Supervisor/Senior Operator, Assistant Manager of WQCP, and/or Plant Manager. (in that order). Non -urgent issues must be reported by next business day via email to the City's Project Manager. 18. WQCP employee and visitor parking lots are within the facility. Employees will enter the front main vehicle gate via the security service or through the key -code entry back vehicle gate. 19. Visitors to the WQCP with a legitimate business purpose are authorized to park inside the WQCP. City employees can park their personal vehicles inside the WQCP. 20. Issue and receive tickets to recycled water trucks filling up at the recycled water standpipe; turn away recycled water trucks without a legitimate permit to use the standpipe. Personnel Requirements: 1. Officer Uniforms a. All security officers must always wear a security uniform. b. The uniform must have the word "Security" on the front and back of the uniform, in conformance with the State of California requirements. c. The name of the individual officer shall be on the front of the uniform. d. All uniforms (collar shirts and pants) shall be cleaned and pressed regularly. e. All collar shirts shall be tucked in neatly with dark color slacks and shoes. f. High visibility apparel and/or reflective vest is recommended due to the requirement of working in vehicle traffic situations. City of Palo Alto General Services Agreement 20 Rev. March 29, 2018 Item 5: Staff Report Pg. 23 Packet Pg. 139 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 g. All uniforms shall be approved by the City's Project Manager prior to wearing them onsite. 2. Officer Qualifications: a. Be able to communicate effectively in both written and oral English. b. Possess a valid California Driver's License or Identification. c. Be a legal resident of the United States of America. d. Have successfully completed the educational requirements and successfully passed the examinations required by the State of California, Department of Consumer Affairs. e. Be capable of performing the assigned tasks. f. Passed background check and have no disqualifying criminal conviction record as determined by City. g. Must ensure that at least one person every day has a working knowledge of the MSC. h. Possess a current security guard card. 3. Code of Conduct a. Security staff shall always stand and greet every vehicle (even City marked vehicles) as it arrives to make their presence known to arriving visitors. b. Communications should be firm but polite with all visitors and staff. c. Violators of the security Standard Operating Procedure shall be identified to the Project Manager immediately. d. No security staff is allowed on the premises outside of the assigned hours of this Agreement unless authorized by the City's Project Manager. e. The City Guard shack will always be properly maintained. f. Computer, phone, and radio issued by the City shall be kept in good condition. g. Security staff shall only park in assigned parking spaces. h. Security staff is not allowed to have visitors while on duty. i. Security staff shall not leave the site without notifying the Project Manager. 4. Equipment: a. Contractor shall furnish all equipment necessary to perform the work as described herein. City of Palo Alto General Services Agreement 21 Rev. March 29, 2018 Item 5: Staff Report Pg. 24 Packet Pg. 140 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 b. All equipment shall be kept in good condition. Required equipment shall include but not be limited to: i. Flashlights and two-way radios/smart phones. ii. Appropriate winter and summer wear for staff meeting guidelines in the "Personnel" section above. Reports 5. Security Officers shall be responsible for the following reports. a. Daily visitor log sheets. b. Contractor shall submit to the City's Project Manager an Incident Report for any security related issue. c. Contractor may use their own forms, subject to prior approval from the City's Project Manager. All reports should be submitted via email. All reports prepared during the term of this Contract shall become the property of the City. Officer Wages 1. Contractor must follow the federal, state, and local minimum wage law each year of the contract. Invoicing 1. Contractor shall invoice monthly and it shall only be for staff hours worked. 2. Contractor shall include time sheets for each staff that worked during the billing cycle. Replacement of Security Guards 1. City reserve the right to refuse or reject any personnel under this agreement, who, in the City's belief, fails to meet the minimum requirements set forth. City of Palo Alto General Services Agreement 22 Rev. March 29, 2018 Item 5: Staff Report Pg. 25 Packet Pg. 141 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT "A-1" GENERAL SERVICES TASK ORDER Contractor hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Contractor shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. IA. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONTRACTOR 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $ BALANCE REMAINING IN MASTER AGREEMENT $ 5. BUDGET CODE: COST CENTER COST ELEMENT WBS/CIP PHASE 6. CITYPROJECTMANAGER'SNAME/DEPARTMENT 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: ■ WORK TO BE PERFORMED ■ SCHEDULE OF WORK ■ BASIS FOR PAYMENT & FEE SCHEDULE ■ DELIVERABLES ■ REIMBURSABLES (with "not to exceed" cost) 8. ATTACHMENTS: A: Scope of Services B: I hereby authorize the performance of the work described above in this Task Order. APPROVED: CITY OF PALO ALTO BY: Name Title Date City of Palo Alto General Services Agreement I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Contractor. APPROVED: COMPANY NAME: BY: Name Title Date 23 Rev. March 29, 2018 Item 5: Staff Report Pg. 26 Packet Pg. 142 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT B SCHEDULE OF PERFORMANCE Required Duties: CITY requires two unarmed security officers for the Municipal Service Center located at 3201 East Bayshore Road, Palo Alto with operation hours from 6 am to 5 pm, Monday through Friday, excluding holidays. The morning shift shall be from 6:00 am to 2:30 pm and the later (mid -morning) shift shall be from 8:30 am to 5:00 pm. The different time shifts will allow for coverage at the guard shack during lunch and regularly scheduled breaks, as well as restroom breaks. A lunch break of 30 minutes is allotted for each security officer. The City will not pay for this lunch break for the security officers. CITY requires two unarmed uniformed security officers for the Regional Water Quality Control Plant (WQCP) located at 2501 Embarcadero Way, Palo Alto with operation hours from 5:30 am to 4 pm, Monday through Friday, excluding holidays. The morning shift shall be from 5:30 am to 2:00 pm and the later (mid -morning) shift shall be from 7:30 am to 4:00 pm. The different time shifts will allow for coverage at the guard shack during lunch and regularly scheduled breaks, as well as restroom breaks. A lunch break of 30 minutes is allotted for each security officer. The City will not pay for this lunch break for the security officers. Additional Security Services: All location may require additional security services for special events and/or special circumstances. The Contractor shall notify the City's designated Project Manager at least 24 hours in advance if for any reason the security officers cannot meet the required schedule. January 1 - New Year's Day 3rd Monday in January - Martin Luther King Jr. 3rd Monday in February - Lincoln's Birthday Last Monday in May — Memorial Day 4th of July 1St Monday of September - Labor Day 2nd Monday of October — Columbus Day November 11 - Veteran's Day Thanksgiving Day (2) Day after Thanksgiving December 25 - Christmas Day City of Palo Alto General Services Agreement 24 Rev. March 29, 2018 Item 5: Staff Report Pg. 27 Packet Pg. 143 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT C COMPENSATION AND SCHEDULE OF FEES CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts set forth in Sections 5 and 6 of the Agreement. Any services provided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. INSERT DETAILED RATE SCHEDULE Type of Hours Hourly Rate per day # ofworking days Cost Straight Time (ST) MSC $ 31.50 16 189 $ 95,256.00 Overtime (OT) MSC $ 47.25 16 19 $ 14,364.00 MSC Open House $ 47.25 16 2 $ 1,512.00 Type of Hours Hourly Rate Hours per # of working Cost day days Straight Time (ST) $ 31.50 16 189 $ 95,256.00 RWCQP Overtime (OT) RWCQP $ 47.25 16 19 $ 14,364.00 City of Palo Alto General Services Agreement 25 Rev. March 29, 2018 Item 5: Staff Report Pg. 28 Packet Pg. 144 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT D INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A -:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION STATUTORY YES EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY $1,000,000 $1,000,000 LIABILITY DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 - EACH PERSON $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, - EACH OCCURRENCE $1,000,000 $1,000,000 YES INCLUDING ALL OWNED, HIRED, PROPERTY DAMAGE $1,000,000 $1,000,000 NON -OWNED BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, NO INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT YES ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. INSURANCE COVERAGE MUST INCLUDE: A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" City of Palo Alto General Services Agreement 26 Rev. March 29, 2018 Item 5: Staff Report Pg. 29 Packet Pg. 145 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 City of Palo Alto General Services Agreement 27 Rev. March 29, 2018 Item 5: Staff Report Pg. 30 Packet Pg. 146 of 309 Item 5 Attachment A - Contract with Universal Security Company; C25193187 EXHIBIT E BONDS [ATTACH BOND FORMS IF BONDS ARE REQUIRED] City of Palo Alto General Services Agreement 28 Rev. March 29, 2018 Item 5: Staff Report Pg. 31 Packet Pg. 147 of 309 Item 6 Item 6 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Administrative Services ALTO Meeting Date: March 24, 2025 Report #:2410-3624 TITLE Adoption of a Resolution Authorizing MuniServices LLP, Hinderliter de Llamas & Associates, and Appropriate City Staff to Examine Sales and Use Tax Records from the California Department of Tax and Fee Administration (CDTFA); Adoption of an Ordinance Amending the Municipal Code to Update References to CDTFA; CEQA Status — Not a Project RECOMMENDATION Staff recommends that the City Council: 1. Adopt a resolution authorizing MuniServices LLP, Hinderliter de Llamas & Associates, and appropriate City staff to examine sales and use tax records from the California Department of Tax and Fee Administration (Attachment A), and 2. Adopt an ordinance amending Municipal Code Chapters 2.32 (Sales and Use Tax) and 4.10 (Solicitors, Peddlers, Pawnbrokers, Secondhand Dealers, and Other Businesses Regulated by Police) to delete references to the State Board of Equalization and replace with the California Department of Tax and Fee Administration (Attachment B). BACKGROUND California Revenue and Taxation Code Section 7056 authorizes the examination of confidential sales and use tax data by officers or employees of local jurisdictions who are designated by resolution of the legislative body of the jurisdiction. The review of confidential information is governed by state law, which sets certain requirements and conditions for the disclosure of sales and use tax records. State law also establishes criminal penalties for the unlawful disclosure of sales and use tax information. After a Request for Proposals (RFP) process, the City contracted with Avenu Insights & Analytics' to perform a sales tax audit, analysis, and projections. Although Avenu is the official 'city Council, June 19, 2023: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82399 Item 6: Staff Report Pg. 1 Packet Pg. 148 of 309 Item 6 Item 6 Staff Report name of the company, it still operates under MuniServices, LLC for sales tax examination purposes. In August 2023, staff contracted with Hinderliter de Llamas & Associates (HdL) to implement the City's business tax. In February 2024, Council approved the contract with HdL to administer, collect, and perform tax audits, including review of tax credits such as the sales tax credit.z Prior to the City Auditor function being contracted to Baker Tilly, the Office of the City Auditor (OCA) shared the sales and use tax audit function with MuniServices. With the change in service delivery of the City Auditor function, the sales and use tax audit function was fully transitioned to MuniServices. The Resolution authorizing appropriate personnel to examine sales and use tax data replaces a prior Resolution adopted by the Council on April 4, 2005.3 In 2017, the State Legislature adopted the Taxpayer Transparency and Fairness Act4, which reorganized tax collection and administration by transferring many duties previously performed by the Board of Equalization (BOE) to the newly -created California Department of Tax and Fee Administration (CDTFA). CDTFA is now responsible for administrating many of the taxes formally handled by the BOE, including sales and use, fuel and cigarette taxes. CDTFA also handles the auditing of taxpayers with regard to these taxes. ANALYSIS The attached resolution revises the list of positions in the City that have authority to examine sales and use tax records for taxes collected for the City by CDTFA and allows the City Manager make updates as needed in the future. The resolution also formalizes MuniServices' and HdL's ability to work with the CDTFA on sales and use tax and business tax audit matters. In addition to the attached resolution, staff recommends updating the Palo Alto Municipal Code (PAMC) to replace references to the State Board of Equalization (State BOE) with the California Department of Tax and Fee Administration (CDTFA) (Attachment B). The City's tax administration was not affected by the outdated references because the Muni Code includes a provision automatically incorporating changes to state law (PAMC 2.32.150). Updating the references, however, will improve clarity and ease of use of the Code by referring to the appropriate responsible state agency. 2 City Council, February 5, 2024: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82678 3 City of Palo Alto Resolution No. 8509, approved April 4, 2005: https://www.cityofpaIoaIto.org/files/assets/public/v/1/city-clerk/resolutions/reso-8509.pdf 4 Taxpayer Transparency and Fairness Act of 2017: https://Ieginfo.legislature.ca.gov/faces/bilINavClient.xhtml?bill id=201720180SB86 Item 6: Staff Report Pg. 2 Packet Pg. 149 of 309 Item 6 Item 6 Staff Report FISCAL/RESOURCE IMPACT Approval of this resolution has no fiscal impact to the City. STAKEHOLDER ENGAGEMENT Administrative Services staff conferred with the Office of the City Auditor regarding this update. It was determined that the City Auditor or their staff no longer need access to sales and use tax records for taxes remitted to the City. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because is it an administrative activity. CEQA Guidelines section 15378(b)(2). ATTACHMENTS Attachment A: Resolution of the City of Palo Alto Authorizing Examination of Sales or Transactions and Use Tax Records Attachment B: Ordinance of the Council of the City of Palo Alto Amending the Palo Alto Municipal Code to Delete Obsolete References to the California Board of Equalization and Replace Them with References to the California Department of Tax and Fee Administration APPROVED BY: Lauren Lai, Administrative Services Director Item 6: Staff Report Pg. 3 Packet Pg. 150 of 309 NOT YET APPROVED Resolution No. A Resolution of The City of Palo Alto Authorizing Examinat Sales or Transactions and Use Tax Records RECITALS Item 6 Attachment A - Resolution Authorizing Examination of Sales or Transactions and Use Tax Records A. Under Ordinance Number 2756, the City of Palo Alto (City) entered into a contract with the California Department of Tax and Fee Administration (Department), formerly the State Board of Equalization, to perform all functions incident to the administration and collection of sales and use taxes. B. Under Ordinance Number 2756 and California Revenue and Taxation Code section 7270, the City entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes. C. The City Council of the City of Palo Alto deems it desirable and necessary for authorized officers, employees and representatives of the City to examine confidential sales and use tax records of the Department pertaining to sales and use taxes collected by the Department for the City pursuant to that contract. D. Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales and use tax records of the Department. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. That the following listed employee titles are hereby appointed to represent the City with authority to examine sales and use tax records of the Department pertaining to sales and use taxes collected for the City by the Department pursuant to the contract between the City and the Department: • City Manager • Assistant City Manager • Deputy City Manager • Assistant to the City Manager • Administrative Services Director • Assistant Director, Administrative Services Department • Director, Office of Management and Budget • Budget Manager • Principal Management Analyst • Treasury, Debt, and Investments Manager • Senior Management Analyst, Administrative Services Department • Management Analyst, Administrative Services Department 20250305 kb Item 6: Staff Report Pg. 4 Packet Pg. 151 of 309 NOT YET APPROVED Item 6 Attachment A - Resolution Authorizing • Other officer or employee of the City designated in writing by the q Examination of Sales or California Department of Tax and Fee Administration Transactions and Use Tax Records SECTION 2. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales and use taxes by the Department pursuant to the contract between the City and the Department, and for purposes related to the following governmental functions of the City: (a) Budget revenue forecasting; (b) Administration of the City's Business Tax; and (c) Economic Development activities. The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above. SECTION 3. That Hinderliter de Llamas & Associates and MuniServices, LLC. are hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales and use taxes collected for the City by the Department. The persons or entities designated by this section meet all of the following conditions, which are also included in the contracts between the City and Hinderliter de Llamas & Associates and MuniServices, LLC.: (a) has an existing contract with the City to examine those sales and use tax records; (b) is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee authorized under Section 1 of this resolution to examine the information; (c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and (d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired. // // // // 20250305 kb Item 6: Staff Report Pg. 5 Packet Pg. 152 of 309 NOT YET APPROVED SECTION 4. That this resolution supercedes all prior resolutions of the City of Palo Alto adopted pursuant to subdivision (b) of Revenue and 1 7056. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Mayor APPROVED: City Manager Item 6 Attachment A - Resolution Authorizing Examination of Sales or Transactions and Use Tax on Records Director of Administrative Services 20250305 kb Item 6: Staff Report Pg. 6 Packet Pg. 153 of 309 NOT YET APPROVED Item 6 Attachment B - Ordinance of the Council of the City of Palo Alto Amending Ordinance No. Chapter 2.32 (Sales and Use Tax) and Chapter 4.1C Ordinance of the Council of the City of Palo Alto Amending Chapte (Solicitors, Peddlers, and Use Tax) and Chapter 4.10 (Solicitors, Peddlers, Pawnbrokers, I Pawnbrokers, Secondhand Dealers, and Dealers, and Other Businesses Regulated by Police) of the Munici Other Businesses Delete Obsolete References to the California Board of Equalization Regulated by Police) of Them with References to the California Department of Tax au the Municipal Codeto Administration Delete Obsolete References to the California Board of The Council of the City of Palo Alto does ORDAIN as follows: Equalization and Replace Them with References to SECTION 1. Findings and Declarations. The City Council finds and d the California Department of Tax and A. Historically, the California Board of Equalization (BOE) was the state EeeAdministration le for collecting sales and use tax and other taxes, auditing taxpayers, and hearing tax appeals. In 2017, the Legislature adopted the Taxpayer Transparency and Fairness Act, which created the California Department of Tax and Fee Administration (CDTFA) and assigned most of BOE's former responsibilities for tax collection and administration to the new agency. B. The Palo Alto Municipal Code includes local provisions implementing sales and use tax responsibilities and recognizing state -issued sellers permits required by the Revenue and Taxation Code. Effective July 1, 2017, these responsibilities were reassigned from BOE to CDTFA. This ordinance amends the update the Municipal Code to show the correct state agency. SECTION 2. The following sections of Chapter 2.32 (Sales and Use Tax) of the Municipal Code are amended to read as follows: 2.32.040 Purpose. (c) To adopt a sales and use tax ordinance which imposes a tax and provides a measure therefor that can be administered and collected by the State Board of Equalization California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the Stat Beard f Equalization California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes; .. 2.32.050 Contract with state. Prior to the operative date the city shall contract with the Stat Board of Equalization California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this chapter, provided, that if the city shall not have contracted with the State Board of Equalization California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date 1 20250305 kb Item 6: Staff Report Pg. 7 Packet Pg. 154 of 309 NOT YET APPROVED Item 6 attachment B - Ordinance of the Council of the City of Palo Alto Amending shall be the first day of the first calendar quarter following the execution o Chapter2.32 (Sales and rather than the first day of the first calendar quarter following the adoptio Use Tax) and Chapter4.10 (Solicitors, Peddlers, 2.32.070 Place of sale. Pawnbrokers, For the purposes of this chapter, all retail sales are consummated at the p Secondhand Dealers, and Other Businesses the retailer unless the tangible personal property sold is delivered by the r Regulated by Police) of to an out-of-state destination or to a common carrier for delivery to an out -o the Municipal Codeto The gross receipts from such sales shall include delivery charges, when suc Delete Obsolete ect to the state sales and use tax, regardless of the place to which delivery is r References to the a retailer has no permanent place of business in the state or has more than California Board of ?ss, the place or places at which the retail sales are consummated shall be det Equalization and Replace S and regulations to be prescribed and adopted by the Statc Board of Equal[ Them with References to Department of Tax and Fee Administration. the California Department of Tax and Fee Administration J 2.32.100 Limitations on adoption of state law. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, wherever the state of California is named or referred to as the taxing agency, the name of the city of Palo Alto shall be substituted therefor. The substitution, however, shall not be made when the word "state" is used as part of the title of the State Controller, the State Treasurer, the State Board of Control, the State Beard of Equalization California Department of Tax and Fee Administration, the State Treasury, or the Constitution of the State of California; the substitution shall not be made when the result of that substitution would require action to be taken by or against the city of Palo Alto, or any agency thereof rather than by or against the Statc Board of Equalization California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this chapter; the substitution shall not be made in those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the state of California, where the result of the substitution would be to provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the state under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or to impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provisions of that Code; the substitution shall not be made in Sections 6701, 6702 (except in the last sentence thereof), 671 I, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code; and the substitution shall not be made for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 or in the definition of that phrase in Section 6203. 2.32.140 Application of provisions relating to exclusions and exemptions. (a) Section 232.130 shall become operative on January 1st of the year following the year in which the State Beard of Equalization California Department of Tax and Fee Administration adopts an assessment ratio for state -assessed property which is identical to the ratio which is required for local assessments by Section 401 of the Revenue and Taxation Code, at which time Section 2.32.120 shall become operative. (b) In the event that Section 232.130 becomes inoperative and the State Beard f Equalization California Department of Tax and Fee Administration subsequently adopts an assessment ratio for the state -assessed property which is higher than the ratio which is Item 6: Staff Report Pg. 8 Packet Pg. 155 of 309 20250305_kb NOT YET APPROVED Item 6 Attachment B - Ordinance of the Council of the City of Palo Alto Amending required for local assessments by Section 401 of the Revenue and Taxatio Chapter2.32(Salesand Section 2.32.120 shall become operative on the first day of the month nex Ise Tax) and Chapter4.10 nth in which such higher ratio is adopted, at which time Section 232.130 shall (Solicitors, Peddlers, it the first day of the month following the month in which the board again a Pawnbrokers, nt ratio for state -assessed property which is identical to the ratio required fo Secondhand Dealers, and Other Businesses by Section 401 of the Revenue and Taxation Code, at which time Section 2 Regulated by Police) of become operative and Section 2.32.120 shall become inoperative. the Municipal Code to Delete Obsolete SECTION 3. Section 4.10.280 of Chapter 4.10 (Solicitors, Peddlers, P References to the Secondhand Dealers, and Other Businesses Regulated by Police) of the Mu California Board of amended to read as follows: Equalization and Replace Them with References to 4.10.280 Exemptions. the California (a) The provisions of this chapter shall not apply to secondhand goods,J Department of Tax and Fee Administration merchandise: (1) Purchased at a public sale or auction; (2) Purchased from any person holding a State Board f Equalization California Department of Tax and Fee Administration permit number as a seller; (3) Accepted in trade on the purchase of new merchandise; (4) Received or purchased by any religious, charitable, civic or fraternal organization for purposes of resale. SECTION 4. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 5. Effective Date. This ordinance shall be effective on the thirty-first date after the date of its adoption. // // // // // Item 6: Staff Report Pg. 9 Packet Pg. 156 of 309 20250305_kb NOT YET APPROVED Item 6 Attachment B - Ordinance of the Council of the City of Palo Alto Amending SECTION 6. CEQA. The City Council finds and determines that this Chapter2.32(Salesand project within the meaning of section 15378 of the California Environment UseTax) and Chapter 4.10 ("CEQA") because it has no potential for resulting in physical change in the (Solicitors, Peddlers, er directly or ultimately. In the event that this Ordinance is found to be a proj Pawnbrokers, is Secondhand Dealers, and subject to the CEQA exemption contained in CEQA Guidelines section 150 Other Businesses can be seen with certainty to have no possibility of a significant effect on t Regulated by Police) of that this Ordinance simply clarifies existing local regulations. the Municipal Code to Delete Obsolete References to the INTRODUCED: California Board of Equalization and Replace PASSED: Them with References to the California AYES: Department of Tax and Fee Administration NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: City Clerk APPROVED AS TO FORM: City Attorney Mayor City Manager Director of Administrative Services 20250305_kb Item 6: Staff Report Pg. 10 Packet Pg. 157 of 309 Item 7 Item 7 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: Human Resources ALTO Meeting Date: March 24, 2025 Report #:2410-3664 TITLE Approval of Professional Services Contract C25187148 with Innovative Claims Solutions (ICS) in an Amount Not -To -Exceed Amount of $760,886 to provide Third -Party Administration of Workers' Compensation Benefits for a Period of One Year with an Option to Renew for up to Five Years Term. CEQA status - Not a Project RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or their designee to execute Contract No. C25187148 (Attachment A) with Innovative Claims Solutions (ICS) to provide third -party administration services for the City's workers' compensation program for a term of one (1) year; and 2. Approve and authorize the City Manager to negotiate and execute renewal options for Contract No. C25187148 for ICS to continue to provide third -party administration services for the workers' compensation program for up to four additional years, without increasing not to exceed $760,886 over the five (5) -year term. The total Not -to -Exceed (NTE) contract amount of $760,886 includes an annual rate structure and one-time conversion fee of $15,000. The NTE amounts for each year are as follows: Year 1 is $239,060, Year 2 is $248,504, and Year 3 is $258,322. If the contract is renewed for Years 4 and 5, the rates and NTE amounts will be determined at that time. BACKGROUND Workers' compensation is a state -mandated benefit program that provides medical care and disability benefits to employees injured on the job. It ensures that employees receive necessary medical treatment and financial support for work -related injuries. Additionally, this program protects the City from legal liability and lawsuits related to workplace injuries and ensures compliance with state laws and labor code. An effective workers compensation program ensures employees get the services, treatment, and diagnosis they need for a healthy recovery to return to their jobs providing services to our community. Item 7: Staff Report Pg. 1 Packet Pg. 158 of 309 Item 7 Item 7 Staff Report The work to be performed under this contract is for third -party claims administration services for City employee workers' compensation benefits. These services include: the processing of all workers' compensation claims in accordance with applicable Labor Code regulations; engaging services related to the investigation and defense of claims; engaging the services of appropriate medical providers; reviewing and paying for the applicable benefits and medical treatment; handling all the necessary State -required forms for each reported claim; completing settlement negotiations; Medicare payment processing; and performing all tasks in a timely manner as required under California workers' compensation laws. All the above -mentioned services are essential to ensure Workers' Compensation benefits are provided for employees as required by State law. These services are currently provided by Sedgwick Claims Management Services. ANALYSIS Procurement Process An REP for the project was posted on the PlanetBids, the City's eProcurement platform at that time, and 742 service providers were notified. The solicitation period was posted for 27 days, and 6 proposals were received. The solicitation closed on January 17, 2023. Following a competitive evaluation process of the 6 proposals received, 3 service providers were determined to best support the City's needs and were interviewed in person. Proposal Description Workers Compensation Program Administration Proposed Length of Project One (1 year) w/ optional 4 -year renewals (up to 5 Years) Number of Providers Notified 742 Number of Proposal Packages Downloaded 18 Total Days to Respond to Proposal 27 Pre -Proposal Meeting None Pre -Proposal Meeting Date N/A Number of Proposals Received 6 Proposal Price Range $306,000 to $1,039,238 Public Link to Solicitation PlanetBids Item 7: Staff Report Pg. 2 Packet Pg. 159 of 309 Item 7 Item 7 Staff Report The three finalists were selected to be interviewed by a panel including Public Safety department managers and HR staff. The interview panel carefully reviewed the proposals in response to the Request for Proposal relative to the following criteria: • Quality customer service; • Established, reliable, claim system capabilities; as well as advanced reporting technology: • Ability to provide innovative programs and services; • Public agency experience, including public safety officers benefits (California Labor Code 4850 provides injured public safety employees with salary continuation up to one year and requires additional handling and knowledge); and, • High level management and claims examiner experience. Due to City staffing constraints, the interview scheduling took longer than originally planned; vendor held pricing for the duration of the RFP evaluation period through contract negotiation. The administration of workers compensation benefits is highly complex and requires deep knowledge of California labor codes, workers compensation law, as well as federal Medicare and Americans with Disabilities Act obligations. In addition to the technical expertise needed, the claims representatives need soft skills and high touch customer service skills to be responsive, to be engaged with the status of each claim to properly administer the claim details and have ability to inform City employees regarding the workers compensation process. With all of this in mind, the panel was focused on selecting a service provider that could effectively provide claims handling services for injured employees and City management. Innovative Claims Solutions (ICS) was the selected service provider. The customer service model ICS will provide to the City's workers compensation program will be based on the City's needs and help our program function at the highest levels to meet the City's expectations. Their communication approach to interactions with injured workers is what they referred to as their "Employee Advocacy Approach." This approach is expected to assist employees to be heard, receive their medical treatment in a timely manner and, as a result, expedite an employee's return back to regular work. The transition for administration services is estimated to take 60 days from Council contract approval date. Caseload Human Resources will work with ICS and the current service provider, Sedgwick, to transition all open claims as well as closed claim files. The total number of claims for FY25 is expected to be lower than prior years. In FY24 claims increased to 86 in comparison to FY23 when there were 76 claims. Claims reported between 2021-2024 has been stable averaging 82 claims annually since the pandemic year of FY20 when there were 105 claims. Open claim inventory fluctuates on a daily basis. The new claims administrator will review all claims during the transition from Item 7: Staff Report Pg. 3 Packet Pg. 160 of 309 Item 7 Item 7 Staff Report the prior third -party administrator to determine if any claims can be closed or reach satisfactory resolution. FISCAL/RESOURCE IMPACT Funds for Third -Party Administration Services are included in the FY2025 budget in the Workers Compensation Service Fund. Funds for the remaining years will be factored into the development of future operating budgets and subject to Council appropriation of funds. STAKEHOLDER ENGAGEMENT As part of the RFP process, key stakeholders including Human Resources, Administrative Services, the City Attorney's Office, and third -party administrator collaborated to ensure current services have not been interrupted. HR outlined requirements, while Administrative Services directed the contracting process and documentation. Human Resources will work with all departments to transition services to this new provider. ATTACHMENTS Attachment A: Professional Services Contract #C25187148 with Innovative Claims Solutions APPROVED BY: Sandra Blanch, Human Resources Director Item 7: Staff Report Pg. 4 Packet Pg. 161 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 CITY OF PALO ALTO CONTRACT NO. C251871 AGREEMENT FOR PROFESSIONAL SERVICE Item 7 Attachment A - Professional Services Contract #C25187148 Solutions BETWEEN THE CITY OF PALO ALTO AND INNOVATIVE CLAIMS SOLUTIONS This Agreement for Professional Services (this "Agreement") is entered into as of the 2nd day of December, 2024 (the "Effective Date"), by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and INNOVATIVE CLAIMS SOLUTIONS, a California corporation, located at 12677 Alcosta Blvd., Suite 335, San Ramon, CA 94583 ("CONSULTANT" or "ICS"). The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference: RECITALS A. CITY intends to provide workers' compensation support services (the "Project") and desires to engage a consultant to administer the City's self -insured Workers' Compensation Program in connection with the Project (the "Services", as detailed more fully in Exhibit A). B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled "SCOPE OF SERVICES". NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows: SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through November 30, 2025 with an option to renew up to 5 years, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled "SCHEDULE OF Professional Services Rev. Jan 29, 2024 Page 1 of 39 Item 7: Staff Report Pg. 5 Packet Pg. 162 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 PERFORMANCE". Any Services for which times for performance ar Attachment A - this Agreement shall be commenced and completed by CONSULTANT in a Professional Services and timely manner based upon the circumstances and direction communicated t Contract 7148 NT. CITY's agreement to extend the term or the schedule for performance shall n with Innovative Claims ry of damages for delay if the extension is required due to the fault of CONSULT Solutions SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled "COMPENSATION," including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Seven Hundred Sixty Thousand, Eight Hundred Eighty -Six Dollars ($760,886). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled "SCHEDULE OF RATES." Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT's schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT's invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY's Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT's supervision. CONSULTANT represents that it, its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this Agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT's errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, Professional Services Rev. Jan 29, 2024 Page 2 of 39 Item 7: Staff Report Pg. 6 Packet Pg. 163 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 any change order markup costs, or costs arising from delay caused by the Attachment A s or unreasonable delay in correcting the errors and omissions. Professional Services Contract #C25187148 SECTION 9. COST ESTIMATES. If this Agreement pertains to the de with Innovative Claims orks project, CONSULTANT shall submit estimates of probable construction tj,Lsolutions se of design submittal. If the total estimated construction cost at any submittal exceeds the CITY's stated construction budget by ten percent (10%) or more, CONSULTANT shall make recommendations to CITY for aligning the Project design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement. CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT will be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers' compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT's performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT's provision of the Services only, and not as to the means by which such a result is obtained. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT's obligations hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties. SECTION 12. SUBCONTRACTING. ® Option B: Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY agrees that subcontractors may be used to complete the Services. The subcontractors authorized by CITY to perform work on this Project are: Diamond Bill Review, Arissa Cost Solutions, Alius Health, MIS, Inc., Klear.ai CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and Professional Services Rev. Jan 29, 2024 Page 3 of 39 Item 7: Staff Report Pg. 7 Packet Pg. 164 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 omissions of subcontractors. CONSULTANT shall change or add subcontra Attachment A - written approval of the City Manager or designee. Professional Services Contract #C25187148 SECTION 13. PROJECT MANAGEMENT. CONSULTANT wi with Innovative Claims reco, dgrecogics-claims.com as the CONSULTANT's Project Manager to have supt vitpuii3?bility for the performance, progress, and execution of the Services and represent CONSULTANT during the day-to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT's Project Manager or any other of CONSULTANT's key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY's Project Manager. CONSULTANT, at CITY's request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property. CITY's Project Manager is Sandra Blanch, Sandra.blanch@cityofpaloalto.org, Human Resources Department, 250 Hamilton Avenue, Palo Alto, CA, 94301, Telephone: (650) 329-2294. CITY's Project Manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services. SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT's records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later. SECTION 16. INDEMNITY. ® [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of any Professional Services Rev. Jan 29, 2024 Page 4 of 39 Item 7: Staff Report Pg. 8 Packet Pg. 165 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 nature, including death or injury to any person, property damage or any other Attachment A - costs and expenses of whatever nature including attorney's fees, experts Professional Services and disbursements ("Claims") resulting from, arising out of or in any manner rd1 Contract #C25187148 ce or nonperformance by CONSULTANT, its officers, employees, agents or with Innovative Claims this Agreement, regardless of whether or not it is caused in part by an Indemnifie Solutions 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement. 16.3. The acceptance of CONSULTANT's Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled "INSURANCE REQUIREMENTS". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key Guide ratings of A -:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days' notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT's receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the Professional Services Rev. Jan 29, 2024 Page 5 of 39 Item 7: Staff Report Pg. 9 Packet Pg. 166 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 insurance are provided to CITY's Chief Procurement Officer during t Attachment A - this Professional Services Agreement. Contract #C25187148 18.4. The procuring of such required policy or policies o with Innovative Claims t be construed to limit CONSULTANT's liability hereunder nor to fulfill the inde solutions sions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination. 19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials). 19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT's Services provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30. 19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers). SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk Professional Services Rev. Jan 29, 2024 Page 6 of 39 Item 7: Staff Report Pg. 10 Packet Pg. 167 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager Item 7 Attachment A - Professional Services Contract #C25187148 with Innovative Claims Solutions To CONSULTANT: Attention of the Project Manager at the address of CONSULTANT recited on the first page of this Agreement. CONSULTANT shall provide written notice to CITY of any change of address. SECTION 21. CONFLICT OF INTEREST. 21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises. 21.3. If the CONSULTANT meets the definition of a "Consultant" as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time. SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA. 22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person's race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. 22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act ("ADA"), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against Professional Services Rev. Jan 29, 2024 Page 7 of 39 Item 7: Staff Report Pg. 11 Packet Pg. 168 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 persons with disabilities in the provision of services, benefits or activiti Attachment A - this Agreement. Professional Services Contract #C25187148 r- with Innovative Claims REQUIREMENTS. CONSULTANT shall comply with the CITY'S Envuiiiiiiys°luteons erred Purchasing policies which are available at CITY's Purchasing Department, hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY's Zero Waste Program. Zero Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and, third, recycling or composting waste. In particular, CONSULTANT shall comply with the following Zero Waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double -sided and printed on a minimum of 30% or greater post - consumer content paper, unless otherwise approved by CITY's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post - consumer material and printed with vegetable -based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department's office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060. SECTION 25. NON -APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. Professional Services Rev. Jan 29, 2024 Page 8 of 39 Item 7: Staff Report Pg. 12 Packet Pg. 169 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 SECTION 26. PREVAILING WAGES AND DIR REGISTRATION F Attachment A - CONTRACTS. Professional Services Contract #C25187148 I with Innovative Claims ® 26.1. This Project is not subject to prevailing wages and tents. CONSULTANT is not required to pay prevailing wages and meet related r solutions r the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract: (1) is not a public works contract; (2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j). SECTION 27. CLAIMS PROCEDURE FOR "9204 PUBLIC WORKS PROJECTS". For purposes of this Section 27, a "9204 Public Works Project" means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in Exhibit F, entitled "Claims for Public Contract Code Section 9204 Public Works Projects". ® This Project is not a 9204 Public Works Project. SECTION 28. CONFIDENTIAL INFORMATION. 28.1. In the performance of this Agreement, CONSULTANT may have access to CITY's Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT's obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. 28.2. "Confidential Information" means all data, information (including without limitation "Personal Information" about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently Professional Services Rev. Jan 29, 2024 Page 9 of 39 Item 7: Staff Report Pg. 13 Packet Pg. 170 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 become publicly known other than by a breach of this Agreement; Attachment A - yin CONSULTANT's possession free of any obligation of confidence prior to Professional Services ntial Information; (iii) is rightfully obtained by CONSULTANT from a third part Contract #C25187148 any confidentiality obligation; (iv) is independently developed by employees of C with Innovative Claims hout any use of or access to the Confidential Information; or (v) CONSULTAN solutions ent to disclose signed by an authorized representative of CITY. 28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order. 28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time. 28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT. 28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions. SECTION 29. MISCELLANEOUS PROVISIONS. 29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions. 29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the Professional Services Rev. Jan 29, 2024 Page 10 of 39 Item 7: Staff Report Pg. 14 Packet Pg. 171 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 authorized representatives of the parties and approved as required under Pal Attachment A - ode, as amended from time to time. Professional Services Contract #C25187148 29.5. If a court of competent jurisdiction finds or rules th with Innovativ�Claims this Agreement is void or unenforceable, the unaffected provisions of this Agree siii olutionfull force and effect. 29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT'S proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT'S proposal (if any), the exhibits shall control. 29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement. 29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement. 29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement. SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein: ® EXHIBIT A: SCOPE OF SERVICES ® EXHIBIT B: SCHEDULE OF PERFORMANCE ® EXHIBIT C: COMPENSATION ® EXHIBIT D: INSURANCE REQUIREMENTS ® EXHIBIT G: INFORMATION PRIVACY POLICY ® EXHIBIT H: CYBERSECURITY TERMS AND CONDITIONS THIS A GREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED. Professional Services Rev. Jan 29, 2024 Page 11 of 39 Item 7: Staff Report Pg. 15 Packet Pg. 172 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 CONTRACT No. C25187148 SIGNATURE PAGE Attachment A - ProfessionalServices IN WITNESS WHEREOF, the parties hereto have by their duly aut Contract #C25187148 tives executed this Agreement as of the date first above written. With Innovative claims Solutions CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney or designee INNOVATIVE CLAIMS SOLUTIONS Officer 1 By: Name: Title: Officer 2 By: Name: Title: Page 12 of 39 Signed byVv DanE C,reco s1aea VP Client Services Signed by: ptut/so A, 92B4A32C40C54BF... Jason Dawson CEO Professional Services Rev. Jan 29, 2024 Item 7: Staff Report Pg. 16 Packet Pg. 173 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 EXHIBIT A Attachment A - SCOPE OF SERVICES Professional Services Contract #C25187148 with Innovative Claims CONSULTANT shall provide the Services detailed in this Exhibit A, entitle�'L). Solutions J SERVICES". Notwithstanding any provision herein to the contrary, CONSULTANT's duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY's preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT's participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services. CONSULTANT (also referred to as ICS) will execute the following claim's management program: Caseloads • CONSULTANT will assign one examiner to CITY's indemnity claims, unless CITY has more than 150 open claims. CONSULTANT may assign those additional claims to another examiner. • CITY may designate claim assignments alphabetically or by department, or by some other mutually agreed upon categorization. • All medical only claims will be managed by a medical only examiner. Communication • CONSULTANT's communications with an injured worker from CITY will begin when ICS is notified of a new lost time injury. • CONSULTANT will initiate telephonic communication within 24 -hours. CONSULTANT will obtain factual information and address any questions or concerns, explain compensation benefits and review the processes to come. • CONSULTANT's claims examiner will contact the injured worker at least monthly while from work and periodically during the life of the claim especially prior to the issuance of any benefit letter. • At CITY's request, ICS conducts quarterly claim reviews, to review in detail jointly selected, key claims. CONSULTANT may designate claims examiners to attend these claim reviews. Daily Communications ICS will have continual interaction and communications with the CITY during normal Professional Services Rev. Jan 29, 2024 Page 13 of 39 Item 7: Staff Report Pg. 17 Packet Pg. 174 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 day-to-day claims management. ICS policies require that all phone c Attachment A - within 1 day and all efforts to do so are clearly documented in the no Professional Services written inquiries are responded to within 5 days of receipt. The folio Contract #C25187148 selected, daily communications: with Innovative Claims Initial contact upon receipt of new lost time claims as part of our 24-h Solutions contact with employer, employee and medical provider for early intervention and implementation/exploration of modified work possibilities. • Discussion of and strategic planning on all claims placed on delay status and. • on all claims recommended for denial. • Written and verbal communications on all prospective settlements in accordance with the CITY's requirements. • Discussion of claims involving potential referral for outside investigation including sub- rosa investigations. • Discussion of claims where proposed reserve increases exceeds pre -established thresholds. • Communication at any other interval as required by the CITY New Claim Reporting ICS offers the CITY several different ways to report new claims. ICS will accept new reports of claims by mail, fax, or e-mail ICS staff. In addition, ICS will provide two options to electronically transmit claims. First, using the ICS Web Site, the CITY can log in and input all relevant claims information on-line. ICS will download the information into its claim system for claim setup. Second, the CITY can go directly into the ICS claim system through their dial -up connection and input the claim into the claim system. ICS Management reviews all new claims to make sure the data is accurate and complete. ICS claim staff then reviews the claim data regularly to update fields with the most current information. New Claim Setup ICS will enter all new claims as pending claims in its claim management system upon receipt and immediately route them to the appropriate Unit Manager for urgent handling. Each unit manager reviews these new claims and documents initial recommendations for acceptance, denial or investigation as appropriate, and routes them to the appropriate examiner for immediate handling. Additionally, the unit manager is assigned a diary on all new claims to track for completion of timely set up. The examiner evaluates each new claim and begins execution of ICS' procedures for handling of new claims. ICS will clearly document all communication, and ICS will complete new claims creations within 72 hours of ICS knowledge. Initial Contact ICS will contact all injured employees who are losing time from work within 24 hours of ICS' knowledge of the claims. Additionally, ICS will obtain factual information surrounding an incident, i.e., witnesses, past medical history, etc. ICS will also obtain information regarding the quality of medical care from the Professional Services Rev. Jan 29, 2024 Page 14 of 39 Item 7: Staff Report Pg. 18 Packet Pg. 175 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 employee's perspective. ICS will send each injured worker an Injury Questi AttachmentA- questions regarding past injuries and treatment. Professional Services ICS requires all examiners to maintain unsolicited communication with each Contract #C25187148 til they return to work. These calls take place monthly, at least. ICS will contact cOntact11t11 Innovative Claims s prior to issuing any mandatory benefit notices for the duration of the claim. Solutions ICS will also maintain contact with the employer to obtain information regarding the specifics of the incident, witnesses and any other pertinent information the employer may have to contribute. ICS will encourage the individual departments to participate in the workers' compensation process, extending their control whenever possible. ICS will assure modified work alternatives have been explored. ICS will contact the medical provider within 24 hours of ICS' knowledge, to obtain information regarding the nature and extent of injuries, prognosis, and estimations on length of disability, etc. ICS will continually explore with the treating physicians the possibility of releasing the injured employee to modified work as soon as possible. When appropriate, ICS claims examiners will maintain close ongoing communications with injured employees, medical providers as well as individual departments on lost time claims. All communication will be clearly documented in the computer system, which is accessible to the Unit Manager as well as the designated CITY contacts. Compensability Determination An ICS Unit Manager will initially review all claims and will give instruction on any claims that appear to be questionable based solely on the information contained in the initial report. All decisions to delay claims must be approved by a Unit Manager, and all decisions to accept compensability once a claim has been placed on delay, or to deny claims, must also be approved by a Unit Manager. Discussion and decisions on delaying or denying benefits will also be discussed with the City. On all claims that will be delayed, ICS will issue a delay notice within 14 days from the employer's date of knowledge, or 14 days from the return of the DWC-1 claim form. Investigations ICS investigates all lost -time claims. The initial investigation is completed by the Unit Manager who is responsible for reviewing all new claims each day outlining any AOE/COE issues to be explored when completing initial calls. When deemed necessary by the Unit Manager, ICS will obtain recorded statements from injured workers or witnesses, and ICS may refer to an outside investigative firm with CITY's advance approval. ICS' initial investigation includes discussions with immediate supervisors or managers of the allegedly injured employee and possible discussion with co-workers. ICS will obtain copies of personnel files and assess the need for scheduling of medical evaluations. Professional Services Rev. Jan 29, 2024 Page 15 of 39 Item 7: Staff Report Pg. 19 Packet Pg. 176 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - On questionable indemnity claims, ICS will make investigative assignments Professional Services within 5 days of ICS notice of claim to obtain statements from witnesses and Contract#C25187148 subject to CITY's written approval as described in Section 12 (Subcontractin with Innovative Claims Solutions ICS will contact the injured employee via telephone within 24 hours of notice of injury on all cases to verify injury, prior related medical history, and accident information and to explain benefits. ICS will document the results of this contact and all contact attempts in the claim file. ICS will maintain subsequent regular contact with disabled employees. ICS will obtain medical verification of causation and disability prior to each payment of disability benefits. ICS will obtain an estimate as to length of disability and extent of disability. ICS will make all referrals to investigators specific in nature, outlining time frames for completion. ICS may retain outside investigative services will be retained on an as -needed basis with concurrence from the CITY, as described in Section 12 (Subcontracting). The need for outside services will be clearly documented in the file. Diary ICS will maintain all unresolved indemnity claim files on an examiner 30 -day diary and manager 90 -day diary for Plan of Action management. Additionally, ICS will maintain all unresolved claims on diary for reserve reviews every 90 days, while resolved claims are reviewed for reserves every 180 days. ICS will maintain Future Medical claims on an examiner 90 -day diary and manager 180 - day diary. ICS will clearly label each Plan of Action and Reserve entry as such. Reserve entries are a combined Reserve and Plan of Action review. The following is a brief list of items that ICS will review at each diary: • Reserves • Plan of Action • Coding • Subrogation Status • Excess Reporting • Treatment Status • Disability Status • Closure Posture • Plan for resolution Litigation status Claim Supervision ICS has developed a claim review frequency to afford optimal quality control including scheduled mandatory reviews, or audits, of all claims. ICS Unit Managers are responsible for conducting these reviews and ICS has customized audit checklist that is followed in association with each review. Professional Services Rev. Jan 29, 2024 Page 16 of 39 Item 7: Staff Report Pg. 20 Packet Pg. 177 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 High Visibility Claims Attachment A - ICS recognizes that each client may have unique circumstances that generate Professional Services involve sensitive or high -profile issues. In such circumstances or as CITY m Contract #C25187148 suppress injured worker names in reports and limit viewing of those designa with Innovative Claims on- line access. At CITY's request, the Unit Manager or Vice President of Opera solutions sensitive cases. Benefits Delivery Initial and subsequent indemnity payment and DWC notices will be processed in full compliance with the Labor Code. ICS will tailor a payment -tracking system to meet the CITY's needs for any potential salary continuation program. ICS's system will encompass voucher posting, unless Disability Payment Options ICS will develop Temporary Disability, Salary Continuation and LC 4850 payment procedures that coincide with payroll periods or other directives from the CITY. Based on CITY's request, ICS will pay LC 4850 as full salary or break-out the TD portion and the non -TD portion as separate payments. ICS will make payments as checks or vouchers posting, or any combination of the two, as directed by CITY. Reserve Accuracy ICS will reserve all claims based on their ultimate probable cost. We understand the importance of establishing accurate reserves as early in the life of a claim as possible. Reserving files accurately requires a combination of experience, skill, judgement and astute analysis of all available data. ICS will schedule all open unresolved indemnity claims for reserve review and potential adjustment at 30 days from date of creation and every 90 days thereafter until a claim either settled or closed. ICS will also adjust reserves when developments are revealed that will likely affect the ultimate cost of a given claim to preclude any reserve "stair stepping". Once claims are settled, ICS will move them to a diary review for reserves every 180 days. ICS will ensure all reserve changes beyond the first 30 days will be reviewed and approved by a supervisor and documented in our computer system. ICS will create and retain a reserve analysis worksheet in the claims management system. CITY can review this information on-line, as well. When reserving for future medical files, ICS examiners will review all medical payments made in the last three years. ICS will delete non -recurring medical expenses will be deleted from the analysis. ICS will evaluate the remaining amount and then multiply by the injured worker's life expectancy. ICS may adjust the reserve based on medical opinion relating to life expectancy as well. All future medical reserves are then reviewed by the ICS Unit Manager. Professional Services Rev. Jan 29, 2024 Page 17 of 39 Item 7: Staff Report Pg. 21 Packet Pg. 178 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Medical Control Attachment A - ProfessionalServices ICS oversees a medical management program that encompasses Bill ReviewJ Contract #C25187148 ' Preferred Provider Organization access, and other Medical Management sery with Innovative Claims J Solutions Actual bill review for reduction to fee schedule and appropriateness of charges is completed by the outside bill review company. However, ICS examiners are responsible for reviewing and approving each bill for payment ensuring all prescriptions, or treatment provided, adheres to what has been authorized. All treatment requests are responded to timely and documented in the claim management system by ICS. ICS will make referrals to the selected utilization review company for concurrent reviews when treatment appears to be excessive, or at time of treatment requests if they meet the referral trigger criteria. Additionally, ICS examiners are responsible for reviewing all medical reports and documenting a brief recap of all reports in the claim management system. Medical verification of disability will be obtained by ICS in a timely manner and maintained in ICS's claim file to document the need for continuing indemnity benefits. Medical treatment provided will be reviewed by ICS for necessity, reasonableness, and relationship to the industrial injury. Catastrophic injury claims and extensive lost -time claims will be reviewed by ICS by a qualified medical management provider. ICS will ensure claims referred for outside medical management services will reflect the intent and scope of services requested. ICS will obtain CITY approval prior to a referral to any nurse case manager. Pre-existing medical conditions and medical records will be explored/obtained by ICS on all lost - time claims. ICS will manage pharmacy benefits as follows. ICS has partnered with a Pharmacy Benefit Program, (PBM), provider that provides a pharmacy card to the injured worker. The pharmacy will use the card to confirm authorization for the meds, give the meds to the injured worker and submit their billing to the PBM provider. Medications will be billed at the Official Medical Fee Schedule (OMFS) with the exception of a $20 discount per prescription filled through mail order. The PBM will monitor for duplicate therapy, early refill, and control access to medications strictly for the industrial injury. Medical bills submitted without a supporting medical report shall not be paid until a medical report is obtained. ICS will ensure all bills will be adjusted according to the fee schedule and paid or objected to according to the law. Medical -legal costs will be reviewed by ICS for appropriateness and necessity. Bills which do not qualify as valid medical -legal expense will be objected to by ICS on a timely basis. Catastrophic Injury Claims Handling The following details the step-by-step process ICS has in place and puts in play following a serious, or potential catastrophic, injury or circumstance: Professional Services Rev. Jan 29, 2024 Page 18 of 39 Item 7: Staff Report Pg. 22 Packet Pg. 179 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 • ICS will provide access to after hours or emergency contact telephon Attachment A - them access to the appropriate Unit Manager, Vice President of Opera Professional Services Presidents of ICS. Contract#C25187148 • Upon notice, from any source, of a catastrophic situation, the Unit M with Innovative Claims of Operations and client should be notified immediately. Solutions • Depending on the severity of injuries that have occurred, an ICS medical case manager should immediately be assigned to the case. In serious injury cases ICS frequently deals with medical practitioners not familiar with the reporting and communication responsibilities associated with treatment of work -related injuries. An ICS medical case manager will assist in ensuring we are provided timely and frequent information regarding the status of the injured workers' medical condition. • In most circumstances, an ICS investigator should be immediately dispatched to the site of the incident to screen and identify witness, ascertain the potential of subrogation opportunities, evaluate exposure for Serious and Willful Misconduct, obtain or determine if police reports will be available and ascertain information required to determine compensability. • ICS will immediately notify the appropriate CITY personnel , and they likely will be dispatched for purposes of a site visit, especially in circumstances where OSHA has been contacted. • In circumstances where injured workers are hospitalized for longer than overnight for purposes other than observation, an ICS representative should meet with the injured worker or their family members, whenever possible. The purpose of the visit would be to personally explain benefits due, explain the processes to come, notify who will be the daily contact person available to them and answer any other questions they may have. • When feasible, ICS's medical case manager assigned should jointly meet the injured worker or family members with the ICS representative. • Depending on the Client's excess coverage and policy, the excess carrier should immediately be notified. • In circumstances involving multiple injured workers, all files should be coded by ICS to reflect they are part of a catastrophic incident to ensure appropriate excess reporting and tracking capabilities are in place. • In cases of serious injury, ICS should provide updates to the Unit Manager, Vice President of Operations and the Client no less frequently than monthly for a period of time to be determined, depending on the seriousness of each incident. Claim Settlements It is ICS' responsibility to identify as early as possible the potential for permanent disability. If none is anticipated or documented, claim closure is pursued rapidly by ICS. If permanent residuals are anticipated, a plan for claim resolution is placed in motion by ICS. ICS will seek from CITY settlement authority that will allow ICS to resolve cases of nominal value in a time- and cost-effective manner. Regardless of the settlement authority value, all settlements will be discussed and approved by the Unit Manager, and basis for recommendations will be clearly documented by ICS in the claims management system. Medicare Reporting Per CMS guidelines, ICS will submit a Query file of all claims from 2010 to CMS quarterly. CMS Professional Services Rev. Jan 29, 2024 Page 19 of 39 Item 7: Staff Report Pg. 23 Packet Pg. 180 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 will process and return that file identifying Medicare Recipients to ICS. That Attachment A - uploaded to Renaissance by ICS. ICS will also keep a log each time of all of Professional Services been reported and those that are Medicare Recipients. Contract #C25187148 with Innovative Claims ICS then goes to each newly identified Medicare Recipient in klear.ai and inpau.mt�i���ay�data to complete the Claim report to CMS. ICSalso reviews other claims to determine if an update or change needs to be reported such as a TPOC (?) or legal representation. ICS transmits the new and updated Claim files to CMS quarterly with all of the new claim information. Medicare Recipient claims are flagged in klear.ai so the examiners will make sure their settlements incorporate the protection of Medicare's interests. Subrogation ICS aggressively pursues subrogation on behalf of the Client. Clear policies and procedures are in place at ICS to assure that any case offering subrogation potential is thoroughly and expeditiously pursued. ICS identifies all opportunities for subrogation although action is not taken unless the CITY has specifically authorized such action. ICS will identify subrogation opportunities immediately upon receipt of a claim and put in motion a plan to obtain information regarding the responsible party. As soon as a responsible third party is identified, notice of intent to pursue recovery will be issued by ICS, and regular contact will be maintained by ICS until a recovery is made. ICS will notify the client as soon as it is felt a complaint in Civil court may be needed to protect the statute of limitations so appropriate legal referrals can be made. ICS will ensure credits are asserted against an injured workers' net recovery for future benefits whenever possible. In addition, ICS' claims supervisor maintains a separate diary of all claims on which ICS is pursuing subrogation recoveries to ensure all statutes are protected. Excess Claims ICS will provide the initial report, follow-up reports and settlement requests to the Client Excess Insurance Carrier when necessary. ICS maintains a listing of all reporting requirements as well as the Self -Insured Retention level for each policy period. ICS will also prepare and send requests for reimbursement on claims that have payments exceeding the SIR. ICS examiners and managers have diaries set to ensure timelines are met for reporting claims and requesting reimbursements. Fraud Claims Management ICS has an in-house fraud investigations unit that consists of both Presidents, VP of Operations and all Unit Managers; however, we do not have in-house investigators. The actual investigative assignment would be referred to an outside vendor. All ICS examiners are trained as to the "red flags" indicative of potential fraud cases. Additionally, ICS will incorporate fraud awareness training into the training program for all CITY supervisors and managers. Professional Services Rev. Jan 29, 2024 Page 20 of 39 Item 7: Staff Report Pg. 24 Packet Pg. 181 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - Sub-rosa Investigation Professional Services Contract #C25187148 While a sub-rosa investigation can be a useful tool, ICS' referrals of this nat with Innovative Claims d due to the high cost and the relative low ratio of success. All sub-rosa investi Solutions both ICS supervisory and CITY approvals. Sub-rosa Guidelines • Examiner will specify number of hours authorized. • Investigator will stop, or request authority to continue, if no activity in four continuous hour period. • No use of second vehicle or investigator without prior approval of ICS examiner. • All videotapes will be sent with the report and are the property of CITY. • Examiner must approve all records checks prior to conducting them. • All expenses are to be itemized, including office expenses, and must show date of activity. • Reports should be received by ICS within 10 working days of completion of assignment. The purpose of the ICS litigation management program is to reduce the client's overall cost of risk, taking into consideration both loss and cost factors in litigated claims. ICS accomplishes this by taking a proactive approach to litigation, Encouraging and fostering early resolution, ICS closely monitors the activities of defense counsel and hearing representatives to assure early disposition. Claims examiners will continue to actively manage all such litigated claims. The mere fact that a claim goes into litigation is insufficient cause to trigger an outside referral. ICS' preference in many cases is that the claims examiners continue with the day-to-day handling of the claim. The second choice is referral to a qualified defense attorney with the client's concurrence. When a defense attorney is optioned, ICS holds defense counsel to strict standards of reporting frequency, report content, cost containment, billing protocol and overall handling. Attorneys will not be authorized to perform or be reimbursed for tasks that are the responsibility of ICS. The ICS Claims Examiner is responsible for the following: • Refer file to specific attorney • Direct and approve plan of action • Subpoena medical records • Serve original medical reports on all parties prior to DOR • Set defense med evaluation and send mileage and TTD • Obtain settlement authority • Review file with attorney prior to conference or trial • Respond to attorney phone call within one working day Professional Services Rev. Jan 29, 2024 Page 21 of 39 Item 7: Staff Report Pg. 25 Packet Pg. 182 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - The Defense Attorney is responsible for the following, which ICS will m Professional Services responsibilities are fulfilled: Contract #C25187148 with Innovative Claims • Assign file to specific attorney requested Solutions • Consult with and follow direction of examiner • Unless otherwise directed, complete an initial file review within 15 days of receipt of file • Serve medical reports on WCAB when necessary • Not refer to another attorney for deposition or appearance without prior examiner approval • Prepare purpose letter for medical evaluation • Evaluate and request settlement authority from examiner • Respond to examiner phone calls within one working day • Meet with examiner and/or employer at request • Within 5 days of receipt of DOR provide written analysis of case strategy and settlement authority requested • Fax notice of hearing/conference/trial to examiner within one day of receipt • Initiate call to examiner to discuss strategy at least two weeks prior to hearing/conference/trial including proposed witnesses and settlement recommendations • Report by fax, email or phone call to examiner within one working day, results of conference, hearing or trial • Fax award notice to examiner within one day of receipt • Use ICS directed copy service • Manage overall cost of litigation By mutual consent the defense attorney may subpoena medical records and set evaluations with Unit Manager approval. Closing Ratios Closing ratios are directly related to examiner competence, staffing levels, and indemnity caseloads. ICS standards require a minimum -closing ratio of 100% in the first six months after transfer of the program. After the transition period, we will be substantially more familiar with employee demographics and the program's operating environment to establish appropriate on- going closing ratio goals above 100% and develop appropriate performance benchmarks. ICS employs a continuous improvement philosophy. Therefore, merely attaining the initial closing - ratio goal is viewed as a temporary accomplishment. Once ICS has assimilated to the Client's program, ICS will then strive toward higher closing ratios and enhanced performance benchmarks. Medical Only Claims Management ICS will use its workflow that addresses claims management criteria similar to the standards required for management of lost time claims. ICS has created a Medical Only Examiner position that handles a blend of medical only and future medical claims and requires mandatory supervisor review of all open medical only claims every 90 days in addition to other review triggers. The medical only examiner is required to review all open claims every 30 days. Professional Services Rev. Jan 29, 2024 Page 22 of 39 Item 7: Staff Report Pg. 26 Packet Pg. 183 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 File Documentation and Structure Item 7 Attachment A - Professional Services Contract #C25187148 Although the computer system offers many capabilities, hard copy files are s with Innovative claims ICS. ICS maintains hard copies of all benefit notices issued and all other correspo solutions im file, although those documents can also be viewed on-line in the claim management system. ICS also documents all file balancing. Claims that have been closed for six months or more are stored by ICS off- site in a secure sub -contracted data storage facility. Records, Files and Transcripts ICS requires all examiners maintain a uniform segregation of information in our claim files. All bills and EOB's are maintained by ICS in one section while medical reports are contained in another. All remaining communication is maintained by ICS in chronologic order, including hard copies of all completed reserve worksheets, benefit notices and any other written communication. All claim activity is documented and maintained by ICS in the notepad area of our claims management system. Every phone call, every email, etc., are all clearly documented. ICS requires all examiners enter all mail received in the notepad area as well and our expectations are that this is done on a daily basis. ICS requires a Plan of Action entry on all unresolved claims every 30 days and a more extensive Plan of Action entry and Reserve recap every 90 days on unresolved claims. For resolved claims these detailed reviews are conducted by ICS every 90 days. Evidence of file balancing is also reflected by ICS in the notes. Certain critical information is scanned by ICS into the claims management system including Applications for Adjudication, Settlement documents and key AME or QME medical reports. Index System ICS subscribes and electronically files reports to the Index Systems; a clearinghouse that receives and facilitates the sharing of reported claims information among some 3000 organizations nationwide. ICS files its Index reports electronically. ICS proposes that all indemnity claims, as well as, medical only claims with extensive treatment issues be indexed. The initial report should be made immediately upon receipt of sufficient information, then on an as needed basis thereafter. ICS will promptly file inquiries on any matches that the system finds. Trust Fund Trust Fund or Zero Balance accounts will be maintained by ICS for CITY. ICS ensures check production is password- protected, and signature requirements are client -specific. ICS will work with CITY on specific funding and banking procedures including frequency of reimbursement, bank reconciliation and signature authority. ICS will customize a reporting mechanism of checks issued to meet the Client's need. ICS ensures that safeguards are in place for the check printing process so that individuals entering checks and vendors into the system cannot also be the ones to sign and release the checks. Professional Services Rev. Jan 29, 2024 Page 23 of 39 Item 7: Staff Report Pg. 27 Packet Pg. 184 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 ICS does not have "check stock" but instead each account has the Magnetic Attachment A - Recognition (MICR) coding embedded by the printer and check software. Oil Professional Services are able to access the check printing system as it is password and rights prot Contract #C25187148 ICS will ensure all checks over a client's designated threshold amount will b With Innovative Claims manager prior to signatures or mailing. Solutions Closed File Storage ICS uses the services of a professional file storage company for off -site storage of older closed claims. All closed claims are inventoried prior to transfer to the storage company. Closed claims are easily obtained from the off -site company if needed. ICS will maintain closed claims at the cost for five years from closing date. Claim Roundtables ICS will conduct random file audits to ensure compliance to all ICS and Client performance requirements. ICS will ensure all teams are up to date on procedure and case law and collaborate on challenging claims. ICS senior management has bi-monthly meetings with all Unit Managers where a number of topics are discussed, including roundtable discussions on claims. The ICS Claim Examiner may initiate a roundtable discussion with senior management staff, defense counsel, the client and others on an as needed basis to discuss issues and resolution of individual claims. Cost Containment Services ICS will continue to partner with one of many managed care full service medical cost containment organizations specializing in workers' compensation. Services include managed care, medical, hospital, and pharmacy PPO access, and bill review. Products and Services All programs are offered as unbundled services: Medical Bill Review Utilization Review management Medical Case Management ICS will always ensure that the managed care companies partnering with the Client and ICS remain uniquely qualified to provide the best medical managed care programs that promote quality medical care with the greatest cost savings, early return to work, and/or a permanent and stationary status of the injured worker. • Early intervention, coordinating services and education of the injured claimant • Ongoing monitoring of treatment which helps to correct or prevent medical complication or secondary injury • Savings of claims dollars through continued monitoring and selective placement of Professional Services Rev. Jan 29, 2024 Page 24 of 39 Item 7: Staff Report Pg. 28 Packet Pg. 185 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 claimants at the appropriate level of care • Reduction of relapses, needless hospital stays, and unnecessary hospital • Ongoing communication and team management which help to gener one level of care to the next with as little confusion and disruption as claimant • Generation of database for claims analysis • Providing accountability for and tracking of medical services required Bill Review Provider Item 7 Attachment A - Professional Services Contract #C25187148 with Innovative Claims Solutions The first step in creating an effective cost containment program begins with bill review. It is our belief that reviewing all medical bills creates a safety net against duplicitous and other erroneous billing. Unless otherwise directed, ICS will continue to utilize Diamond Bill Review (DBR) to provide all bill review functions. ICS utilizes DBR for their knowledge and expertise of not only reviewing medical bills, but also providing the support and communication necessary to provide the quickest, most accurate turn -around for bill payments. DBR's bill review software and services are the hallmark of their company culture. They prove it every day with an investment in experienced personnel and advanced technology. The staff includes: o Coding and Analyst Experts o Dedicated Account and Production Managers o Fee Schedule and Research Technicians o Surgical Evaluation Specialists DBR's flexible bill review program allows changes to be made by ICS quickly if requested. Diamond Bill Review takes care of any correspondence with providers concerning allowance disputes over bills reviewed for their offices. ICS will ensure ICS claims adjusters are always kept updated with any billing questions and DBR helps find immediate solutions. Diamond Bill Review incorporates a system of checks and balances that refer to state -mandated allowances. From time to time a provider will have an extraordinary circumstance that goes beyond the "usual" level of care covered by a fee schedule item. When this occurs, the provider is asked to submit a report citing specific reasons for an additional allowance of those items in question. If, upon re -review, an additional payment to the provider is recommended, a letter is sent to the claims adjuster with appropriate recommendations contained therein. DBR practices a series of processes for Quality Assurance that allows for capturing duplicate bills, overpayments, and billing errors. Duplicate billing is captured by comparing bills that are received against bills that are already in the ICS system. The bill intake process involves the billing technology catching most duplicate bills when they are uploaded into the system. The data verification coordinators verify that each bill is an original, and if there is duplicate billing, ICS will Professional Services Rev. Jan 29, 2024 Page 25 of 39 Item 7: Staff Report Pg. 29 Packet Pg. 186 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 ensure that the provider is sent an EOR with the check number or request for Attachment A - on it. Quality Assurance is maintained through Communication, Managemei Professional Services will manage continual contact with DBR's staff. Contract #C25187148 with Innovative Claims ICS will manage contract with DBR, intending to deliver services to CITY b'ill solutions performance standards, listed below: Turn -Around time from bill being received into software, through payment file processing: a. Maximum of 3 days 2. Review -Only Turn -Around Time: a. Same day 3. Complex Bill Review Turn -Around Time: a. l Day from time received 4. Reconsideration Request: a. 1 Day from time received 5. Paper Bill Scans: a. Same day of being received 6. Bill Review Processing Quantity per Day/Employee: a. 300 Minimum (Bill is scanned and uploaded into software) 7. Data Verification Processing Quantity per Day/Employee: a. 400 Minimum (Bill is scanned and uploaded into software) 8. Provider Request (EOR, Payment Question, Bill Process, Etc.): a. Same day of being received Diamond Bill Review's charges are as follows and are paid off the claim files: Medical bills $3.00 Header per bill, $1.00 per line Inpatient Bills 20% of savings Outpatient Bills 16% of savings PPO Network 20% of savings Fees for Review Only bills and liens $100.00 flat rate Hospital Bill Review With the implementation of the hospital inpatient fee schedule, hospital bills that do not fall into a PPO network will be reduced to the fee schedule. DBR's highly trained bill review staff will ensure that a bill's DRG code matches the services the provider is billing for and will screen for length of stay and trauma situations before applying the rates. Professional Services Rev. Jan 29, 2024 Page 26 of 39 Item 7: Staff Report Pg. 30 Packet Pg. 187 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 JWhen a facility bill falls outside of the fee schedule, DBR will establish a U Attachment A - treatment. They will use the 85th percentile U&C application and consult th Professional Services "Blue Book" for pricing recommendations. After establishing a starting rate Contract #C25187148 will contact ICS to receive authorization for the recommended amount. DBRL with Innovative Claims throughout the negotiation process keeps our examiners updated as to each st solutions process. All DBR staff members have been trained on the calculations and regulations of the fee schedule in each state, for determining the rates of reimbursement, with key staff members attending state fee schedule programs pertaining to accurate calculations of Hospital bills. All bills that go through the office are subject to a two -check system to ensure accuracy. Utilization Review Unless otherwise directed, ICS will continue to utilize Arissa Cost Solutions to manage all Utilization and Physician/Peer Review services provided to CITY. All Utilization Review (UR) requests are reviewed by physicians. Arissa's charges remain as follows: Level 1 (Nurse) UR Services: • 1-3 Treatment Requests: $156 • 4-6 Treatment Requests: $156 • 7-9 Treatment Requests: $156 • 10+ Treatment Requests: $156 Level 2 (Peer) UR Services: • 1-3 Treatment Requests: $215 • 4-6 Treatment Requests: $430 • 7-9 Treatment Requests: $645 • 10+ Treatment Requests: $860 • Escalated Requests: $50 • Withdrawal: $50 ICS will follow its UR referral guidelines, described below, that allow the claims examiners to authorize most treatment requests that are in line with each type of injury. ICS will utilize its list of triggers to reduce unnecessary delays, and questions only those treatment requests that appear to be outside of the ACOEM guidelines. ICS's UR Referral Guidelines: All requests for spinal surgery that are not being authorized outright. If there is any question regarding authorization, a referral must be made to UR immediately. If UR denies the surgery, we must formally object and request a 2nd opinion. All of this must take place within 10 days of receipt of the request for surgery. Likewise, if UR recommends the surgery, it must be authorized immediately — there is no option for a 2nd opinion. This applies only to claims with dates of injury prior to 1/1/13 — and only until 6/30/13. Thereafter, only submit Professional Services Rev. Jan 29, 2024 Page 27 of 39 Item 7: Staff Report Pg. 31 Packet Pg. 188 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Jrequests for spinal surgery to UR if the request meets another r Attachment A- ailed Professional Services below. Contract #C25187148 • Physical Therapy/Occupational Therapy, Chiropractic or Acupunctul ests when the number of recommended visits has reached or exceeded L. treatment. • Post -Operative Physical/Occupational Therapy or Chiropractic treatment requests when the number of recommended post -operative visits has reached or exceeded 18. • All authorization requests for experimental, new, or not commonly performed surgical or other procedures. • All requests for authorization of Durable Medical Equipment, expected to be used for more than 60 days, or suggested for a purchase price in excess of $500. • All authorization requests for inpatient surgery • All authorization requests for referrals to nursing, convalescent or residential homes or for home health care services not related to post -surgical care. • All home health care service requests for a period beyond 2 weeks post -surgery, or 2 weeks post release from hospital. • All cases where psychiatric or psychological therapy extends beyond two weeks. • All cases where the doctor specialty does not match diagnosis, i.e., chiropractic care for the diagnosis of a fracture, etc. • All authorization requests for repeat diagnostic testing (CT/myelogram, discogram, diagnostic injections, angiogram, MRI, and EMG's) unless required due to the poor quality of prior studies, or when requested by a QME/AME, or when original studies are more than 12 months old. • All authorization requests for referrals to Functional Restoration Programs and/or FRP evaluations. • All authorization requests for Inpatient or Outpatient chemical dependency or weight loss programs. • All cases where there is a need to obtain a second opinion on long-term need/use of prescriptions. • All authorization requests for therapeutic injections (i.e. ESI, steroid injections, PRP injections, viscosupplementation, etc.). • All prescription requests for unlisted, or non-exempt drugs per the MTUS guidelines. • Requests for treatment not recognized within LC 4600, such as massage therapy, gym memberships, etc. Professional Services Rev. Jan 29, 2024 Page 28 of 39 Item 7: Staff Report Pg. 32 Packet Pg. 189 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 • Any other additional criteria requested by CITY. Item 7 Attachment A - Professional Services Contract #C25187148 When ICS determines a referral to Utilization is inappropriate, ICS will Iof a with Innovative Claims physician regarding past or future treatment recommendations. Those occL Solutions Jerral for a Peer or Physician Review. ICS will manage internal review prior to referra . ICS will perform a non -utilization review, a product entitled, "Administrative Denials," as defined by CCR9792.9.1(h) for those requests which have been previously submitted and partially certified or denied within the past 365 days by the same reviewer for the same service. PPO Network ICS will include the number of members in the PPO to be used and the number of specialties represented. In addition, ICS will provide the PPO member's contract provision language which specifies the percentage below the California Official Medical Fee Schedule to which the PPO member has agreed. Through the ICS affiliation with Diamond Bill Review ICS is able to offer access to 9 PPO networks: • CorCare: • Average of 9% discount off of CA state fee schedule. • 2200 members with 146,000 treatment locations in CA. • Multiplan • Three Rivers Provider Network • Triton Networks • HealthSmart • IHP • Optum • Novanet • CarelQ Physical Therapy and DME Specialties Medical Case Management ICS will perform the role of the Medical Case Manager, to coordinate, facilitate and orchestrate the management of the case under the review of the best -qualified physicians. ICS will ensure an appropriate treatment plan is established that delineates specific goals and outcome objectives. ICS's roles and responsibilities include the following: • Involvement with the selection of quality medical providers • Assuring all treatments are medically justified • Tracking information and data on the injured workers • Working with the medical treatment team to develop a plan of care with specific goals and objectives Professional Services Rev. Jan 29, 2024 Page 29 of 39 Item 7: Staff Report Pg. 33 Packet Pg. 190 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 • Monitoring the utilization of services Attachment A - Evaluating the treatment plan as injured worker makes progress. Professional Services • Educating the injured worker on rehabilitation or the treatment progr Contract #C25187148 • with Innovative Claims • Encouraging active compliance with medically necessary treatment • Working to eliminate duplication of medical care or treatment Solutions • Active communication with the claim adjuster on management of the case • Working with the injured worker to develop trust and credibility in the treatment team and employer with return to work as soon as medically possible • Communication with the injured worker weekly to prevent regression, undue stress and feelings of abandonment which workers often experience, and which lead them to initiate litigation • Working with all parties concerned to ensure timeliness of payments of disability, medical services and any out-of-pocket expenses • Provide an "active" therapeutic environment for the injured worker ICS's Medical Case Manager works with the claimant's physician and health care providers to appropriately coordinate services and monitor the various treatment programs. Pharmacy Benefit Management ICS will manage its partnership with Alius Health to deliver pharmacy benefit management services to CITY as described below. Alius Health provides a pharmacy lookup tool for convenience and boasts a network of over 74,000 pharmacies nationwide, over 6,000 of which are in the state of California. Their First Fill Program is completely customizable and can be delivered over text, digital or paper format. The card can be used at no risk to the CITY. Should a medication fall outside the California formulary, a prior authorization notification is sent in real time to one of the ICS claims professionals. Alius Health can SMART route the prior authorizations to adjusters, utilization review or nurse case managers. The determination can be made in real time through Alius Health's interactive email delivery system or through the client web portal. The client web portal gives claims professional additional tools to help manage the pharmacy benefits, including but not limited to: • Manage Prior Authorizations • Alerts/Risk Scoring • Medication History • Claims documents and notes • Reporting • Distribution of pharmacy cards Alius Health offers a wide variety of clinical tools to ensure that the injured workers receive the most cost-effective treatment while safeguarding that the care received is within the guidelines of Professional Services Rev. Jan 29, 2024 Page 30 of 39 Item 7: Staff Report Pg. 34 Packet Pg. 191 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 the state of California's workers' compensation system. Formularies ar AttachmentA- monthly and updated as frequently as daily when applicable. Professional Services Contract #C25187148 I with Innovative Claims Through Surescripts, Alius Health connects with over 85% of the prescrib Solutions Jdical records (EMR) platforms. The Alius Health technology allows to upload formulary in orma Ion and medication history into the prescriber's EMR. Through Alius Health proprietary algorithms, prescribers can be notified if a medication is going to require prior authorization and presents a medication option within the California formulary. Benefits of this technology are endless but some of the highlights include: • Increased patient safety • Over a 30% reduction in spend • Up to a 40% reduction in prior authorization requests • Less wait time at the pharmacy • Greater medication adherence At the point of sale, the formularies provide utilization review edits to help to protect against unrelated prescriptions as well as redundant therapy, early refills, unapproved prescribers, excessive morphine equivalent dosages, and cost thresholds. Aside from the constant real-time monitoring of medication regimens, they also offer quarterly reports that are risk based in an attempt to highlight claims that may be headed in the wrong direction. Diagnostic Services ICS has elected MIS, Inc., as their diagnostic services network provider. ICS staff is equipped with a toll- free number when diagnostics are requested, and all referrals are directed to schedule services through MIS who provides quality services at a competitive rate. CITY may elect another service provider in this area. Return to Work ICS will ensure all employees who are off work, or working modified duty, be evaluated by their treating physician at least every two weeks so that updated work restrictions can be obtained. This also assists the examiner in evaluating evidence of improvement, as work restrictions should decline throughout the process of recovery. For individuals who have undergone surgery, depending on the severity of that surgery, ICS will encourage re-evaluations no less frequently than monthly. During ICS' claims examiner's initial and ongoing communication with injured workers, ICS will ensure workers are aware of the CITY's program as well, and if they have been released to modified duty, instruct them to report for work. ICS will make sure they understand that returning for modified duty is not an option, and that they may not qualify for benefits if the Client is able to offer them work within their restrictions. Transition Plan Professional Services Rev. Jan 29, 2024 Page 31 of 39 Item 7: Staff Report Pg. 35 Packet Pg. 192 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Accordingly, ICS will deploy sufficient senior staff to ensure a smooth, clos transition, avoiding a disruption of benefits to injured employees. ICS will f achieve a successful first contract year. Item 7 Attachment A - Professional Services Contract #C25187148 S to with Innovative Claims Solutions In addition to the above transition processes, ICS creates a document entitled "Client Profile" to confirm all client specific operational procedures and requirements. ICS integrates this document integrated into the CITY's claims administrative standards and into ICS's policy and procedures. This document is maintained by the ICS Unit Manager, updated regularly, and provided to each ICS team member assigned to the CITY's program. Database Management ICS utilizes klear.ai which is Internet and Windows based. ICS will complete data conversions for any other claims management software systems when necessary. ICS has a complete IMS department that oversees all hardware and software support for client and internal use. Our current configuration allows clients to access their claims data, free of charge, through use of our claims management system. ICS, through a subcontractor, will providethe ability to see all active information and manage a CITY diary. CITY can enter notes and update body part and classification coding (?) as well. ICS will allow CITY to be users of the system and give CITY the capability to view all data that ICS maintains. Security is a primary concern in today's corporate world, especially when dealing with personal information. Consequently, klear.ai allows the system administrator to assign permissions by user or by group access, all the way from network rights to database rights, down to individual screen and field access. ICS adheres to the IT Standards as adopted by CAJPA in their Accreditation Standards. ICS will customize the software for CITY as needed. The ICS IMS Department will provide Help Desk support and custom programming. Claim Reports ICS will provide each client with a customized set of claim reports based on the CITY's need. These reports can be done daily, weekly, monthly, quarterly or upon CITY request. As requested, ICS will download and email the reports in Word, Excel, Adobe or other formats. Reports will be delivered to the CITY within 5 working days of the end of each month. ICS will provide the following reports based on CITY's needs: Claim Activity Report Report produces a detailed listing of claims, the associated financial activity, and indicates if each claim has one (or more) of nine categories of claim activity. Professional Services Rev. Jan 29, 2024 Page 32 of 39 Item 7: Staff Report Pg. 36 Packet Pg. 193 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - Claim Summary by Year Report Professional Services Report produces a listing of claim counts and totals, grouped by annual perio Contract #C25187148 report categories (loss type/LOB categories). With Innovative Claims Solutions Claim Cost Detail Report Report produces a detailed listing of claims and their associated financial activity broken down by reserve category. Claims Cost Summary Report Report produces a single -line, detailed listing of claims and their associated financial activity. Claim Log Report produces a listing of claims dated within a user -specified date -range, sorted by either claimant name or claim number. Examiner Activity Report Report produces a listing of claims, which 1) have been Opened, Closed, or Reopened during the activity period, or 2) are dated within the activity period. Management Summary Report Report produces a listing of claim counts and totals, grouped by user -specified location levels. Examiner Case Log Report produces one of three listings of claims, sorted by examiner: 1) Claims with activity in period; 2) Claims dated within the period; or 3) Claims, which are open at the end of the period. If "claims with activity within the period" is chosen, a summary section showing New, Closed, or Reopen counts is also produced. Frequency Analysis Reports Nine reports, each of which produces a different listing showing the frequency of claim incidences. All reports have the same parameters, and most display information in the same way. Each report is ordered by the total number of claims for the type, highest count to lowest. The following nine types of frequency analysis are available: • Body Part - claim counts by body part code. • Line of Business - claim counts by line of business code. • Loss Age - claim counts by claimant age on the loss date (whole years only) • Loss Agency - claim counts by loss agency code. • Loss Cause - claim counts by loss cause code. • Loss Nature - claim counts by loss nature code. • Loss Time - claim counts by loss time hour • Loss Type - claim counts by loss type code. Professional Services Rev. Jan 29, 2024 Page 33 of 39 Item 7: Staff Report Pg. 37 Packet Pg. 194 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 • Loss Day of Week - claim counts by loss day of week. Attachment A - • Class Code — claim counts by class code. Professional Services • Length of Service — claim counts by number of years' claimant has b Contract 7148 • Claim Location (Org Tree) — claim counts by location in your organiwith Innovative Claims Solutions • Loss Location — claim counts by loss location (using the loss location Financial Reconciliation Ledger Report produces a listing of financial transactions within a user -entered effective date range and/or a user -entered check number range. Financial Location Summary by Year Report produces a listing of claim counts and totals, grouped by Annual Periods (claim years). Payment Type Totals Report Report produces either a summary or detail report, showing totals by payment types. The summary report shows totals for each pay type grouped by reserve summary type. The detail report shows totals for each pay type grouped by individual claims. Loss Triangle Report Eight reports, each of which produces a trend analysis for specific claim activity for annual reporting periods, with aging based on the claim year, or based on claim life, i.e. the actual claim date chosen according to the parameter choice entered. All reports have the same parameters, and display information in the same way. • Case Reserves - Net open reserves of all claims as of each period. • Claims Entered - Displays the number of claims entered for each period based on claim entry date. • Claims with Incurred - Claims which have an incurred amount. Note: a reduction in the claim count within a development period represents the zeroing out of reserves. • Closed Claims - Number of claims closed as of each development period. • Closed with Paid - Number of closed claims which have payments as of each development period. • Incurred Loss - Total incurred loss of all claims as of each period. • Open Claims - Number of claims open as of each development period. • Paid Loss - Total paid loss of all claims as of each period. Vendor Payments by Claim Report Report produces a listing of payment counts and totals to selected vendors, summarized for each claim and grouped by vendor. Vendor Payments Summary Report Professional Services Rev. Jan 29, 2024 Page 34 of 39 Item 7: Staff Report Pg. 38 Packet Pg. 195 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - Report produces either a single -line summary of payment totals for each ven Professional Services totals grouped by payment type within vendor. Reported information is for p Contract #C25187148 extract Activity Period. with Innovvativeative Claims Solutions Multiple Claims Report Report produces a list showing multiple instances of a common tax ID number on different claims. A user- specified number of instances controls how many times claims must be found in order to be reported. Occurrence Cost Detail Report Report produces a detailed listing of occurrences and their associated financial activity broken down by reserve category. Occurrence Cost Summary Report Report produces a single -line, detailed listing of occurrences and their associated financial activity. SIP Annual Report Report produces a completed Consolidated Liabilities report and Open Claim Log as required by SIP. OSHA 300 Report Report produces OSHA 300 log for calendar year and can be broken out by department. ICS will prepare IRS Form 1099's and all other State mandated reports. ICS will download data to Excel, Word, Adobe and to most other software programs as requested. Professional Services Rev. Jan 29, 2024 Page 35 of 39 Item 7: Staff Report Pg. 39 Packet Pg. 196 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 EXHIBIT B Attachment A - SCHEDULE OF PERFORMANCE Professional Services Contract #C25187148 CONSULTANT shall perform the Services so as to complete each milestonI with Innovative Claims er of days/weeks specified below. The time to complete each milestone may be inc solutions ed by mutual written agreement of the Project Managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed ("NTP") from the CITY. Duties assigned as needed. Year 1 $239,060.00 Year 2 $248,504.00 Year 3 $258,322.00 Conversion Fee $15,000.00 Total Years 1-3 Not to Exceed Compensation $760,866.00 Professional Services Rev. Jan 29, 2024 Page 36 of 39 Item 7: Staff Report Pg. 40 Packet Pg. 197 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - EXHIBIT C Professional Services COMPENSATION Contract #C25187148 with Innovative Claims CITY agrees to compensate CONSULTANT for the Services performed in acct Solutions .{erms and conditions of this Agreement, including Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4 of the Agreement), based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. Should termination occur prior to the end of this agreement, the CITY agrees to pay a fee of $8,000 for the data transfer to a new entity. REIMBURSABLE EXPENSES CONSULTANT'S ordinary business expenses, such as administrative, overhead, administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder. Reimbursable expenses, if any are specified as reimbursable under this section, will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: NONE up to the not -to -exceed amount of: $0.00. Professional Services Rev. Jan 29, 2024 Page 37 of 39 Item 7: Staff Report Pg. 41 Packet Pg. 198 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 EXHIBIT D INSURANCE REQUIREMENTS Item 7 Attachment A - Professional Services Contract #C25187148 with Innovative Claims Solutions CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A -:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REOUIREMENTS AS SPECIFIED HEREIN. MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH OCCURRENCE AGGREGATE YES WORKER'S COMPENSATION STATUTORY STATUTORY STATUTORY YES EMPLOYER'S LIABILITY STATUTORY YES GENERAL LIABILITY, INCLUDING BODILY INJURY $2,000,000 $4,000,000 PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $2,000,000 $4,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY $2,000,000 $4,000,000 LIABILITY DAMAGE COMBINED. BODILY INJURY $1,000,000 $1,000,000 - EACH PERSON $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, - EACH OCCURRENCE $1,000,000 $1,000,000 INCLUDING ALL OWNED, HIRED, PROPERTY DAMAGE $1,000,000 $1,000,000 NON -OWNED BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN ALL DAMAGES $2,000,000 APPLICABLE), AND NEGLIGENT PERFORMANCE YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT'S AGREEMENT TO INDEMNIFY CITY. II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT(CITYOFPALOALTO.ORG III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS: A. PRIMARY COVERAGE Professional Services Rev. Jan 29, 2024 Page 38 of 39 Item 7: Staff Report Pg. 42 Packet Pg. 199 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS O Professional Services RED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS Contract #025187148 O OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR F THE ADDITIONAL INSUREDS. with Innovative Claims Solutions B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL: PURCHASINGSUPPORT(iCITYOFPALOALTO.ORG Professional Services Rev. Jan 29, 2024 Page 39 of 39 Item 7: Staff Report Pg. 43 Packet Pg. 200 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services Contract #C25187148 017 with Innovative Claims Solutions CITY OF PALO ALTO INFORMATION PRIVACY POLICY POLICY STATEMENT The City of Palo Alto (the "City") strives to promote and sustain a superior quality of life for persons in Palo Alto. In promoting the quality of life of these persons, it is the policy of the City, consistent with the provisions of the California Public Records Act, California Government Code §§ 6250 — 6270, to take appropriate measures to safeguard the security and privacy of the personal (including, without limitation, financial) information of persons, collected in the ordinary course and scope of conducting the City's business as a local government agency. These measures are generally observed by federal, state and local authorities and reflected in federal and California laws, the City's rules and regulations, and industry best practices, including, without limitation, the provisions of California Civil Code §§ 1798.3(a), 1798.24, 1798.79.8(b), 1798.80(e), 1798.81.5, 1798.82(e), 1798.83(e)(7), and 1798.92(c). Though some of these provisions do not apply to local government agencies like the City, the City will conduct business in a manner which promotes the privacy of personal information, as reflected in federal and California laws. The objective of this Policy is to describe the City's data security goals and objectives, to ensure the ongoing protection of the Personal Information, Personally Identifiable Information, Protected Critical Infrastructure Information and Personally Identifying Information of persons doing business with the City and receiving services from the City or a third party under contract to the City to provide services. The terms "Personal Information," "Protected Critical Infrastructure Information", "Personally Identifiable Information" and "Personally Identifying Information" (collectively, the "Information") are defined in the California Civil Code sections, referred to above, and are incorporated in this Policy by reference. PURPOSE The City, acting in its governmental and proprietary capacities, collects the Information pertaining to persons who do business with or receive services from the City. The Information is collected by a variety of means, including, without limitation, from persons applying to receive services provided by the City, persons accessing the City's website, and persons who access other information portals maintained by the City's staff and/or authorized third -party contractors. The City is committed to protecting the privacy and security of the Information collected by the City. The City acknowledges federal and California laws, policies, rules, regulations and procedures, and industry best practices are dedicated to ensuring the Information is collected, stored and utilized in compliance with applicable laws. Page 1 of 8 Item 7: Staff Report Pg. 44 Packet Pg. 201 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services VIT Re Contract #C25187148 017 with Innovative Claims Solutions J The goals and objectives of the Policy are: (a) a safe, productive, and inoffensive work environment for all users having access to the City's applications and databases; (b) the appropriate maintenance and security of database information assets owned by, or entrusted to, the City; (c) the controlled access and security of the Information provided to the City's staff and third party contractors; and (d) faithful compliance with legal and regulatory requirements. The Policy will guide the City's staff and, indirectly, third party contractors, which are by contract required to protect the confidentiality and privacy of the Information of the persons whose personal information data are intended to be covered by the Policy and which will be advised by City staff to conform their performances to the Policy should they enjoy conditional access to that information. CONSEQUENCES The City's employees shall comply with the Policy in the execution of their official duties to the extent their work implicates access to the Information referred to in this Policy. A failure to comply may result in employment and/or legal consequences. *Xlt l[I7►1:1 In the event that a City employee cannot fully comply with one or more element(s) described in this Policy, the employee may request an exception by submitting Security Exception Request. The exception request will be reviewed and administered by the City's Information Security Manager (the "ISM"). The employee, with the approval of his or her supervisor, will provide any additional information as may be requested by the ISM. The ISM will conduct a risk assessment of the requested exception in accordance with guidelines approved by the City's Chief Information Officer ("CIO") and approved as to form by the City Attorney. The Policy's guidelines will include at a minimum: purpose, source, collection, storage, access, retention, usage, and protection of the Information identified in the request. The ISM will consult with the CIO to approve or deny the exception request. After due consideration is given to the request, the exception request disposition will be communicated, in writing, to the City employee and his or her supervisor. The approval of any request may be subject to countermeasures established by the CIO, acting by the ISM. MUNICIPAL ORDINANCE This Policy will supersede any City policy, rule, regulation or procedure regarding information privacy. RESPONSIBILITIES OF CITY STAFF Page 2 of 8 Item 7: Staff Report Pg. 45 Packet Pg. 202 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services Contract #C25187148 017 with Innovative Claims Solutions A. RESPONSIBILITY OF CIO AND ISM The CIO, acting by the ISM, will establish an information security management framework to initiate and coordinate the implementation of information security measures by the City's government. The City's employees, in particular, software application users and database users, and, indirectly, third party contractors under contract to the City to provide services, shall by guided by this Policy in the performance of their job responsibilities. The ISM will be responsible for: (a) developing and updating the Policy, (b) enforcing compliance with and the effectiveness of the Policy; (c) the development of privacy standards that will manifest the Policy in detailed, auditable technical requirements, which will be designed and maintained by the persons responsible for the City's IT environments; (d) assisting the City's staff in evaluating security and privacy incidents that arise in regard to potential violations of the Policy; (e) reviewing and approving department -specific policies and procedures which fall under the purview of this Policy; and (f) reviewing Non - Disclosure Agreements (NDAs) signed by third party contractors, which will provide services, including, without limitation, local or 'cloud -based' software services to the City. B. RESPONSIBILITY OF INFORMATION SECURITY STEERING COMMITTEE The Information Security Steering Committee (the "ISSC"), which is comprised of the City's employees, drawn from the various City departments, will provide the primary direction, prioritization and approval for all information security efforts, including key information security and privacy risks, programs, initiatives and activities. The ISSC will provide input to the information security and privacy strategic planning processes to ensure that information security risks are adequately considered, assessed and addressed at the appropriate City department level. C. RESPONSIBILITY OF USERS All authorized users of the Information will be responsible for complying with information privacy processes and technologies within the scope of responsibility of each user. D. RESPONSIBILITY OF INFORMATION TECHNOLOGY (IT) MANAGERS The City's IT Managers, who are responsible for internal, external, direct and indirect connections to the City's networks, will be responsible for configuring, maintaining and securing the City's IT networks in compliance with the City's information security and privacy policies. They are also responsible for timely internal reporting of events that may have compromised network, system or data security. Page 3 of 8 Item 7: Staff Report Pg. 46 Packet Pg. 203 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services Contract #C25187148 017 with Innovative Claims Solutions E. RESPONSIBILITY OF AUTHORIZATION COORDINATION The ISM will ensure that the City's employees secure the execution of Non -Disclosure Agreements (NDA), whenever access to the Information will be granted to third party contractors, in conjunction with the Software as a Service (SaaS) Security and Privacy Terms and Conditions. An NDA must be executed prior to the sharing of the Information of persons covered by this Policy with third party contractors. The City's approach to managing information security and its implementation (i.e. objectives, policies, processes, and procedures for information security) will be reviewed independently by the ISM at planned intervals, or whenever significant changes to security implementation have occurred. The CIO, acting by the ISM, will review and recommend changes to the Policy annually, or as appropriate, commencing from the date of its adoption. GENERAL PROCEDURE FOR INFORMATION PRIVACY A. OVERVIEW The Policy applies to activities that involve the use of the City's information assets, namely, the Information of persons doing business with the City or receiving services from the City, which are owned by, or entrusted to, the City and will be made available to the City's employees and third party contractors under contract to the City to provide Software as a Service consulting services. These activities include, without limitation, accessing the Internet, using e-mail, accessing the City's intranet or other networks, systems, or devices. The term "information assets" also includes the personal information of the City's employees and any other related organizations while those assets are under the City's control. Security measures will be designed, implemented, and maintained to ensure that only authorized persons will enjoy access to the information assets. The City's staff will act to protect its information assets from theft, damage, loss, compromise, and inappropriate disclosure or alteration. The City will plan, design, implement and maintain information management systems, networks and processes in order to assure the appropriate confidentiality, integrity, and availability of its information assets to the City's employees and authorized third parties. B. PERSONAL INFORMATION AND CHOICE Except as permitted or provided by applicable laws, the City will not share the Information of any person doing business with the City, or receiving services from the City, in violation of this Policy, unless that person has consented to the City's sharing of such information during the conduct of the City's business as a local government agency with third parties under contract to the City to provide services. Page 4 of 8 Item 7: Staff Report Pg. 47 Packet Pg. 204 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services Contract #C25187148 017 with Innovative Claims Solutions C. METHODS OF COLLECTION OF PERSONAL INFORMATION The City may gather the Information from a variety of sources and resources, provided that the collection of such information is both necessary and appropriate in order for the City to conduct business as a local government agency in its governmental and proprietary capacities. That information may be gathered at service windows and contact centers as well as at web sites, by mobile applications, and with other technologies, wherever the City may interact with persons who need to share such formation in order to secure the City's services. The City's staff will inform the persons whose Information are covered by this Policy that the City's web site may use "cookies" to customize the browsing experience with the City of Palo Alto web site. The City will note that a cookie contains unique information that a web site can use to track, among others, the Internet Protocol address of the computer used to access the City's web sites, the identification of the browser software and operating systems used, the date and time a user accessed the site, and the Internet address of the website from which the user linked to the City's web sites. Cookies created on the user's computer by using the City's web site do not contain the Information, and thus do not compromise the user's privacy or security. Users can refuse the cookies or delete the cookie files from their computers by using any of the widely available methods. If the user chooses not to accept a cookie on his or her computer, it will not prevent or prohibit the user from gaining access to or using the City's sites. D. UTILITIES SERVICE In the provision of utility services to persons located within Palo Alto, the City of Palo Alto Utilities Department ("CPAU") will collect the Information in order to initiate and manage utility services to customers. To the extent the management of that information is not specifically addressed in the Utilities Rules and Regulations or other ordinances, rules, regulations or procedures, this Policy will apply; provided, however, any such Rules and Regulations must conform to this Policy, unless otherwise directed or approved by the Council. This includes the sharing of CPAU-collected Information with other City departments except as may be required by law. Businesses and residents with standard utility meters and/or having non -metered monthly services will have secure access through a CPAU website to their Information, including, without limitation, their monthly utility usage and billing data. In addition to their regular monthly utilities billing, businesses and residents with non-standard or experimental electric, water or natural gas meters may have their usage and/or billing data provided to them through non -City electronic portals at different intervals than with the standard monthly billing. Page 5 of 8 Item 7: Staff Report Pg. 48 Packet Pg. 205 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services /IT Re Contract #C25187148 017 with Innovative Claims Solutions J Businesses and residents with such non-standard or experimental metering will have their Information covered by the same privacy protections and personal information exchange rules applicable to Information under applicable federal and California laws. E. PUBLIC DISCLOSURE The Information that is collected by the City in the ordinary course and scope of conducting its business could be incorporated in a public record that may be subject to inspection and copying by the public, unless such information is exempt from disclosure to the public by California law. I�_[Ky�.Y.lrr�l»:���7►1e1�1►1��1:1► Ie��[�7► The City will take reasonable steps to verify a person's identity before the City will grant anyone online access to that person's Information. Each City department that collects Information will afford access to affected persons who can review and update that information at reasonable times. G. SECURITY, CONFIDENTIALITY AND NON -DISCLOSURE Except as otherwise provided by applicable law or this Policy, the City will treat the Information of persons covered by this Policy as confidential and will not disclose it, or permit it to be disclosed, to third parties without the express written consent of the person affected. The City will develop and maintain reasonable controls that are designed to protect the confidentiality and security of the Information of persons covered by this Policy. The City may authorize the City's employee and or third party contractors to access and/or use the Information of persons who do business with the City or receive services from the City. In those instances, the City will require the City's employee and/or the third party contractors to agree to use such Information only in furtherance of City -related business and in accordance with the Policy. If the City becomes aware of a breach, or has reasonable grounds to believe that a security breach has occurred, with respect to the Information of a person, the City will notify the affected person of such breach in accordance with applicable laws. The notice of breach will include the date(s) or estimated date(s) of the known or suspected breach, the nature of the Information that is the subject of the breach, and the proposed action to be taken or the responsive action taken by the City. H. DATA RETENTION / INFORMATION RETENTION Page 6 of 8 Item 7: Staff Report Pg. 49 Packet Pg. 206 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services /IT Re Contract #C25187148 017 with Innovative Claims Solutions The City will store and secure all Information for a period of time as may be required by law, or if no period is established by law, for seven (7) years, and thereafter such information will be scheduled for destruction. I. SOFTWARE AS A SERVICE (SAAS) OVERSIGHT The City may engage third party contractors and vendors to provide software application and database services, commonly known as Software -as -a -Service (SaaS). In order to assure the privacy and security of the Information of those who do business with the City and those who received services from the City, as a condition of selling goods and/or services to the City, the SaaS services provider and its subcontractors, if any, including any IT infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, while it performs such services and/or furnishes goods to the City, to the extent any scope of work or services implicates the confidentiality and privacy of the Information. These requirements include information security directives pertaining to: (a) the IT infrastructure, by which the services are provided to the City, including connection to the City's IT systems; (b) the SaaS services provider's operations and maintenance processes needed to support the IT environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. The term "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. Prior to entering into an agreement to provide services to the City, the City's staff will require the SaaS services provider to complete and submit an Information Security and Privacy Questionnaire. In the event that the SaaS services provider reasonably determines that it cannot fulfill the information security requirements during the course of providing services, the City will require the SaaS services provider to promptly inform the ISM. J. FAIR AND ACCURATE CREDIT TRANSACTION ACT OF 2003 CPAU will require utility customers to provide their Information in order for the City to initiate and manage utility services to them. Federal regulations, implementing the Fair and Accurate Credit Transactions Act of 2003 (Public Law 108-159), including the Red Flag Rules, require that CPAU, as a "covered financial institution or creditor" which provides services in advance of payment and which can affect consumer credit, develop and implement procedures for an identity theft program for new and existing accounts to detect, prevent, respond and mitigate potential identity theft of its customers' Information. Page 7 of 8 Item 7: Staff Report Pg. 50 Packet Pg. 207 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 Attachment A - POLICY AND Professional Services /IT Re Contract #C25187148 017 with Innovative Claims Solutions CPAU procedures for potential identity theft will be reviewed independently by the ISM annually or whenever significant changes to security implementation have occurred. The ISM will recommend changes to CPAU identity theft procedures, or as appropriate, so as to conform to this Policy. There are California laws which are applicable to identity theft; they are set forth in California Civil Code § 1798.92. NOTE: Questions regarding this policy should be referred to the Information Technology Department, as appropriate. Docu5igned by: E�6,914D9897578424 C,&t'vLst 12/5/2017 Recommended: - Director Information Technology/CIO Date A Docu5igned by: 12/13/2017 39E7298FB2064DB... City Manager Date Page 8 of 8 Item 7: Staff Report Pg. 51 Packet Pg. 208 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 CITY OF PALO ALT(' ATTACHMENT H CYBERSECURITY TERMS AND CONDITIONS Item 7 Attachment A - Professional Services to Alto Contract #C25187148 ecurity n: V3.0 with Innovative Claims ec 110 Solutions In order to assure the privacy and security of the personal information of the City's customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons, and other individuals and companies, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the "Consultant") and its subcontractors, if any, including, without limitation, any Information Technology ("IT") infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City's customers. The Consultant shall fulfill the data and information security requirements (the "Requirements") set forth in Part A below. A "secure IT environment" includes (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant's operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. In the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the "Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the "ISM"). Part A. Requirements: The Consultant shall at all times during the term of any contract between the City and the Consultant: (a) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement. (b) Comply with the City's Information Privacy Policy: (c) Have adopted and implemented information security and privacy policies that are documented, are accessible to the City, and conform to ISO 27001/2 — Information Security Management Systems (ISMS) Standards. See the following: http://www.iso.org/iso/home/store/catalogue tc/catalogue detail. htm?csnumber=42103 http://www.iso.org/iso/iso catalogue/catalogue tc/catalogue detail. htm?csnu mber=50297 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role. (e) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels. (f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees' personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by any of its employees who no Page 1 of 3 Item 7: Staff Report Pg. 52 Packet Pg. 209 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 CITY OF PALO ALT(` Item 7 Attachment A - Professional Services to Alto Contract #C25187148 ecurity n: V3.0 with Innovative Claims ec 110 Solutions longer would require access to that information or who are terminated. (g) Provide a list of IT infrastructure components in order to verify whether the Consultant has met or has failed to meet any objective terms and conditions. (h) Implement access accountability (identification and authentication) architecture and support role -based access control ("RBAC") and segregation of duties ("SoD") mechanisms for all personnel, systems, and Software used to provide the Services. "RBAC" refers to a computer systems security approach to restricting access only to authorized users. "SoD" is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors. (i) Assist the City in undertaking annually an assessment to assure that: (1) all elements of the Services' environment design and deployment are known to the City, and (2) it has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture. (j) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity, and availability of the City's information. (k) Deploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 24 hours after its date of release. (I) Provide for the timely detection of, response to, and the reporting of security incidents, including on -going incident monitoring with logging. (m) Notify the City within one (1) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City that any third party service provider(s) meet(s) all of the Requirements. (o) Perform security self -audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self -audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. (p) Accommodate, as practicable, and upon reasonable prior notice by the City, the City's performance of random site security audits at the Consultant's site(s), including the site(s) of a third -party service provider(s), as applicable. The scope of these audits will extend to the Consultant's and its third -party service provider(s)' awareness of security policies and practices, systems configurations, access authentication and authorization, and incident detection and response. (q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, and the Confidential Information will be accessible only by the Consultant and any authorized third -party service provider's personnel. (r) Perform regular, reliable secured backups of all data needed to maximize the availability of the Services. Adequately encrypt the City of Palo Alto's data, during the operational process, hosted at rest, and the backup stage at the Vendors' environment (including Vendor's contracting organization's environment). (s) Maintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state, and local data and information privacy laws, rules, and regulations. (u) Encrypt the Confidential Information before delivering the same by electronic mail to the City and or any authorized recipient. (v) Provide Network Layer IP filtering services to allow access only from the City of Palo Alto's IP address to the Vendor environment (primarily hosted for the City of Palo Alto). (w) Offer a robust disaster recovery and business continuity (DR-BCP) solutions to the City for the systems and services the Vendor provides to the City. Page 2 of 3 Item 7: Staff Report Pg. 53 Packet Pg. 210 of 309 Docusign Envelope ID: 540DFEFB-C8BA-4F56-A850-F1BE0BE67C90 Item 7 CITY O F Attachment A7 PALO A LTC' Professional Services Alto Contract#025187148 ecuri with Innovative Claims n: V3..00 ec 110 Solutions (x) Provide and support Single Sign -on (SSO) and Multifactor Authentication (MFA) solutions for authentication and authorization services from the "City's environment to the Vendor's environment," and Vendor's environment to the Vendor's cloud services/hosted environment." The Vendor shall allow two employees of the City to have superuser and super-admin access to the Vendor's IT environment, and a cloud -hosted IT environment belongs to the City. (y) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City's IT environment, including, without limitation, IT infrastructure communications. (z) The Vendor must provide evidence of valid cyber liability insurance policy per the City's EXHIBIT "D" INSURANCE REQUIREMENTS. Part B. Alternate Requirements: Page 3 of 3 Item 7: Staff Report Pg. 54 Packet Pg. 211 of 309 Item 8 Item 8 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: City Auditor ALTO Meeting Date: March 24, 2025 Report #:2502-4132 TITLE Approval of Contract Amendment Number 2 to Contract Number C22183462 with Macias Gini & O'Connell LLP (MGO) to Add $415,071 and Extend the Term for Two Years for External Financial Audit Services; CEQA Status -- Not a Project. RECOMMENDATION The Office of the City Auditor recommends that City Council approve and authorize the City Manager or their designee to execute Amendment Number 2 to Contract C22183462 with Macias Gini & O'Connell LLP (MGO) for external financial audit services, to add $415,071 and extend the term for two years. This amendment results in a revised total contract not to exceed amount of $1,014,390, for five years of services, from 2022 through March 31, 2027. BACKGROUND The City Charter requires the City Council, through the City Auditor, to engage an independent certified public accounting firm to conduct the annual external financial audit, and report the results of the audit, in writing, to the City Council. MGO has provided the city with external financial audit services since 2017. In October 2021, the City initiated a formal Request for Proposal (RFP) process that encouraged competition from all qualified firms, including MGO, and selected MGO's proposal for continued services through March 31, 2025. The City Council approved the agreement with MGO on May 2, 20221. Due to the recent appointment of the current City Auditor, and to ensure the City is not in the position of potentially replacing both the City Auditor and External Financial Auditor in the same year, the Office of the City Auditor proposes extending the contract with MGO through fiscal years 2025 and 2026, and conducting another formal Request for Proposal (RFP) process in 2026 for external financial auditing services to commence in FY2027. 1 City Council, May 2, 2022: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81841 Item 8: Staff Report Pg. 1 Packet Pg. 212 of 309 Item 8 Item 8 Staff Report ANALYSIS This recommendation does not present any changes to existing City policies and aligns with the City's Charter requirements. FISCAL/RESOURCE IMPACT The total five-year cost not to exceed $1,019,556 is funded in the City Auditor's Office operating budget beginning in Fiscal Year 2023 through March 31, 2027, subject to Council appropriation of funds for future fiscal year budgets. Funding for this agreement is included in the FY 2025 Adopted Budget. The payment per year for professional services and reimbursable expenses shall not exceed: 2022 - 2023 $176,270 2023 - 2024 $181,560 2024 - 2025 $187,005 2025 - 2026 $204,452 2026 - 2027 $210,619 Additional Services $54,484 STAKEHOLDER ENGAGEMENT The Office of the City Auditor worked primarily with the Administrative Services Department in assessing contract amendment terms. The Office of the City Attorney assisted in review of the contract amendment. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because the financial audit activities are an administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5). ATTACHMENTS Attachment A: Amendment No. 2 to Contract No. C22183462 with Macias Gini & O'Connell LLP APPROVED BY: Kate Murdock, City Auditor Item 8: Staff Report Pg. 2 Packet Pg. 213 of 309 Docusign Envelope ID: C33C9314-809E-4BB0-A68A-611BC4AE55DE Item 8 Attachment A - Amendment No. 2 to AMENDMENT NO. 2 TO CONTRACT NO. C22183462 BETWEEN THE CITY OF PALO ALTO AND MACIAS GINI & O'CONNELL LLP Contract No. C22183462 with Macias Gini & O'Connell LLP This Amendment No. 2 (this "Amendment") to Contract No. C22183462 (the "Contract" as defined below) is entered into as of March 17, 2025 by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and MACIAS GINI & O'CONNELL LLP, a Limited Liability Partnership, located at 500 Capitol Mall, Suite 2200 Sacramento, CA 95814 ("CONSULTANT"). CITY and CONSULTANT are referred to collectively as the "Parties" in this Amendment. RECITALS A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of providing External Audit Services, as detailed therein. B. The Parties now wish to amend the Contract in order to (1) extend the contract term (2) increase Not to Exceed Compensation (3) revise Exhibit C Compensation, and (4) revise Exhibit C-1 Schedule of Rates, as detailed herein. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term "Contract" shall mean Contract No. C22183462 between CONSULTANT and CITY, dated April 13, 2022 as amended by Amendment No. 1 dated January 22, 2024 and Amendment No. 2 dated March 17, 2025. b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2 "TERM" of the Contract is hereby amended to read as follows: "The term of this Agreement shall be from the date of its full execution through March 31, 2027 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement." SECTION 3. Section 4_"NOT TO EXCEED COMPENSATION" of the Contract is hereby amended to read as follows: Vers.: Aug. 5, 2019 Page 1 of 7 Item 8: Staff Report Pg. 3 Packet Pg. 214 of 309 Docusign Envelope ID: C33C9314-809E-4BB0-A68A-611BC4AE55DE Item 8 Attachment A - Amendment No. 2 to Contract No. C22183462 "The compensation to be paid to CONSULTANT for performance of the Seri with Macias Gini & d on the compensation structure detailed in Exhibit C, entitled "COMPENSA o'conne1l L Y reimbursable expenses specified therein, and the maximum total compensation shall not exceed Nine Hundred Fifty -Nine Thousand Nine Hundred Six Dollars ($959,906.00). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled "SCHEDULE OF RATES." Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY. Optional Additional Services Provision (This provision applies only if checked and a not -to - exceed compensation amount for Additional Services is allocated below under this Section 4.) In addition to the not -to -exceed compensation specified above, CITY has set aside the not -to - exceed compensation amount of Fifty -Four Thousand Four Hundred Eighty -Four Dollars ($54,484.00) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed One Million Fourteen Thousand Three Hundred and Ninety Dollars ($1,014,390), as detailed in Exhibit C. "Additional Services" means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY's Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled "PROFESSIONAL SERVICES TASK ORDER". Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY's Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter -signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement." Vers.: Aug. 5, 2019 Page 2of7 Item 8: Staff Report Pg. 4 Packet Pg. 215 of 309 Docusign Envelope ID: C33C9314-809E-4880-A68A-611BC4AE55DE Item 8 Attachment A - Amendment No. 2 to Contract No. C22183462 SECTION 4. The following exhibit(s) to the Contract is/are hereby with MaciasGini & as indicated below, to read as set forth in the attachment(s) to this Ame o conned LLP /are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit "C" entitled "Compensation, Amendment No. 2", AMENDED, REPLACES PREVIOUS, to provide the not to exceed compensation for Basic Audit Services for FY 2025 and FY 2026. b. Exhibit "C-1" entitled "Schedule of Rates, Amendment No. 2", AMENDED, REPLACES PREVIOUS, to provide the applicable hourly rates for services performed during FY 2025 and FY 2026. SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 6. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) Vers.: Aug. 5, 2019 Page 3of7 Item 8: Staff Report Pg. 5 Packet Pg. 216 of 309 Docusign Envelope ID: 03309314-809E-4BBO-A68A-61 1 BC4AE55DE SIGNATURES OF THE PARTIES Item 8 Attachment A - Amendment No. 2 to Contract No. C22183462 with Macias Gini & O'Connell LLP IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO MACIAS GINI & O'CONNELL LLP Officer 1 B937904B31F141B By: Lm' Al//e,; City Manager LDocusgned By: David Bullock Name: David Bullock Title: Partner 1 SIYA7T-Sterne t11 1 City Attorney or designee Attachments: EXHIBIT C: "COMPENSATION, AMENDMENT NO. 2" (AMENDED, REPLACES PREVIOUS) EXHIBIT C-1: "SCHEDULE OF RATES, AMENDMENT NO. 2" (AMENDED, REPLACES PREVIOUS) Vers.: Aug. 5, 2019 Page 4 of 7 Item 8: Staff Report Pg. 6 Packet Pg. 217 of 309 Docusign Envelope ID: 03309314-809E-4880-A68A-611 BC4AE55DE Item 8 Attachment A - Amendment No. 2 to EXHIBIT C COMPENSATION, AMENDMENT NO. 2 (AMENDED, REPLACES PREVIOUS) Contract No. C22183462 with Macias Gini & O'Connell LLP CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CITY's Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below, provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement._ CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. BUDGET SCHEDULE FISCAL YEAR NOT TO EXCEED AMOUNT Basic Audit Services for FY 2022, Single Audit includes one major program $176,270.00 Basic Audit Services for FY 2023, Single Audit includes one major program $181,560.00 Basic Audit Services for FY 2024, Single Audit includes one major program $187,005.00 Basic Audit Services for FY 2025, Single Audit includes two major programs $204,452.00 Basic Audit Services for FY 2026, Single Audit includes two major programs $210,619.00 Sub -total for Services $959,906.00 Reimbursable Expenses (if any) $0.00 Total for Services and Reimbursable Expenses $959,906.00 Additional Services (if any, per Section 4) $54,484.00 Maximum Total Compensation $1,014,390.00 Vers.: Aug. 5, 2019 Page 5 of 7 Item 8: Staff Report Pg. 7 Packet Pg. 218 of 309 Docusign Envelope ID: C33C9314-809E-4BB0-A68A-611BC4AE55DE Item 8 Attachment A - Amendment No. 2 to Contract No. C22183462 REIMBURSABLE EXPENSES with Macias Gini & O'Connell LLP CONSULTANT'S ordinary business expenses, such as administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder. Reimbursable expenses, if any are specified as reimbursable under this section, will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: NONE up to the not -to -exceed amount of: $0.00. Vers.: Aug. 5, 2019 Page 6of7 Item 8: Staff Report Pg. 8 Packet Pg. 219 of 309 Docusign Envelope ID: C33C9314-809E-4BB0-A68A-611BC4AE55DE Item 8 Attachment A - Amendment No. 2 to EXHIBIT C-1 SCHEDULE OF RATES, AMENDMENT NO. 2 (AMENDED, REPLACES PREVIOUS) Contract No. C22183462 with Macias Gini & O'Connell LLP Position FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Partner/Director $ 350 $ 361 $ 371 $382 $393 Manager $ 240 $ 247 $ 255 $263 $271 IT Consultant $ 245 $ 252 $ 260 $268 $276 Auditor In Charge $ 175 $ 180 $ 186 $191 $197 Staff Auditor $ 135 $ 139 $ 143 $147 $151 Support Staff $ 90 $ 93 $ 95 $98 $101 Vers.: Aug. 5, 2019 Page 7 of 7 Item 8: Staff Report Pg. 9 Packet Pg. 220 of 309 Item 9 Item 9 Staff Report City Council Staff Report From: City Manager CITY O F Report Type: CONSENT CALENDAR PALO Lead Department: City Auditor ALTO Meeting Date: March 24, 2025 Report #:2503-4318 TITLE Approval of Audit Reports for Grant Management And Utility Billing as Reviewed by Policy and Services Committee; CEQA: Not A Project RECOMMENDATION The Policy & Services Committee and Office of the City Auditor recommend City Council approve the results of two audit reports: 1. Grant Management Audit (Attachment A, P&S Committee recommended approval on February 11, 2025), and 2. Utility Billing Audit (Attachment B, P&S Committee recommended approval on February 11, 2025). BACKGROUND Baker Tilly, in its capacity serving as the Office of the City Auditor (OCA), performed a citywide risk assessment that assessed a wide range of risk areas, including strategic, financial, operational, compliance, technological, and reputation risks. The purpose of the assessment was to identify and prioritize risks to develop the annual audit plan. During the FY 2023 risk assessment, the OCA identified grant management processes and utility billing as potential areas of risk and included these audits in their FY 2024 Audit Plan. These audits were presented to, and approved by, the Policy and Services Committee on February 11, 2025 and are here transmitted to City Council for approval. ANALYSIS Grant Management Audit The objective of this audit was to determine whether the City has adequate internal controls to manage the grant lifecycle efficiently and effectively. Item 9: Staff Report Pg. 1 Packet Pg. 221 of 309 Item 9 Item 9 Staff Report The City receives incoming grant funding from various sources to support its services, including federal, state, and local grants. Most of the City's grant funding comes from federal agencies. Audit findings and recommendations focused on three areas of improvement: 1) better coordinating oversight of grant management across departments; 2) improving recordkeeping and internal reporting of active grants in order to better monitor grant activities and increase visibility of grant performance; and 3) more consistently assess and track efforts in pursuit and management of grant opportunities to measure its return on investment. OCA's Grant Management Audit report, included as Attachment A, summarizes the analysis, audit findings, and recommendations. The Policy and Services Committee unanimously recommended City Council approval of this audit report on February 11, 2025. Utility Billing Audit The objectives of the Utility Billing Audit were to: 1) determine whether the internal controls over the utility billing process are adequate and working effectively to ensure billing is accurate and in compliance with the City's policies and regulations, and 2) determine whether billing adjustments are properly supported and approved. The CPAU Department provides the City of Palo Alto with five municipal utility services: electricity, natural gas, water, wastewater, and fiber optics. The City's Public Works Department also provides refuse collection and processing for recycling, compost and garbage, wastewater treatment, and stormwater management services. Palo Alto is the only city in California that owns and operates a full suite of municipal utility services, including electric, fiber optics, natural gas, water and wastewater. The OCA found utility bills and adjustments are accurately calculated in compliance with City policies and regulations. Audit findings and recommendations focus on two areas of improvement: 1) improving documentation and approval for some billing processes; and 2) closing some internal controls gaps to improve overall process performance. OCA's Utility Billing Audit report, included as Attachment B, summarizes the analysis, audit findings, and recommendations. The Policy and Services Committee unanimously recommended City Council approval of this audit report on February 11, 2025. Item 9: Staff Report Pg. 2 Packet Pg. 222 of 309 Item 9 Item 9 Staff Report FISCAL/RESOURCE IMPACT The timeline for implementation of corrective action plans and the necessary resources are identified within the attached reports. STAKEHOLDER ENGAGEMENT The Office of the City Auditor worked with and would like to thank several departments for their assistance in conducting the Grant Management d Utility Billing Audits including: Administrative Services, City of Palo Alto Utilities, City Manager's Office, Public Works, Planning & Development Services, Office of Transportation, Community Services, City of Palo Alto Utilities, Library, Police and Office of Emergency Services. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because the audit activities do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). ATTACHMENTS Attachment A: Grant Management Audit, January 29, 2025 Attachment B: Utility Billing Audit, January 30, 2025 APPROVED BY: Kate Murdock, City Auditor Item 9: Staff Report Pg. 3 Packet Pg. 223 of 309 January 29, 2025 City of Palo Alto Office of the City Auditor Grant Management Audit Item 9: Staff Report Pg. 4 Packet Pg. 224 of 309 Contents EXECUTIVESUMMARY...................................................................................................1 INTRODUCTION...............................................................................................................4 DETAILED ANALYSIS.....................................................................................................7 AUDITRESULTS............................................................................................................10 APPENDICES.................................................................................................................18 C7 CG bakertitty Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under a ative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent le . Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities tax and consulting services to their clients and are not licensed CPA firms. Item 9 Attachment A - Grant Management Audit,AtyJanuary29,2025 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted a Grant Management Audit based on approved Task Order 4.24 as part of the City's FY24 Audit Plan. The objective of this audit was to: Determine whether the City has adequate internal controls to manage the grant lifecycle efficiently and effectively. Report Highlights Finding 1: There is a lack of coordinated oversight of the City's grant management (Page 10) efforts, resulting in inconsistent management across departments and the potential for non-compliance with grant requirements While the City has a grant policy, it is not consistently implemented and enforced by departments applying for grants. The OCA noted the following observations regarding grant management practices: For 11 out of 15 grants tested, the Grant Application Authorization Checklist was not completed by the project manager prior to grant application as required by the policy. This checklist ensures that management has reviewed the appropriateness of the grant, as well as the financial obligations pertaining to the City upon grant award. Four of the 11 grants did not have a checklist as the City did not have to go through an application process for these awarded grants. • For all samples tested, copies of acceptance and/or cooperative agreements were not provided to all the relevant sponsoring departments listed in the policy. Additionally, the grant policy in place was last revised in 2004 and appears to be insufficient to govern the complete grant management process and ensure a consistent process across departments. The City's policy only addresses grant and funding request applications, leaving a gap in policies and procedures for managing activities throughout the grant lifecycle, including tracking, monitoring, and closing activities. A more comprehensive grant policy to govern the complete grant management process will help ensure a consistent process across departments. To promote the coordinated oversight of grant management activities, the City recently hired a Grant Analyst position. This position will help improve the grant administration process by implementing a standardized tracking and monitoring system. Additionally, the Grant Analyst can help develop more diverse grants and find new opportunities. Key Recommendations Item 9: Staff Report Pg. 6 Packet Pg. 226 of 309 Item 9 Attachment A - Grant EXECUI Management Audit, January 29, 2025 The City should perform regular reviews and updates of all city policies. We recommend that the City update the grant policy to document how departments should manage activities throughout the grant lifecycle, including tracking, monitoring, and closing activities. Additionally, the City should ensure that all departments receive the appropriate training and awareness of the updated policy. It should be determined if the policy should be enforced for all grants received or only grants actively applied for by the City'. Lastly, we recommend that the City utilize the Grant Analyst position to provide centralized oversight of grant administration and management from the application phase to the closing of the grant. Finding 2: While the City is actively pursuing grant opportunities, there is (Page 12) insufficient recordkeeping and internal reporting of active grants, resulting in limited monitoring and visibility of grant performance The OCA noted the following observations: • There is not a complete, central repository of all active City grants. While the Administrative Services Department (ASD) compiles an annual listing of grants, only Federal grants are validated for completeness and accuracy for the Single Audit, an annual audit designed to meet the requirements of federal grantor agencies. • Grants do not have formalized internal tracking and reporting, such as project plans and timelines in place. The OCA noted the following observations pertaining to grant tracking and monitoring of grant requirements: - For 8 out of 15 samples tested, there did not appear to be any formalized internal tracking and reporting, such as project plans and timelines in place. - For 4 out of 15 samples tested, progress and/or performance reports were not provided within the required timeframe stated in the Grant Agreement. There were no penalties or consequences for reports submitted after the deadline for these grants. • Grant milestones are not formally and consistently communicated internally by departments, such as when a grant is awarded or closed out. • There is a lack of reporting and visibility of the pursuit of grants as the City has not formally tracked which grants have been applied for versus awarded. Key Recommendations We recommend that the City consider establishing a complete, central repository of all City grants including such information as how many active grants there are, if they are federal or local, and dollar amount. Additionally, the City should consider whether they can set up a separate account, cost center, or chart string for each grant within the 1 The City receives some grants that do not require the City to formally apply for them. Item 9: Staff Report Pg. 7 Packet Pg. 227 of 309 Item 9 Attachment A - Grant EXECUI Management Audit, January 29, 2025 financial system (SAP). This will allow the City to easily pull a complete listing of grants. For appropriate grants, those that are not awarded by the State on a recurring basis, milestones should be tracked, monitored and noticed to the appropriate departments, such as when a grant has been successfully awarded and/or closed out to enhance recordkeeping of active grants. Lastly, the City should consider utilizing the Grant Analyst position to enhance tracking and reporting of active grants. Formalized tracking will help the City gauge trends and review who is pursuing grants and what was applied for vs. rewarded. Finding 3: The City does not consistently assess and track efforts in pursuit and (Page 14) management of grant opportunities to measure its return on investment The OCA noted the following observations: • The City does not assess whether or not to pursue potential grant opportunities based on the effort, time and complexity that may be required in the application and administration of the grant. • While Townsend Public Affairs, Inc., an external consultant providing grant pursuit and management activities for the City, appears to have provided some valuable services to the City, they have not provided some of the deliverables specified in the contract. This may make it difficult for the City to assess their performance. • The City's recently hired Grant Analyst indicated they will be working with Townsend to clarify deliverables and incorporate a strategic funding plan and a grant dashboard to improve reporting and tracking of grants. Key Recommendations We recommend that the City consider the merits of establishing a system for assessing grant pursuit, application, and administration efforts and determining when to pursue or abandon such opportunities. The City should determine if tracking staff time spent pursuing and managing grants would be beneficial. Establishing a process for assessing efforts would aid in the overall evaluation of grant program performance and its return on investment. In addition, we recommend that the City continue to explore and implement strategies to make the most effective use and reporting of the external contract for grant application, tracking and monitoring services. Item 9: Staff Report Pg. 8 Packet Pg. 228 of 309 Item 9 Attachment A - Grant Management Audit,AtyJanuary29,2025 Introduction Objective The objective of this audit was to determine whether the City has adequate internal controls to manage the grant lifecycle efficiently and effectively. Background The City receives incoming grant funding from various sources to support its services, including federal, state, and local grants. Most of the City's grant funding comes from federal agencies. Macias Gini & O'Connell LLP, Certified Public Accounts (MGO) conducts a "Single Audit" designed to meet the requirements of federal grantor agencies. The standards governing the Single Audit require the independent auditor to report the fair presentation of the financial statements, government internal controls and compliance with legal requirements. The City's expenditures of federal grants totaled $8.2 million in FY 20242. The Federal Grantor Agencies included the U.S. Department of Housing and Urban Development, U.S. Department of the Interior, U.S. Department of Justice, U.S. Department of Transportation, U.S. Department of Treasury, National Endowment for the Humanities, U.S. Department for Health and Human Services, and U.S. Department of Homeland Security. Table 1: Percentage of FY 2024 Federal Award Expenditures by Federal Grantor Agency3 HoL I Health ani Servl 15 Homelan< 2L,,, lice, Interior, & I Protection 6 Transportation 56% Table 2: Expenditures of Federal Grants FY 2022 - 2024 2 https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/financial-reporting/annual-comprehensive-financial-reports- acfr/current-2011-cafrs/city-of-palo-alto-acfr-single-audit-fy2024-final-u nsercu red. pdf 3 56% of federal award expenditures were granted by the U.S. Department of Transportation, which included the following program(s): Airport Improvement Program, Highway Planning and Construction, and Safe Streets and Roads for All. 20% of federal award expenditures were granted by the U.S. Department of Homeland Security, which included the following program(s): Staffing for Adequate Fire and Emergency Response (SAFER) and Disaster Grants — Public Assistance (Presidentially Declared Disasters) 15% of federal award expenditures were granted by the U.S. Department of Health and Human Services, which included the following program(s): Congressional Directives 4 Item 9: Staff Report Pg. 9 Packet Pg. 229 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Total Federal Financial Awards Expeditures $20,000,000 $17,754,575 $15,000,000 $9,731,531 $10,000,000 $8,214,153 $5,000,000 $- 2022 2023 2024 *Analysis conducted by OCA in November 2024 The City has decreased Federal grant expenditures since FY 2022 due to lower expenditures of COVID 19 grants, such as the COVID-19 Coronavirus Relief Fund which decreased approximately $8M from 2022 to 2024. According to the Schedule of Expenditures of Federal Awards (SEFA) listings prepared by the City for the Single Audit, the City had a portfolio of 21 Federal grants, including 5 Federal grants with no expenses incurred/activities, and 8 State and Local Grants in FY 2022; 24 Federal grants, including 2 Federal grants with no expenses incurred/activities, and 11 State Local, or Private grants in FY 2023; and 20 Federal grants and 20 State, Local, or Private grants in FY 2024. The OCA determined that the City had an approximate population of 82 incoming grant awards from FY 2022 - FY 2024 based on the Schedule of Expenditures of Federal Awards (SEFA) listings and surveying 3 City departments with the highest number of grants. Scope Methodology The OCA obtained grant records from FY 2022 to FY 2024 and assessed grant management activities and internal controls to manage the grant lifecycle across all applicable departments. To achieve the audit objectives, the OCA performed the following procedures: • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to grant management. • Analyzed policies and procedures as well as the legislative and regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness. • Selected a sample of grants during the audit period, FY 2022 to FY 2024, to assess whether grant performance standards, procurement, and reporting complied with grant requirements, city policies, and best practices. The OCA stratified the population into smaller groupings by Item 9: Staff Report Pg. 10 Packet Pg. 230 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 department. The OCA selected at least one grant from each department. If multiple grants were sampled for a department, at least one federal and one state or local grant was selected. The OCA tested a sample of 15 grants across departments. Please see a listing of grant selections in Appendix A. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Compliance This audit activity was conducted from June 2024 to December 2024 in Statement accordance with generally accepted government auditing standards, except for the requirement of an external peer review4. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings, observations, and conclusions based on our audit objectives. Organizational During this audit activity, we noted the professionalism and responsiveness of Strengths the following departments: Administrative Services, City Manager's Office, Public Works, Planning & Development Services, Office of Transportation, Community Services, City of Palo Alto Utilities, Library, Police and Office of Emergency Services. We appreciated the participation of departments in interviews, providing grant documentation for selected samples, and responding to follow-up requests. The Office of the City Auditor greatly appreciates the support of the departments involved in conducting this audit activity. Thank you! 4 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Audit Manager in Baker Tilly's Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2025. It should be noted that Baker Tilly's most recent firmwide peer review was completed in November 2024 with a rating of "Pass". The scope of that peer review includes projects completed under government auditing standards. A report on the next firmwide peer review should be available later in 2024. Item 9: Staff Report Pg. 11 Packet Pg. 231 of 309 Item 9 Attachment A - Grant Management Audit,AtyJanuary29,2025 Detailed Analysis Best Practices: The Institute of Internal Auditors (IIA) 5 Supplemental Guidance Practice Guide for Grant Auditing Grants in the Public Sector, released in April 2018, provides supplemental Management guidance for auditing grants in the public sector. This practical guide provides detailed, Criteria step-by-step approaches, featuring processes, procedures, tools, and programs, as well as examples of deliverables. Key public sector grant management insights are highlighted here: "Examples of Grant Usage in the Public Sector • Address specific policy goals. • Stimulate an industry or the economy. • Support activities including research and capital projects. • Deliver public services, such as health care and education. • Produce goods, such as medicines; intellectual property, such as patents; and infrastructure, such as highways, schools, homes, and hospitals." "A grant program follows a linear life cycle that includes creating the funding opportunity, applying, making award decisions, and successfully implementing the award. The specific actions along the life cycle are grouped into three phases6: • Pre -award phase. • Award phase. • Post -award phase. Figure 1: Grant Activities per Phase Award Pre -award Phase PhdSe Post -award Phase Grantor I I Def ine Pra ect Se[ Eriglbilily I Identllvand DIStrlbulg GrdrM I Mamie Program Enwre Ob di '/ Ti'.rrg5, Ggndi[Ip+5 I Selert Recipients Resources I arRxipienr and AcuwrdarM lilyol Evaluate Pwerdrn Cluee Ra +dam Pur P� andCrlSe�ie I Sub nri euel I � R esouroes Grantee I I I tl otje Pr -0 OBject6e I IdentIP Sources I AppFy for Grants Acceprance I I MarWID2 Grant Accountabillly Evaluate PrajcYt Close Projoc[ F lrpp5p of(AWN I I I I Re3rxrmes I I Reputing Grant Management Grant Administration The above infographic was obtained from pg. 6 of IIA Supplemental Guidance Practice Guide for Auditing Grants in the Public Sector. "Grant administration is a broader concept that involves all administrative, financial, and operational activities required to implement, execute, and monitor a grants program (from phase one to phase three)." 5 https://www.theiia.org/ 6 https://grants.gov/learn-grants/grants-101/ Item 9: Staff Report Pg. 12 Packet Pg. 232 of 309 Item 9 Attachment A - Grant DETAIManagement Audit, January 29, 2025 Grants management has a very specific starting point, and the scope is limited to activities in phases two and three. The management process starts when the grantee signs an agreement with the grantor and aid in the form of funds are disbursed or resources transferred." Grant Administration and Management Controls The Practice Guide provides a Risk and Control Matrix for Grants Administration and Management for a grantee. See full Risk & Control Matrix visual in Appendix B. Control examples for each phase of the grant life cycle include the following: Phase: Program Objective/Purpose • Implement policies and procedures for application development. • Identify eligibility limitations. • Understand the community needs and how they can be addressed. • Establish a process to research potential grantors to better understand their selection process. Phase: Identifying Sources of Grants • Dedicate resources to research potential sources of grants. • Implement controls that ensure potential grants match the organization's objectives. Phase: Applying for Grants • Implement a robust grant application process. • Implement a continuous improvement process to ensure the application process meets new regulations or operating procedures. • Implement controls that ensure completeness/accuracy/validity of information submitted. • Secure regulatory approval, or at a minimum, determine if it can be obtained if needed. Phase: Managing Grant Resources • Adequate/effective internal controls over expenditures. • Implement audit trail of resources. • Adequate segregation of duties or dual controls for approval. • Periodic account reconciliation. • Monitoring progress of substantive work during the life of the grant. Phase: Accountability Reporting • Adequate/effective internal controls to account for use of resources in accordance with terms and conditions. • Complete/accurate/valid/timely reporting. Item 9: Staff Report Pg. 13 Packet Pg. 233 of 309 Item 9 Attachment A - Grant DETAIManagement Audit, January 29, 2025 Phase: Program Evaluation and Closing • Completeness and accuracy of accountability reports. • Ensuring project managers have measures in place to demonstrate that objectives and/or performance standards were met. • Include steps to evaluate if the program was effective in the program closing process. Item 9: Staff Report Pg. 14 Packet Pg. 234 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Audit Results Finding 1: Grant management activities are dispersed among several departments that use grant funding for City projects and programs. These include There is a lack of Administrative Services, the City Manager's Office, Public Works, Office coordinated of Transportation, Planning & Development Services, Community oversight of the Services, Utilities, Library, Police, and Emergency Services. City's grant Individual departments are responsible for submitting the grant management application, preparing a council resolution if required, complying with efforts, resulting applicable grant laws and regulations, establishing and maintaining in inconsistent effective internal controls for compliance with grant requirements, and management tracking grant expenses and revenues. across departments and While the City has a grant policy, it is not consistently followed by departments applying for grants. the potential for non-compliance The City has a Grant and Funding Request Applications Policy that with grant establishes uniform procedures for grant applications and other funding requirements requests. This policy requires: • Completion of a Grant Application and Authorization Checklist prior to applying for grant funds. • Department Head review of the Grant Application Authorization Checklist at the time a grant funding application is made. • When grants are funded, the sponsoring department must notify and provide copies of the acceptance or cooperative agreement to: a. The City Manager b. The Director of Administrative Services c. The City Auditor d. The City Attorney The OCA tested a sample of 15 grants across 10 departments. The OCA selected at least one grant from each department to see how grant management is approached across the City. If multiple grants were sampled for a department, the auditor selected at least one federal and one state or local grant. The grant application and acceptance process does not appear to be consistently followed in accordance with the policy adopted by the City. Per the policy, it is essential that grants be reviewed carefully for impact on the City's resources and consistency with City policy and procedures. Additionally, there appears to be a lack of regular training and awareness of the grant application and acceptance process. When inquiring with staff, some staff were unaware of the policy itself or unaware of the necessary requirements to adhere to the policy. 10 Item 9: Staff Report Pg. 15 Packet Pg. 235 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 The OCA noted the following observations pertaining to the Grant and Funding Request Applications Policy: For 11 out of 15 grants tested, the Grant Application Authorization Checklist was not completed by the project manager prior to grant application as required by the policy. This checklist ensures that management has reviewed the appropriateness of the grant, as well as the financial obligations pertaining to the City upon grant award. Four of the 11 grants did not have a checklist as the City did not have to go through an application process for these awarded grants. • For all samples tested, copies of acceptance and/or cooperative agreements were not provided to all the relevant sponsoring departments listed in the policy. A more comprehensive grant policy to govern the complete grant management process will help ensure a consistent process across departments. The City lacks policies and/or procedures to govern activities performed during the duration of the grant lifecycle. The City's policy, last revised in 2004, only addresses grant and funding request applications, leaving a gap in policies and procedures for managing activities throughout the grant lifecycle, including tracking, monitoring, and closing activities. Although grant requirements vary based on the grant agreement, there should be a standardized policy establishing grant internal controls during the grant lifecycle. The City should perform a regular review of the policy to ensure it is still applicable and appropriate in coordinating grant applications across departments. The City is hiring a Grant Analyst position to provide coordinated oversight of grant management activities. The City recently hired a Grant Analyst. This position can help improve the grant administration process by implementing a standardized tracking and monitoring system. Additionally, staff stated that the Grant Analyst can help develop more diverse grants, find new opportunities, and will be working on compliance and training issues with departments. Recommendation We recommend that the City update the grant policy to document how departments should manage activities throughout the grant lifecycle, including tracking, monitoring, and closing activities. Additionally, the City should ensure that all departments receive training on the updated policy and grant management procedures. It should be determined if the policy should be enforced for all grants received or only grants actively applied for by the City. 11 Item 9: Staff Report Pg. 16 Packet Pg. 236 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Lastly, we recommend that the City utilize the Grant Analyst position to provide coordinated oversight of grant administration and management from the application phase to the closing of the grant. Management Responsible Department(s): ASD Response Concurrence: Agree Target Date: August 30, 2025 Action Plan: Department staff have been able to manage and monitor their grant activities, however with increased volume and complexity staff recognizes that the grant policy should be updated with a more comprehensive view of the grant lifecycle. Prior to FY 2017, complex grants awarded to the City consisted of recurring Housing and Urban Development and Department of Transportation grants. Staff has begun the update of the City's grant policy and procedures, using best practices Government Finance Officers Association and agencies with similar grant portfolios. The revised grant policy will include guidelines for managing activities throughout the grant lifecycle, from pre -award to post -award and is expected to be complete spring/summer 2025. Staff concurs that a training plan should be developed for all departments on the updated procedures and continual training be a focus. Staff is targeting the first round of training to be done in spring/summer 2025 to coincide with the release of the updated Grants Policy. Additional training modules will be developed and conducted on an ongoing and as needed basis. Staff expects to release a comprehensive training calendar in late summer 2025. The Grant Analyst position to oversee this coordination, utilizing the City's grant consultant as a resource, in addition to overall grant administration and management. The Grant Analyst was hired in November 2024. Finding 2: The City completes an annual Schedule of Expenditures of Federal Awards (SEFA) as required by the Single Audit, which is required for While the City is non -Federal entities that expend $750,000 or more of Federal awards actively pursuing during the fiscal year. ASD prepares the SEFA using data reported by grant opportunities, departments in the Single Audit questionnaire. Departments provide there is insufficient information about State, Local, and Private grants in the Single Audit recordkeeping and questionnaire. internal reporting of There is not a complete, central repository of all active City grants. active grants, While ASD compiles an annual listing of grants, only Federal grants are resulting in limited validated for completeness and accuracy for the Single Audit. monitoring and visibility of grant The OCA was unable to obtain a complete population of grants for our performance testing. Upon surveying 3 City departments, the OCA identified some State and Local grants that were not included in the City's single audit listing. The City uses the annual Single Audit process as an opportunity 12 Item 9: Staff Report Pg. 17 Packet Pg. 237 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 to ask departments about all grant funding received. However, it appears that this process does not ensure a complete list of all Federal, State, and Local grants. Although the SEFA listing appeared to include a complete inventory of all Federal grants, it did not have complete information such as a unique identifier or grant number for each grant. Due to incomplete recordkeeping, it was difficult for the OCA to obtain a complete inventory of how many Federal, State, and Local grants have been received by the City. As a result, the City does not have visibility into the population of all grants. Staff stated that it is difficult to obtain federal grant identification numbers, but they are still able to track these grants within the ERP system. Additionally, it was noted that recently the Federal Government changed their numbering system from the name Catalogue of Federal Domestic Assistance to Assistance Listing Number in June 2023. Staff stated that they will explore assigning grants an internal tracking number that will better enable annual and multi -year grant reconciliation. Grants do not have formalized internal tracking and reporting, such as project plans and timelines in place. According to the IIA Supplemental Guidance Practice Guide for Auditing Grants in the Public Sector, internal controls should be implemented to effectively monitor substantive progress during the life of the grant. In addition, effective internal controls should be in place around accountability reporting to account for use of resources in accordance with terms and conditions of the grant agreement and complete, accurate, and timely reporting. The OCA tested a sample of 15 grants to see if internal tracking and reporting was in place and if progress and/or performance reports were submitted timely and accurately within the deadline outlined in the grant agreement. The OCA noted the following observations pertaining to grant tracking and monitoring of grant requirements: • For 8 out of 15 samples tested, there did not appear to be any formalized internal tracking and reporting, such as project plans and timelines in place. • For 4 out of 15 samples tested, progress and/or performance reports were not provided within the required timeframe stated in the Grant Agreement. There were no penalties or consequences for reports submitted after the deadline for these grants. Not all departments have adopted an internal tracking and reporting process, resulting in limited visibility in the progress of meeting project goals and timelines. Since program managers track grants differently and projects/programs are monitored individually, there is no consistent, formal tracking system in place. Additionally, many City grants require the submission of financial and/or performance reporting within a required deadline. The OCA noted that 13 Item 9: Staff Report Pg. 18 Packet Pg. 238 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 some of the required reports were not submitted within the required deadline, however, there were no penalties or consequences for reports submitted after the deadline. The OCA also validated that for all completed grants tested, the grant funds were fully expended timely as all grant funds were received. Grant milestones are not formally and consistently communicated by departments. Departments do not formally and consistently communicate with ASD when grant milestones are completed such as when a grant is awarded or closed out. There are no formal close-out procedures performed to internally notify the City that a grant is officially closed out or to evaluate its effectiveness during the closing process. There is a lack of reporting and visibility of the pursuit of grants as the City has not formally tracked which grants have been applied for vs. awarded. There is not a formal, complete list of grants applied for vs. awarded. The OCA obtained a Grant Tracker document from ASD which included an informal list of grants, awarded amount, and the award status, however, it was indicated that this was not a precise or formal list. Staff noted that the primary purpose of the list is to provide information to the external auditors for the purposes of the Single Audit and is not the full list of all grants, regardless of granting agency. The City reports expenditure data in the annual SEFA (see Table 2 - Expenditures of Federal Grants FY 2022 - 2024 located in the Background section of the report). However, they do not appear to track or report the annual grant funding awarded to the City. As a result, the City does not have visibility of its performance of pursuing and winning grants. This leads to difficulty in reporting and monitoring how the City is performing. Recommendation We recommend that the City consider establishing a complete, central repository of all City grants including such information as how many active grants there are, if they are federal or local, and dollar amount. Additionally, the City should consider whether they can set up a separate account, cost center, or chart string for each grant within the financial system (SAP). This will allow the City to easily pull a complete listing of grants. For appropriate grants, milestones should be tracked, monitored and noticed to the appropriate departments, such as when a grant has been successfully awarded and/or closed out to enhance recordkeeping of active grants. Lastly, the City should consider utilizing the Grant Analyst position to enhance tracking and reporting of active grants. Formalized tracking will help the City gauge trends and review who is pursuing grants and what was applied for versus rewarded. 14 Item 9: Staff Report Pg. 19 Packet Pg. 239 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Management Responsible Department(s): ASD Response Concurrence: Agree Target Date: March 31, 2025 Action Plan: Staff has completed a comprehensive list and repository of all City grants that will formalize grant tracking and be used by ASD and the grant consultant to track and report out on grants throughout the grant life cycle. The City's SEFA listing is a complete list of grants that were communicated to ASD or of grants that received revenue during the reporting period. The SEFA list contains known information; unique identifiers are not assigned to all grants by the granting agency. Staff will assess whether changes to SAP accounts, cost centers, and/or chart strings for each grant or a grant module/software need to be made to more effectively support grant management and tracking. Finding 3: Currently, the City does not assess whether or not to pursue potential grant opportunities based on the effort, time and complexity that may be The City does not required in the application and administration of the grant.. In addition to consistently assess internal grant pursuit efforts, the City has a contract with an external and track efforts in consultant, Townsend Public Affairs, Inc. (Townsend) to provide grant pursuit and pursuit and management activities but does not appear to receive all the management of grant tracking and monitoring deliverables noted in the contract that would help opportunities to the City to assess the value obtained from these services. measure its return on The City does not assess efforts expended in the pursuit, investment application for, and administration of potential grant opportunities. Currently, the City does not have a process for assessing the time and effort a grant opportunity may require and criteria for determining when to pursue vs. abandon opportunities due to lack of return on investment. Also, the City does not appear to capture data related to these activities. Tracking such information could help the City to determine when it is worthwhile to pursue a grant opportunity versus when the effort and investment may not be justified. While Townsend appears to have provided some valuable services to the City, they have not provided some of the deliverables specified in the contract. This may make it difficult for the City to assess their performance. Townsend supports the City in identifying grant funding opportunities, completing applications, and communicating with funding agencies. Although Townsend holds a monthly meeting to report progress to the City and provides a monthly memo detailing current and upcoming 15 Item 9: Staff Report Pg. 20 Packet Pg. 240 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 opportunities, some deliverables have not been provided that would aid the City in monitoring grants and the contractor's performance. According to the Townsend contract with the City, there are several grant application, management and tracking deliverables they are required to provide to the City. These deliverables include a: • Strategic Funding Plan • Grant Matrix of Funding Programs • Overview of application requirement for grants with project background and details • Monthly status reports of grants in progress, submitted and awarded • Monthly report detailing compliance activities and current and upcoming state and/or federal legislative advocacy work/support. It does not appear that these documents are currently being provided. The City's recently hired Grant Analyst communicated that the City will be working with Townsend to clarify deliverables, how tasks are being accomplished and what may need to be done moving forward. In addition, the City's new Grant Analyst said they will be working with Townsend on a strategic funding plan, a grant calendar and eventually a grant writing manual and working to develop a grant dashboard to show the status of grants in Monday.com, an online project management and reporting system. As of the date of this report, Townsend reports helping the City pursue a total of approximately $14 million in grant opportunities with one grant awarded in the amount of $5,176,812 and approximately $8 million in grant opportunities still pending a funding decision. Recommendation We recommend that the City consider the merits of establishing a system for assessing grant pursuit, application, and administration efforts and determining when to pursue or abandon such opportunities. The City should determine if tracking staff time spent pursuing and managing grants would be beneficial. Establishing a process for assessing efforts would aid in the overall evaluation of grant program performance and its return on investment. In addition, we recommend that City continue to explore and implement strategies to make the most effective use and reporting of the external contract for grant application, tracking and monitoring services. Management Responsible Department(s): ASD Response Concurrence: Agree Target Date: June 30, 2025 Action Plan: 16 Item 9: Staff Report Pg. 21 Packet Pg. 241 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Staff agrees that a formal system to assess grant pursuit, application, and administration efforts to determine when to pursue or abandon grant opportunities would be beneficial to support grant strategic planning. These conversations are currently informal and while the discussion between the grant consultant and City staff is sufficient to guide decision making of whether to pursue a grant. City staff and the grant consultant meet monthly to assess whether available grant opportunities are worth pursuing, from a priority aspect and staff time spent to manage the grant. A more formal workplan with the grant consultant is under development that includes the deliverables listed in the contract, included in these findings. Staff will assess whether establishing a system to track staff time for grant management activities, including pursuing or abandoning opportunities, is a value adding activity and will engage with its grant consultant to strategically focus time spent. In 2024, five grants were awarded, totaling $44.5 million. 17 Item 9: Staff Report Pg. 22 Packet Pg. 242 of 309 Item 9 Attachment A - Grant 1 • LManagement Audit, erti ityeJanuary 29, 2025 Item 9: Staff Report Pg. 23 Packet Pg. 243 of 309 Item 9 Attachment A - Grant Management Audit, Appendix A. Grant Testing Selections January29,2025 The OCA determined that there was a population of 82 grants from FY 2022 - FY 2024 based on the SEFA listings and surveying 3 City departments with the highest number of grants. A sample of 15 grants was selected for testing. The population was stratified based on City department. The auditor selected a sample of grants from the following 10 departments: Administrative Services (ASD), the City Manager's Office (CMO), Public Works (PWD), Office of Transportation (OOT), Planning & Development Services (PDS), Community Services (CSD), Utilities (UTL), Library (LIB), Police (PD), and Emergency Services (OES). U.S. Severe Winter Department California Storms, Flooding, of Homeland Governor's 1 FY Federal Landslides, and Security's Office of ASD 2023 $135,185.01 Mudslides Federal Emergency FEMA-4683-DR- Emergency Services CA Managemen CalOES Agency Institute Institute of Museum & Library FY Serv/Museums Palo Alto 2 2022 Federal $150,194.00 for IMLS Art Center CSD America/museum Foundation s Empowered - Working Together Historical 3 FY State/Local/ . $18244800 Heritage Grant County of ASD 2024 Private , Program Santa Clara (windows) California State National Library - Library Endowment California 4 FY Federal $6,000.00 Services & for the State LIB 2023 Technology Act Humanities Library (LSTA) (NEH) Inspiration Grant Staffing for Department FY Adequate Fire of Homeland 5 2022 Federal $3,657,685.00 and Emergency Security OES Response FEMA (SAFER) Section 130 6 FY Federal Grade Crossing Caltrans OOT 2022 $3,863,677.27 Improvement Program Metropolitan FY Transportation Transportati 7 2023 State $92,640.00 Development Act on OOT Commission (MTC) 19 Item 9: Staff Report Pg. 24 Packet Pg. 244 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Board of FY State/Local/ BSCC Organized State and 8 2024 Private $5,176,812.00 Retail Theft Community PD (ORT) Grant Corrections - California U.S MTC Department (Metropolit FY PDA Planning of Housing an 9 2023 Federal $800,000.00 and Technical and Urban Transportat PDS Assistance Grant Developmen ion t Commissio n) California Department FY SB2 (Housing of Housing 10 2023 State $310,000.00 Element) and PDS Community Developmen t State F11 Water 2022 Federal $237,396.18 CWWAPP ARPA Resource UTL Control Board US EPA SF Bay U.S. FY Area Water Environment 12 2023 Federal $1,216,351.00 Quality al Protection PWD Improvement Agency Fund 13 14 15 FY Airport 2024 Federal $156,841.00 Improvement Program FY State/Local/ EV Charges 2024 Private $175,000.00 FY Consolidated 2023 Federal $2,000,000.00 Appropriation Act, 2022 U.S Department of Transportati on Bay Area Air Quality Managemen t District US Department of Health and Human Services/Su bstance Abuse and Mental Health Services (SAMHSA) PWD PWD CMO 20 Item 9: Staff Report Pg. 25 Packet Pg. 245 of 309 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Appendix B: Risk and Control Matrix for Grants Administration and Management — Grantee7 Phase: Program Objective/Purpose • The program objective/purpose does not match the grant's intended purpose. • Applying for grants that organization is ultimately ineligible (wasting time)_ ■ The program does not include the necessary systems to manage the resources and maximize the benefits_ Phase: Identifying Sources of Grants • Lost opportunities — unaware of grants or unknowledgeab'e of application process. • Foregone funds due to late application. • Unrecoverable administrative costs incurred to manage applications. Phase: Applying for Grants • Organization does not have capabilityto applyforthe grant. • The organization is deemec ineligible_ ■ The organization is rated low on the assessment criteria for competitive funding. • The organization is awarded a grant that it does not have capacity to manage. • The organization is awarded a grant for which cannot meet the terms and conditions. https://www.theiia.org/ • Implement policies and procedures for application development. • Ideitify eligibility limitations. • Understand the community needs and how they can be addressed. • Establish a process to resea rc h potential grantors to better understand their selection process_ ■ Dedicate resources to research potential sources of grants_ ■ Implement controls that ensure potential grants match the organization's objectives. • Implement a robust grant application process_ ■ Implement a continuous improvement process to ensure the application process meets new regulations or operating procedures. • Implement controls that ensure cc m pleten ess/aocu racy/validity of information submitted. • Secure regulatory approval, or at a minimum, determine if it can be obtained if needed. • Assess the adequacy of internal controls over application process • Determine if the organization has an effective process to identify grants that meet their operational objectives_ ■ Determine if the program includes adequate systems to manage the application and grant management process_ ■ Assess the adequacy/effectiveness of internal controls over identification and screening of all appropriate sources of funds. • Determine if the organization has implemented a process to ensure that funding sources have been maximized. • Assess the adequacy/effectiveness of grant application process. • Assess the effectiveness of controls in place to ensure that information submitted as part of the application process is complete, accurate, and valid. • Determine if the organization has implemented a process to secure regulatory approval. Item 9: Staff Report Pg. 26 Packet Pg. 246 of 309 21 Item 9 Attachment A - Grant Management Audit, January 29, 2025 Phase: Managing Grant Resources • Resources are used for purposes not intended by the grantor (i.e., does not meet terms and conditions). • Resources are used for inappropriate spending. • Weak management systems to manage funds received. Phase: Accountability Reporting • Unable to account for resources in accordance with terms/conditions. • Resources not used for intended purposes. • Resources used inefficiently. • Inaccurate/inappropriate internal and external reporting. Phase: Program Evaluation and Closing • Program objectives and/or performance standards are not achieved_ ■ Program was not effective or efficient in meeting the specific objectives_ • Adequate/effective internal controls over expenditures. • Implement audit trail of resources. • Adequate segregation of duties or dual controls for approval. • Periodic account reconciliation. • Monitoring progress of substantive work during the life of the grant. ■ Adequate/effective internal controls to account for use of resources in accordance with terms and conditions. • Complete/accurate/valid/time) y reporting. • Completeness and accuracy of accountability reports_ ■ Ensuring project managers have measures in place to demonstrate that objectives and/or performance standards were met ■ Include steps to evaluate if the program was effective in the program closing process_ • Assess the effectiveness of internal controls over expenditures. • Assess the effectiveness of audit trail offunds. • Assess the effectiveness of tools used to monitor and report progress of substantive work. • determine if proper segregation of duties or dual controls for approval have been implemented and are working as intended_ ■ Evaluate account reconciliation procedures_ ■ Assess the effectiveness of internal controls to account for use of funds in accordance with terms and conditions. • Assess the effectiveness of internal controls for reporting complete, accurate, valid, and timely information. • Assess the effectiveness of internal controls for accountability reports_ ■ determine if project managers have measures in place to demonstrate that objectives and/or performance standards were met ■ Determine if the organization has implemented a process to determine if the program was effective_ ■ Assess the tools enabling measure of grantor's satisfaction {e_g_, surveys)_ Item 9: Staff Report Pg. 27 Packet Pg. 247 of 309 22 Item 9 Attachment B - Utility Billing Audit, January 30, I LL, 2025 i1l1FiViIFi Item 9: Staff Report Pg. 28 1 1 Packet Pg. 248 of 309 Contents EXECUTIVESUMMARY..................................................................................................1 INTRODUCTION...............................................................................................................5 DETAILEDANALYSIS.....................................................................................................9 AUDITRESULTS............................................................................................................12 APPENDICES.................................................................................................................21 �Q bakertitty Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Item 9 CC Attachment B - Utility 0 Billing Audit, January 30, JJY2025 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted a Utility Billing Audit based on approved Task Order 4.26 as part of the City's FY24 Audit Plan. The objectives of this audit were to: 1. Determine whether the internal controls over the utility billing process are adequate and working effectively to ensure billing is accurate and in compliance with the City's policies and procedures. 2. Determine whether billing adjustments are properly supported and approved. Report Highlights Finding 1: The OCA found utility bills and adjustments are accurately calculated in (Page 12) compliance with City policies; however, certain billing adjustments and account write-offs were not properly documented or approved per City policy. Overall, the OCA concluded that there is a robust utility billing process in place and found that utility bills are accurate and in agreement with rates annually established by the City. The OCA noted the following positive observations: • For all utility billing invoices tested, the OCA concluded that billing was accurate and in compliance with City policies as we found no test exceptions. • Utility billing is appropriately reviewed for exceptions. • The implementation of AMI meters will provide an opportunity to reduce both the frequency and magnitude of adjustments as it will enable the City of Palo Alto Utilities (CPAU) Department to have more timely access to usage data. While billing adjustments are properly billed, the OCA identified some instances in which utility billing adjustments were not properly documented or approved during the period tested. The OCA selected a sample of adjustments from FY 2023 - FY 2024 for testing. The OCA tested all categories of adjustments, which include consumption, miscellaneous debit/credit, water leak, and GreenWaste adjustments. Out of 60 adjustments tested, there were 10 exceptions noted. These exceptions were primarily due to documentation and approval errors. The OCA observed the following: • For 6 adjustments tested, there was no IC WEB (Interaction Center Webclient) interaction record as the processor did not note the adjustment in SAP per the Processing Adjustments procedural document. Item 9: Staff Report Pg. 30 Packet Pg. 250 of 309 Item 9 Attachment B - Utility EXEC U- Billing Audit, January 30, 2025 • For 1 miscellaneous adjustment tested, a Customer Service Specialist (CSS) approved transactions above their authority level. • For 1 miscellaneous adjustment tested, there was no Adjustment Form submitted to verify proper approval. • For 1 miscellaneous adjustment tested, the Invoice Cancellation Form was incorrectly filled out by the CSS to include the incorrect invoice document number. • For 1 consumption adjustment tested, an adjustment was incorrectly entered in the Adjustment Log due to a typographical error; however, the correct amount was entered into SAP. Therefore, this did not result in a billing error to the customer. When proper approvals for adjustments are not obtained and documented, there is potential for inappropriate adjustments, financial losses, or fraud. As approval is currently obtained via DocuSign or manually entered in the Adjustment Log, there is an increased possibility for improper approval due to human error. Additionally, the OCA identified some instances when account write-offs of stale -dated checks were not properly approved during the period tested. The OCA selected a sample of 25 account write-offs of uncollectable utility accounts during FY 2023 - FY 2024 for testing. During the period tested, collections were put on hold from March 4th, 2020 — October 2023 due to COVID-1 9. Therefore, the OCA did not test the collections process. Out of 25 account write-offs tested, there were 4 exceptions noted. The OCA observed that for all 4 stale -dated check write-offs sampled, the support was not attached to the Quarterly Utilities Invoice Cancellation Memorandum and Form (Quarterly Memo) for proper approval per the City Write-off Policy for Utilities Bad Debt. By omitting support for review and approval, this could lead to inaccurate financial reporting as not all write-offs are properly reviewed. Key Recommendations We recommend that the City review the adjustments process to determine if there are ways to automate approvals in the billing system rather than relying on manual processes which can increase the possibility for human error. Otherwise, the City should review the current Processing Adjustments procedural document to ensure it is comprehensive and includes all necessary steps for accurately recording and reviewing adjustments. The City should determine if an IC WEB interaction record should be submitted for all miscellaneous adjustments and ensure this process is implemented by the CPAU Department. Additionally, if automation is not possible, the City could consider enhancing the procedural document by incorporating a checklist for both the processor and the approver of the adjustment. The approver checklist should include steps to reconcile adjustments entered in SAP with supporting documentation. By defining these steps in a checklist, the reviewer is more likely to identify any data entry errors before approving an adjustment. The CPAU Department should provide regular training Item 9: Staff Report Pg. 31 Packet Pg. 251 of 309 Item 9 Attachment B - Utility EXEC U- Billing Audit, January 30, 2025 sessions for staff on any updated procedures and the importance of accurate data entry and review. Lastly, we recommend that the City maintain the practice of incorporating stale -dated check support in the Quarterly Memo and integrate this procedure into training materials or official policies. This will help ensure employees consistently follow this important step and prevent any potential oversights. Finding 2: Two internal control gaps in the utility billing process should be addressed to (Page 16) prevent potential errors and inefficiencies. The OCA identified some internal control gaps in the utility billing process, specifically related to segregation of duties and timely resolution of billing adjustments. First, the utility billing process does not currently instruct staff on the proper segregation of duties to ensure that the same person processing a consumption adjustment is not the same person approving the adjustment. We noted that for 3 consumption adjustments tested, the same individual processed and approved the adjustments on the Adjustment Log. Segregating duties helps an organization reduce the risk of errors and fraud by distributing responsibilities and accountability among multiple people and/or departments. Second, outstanding investigations are not regularly reviewed to ensure prompt resolution of billing adjustments. Despite the CSS's responsibility to follow up on outstanding Service Notifications (SNs), there is no regular, formal review process for these outstanding investigations. While such instances appear to be rare, we noted an example where this lack of a structured review led to a prolonged open investigation for more than 2 months (77 days) after the initial customer complaint and unresolved customer bill, causing delays in resolution. Delays in resolving billing issues can lead to inaccurate financial records and operational inefficiencies as well as customer frustration and dissatisfaction. Key Recommendations We recommend that the CPAU update the utility billing process to include a control to ensure proper segregation of duties between processing and approving adjustments. Without proper segregation of duties, there is a risk of potential error or fraud, as an individual can self -authorize an adjustment without adequate review. Additionally, we recommend that the City consider implementing a regular, periodic review process for outstanding billing adjustments to prevent prolonged unresolved billing issues. The City should establish specific timeframes for reviewing outstanding adjustments and maintain thorough documentation of these reviews. This approach will enable the CPAU Department to better monitor the timeliness and effectiveness of resolving investigations and billing adjustments. Item 9: Staff Report Pg. 32 Packet Pg. 252 of 309 Item 9 Attachment B - Utility EXEC U- Billing Audit, January 30, 2025 The City should provide ongoing training and support for CSSs and Field Service Technicians to ensure they are equipped to handle billing adjustments efficiently and effectively. 4 Item 9: Staff Report Pg. 33 Packet Pg. 253 of 309 Item 9 CC Attachment B - Utility IC Billing Audit, January 30, JJY2025 Introduction Objective The objectives of this audit were to: 1. Determine whether the internal controls over the utility billing process are adequate and working effectively to ensure billing is accurate and in compliance with the City's policies and procedures. 2. Determine whether billing adjustments are properly supported and approved. Background The CPAU Department provides the City with five municipal utility services: electricity, natural gas, water, wastewater, and fiber optics. The City's Public Works Department also provides refuse collection and processing for recycling, compost and garbage, wastewater treatment, and stormwater management services. Palo Alto is the only city in California that owns and operates a full suite of municipal utility services, including electric, fiber optics, natural gas, water and wastewater. These services benefit thousands of customers, including residential, commercial, and City facilities. In FY 2023, there were 30,002 electric; 20,533 water; and 23,837 natural gas customer accounts, the majority of which were residential households'. See table below for breakout by customer type (residential, commercial, or City). Number of Customer of Accounts in FY 2023 By Utility & Customer Type 35,000 30,000 142 25,000 36 20,000 345 15,000 10,000 5,000 0 Electric Water Natural Gas City 142 345 36 ■ Commercial 3,640 3,572 2,202 ■ Residential 26,220 16,616 21,599 ■ Residential ■ Commercial City 1 utilities-at-a-glance-fy-2023_final.pdf Item 9: Staff Report Pg. 34 Packet Pg. 254 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 See below FY 2023 financial highlights (in thousands) per utility2: FY 2023 Financial Highlights (in thousands) $200,000 $180,000 $171,605 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 $72,474 $41,802 _i. I_11 • $20,694 $29,542 ■■ $2,629 _ I_i. Electric Natural Gas Water Wastewater Fiber Optics Refuse • Sales Revenue ■ Interest, Fees & Other Revenue ■ Commodity Purchase Costs ■ Operating Costs Electricity led with the highest sales revenue of $171,605 (in thousands) in FY 2023. Per the FY 2024 Annual Comprehensive Financial Report, electric operating revenue totaled $131,273, $164,556, and 178,549 in FY 2022, 2023, and 2024 (amounts in thousands). The average monthly residential bill totaled $451.84 in FY 2023. See chart below for a breakout by utility: FY 2023 Average Monthly Residential Bill by Utility $16.76 $50.07 $103.23 $107.99 $125.15 ■ Electric ■ Gas Water ■ Sewer a Refuse ■ Stormwater Per the FY 2024 Annual Comprehensive Financial Report3, due to the COVID-19 pandemic, the City Council aimed to provide economic relief for residential and commercial utility customers by directing staff to maintain lower rate increases over several years without compromising the safety and integrity of the utility systems. As the City and the economy continues to transition into a steadier z https://www.cityofpaloalto.org/Departments/Utilities/Customer-Service/Utilities-at-a-Glance https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/financial-reporting/annual-comprehensive-financial-reports- acfr/current-2011-cafrs/city-of-palo-alto-acfr-single-audit-fy2024-final-unsercured. pdf 6 Item 9: Staff Report Pg. 35 Packet Pg. 255 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 state, rates were approved to increase in FY 2024 for all utility services except electric, which decreased, and refuse, which remained flat, resulting in a $11.11, or 3.01 %, increase for the average residential bill. As of the writing of this report, CPAU management staff reported the City has installed approximately 80% of advanced or smart electric, gas, and water meters as part of the Advanced Metering Infrastructure (AMI) project. Staff reported that AMI implementation will likely be completed by Spring 2025. The AMI meters will empower customers to utilize energy and water more efficiently, better enable customer adoption of distributed energy resources (DER) such as solar photovoltaics, energy storage, and electric vehicles, and enable the timely detection of water leaks. AMI will also enable Utilities to optimize operations and improve reliability by reducing restoration time for outages. Scope The OCA obtained utility billing records from FY 2023 to FY 2024 and assessed whether internal controls over the utility billing process and billing adjustments are working effectively and in compliance with the City's policies. Methodology To achieve the audit objectives, the OCA performed the following procedures: • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to utility billing. • Analyzed City policies and procedures to identify the criteria to be used for evaluation of control design and effectiveness. • Selected a sample of utility billing invoices, utility billing adjustments, billing and usage exceptions, and write-offs of uncollectable accounts for testing to compare the process and controls against City policies. • Developed Meter Reading and Utility Billing Adjustments process maps, identifying internal controls and control gaps. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Compliance This audit activity was conducted from June 2024 to December 2024 in Statement accordance with generally accepted government auditing standards, except for the requirement of an external peer review4. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings, observations, and conclusions based on our audit objectives. 4 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Audit Manager in Baker Tilly's Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2025. It should be noted that Baker Tilly's most recent firmwide peer review was completed in October 2021 with a rating of "Pass". The scope of that peer review includes projects completed under government auditing standards. A report on the next firmwide peer review should be available in 2025. Item 9: Staff Report Pg. 36 Packet Pg. 256 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Organizational During this audit activity, we noted the expertise and responsiveness Strengths demonstrated by the CPAU Department, notably the Director of Customer Service, Credit & Collections Manager, and the Customer Service Manager. We greatly appreciate staff participating in interviews and providing a substantial amount of documentation for testing. The OCA greatly appreciates the support of the departments involved in conducting this audit activity. Thank you! Item 9: Staff Report Pg. 37 Packet Pg. 257 of 309 Item 9 CC Attachment B - Utility 0 Billing Audit, January 30, JJY2025 Detailed Analysis Utility Billing The utility billing function must accurately measure a customer's usage and bill Process and customers for their electricity, water, and gas usage based on current utility rates. Controls The Utility Billing Memo provides a summary of the utility billing process in the City of Palo Alto. It outlines the procedures performed for meter reading, billing and invoicing, and processing adjustments. Meter Reading Meter readings for natural gas, electric, and water consumption are required within a 27 to 33 -day period. The SAP CCS system, a customer information system, generates a daily meter read route file, which is given to 7 to 9 Meter -Readers. They visit customer addresses to record readings using handheld or drive -by devices. These readings are batch uploaded to the CCS system nightly. For residents with Advanced Metering Infrastructure (AMI) meters, data is transmitted via radio signals to pole -mounted antennas and substations, then stored in the Head End System (HES). The data is verified, stored in the Meter Data Management System (MOMS), and uploaded to the billing system for processing. If meter readings fall outside pre-programmed tolerance bands, the system generates an exception report. CSSs perform an "Implausibles" review of these exceptions using account history to determine if the readings are reasonable. If accuracy is in question, a "check -read" is requested. Once validated or corrected, the account proceeds to the next billing step. If exceptions remain, the account cannot proceed to invoicing. The City also accepts monthly self -readings from customers, which are subjected to the same tests as those by Meter Readers. Billing and Invoicing Invoices are pre -numbered and created in the CCS system, which Customer Service and Credit Collections use to track the outstanding balance owed by customers, usage statistics, past due amounts, etc. Billing charges that appear out -of -range must pass a "Billing Outsorts" review to ensure they are reasonable. If charges fail standard financial controls, an exception report is generated for further review by Customer Service staff. Accounts failing validation are held from invoice processing until manually released. Monthly customer invoices are created in the CCS system and update the Accounts Receivable (A/R) account balance in the SAP Fl -CA system nightly. This system tracks customer payments, late fees, and account adjustments. Adjustments Item 9: Staff Report Pg. 38 Packet Pg. 258 of 309 Item 9 Attachment B - Utility DETAIBilling Audit, January 30, 2025 Adjustments are initiated from various sources, including customer disputes or exceptions flagged during the "Implausibles" or "Billing Outsorts" reviews. Account adjustments and credits are prepared by Utilities Customer Service staff. Before processing, these are reviewed and approved by varying levels of Utilities management based on organizational level and financial limits. If the adjustments exceed internal signing authority limits, additional reviews and approvals from external departments are required. Financial Authorization Levels and Signing Authority: • Customer Service Specialist — Authorized to approve billing adjustments up to $500 per transaction per account. • Customer Service Specialist Lead — Authorized to approve billing adjustments of up to $2000 per transaction per account. • Manager, Utilities Credit and Collection - Authorized to approve billing and financial transactions up to $19,999 per transaction. • Manager, Utilities Customer Service - Authorized to approve billing and financial transactions up to $19,999 per transaction. • Assistant Director, Utilities Customer Support Services Division- Authorized to approve billing and financial transactions up to $65,000 per transaction. • General Manager, Utilities Department —Authorized to approve billing and financial transactions greater than $65,000. Twice per month the SAP ZCAR002 report of adjustments/credits is generated by the billing system. Utilities Credit and Collections staff review the report to make sure that the scheduled transactions and adjustments have been processed correctly in the billing system. See Appendices for flowcharts showing the abbreviated current processes and controls in place. Write-off Policy for Utilities Bad Debt A quarterly memorandum requesting approval for "Utility Invoice Cancellation" is submitted by the Utilities Credit Collection Specialist, reviewed by the Utilities Back Office, and approved by the Manager of Utilities Customer Service and the Utilities Assistant Director of Customer Support Service. Utilities Debt Collection Guidelines. Accounts are defined by their aging as follows: 10 Item 9: Staff Report Pg. 39 Packet Pg. 259 of 309 Item 9 Attachment B - Utility DETAIBilling Audit, January 30, 2025 • 1 to 30 days Current — No action • 31 to 90 days Past Due — Automated system letter generation • 91 to 180 days Delinquent — Internal Collections while customer account is in an Active Status • 181 days to 3 years Collection Agency - External Collections while customer account is in an Inactive Status and Accounting calculates Allowance for Doubtful Customers and Bad Debt • 4+ years and beyond Write-off - Cancellation of Uncollectible Utilities Accounts Receivable and Write-off The exceptions below are all considered automatic cancellation of uncollectible utilities accounts receivable and write-off: • Amounts <$25 and 91+ days • Discharged/Uncollectible Bankruptcies and 1+ days • Verified deceased and 1+ days • Deemed as uncollectible by external collection agency The thresholds below require signatures of approval before write-off occurs: • $.01 or more Signed by Assistant Director of Customer Support Services • $10,000 or more Signed by Director of Utilities Department and Director of Administrative Services Department • $25,000 or more Signed by City Manager or Assistant City Manager 11 Item 9: Staff Report Pg. 40 Packet Pg. 260 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Audit Results Finding 1: Overall, the OCA concluded that there is a robust utility billing process in place and found that, based on our testing, utility bills are accurately The OCA found calculated. During our assessment of the City's policies and procedures as utility bills and well as testing of internal controls over the utility billing process, the OCA adjustments are concluded that the process is working as intended. accurately calculated in compliance with Specifically, the OCA performed testing over utility billing invoices, utility City policies; billing adjustments, billing and usage exceptions, and write-offs of however, certain uncollectable accounts to compare the process and controls against City billing adjustments policies. and account write- offs were not For all utility billing invoices tested, the OCA concluded that billing was properly accurate and in compliance with City policies as we found no test documented or exceptions. approved per City On a monthly basis, utility billing invoices are generated from SAP based on policy, monthly usage and the City Council approved rates. These are then billed to customers. To test the completeness and accuracy of utility billing invoices, the OCA selected an invoice from each account class (Residential Single Family, Residential Multi Family, Commercial, Industrial, Public Facilities Non -City, City, and Residential Multi Family Master Meter) during FY 2023 - FY 2024. This resulted in a sample size of 7 invoices. In our testing of utility billing invoices, we found no exceptions. For all invoices tested, the utility rates billed on the customer invoice aligned with City Council approved rates and the invoice amount and usage was accurately reflected in the system -generated reports from SAP. Utility billing is appropriately reviewed for exceptions. Prior to customer billing of invoices, CPAU generates a daily exception report and reviews it for implausible and billing outsorts exceptions. The exception reports flag when meter readings or billing charges fall outside pre-programmed tolerance bands and need to be reviewed to ensure they are reasonable. If exceptions are deemed reasonable during a daily review, they are released for billing. However, if the accuracy of an exception is in question, it is investigated further and may result in an adjustment. The OCA tested a sample of implausibles and billing outsorts exceptions from randomly selected dates during FY 2023 - FY 2024. The OCA randomly selected 4 dates from each year that fell between FY 2023 - FY 2024. The OCA tested 1 implausible and 1 billing outsort for each date, excluding one date from testing that did not have Outsorts or Implausibles 12 Item 9: Staff Report Pg. 41 Packet Pg. 261 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Exception Report. This resulted in testing 22 samples. In our testing of implausibles and billing outsorts exceptions, we found no exceptions. For all implausibles and billing outsorts exceptions tested, the exception reports included appropriate amounts based on established parameters and were properly reviewed by the CSS to evaluate whether the readings are determined to be reasonable before released for billing or resulting in an adjustment. With the implementation of AMI Meters, the City is confident that there will be a reduction in the number and magnitude of adjustments. With the implementation of Advanced Metering Infrastructure (AMI) Meters in FY 2024, the CPAU Department will be able to flag high usage of meters on a daily rather than monthly basis. This will enable more timely detection of possible water leaks or meter read errors. Additionally, customers will be able to track their own meter usage as the AMI system can share usage information with customers. According to the FY 2024 Annual Comprehensive Financial Reports, the City has installed approximately 38,000 or 40% electric, gas, and water AMI meters. As of the writing of this report, staff reported that CPAU has installed approximately 80% of water meters. Additionally, CPAU staff indicated that AMI implementation will likely be completed by Spring 2025. The OCA identified some instances in which utility billing adjustments were not properly documented, supported, or approved during the period tested. Utility billing adjustments are initiated from a few different sources: 1) Customer calls to question or dispute billings; 2) Incorrect read identified while processing "Implausible" exceptions; 3) Miscellaneous billing adjustments submitted to CSS for addition to the account, 4) Incorrect billing charges are identified while processing "Billing Outsorts" exceptions, and 5) annual reconciliation of the refuse service data. Any of the above actions may result in a consumption or miscellaneous adjustment. Consumption adjustments primarily result from incorrect reads identified while processing implausibles exceptions. Miscellaneous adjustments result from credit/debiting a customer account for billing discrepancies, a water leak credit, or from periodic emails received from GreenWaste, a waste collection service provider for the City of Palo Alto, to process refuse adjustments. See table below: Adjustment Type Table Consumption Implausibles Exceptions Miscellaneous Billing Discrepancies / Billing Outsorts Exceptions Water Leak Credit 5 https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/financial-reporting/annual-comprehensive-financial-reports- acfr/current-2011-cafrs/city-of-palo-alto-acfr-single-audit-fy2024-final-unsercured. pdf 13 Item 9: Staff Report Pg. 42 Packet Pg. 262 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 GreenWaste Adjustment The City has a Processing Adjustments procedural document in place which describes the steps taken to process adjustments. See Appendix B: Utility Billing Adjustment Process Map for the abbreviated current processes and controls in place for processing adjustments. The OCA requested a population of adjustments from FY 2023 - FY 2024 to select a sample for testing. The OCA sampled all categories of adjustments and determined that the following sample sizes were appropriate using AICPA sample size guidance: 25 consumption adjustments and 35 miscellaneous adjustments (13 miscellaneous debit/credit adjustments, 12 water leak adjustments, and 10 GreenWaste adjustments). This totaled a sample size of 60 adjustments tested for FY 2023 - FY 2024. Out of 60 adjustments tested, there were 10 exceptions noted. These exceptions were primarily due to documentation and approval errors. The OCA observed the following: • For 6 adjustments tested, there was no IC WEB interaction record. The Processing Adjustments procedural document states that the CSS goes to IC WEB to note the account for Miscellaneous Adjustments. Failure to note the adjustment in IC WEB results in gaps in documentation used internally by the CPAU Department. For 1 miscellaneous adjustment tested, a CSS approved transactions above their authority level. When the CSS entered signatures in DocuSign, they accidentally placed the signature and date block in the wrong place on the Miscellaneous Adjustment Form. The absence of proper approval from the appropriate authorization level and signing authority can result in inaccurate or unauthorized adjustments. For 1 miscellaneous adjustment tested, there was no Miscellaneous Adjustment or Invoice Cancellation Form submitted. The Processing Adjustments procedural document states that the CSR (Utilities Customer Service Center Representative) will fill out an Invoice Cancellation Form if the entire invoice needs to be cancelled. Failing to submit the Invoice Cancellation Form results in gaps in documentation and does not allow verification of proper review and approval of the invoice cancellation. • For 1 miscellaneous adjustment tested, the Invoice Cancellation Form was incorrectly filled out by the CSS to include the incorrect Invoice Document Number. This resulted in a data entry error on the Invoice Cancellation Form. For 1 consumption adjustment tested, an adjustment was incorrectly entered in the Adjustment Log, due to a typographical error, however, the correct amount was updated in SAP. Therefore, this did not result in a billing error to the customer. 14 Item 9: Staff Report Pg. 43 Packet Pg. 263 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 When proper approvals for adjustments are not obtained and documented, there is potential for inappropriate adjustments, financial losses, or fraud. As approval is currently obtained via DocuSign or manually entered in the Adjustment Log, there is an increased possibility for improper approval due to human error. Some account write-offs of stale -dated checks were not properly approved during the period tested. The City collects customer payments and adjusts A/R for cash received. Accounts that are aged past 30 days are considered "past due" and may be escalated to internal collections, an external collections agency, and eventually written off, as demonstrated in the table below: Customer Account Aging Table ..• 1 to 30 days .. .� Current No action 31 to 90 days Past Due Automated system letter generation 91 to 180 days Delinquent Internal Collections 181 days to 3 years Collection Agency External Collections 4+ years Write-off Cancellation of A/R and Write-off Cancellation of uncollectable utilities A/R and write-off occurs during the following exceptions: • Aged 4+ years • Amounts <$25 and 91+ days • Discharged/Uncollectible Bankruptcies and 1+ days • Verified deceased and 1+ days • Deemed as uncollectible by external collection agency For invoice cancellation and write-off of customer accounts, a Quarterly Utilities Invoice Cancellation Memorandum and Form (Quarterly Memo) is submitted for review and approval of cancellation of uncollectible utilities accounts receivable and write-off. The OCA selected a sample of 25 account write-offs of uncollectable utility accounts during FY 2023 - FY 2024 for testing. During the period tested, collections were put on hold on March 4th, 2020 — October 2023 due to COVID-19. Therefore, the OCA did not test the collections process. Out of 25 account write-offs tested, there were 4 exceptions noted. The OCA observed that for all 4 stale -dated check write-offs sampled, the support, showing proper approval for the write-off, was not attached to the Quarterly Memo per the City Write-off Policy for Utilities Bad Debt. By omitting support for review and approval, this could lead to inaccurate financial reporting if all write-offs are not properly reviewed. Per discussion with the CPAU Department, these were unintentionally omitted from the reports by an employee in training. The amounts of each stale -dated check did not exceed $25. Per review of the FY 24-25 1st 15 Item 9: Staff Report Pg. 44 Packet Pg. 264 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Quarter Memo, the OCA observed that stale -dated check write-offs were properly included in the attached support. Recommendation We recommend that the City review the adjustments process to determine if there are ways to automate approvals in SAP rather than relying on manual processes which can increase the possibility for human error. Otherwise, the City should review the current Processing Adjustments procedural document to ensure it is comprehensive and includes all necessary steps for accurately recording and reviewing adjustments. The City should determine if an IC WEB interaction record should be submitted for all miscellaneous adjustments and ensure this process is implemented by the CPAU Department. Additionally, if automation is not possible, the City could consider enhancing the procedural document by incorporating a checklist for both the processor and the approver of the adjustment. The approver checklist should include steps to reconcile adjustments entered in SAP with supporting documentation. By defining these steps in a checklist, the reviewer is more likely to identify any data entry errors before approving an adjustment. The CPAU Department should provide regular training sessions for staff on any updated procedures and the importance of accurate data entry and review. Lastly, we recommend that the City maintain the practice of incorporating stale -dated check support in the Quarterly Memo and integrate this procedure into training materials or official policies. This will help ensure employees consistently follow this important step and prevent any potential oversights. Management Responsible Department(s): CPAU Response Concurrence: Agree Target Date: Q4 CY 2025 Action Plan: Staff concur with the audit finding regarding the benefits of automation in mitigating human error. As the Office of the City Auditor (OCA) acknowledges, automation is not always feasible or readily attainable. Currently, staff adhere to the established standard operating procedures outlined in the Processing Adjustments procedural document to ensure accurate processing. To further address the finding, we will undertake the following actions: • Automation Assessment: Staff will assess the effort and costs associated with automating the adjustment process within the current SAP environment. These specifications will be considered during the development of the next system upgrade. • Procedural Enhancement: Staff will revise the Processing Adjustments procedural document to incorporate a reference to an adjustment checklist. This will enhance clarity and ensure all necessary steps are followed. 16 Item 9: Staff Report Pg. 45 Packet Pg. 265 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Furthermore, to ensure comprehensive clarity and consistency across all related processes, the following areas within the procedural document will be reviewed and updated as needed: inclusion of the ICWEB interaction record with each adjustment; clarification of training requirements and documentation expectations at each staff/approval level; all processes, including the quarterly write-off process, reflect appropriate backup and review procedure expectations in the checklist. Targeted changes include: • Adjustments (Misc. Adjustments, Invoice Cancellations, Green Waste Adjustments, Water Leak Credits) are to be submitted in DocuSign for approval process, according to the Authority Level. • Adding that an IC WEB interaction record is required for adjustments. (Misc. Adjustments, Invoice Cancellations, Green Waste Adjustments, Water Leak Credits) • Review and update the Miscellaneous Adjustment and Invoice Cancellation forms including process for checking data in the form prior to approving and processing. Process to include steps to verify information in SAP. • Review and update Adjustment Log. Include steps to verify information in SAP before providing approval. Clarifying approval process, to include screenshots of the steps. • The City's Quarterly Write off training instructions will add the process to include the stale dated checks on the Quarterly Write -Off Memo Finding 2: Through our testing and analysis of the process map, the OCA identified some internal control gaps in the billing process, specifically related to Two internal segregation of duties and timely resolution of billing adjustments. control gaps in the utility billing The CPAU Department does not enforce proper segregation of duties process should be between processing and approving consumption adjustments. addressed to The utility billing process does not currently instruct staff on the proper prevent potential segregation of duties to ensure that the same person processing a errors and consumption adjustment is not the same person approving the adjustment. In inefficiencies, the current utility billing process, the same individual can both record and self - approve adjustments. For 3 consumption adjustments tested, the same individual processed and approved the adjustments on the Adjustment Log. The absence of segregation of duties between processing and approving consumption adjustments can result in inadequate review and increased risk for potential errors or fraud. The City can minimize these risks by utilizing more than one person to complete they types of tasks. Segregating duties helps an organization reduce the risk of errors and fraud by distributing responsibilities and accountability among multiple people and/or departments. Outstanding investigations are not regularly reviewed to ensure prompt resolution of billing adjustments. 17 Item 9: Staff Report Pg. 46 Packet Pg. 266 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Adjustments can originate from various sources, such as customer billing disputes or when atypical billing and/or consumption amounts are during review via exception reports. If the accuracy of a customer bill is in question, the CSS opens a Service Notification (SN) in SAP to investigate the potential issue. After the SN is created, a Field Service Technician conducts a further review of the meter. The CSS is responsible for monitoring the status of any outstanding SNs. Despite the CSS's responsibility to follow up on outstanding SNs, there is no regular, formal review process for these outstanding investigations. This lack of a structured review can lead to prolonged open investigations and unresolved customer bills, causing delays in resolution. We noted an example where this lack of a structured review led to a prolonged open investigation for more than 2 months (77 days) after the initial customer complaint and unresolved customer bill, causing delays in resolution. Delays in resolving billing issues can lead to inaccurate financial records and operational inefficiencies as well as customer frustration and dissatisfaction. Recommendation We recommend that the City consider implementing a control to ensure proper segregation of duties between processing and approving adjustments. Without proper segregation of duties, there is a risk of potential error or fraud, as an individual can self -authorize an adjustment without adequate review. Additionally, we recommend that the City consider implementing a regular, periodic review process for outstanding billing adjustments to prevent prolonged unresolved billing issues. The City should establish specific timeframes for reviewing outstanding adjustments and maintain thorough documentation of these reviews. This approach will enable the CPAU Department to better monitor the timeliness and effectiveness of resolving investigations and billing adjustments. The City should provide ongoing training and support for CSSs and Field Service Technicians to ensure they are equipped to handle billing adjustments efficiently and effectively. Management Responsible Department(s): CPAU Response Concurrence: Agree Target Date: Q4 CY 2025 Action Plan: Staff concur that standardized processes and robust internal controls are essential for mitigating the risks of errors and fraud. As noted in the prior response, staff are revising the Processing Adjustments procedural document to include a reference to a comprehensive adjustment checklist, ensuring all required steps are clearly delineated and consistently followed. The Processing Adjustments procedural document and the new checklist will incorporate the following enhancements: • Clear Approval Authorities: A review and update of approval authorities will be conducted, specifying both dollar thresholds and appropriate signing authority. 18 Item 9: Staff Report Pg. 47 Packet Pg. 267 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Implausibles Documentation: The Implausibles documentation will be revised to include a documented process for managing outstanding investigations. • Training Expectations: Consistent with the above, training expectations related to the revised procedures and controls will be clearly outlined within the documentation. To further strengthen oversight and segregation of duties, staff will facilitate coordination between the Utilities Department and the Administrative Services Department providing an independent review of these procedure revisions to ensure their effectiveness and alignment with the City's internal control practices. Review and update Implausibles documentation to include a process for these outstanding investigations, which includes checkpoints for follow up. • Review DocuSign documentation to include expectations for review steps and timely approvals deadlines. • Coordinate training with CSR, CSS for follow up procedures for Service Notifications investigations. • Project coordinator currently working on checklist and updated policies and procedures for follow up on billing investigations. • Completion target is resolutions within two billing cycles. • Communicate with Meter Shops on timely resolution of field issues. Additional Observations: 1. Formalizing The CSR/CSS manually inputs adjustments into the Adjustment Log, an excel and more sheet kept by the CPAU Department. When entering an adjustment in the log, consistently the CSR/CSS notes the reasoning for the adjustment in the "Adjustment "Notes" documenting Reason" and/or column of the log. adjustments may Per the OCA's observation of the adjustment documentation in the adjustment improve logs, we noted that there were blank rows, and a variety of adjustment efficiency reasons and notes entered in the Adjustment Log. The adjustment notations did not follow a consistent naming convention or provide a clear and detailed reasoning for the adjustment. The CPAU Department could enhance the adjustment documentation process by creating a bank of approved adjustment reasons (reason codes) and notes to ensure consistency throughout the process. Additionally, by formalizing notations of adjustments and the reasoning, the reviewer could better understand the adjustment justification and ensure that it was appropriate. 19 Item 9: Staff Report Pg. 48 Packet Pg. 268 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 2. Formally CPAU management said they do not formally track utility billing Key tracking key Performance Indicators (KPIs) but do monitor some indicators periodically. Utility Billing There are several utility billing KPIs that could help the utility track its billing indicators could function performance over time and improve its effectiveness and efficiency. aid CPAU in Based on our analysis of a few industry publications, use of such indicators monitoring can help management make more informed decisions, improve operations and increase customer satisfaction. Some of these indicators include: performance over time • Billing Error Rate — percentage of total bills that have errors • Customer Satisfaction Score — a direct measure of satisfaction with services provided • Collection Rate — percentage of billed amount received within a specific time frame • Percentage of On -Time Payments — percentage of payments that were paid timely • First Contact Resolution Rate — percentage of customer inquiries or issues resolved during the first interaction Tracking KPIs over time can help an organization see trends, note when performance either improves or worsens, and determine what areas may need assessment. 6 7 KPIS and Metrics That Your Utility Needs to Know - Silver Blaze Solutions 7 KPIs to Streamline Utility Billing 20 Item 9: Staff Report Pg. 49 Packet Pg. 269 of 309 ■ Appendices Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Appendix A: Meter Reading Process Map Process Narrative 1. Meter Readers are assigned a specific route and walk the route performing reads through visual inspection or with AMI meters. Customers have the ability to self report their meter data by submitting a photo of their meter to the utility department email. Meter reads Input meter data into handheld Dock meter reader in reading 2. Meter data is either inputted manually by meter readers who visually inspect meters and input data into a handheld device or O V,rual device station transmitted wirelessly via AMI meters to pole -mounted antennas at five CPAU substations. The data is then uploaded to the Utilities billing system. By April 2025 AMI implementation is planned to be complete. Meter data is 3. Meter Readers dock their handheld devices into a reading station sdf Rarrd Ay,, automatically and the data is automatically uploaded to SAP. transmitted to billing 4. SAP performs a validation checkpoint for consumption data based v rtment on established thresholds set by pre-programmed tolerance bands or an established range. The accounts that fall outside of these established parameters are placed on the Implausibles exception report. 5. The Customer Service Specialist (CSS) analyzes the Implausibles exception report and determines whether to release the accounts for Self report billing or if an adjustment is necessary. meter data 6. After the 'Implausiblesprocess, SAP performs a validation checkpoint for billing charges that fall outside of established parameters. The Billing Outsorts exception report is generated for further review. 7. The CSS analyzes the Billing Outsorts exception report and determines whether to release the accounts for invoice processing or if an adjustment is necessary. Invoice processing is held until reviewed Check consumption check billing data and released by a Customer Service Specialist. Bills are sent to the data against Is meter read against established Is Will Release billing to customer via mail or electronically. established parameters for data acairate? parameters for aolwaoa? bill customer accuracy accuracy. Controls Review and determine if an adjustments is necessary Cl: SAP performs a validation checkpoint for consumption data for accounts that fall outside of established parameters and an exception report is generated for further review. Review and C2: The CSS reviews the Implausibles exception report and determines determine if an whether exceptions are valid or if an adjustment is necessary. adjustments is necessary C3: SAP performs a validation checkpoint for billing charges for accounts that fall outside of established parameters and an exception report is generated for further review. C4: The CSS reviews the Billing Outsorts exception report and • determines whether exceptions are valid or if an adjustment is necessary. 22 Item 9: Staff Report Pg. 51 1 Packet Pg. 271 of 309 Item 9 Attachment B - Utility Billing Audit, January 30, 2025 Appendix B: Utility Billing Adjustment Process Map Consumption Miscellaneous Yes ► ► w No • Yes ► No V cl O IT_i Process Narrative 1. Once the CSS determines that an adjustment is needed, they start the adjustment process. Adjustments are initiated from a few different sources: 1) Customer calls to question or dispute billings; 2) Incorrect read identified while processing "Implausible" exceptions; 3) Miscellaneous billing adjustments submitted to CSS for addition to C2 the account. 4) Incorrect billing charges are identified while I processing "Billing Outsorts" exceptions, and, 5) annual reconciliation of the refuse service data. ri Once the type of adjustment: Consumption or Miscellaneous (credit/ debiting a customer for discrepancies, Water Leak Credit, or GreenWaste emails to process refuse adjustments) has been determined, the CSS will process the adjustment following the established procedure. • 2. For Consumption adjustments, a Service Notification will be scheduled to confirm the read and test the meter for accuracy if applicable. Once the SN has been completed, the CSS fills out the Adjustment Log and records the adjustment in SAP. 3. The Consumption adjustment is approved on the Adjustment Log by the appropriate authority level. 4. For all Miscellaneous adjustments with the exception of GreenWaste adjustments, once the adjustment has been reviewed it is approved via DocuSign by the appropriate authority level. For more detailed adjustments that require entire invoices to be cancelled, an Invoice Cancellation Form is required to be submitted and approved via DocuSign by the appropriate authority level. S. The CSS enters the adjustment into the applicable Adjustment Log and records the adjustment in SAP. 6. The CSS notes the account in ICWFB. Controls Cl. Miscellaneous adjustments are approved by the proper authority and signing level via DocuSign. C2: Consumption adjustments are approved by the proper authority level on the Adjustment Log. Control Gaps G1: There is no established review of outstanding Service Notifications, leaving the potential for extended processing times. G2: There are no segregation of duties between processing and approving Consumption adjustments. allowing the CSS to self - authorize adjustments. 23 Item 9: Staff Report Pg. 52 1 Packet Pg. 272 of 309 Item 10 Item 10 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Transportation Meeting Date: March 24, 2025 Report #:2411-3835 TITLE Approval of an Amended Funding Agreement with the Santa Clara Valley Transportation Authority (VTA) for 2016 Measure B Bicycle and Pedestrian Education and Encouragement Program Funding; CEQA status — not a project. RECOMMENDATION Staff recommends that Council authorize the City Manager to execute an amended and restated funding agreement with VTA for the 2016 Measure B Bicycle and Pedestrian Education and Encouragement Program through March 2047 (the life of Measure B). BACKGROUND On November 8, 2016, Santa Clara County voters passed 2016 Measure B1 ("Measure B"), a 30 - year, half -cent sales tax measure funding transportation projects. Collection of the tax revenue began on April 1, 2017. The measure funds projects in nine program areas. The Bicycle and Pedestrian Program2 is allocated 3.97% of tax revenue to eliminate gaps in active transportation networks and to make walking and bicycling safer and more convenient. The program has three sub -categories: Planning Studies, Capital Projects, and E&E. The current agreement with VTA for the Bicycle and Pedestrian Program E&E Category funds was signed by the City Manager on October 29, 2019 and signed by VTA on November 13, 2019. This agreement expires on June 30, 2025. The amended and restated funding agreement (Attachment A) for 2016 Measure B Bicycle & Pedestrian E&E Program Category funds will go through the life of the measure until March 31, 2047 — reducing need and effort to renew and extend the current funding agreements every two years. This new agreement also includes new 1 VTA 2016 Measure B, https://2016measureb.vta.org/ 2 VTA 2016 Measure B, Bicycle and Pedestrian Program, https://2016measureb.vta.org/?transactionType=award&grantee=&protect=&category=Bicycle%20%26%2OPedest rian Item 10: Staff Report Pg. 1 Packet Pg. 273 of 309 Item 10 Item 10 Staff Report 2016 Measure B standard language. Approval and execution of the funding agreement with VTA is required for the City to access any of the Bicycle & Pedestrian funds. ANALYSIS E&E funds can be used, with VTA's approval, for activities such as: organization and implementation of Safe Routes to Schools programs and activities, education of walking and bicycling skills to adults and children, and purchase and distribution of bicycle helmets, lights, reflective vests, or other bicycle/pedestrian safety equipment to be used in education/encouragement activities. Funds are only available for activities or projects for individuals who live, work, or attend school in Palo Alto. Funds may be used for direct costs or staff time costs. Funds may not be used for capital improvements. The City has previously utilized this funding for reimbursement of staff time and is currently using funding for K-5 bicycle and pedestrian safety educational programming. The City's maximum funding allocation for each fiscal year (July 1st through June 30th of the following calendar year) is based upon an annual population -based distribution formula (Attachment A, Section II, Paragraph 5). The County of Santa Clara has a separate agreement for these funds that also address the sharing of countywide funds/activities with VTA. The City must submit a work program and annual progress report3 as part of the funding agreement. Upon execution of the funding agreement, the City will continue to receive annual allocations from Measure B. FISCAL/RESOURCE IMPACT The City receives approximately $50,000 annually in E&E funds, and the VTA releases its annual funding allocations in two-year cycles. FY 2024 and 2025's allocation has been budgeted to help fund K-5 bicycle and pedestrian safety educational programming as previously mentioned, and future funding is also earmarked for this purpose.4 The VTA has yet to announce its allocations for FY 2026 and FY 2027. Depending on the timing of the announcement, staff will request to appropriate the additional funding through the FY 2026 budget process or the FY 2026 mid -year budget review. No additional budgetary action is required at this time. ENVIRONMENTAL REVIEW Approval and execution of the funding agreement are actions that do not meet the definition of a project for the purposes of CEQA, under Public Resources Code Section 21065 and CEQA 3 Palo Alto Bike/Pedestrian Education & Encouragement Program, VTA, https://2016measureb.vta.org/projects/palo-alto-bike-pedestrian-education-encouragement-program ° City Council, February 24, 2025; Agenda Item #9; SR #2412-3864, https://cityofpaloaIto.primegov.com/Portal/viewer?id=0&type=7&uid=141736ca-9e37-4a2f-a38c-aeba5c8e1048 Item 10: Staff Report Pg. 2 Packet Pg. 274 of 309 Item 10 Item 10 Staff Report Guidelines Section 15378(b)(5), because they are administrative governmental activities which will not cause a direct or indirect physical change in the environment. Each project funded via Measure B Bicycle and Pedestrian E&E funds will be reviewed for compliance under CEQA. ATTACHMENTS Attachment A: 2016 Measure B Bicycle & Pedestrian Education and Encouragement Program Funding Agreement APPROVED BY: Lily Lim-Tsao, Interim Chief Transportation Official Item 10: Staff Report Pg. 3 Packet Pg. 275 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and AMENDED AND RESTATED FUNDING AGREEMENT BETWEEN Encouragement Program CITY OF PALO ALTO AND SANTA CLARA VALLEY TRANSPORTATION AUTHORITY FOR 2016 MEASURE B BICYCLE & PEDESTRIAN EDUCATION AND ENCOURAGEMENT PROGRAM THIS AMENDED AND RESTATED FUNDING AGREEMENT ("AGREEMENT") is entered into as of July 15Y, 2025 ("EFFECTIVE DATE") and is by and between the CITY OF PALO ALTO ("RECIPIENT") and SANTA CLARA VALLEY TRANSPORTATION AUTHORITY ("VTA"). RECIPIENT and VTA may be individually referred to as "PARTY" or collectively referred to as "PARTIES." RECITALS 1. Whereas, on June 24, 2016, the VTA Board of Directors ("VTA BOARD") adopted a resolution to place a ballot measure before the voters of Santa Clara County ("SCC") in November 2016 to authorize a one-half of one percent retail transaction and use tax ("2016 MEASURE B") for 30 years for nine transportation -related program categories; 2. Whereas, on November 8, 2016, the voters of Santa Clara County enacted 2016 MEASURE B for 30 years to pay for the nine transportation -related program categories; 3. Whereas, on October 5, 2017, the VTA BOARD established the 2016 Measure B Program ("PROGRAM") and adopted the 2016 Measure B Program Category Guidelines ("GUIDELINES"). In addition, VTA established a program manual ("PROGRAM MANUAL"). Both the GUIDELINES and the PROGRAM MANUAL are incorporated into this Agreement by this reference and available at www.vta.org or upon request to VTA; 4. Whereas, the PROGRAM includes a Bicycle & Pedestrian program category ("BIKE/PED CATEGORY") to fund bicycle and pedestrian projects and educational programs; 5. Whereas, the BIKE/PED CATEGORY consists of three sub -categories, including the education & encouragement program ("BIKE/PED E&E PROGRAM"); 6. Whereas, the duration of 2016 MEASURE B will be 30 years from the initial year of collection, beginning April 1, 2017, and continuing through March 31, 2047; 7. Whereas, the PARTIES executed a funding agreement for the BIKE/PED E&E PROGRAM funds on November 13, 2019 which expires on June 30, 2025 ("PRIOR AGREEMENT"); and 8. Whereas, the PARTIES desire to amend and restate the PRIOR AGREEMENT to, among other things, specify the terms and conditions under which VTA will administer BIKE/PED E&E PROGRAM funds allocated to VTA and RECIPIENT through the life of the PROGRAM. NOW, THEREFORE, in consideration of the mutual promises contained in this AGREEMENT, the PARTIES agree as follows: Rev 2.4.25 Page 1 of 19 Item 10: Staff Report Pg. 4 Packet Pg. 276 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and AGREEMENT 1. BIKE/PED E&E PROGRAM DEFINITION Encouragement Program Funding Agreement The BIKE/PED E&E PROGRAM covers activities and the development and distribution of materials that are designed and intended to satisfy the following goals within RECIPIENT's jurisdiction: (i) promote, educate, and/or encourage safe walking or bicycling for residents or visitors of every age and ability; (ii) communicate to residents and visitors the benefits of walking and bicycling; and (iii) communicate to school children, residents, and visitors the rights and responsibilities of pedestrians, bicyclists, and motorists. 2. TERM OF AGREEMENT The term of this AGREEMENT will commence on the EFFECTIVE DATE and continue through March 31, 2047, or until BIKE/PED E&E PROGRAM CATEGORY funds allocated to RECIPIENT have been expended entirely, whichever occurs later. Notwithstanding the foregoing, the PARTIES may terminate this AGREEMENT pursuant to Section II, Paragraph 13. 3. ELIGIBLE USE OF FUNDS A. RECIPIENT may use RECIPIENT's allocated BIKE/PED E&E PROGRAM funds only for activities/projects that (i) are offered/available to individuals who live, work, or attend school in RECIPIENT'S boundaries or school districts, and (ii) VTA has pre -approved in writing (each, an "E&E PROJECT"). Only VTA's AUTHORIZED REPRESENTATIVE (defined in Section II, Paragraph 15 below), or designee, has authority to approve an E&E PROJECT. B. VTA will consider for approval the following types of activities / projects: i. Organization and implementation of K-12 Safe Routes to Schools programs and activities. ii. Organization and implementation of Vision Zero programs. "Vision Zero" is defined by the Vision Zero Network campaign as the "Strategy to eliminate all traffic fatalities and severe injuries while increasing safe, healthy, equitable mobility for all," which definition is adopted for purposes of this AGREEMENT. iii. Organization and implementation of open streets events. "Open streets events" are defined by the Open Streets Project (an advocacy project and collaboration between 8 80 Cities and Street Plans) as "Programs that temporarily open streets to people by closing them to cars," which definition is adopted for purposes of this AGREEMENT. iv. Creation and implementation of marketing to encourage mode shift towards active transportation. v. Development and distribution of maps that promote places to walk or bike. vi. Education of walking and bicycling skills to adults and children. vii. Working with law enforcement officials to ensure common understanding and consistent application among law enforcement officials of traffic laws related to biking and walking. viii. Organization and implementation of broad or targeted safety campaigns to promote safe driving, walking, and bicycling behavior.* Rev 2.4.25 Page 2 of 19 Item 10: Staff Report Pg. 5 Packet Pg. 277 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and ix. Creation and distribution of marketing materials to encourage sa Encouragement Program and driving.* Funding Agreement x. Purchase and distribution of bicycle helmets, lights, reflective vests, or other bicycle/pedestrian safety equipment to be used in education/encouragement activities. xi. Purchase and distribution of incentives for education/encouragement activities. xii. Organization and implementation of crosswalk stings or other activities that educate roadway users on traffic laws. Crosswalk stings are activities conducted by law enforcement to educate the public about crosswalk right of way laws that may or may not include citations. xiii. Organization and implementation of special community events focused on achieving the BIKE/PED E&E PROGRAM goals described in Section II, Paragraph 1, such as community rides or walks. xiv. Energizer stations and other Bike to Wherever Day activities. xv. Implementation of valet bicycle parking. xvi. Community -based bicycle/pedestrian surveys of facilities and surrounding areas to learn, observe, and identify bicycle and pedestrian hot spots. xvii. Any other program or activity VTA pre -approves in writing. *Any safety campaign or public service announcement targeted to motorists must focus on safe, responsible, and respectful motorist interactions with pedestrians and bicyclists. C. RECIPIENT is permitted to use BIKE/PED E&E PROGRAM funds allocated for (i) direct costs and staff time costs incurred by RECIPIENT to support E&E PROJECTS, and (ii) costs incurred for evaluation of the E&E PROJECTS (as required under Section II, Paragraph 4). D. Notwithstanding any other provision of this AGREEMENT, RECIPIENT is not permitted to use BIKE/PED E&E PROGRAM funds for capital improvements. E. E&E PROJECTS maybe targeted and limited to specific demographics including, but not limited to, school children, seniors, or people with disabilities to the extent not prohibited by applicable law. F. Only BIKE/PED E&E PROGRAM costs incurred by RECIPIENT on or after July 1, 2017, will be eligible for reimbursement. 4. EVALUATION REQUIREMENTS A. RECIPIENT must identify (i) the project reach and scale of each E&E PROJECT and (ii) one or more metric(s) that will be used to evaluate whether the goal was achieved. Examples of acceptable metrics are set forth in Attachment A, attached hereto and incorporated herein. B. RECIPIENT must identify and obtain VTA's prior written approval of the frequency and schedule of each E&E PROJECT evaluation. Rev 2.4.25 Page 3 of 19 Item 10: Staff Report Pg. 6 Packet Pg. 278 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and 5. MAXIUMUM FUNDING ALLOCATIONS Encouragement Program Funding Agreement J A. RECIPIENT'S maximum funding allocation for each fiscal year (July 1st through June 30th of the following calendar year) will be based upon the VTA BOARD's Adopted Biennial Budget for the BIKE/PED E&E PROGRAM and the annual fund distribution formula described below. B. Annual Fund Distribution Formula. The BIKE/PED E&E PROGRAM annual fund distribution formula is calculated every two fiscal years (in line with VTA's budget cycle) and is based on the following: i. First, at the same time that VTA plans and finalizes its budget for the two upcoming fiscal years, the VTA BOARD determines the allocation of 2016 MEASURE B funds for the two upcoming fiscal years. ii. Second, the VTA BOARD determines the amount of 2016 MEASURE B funds to be allocated amongst the PROGRAM categories and subcategories, including the BIKE/PED E&E PROGRAM CATEGORY. iii. Third, an allocation is made to VTA and the County of Santa Clara for countywide (with respect to Santa Clara County) BIKE/PED E&E PROGRAM activities ("COUNTYWIDE ACTIVITIES"). Per the GUIDELINES, COUNTYWIDE ACTIVITIES will receive 25% of available BIKE/PED E&E POGRAM funds. iv. Fourth, the 2016 Measure B funds remaining for the BIKE/PED E&E PROGRAM category allocation are calculated by deducting the amount allocated for COUNTYWIDE ACTIVITIES in subparagraph (iii), immediately above, from the total BIKE/PED E&E PROGRAM category allocation ("REMAINING FUNDS"). v. Fifth, VTA determines the percentage of the total population of SCC ("TOTAL SCC POP") of each city ("CITY POP") and of the unincorporated areas of SCC ("SCC UNINCORP POP") to determine allocations to each city. For purposes of these calculations, the TOTAL SCC POP includes unincorporated areas and is based on the then most current California Department of Finance's more current annual population estimates at the time of allocation determination, i.e., Report E-1, or any successor report. Each CITY POP is divided by the TOTAL SCC POP, and then the result is multiplied by 100. The result for each city is the "CITY PERCENTAGE SHARE" (for SCC, the "SCC PERCENTAGE SHARE"). vi. SIXTH, each CITY PERCENTAGE SHARE (including the SCC PERCENTAGE SHARE) is multiplied by the REMAINING FUNDS to determine the dollar amount that would be allocated to each city based on their CITY PERCENTAGE SHARE; however, no allocation is yet made at this step. Cities that would receive less than $10,000 as a result of the calculation described in Subsection (v) will be identified as low population cities ("LOW POP CITIES"). vii. Seventh, each city is allocated $10,000 ("10K ALLOCATIONS"). LOW POP CITIES will not be allocated any additional funds beyond the 10K ALLOCATIONS made to each city as described in this Subsection (vii). The minimum 10k ALLOCATIONS will continue through fiscal year 2025. Following fiscal year 2025, the minimum allocated to LOW POP CITIES will increase by Rev 2.4.25 Page 4 of 19 Item 10: Staff Report Pg. 7 Packet Pg. 279 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and $2,000 every five years. See the "LOW POP CITES ALLOCATION SCHI Encouragement Program Ithis AGREEMENT as Attachment B, attached hereto and incorporated hL Funding Agreement viii. Eighth, the modified REMAINING FUNDS are calculated by subtracting the cumulative total of allocations made to LOW POP CITIES from the REMAINING FUNDS ("MOD REMAINING FUNDS"). ix. Ninth, a modified Santa Clara County population is calculated by deducting the SCC UNINCORP POP and all LOW POP CITIES from the TOTAL SCC POP ("MODIFIED POPULATION"). x. Tenth, a modified population percentage share ("MOD CITY PERCENTAGE SHARE") is calculated for all cities that are not LOW POP CITIES ("NON -LOW POP CITIES") by dividing the NON -LOW POP CITY'S total population by the MODIFIED POPULATION and multiplying the result by 100. xi. Eleventh, each NON -LOW POP CITY'S MOD CITY PERCENTAGE SHARE is multiplied by the MOD REMAINING FUNDS to calculate each NON -LOW POP CITY's additional allocation of 2016 Measure B funds for the BIKE/PED E&E PROGRAM category. This allocation will be made in addition to the 10K ALLOCATION described above. C. RECIPIENT's allocations are subject to change based on allocations made by the VTA BOARD pursuant to the PROGRAM. D. BIKE/PED E&E PROGRAM allocations may be banked and remain unspent fora maximum of three fiscal years, provided that (i) RECIPIENT provides VTA with a satisfactory explanation for why the allocation is not being spent and (ii) VTA provides RECIPIENT with written approval for such explanation. In this instance, RECIPIENT must begin drawing funds during the fourth fiscal year. Following the third fiscal year of banked allocations and within the fourth fiscal year, RECIPIENT must provide to VTA the required documentation as described in Section II, Paragraph 7. In this fourth fiscal year, RECIPIENT must submit, at minimum, one invoice for funds towards an E&E PROJECT. If RECIPIENT fails to do the above by the end of the fourth fiscal year and no funds have been spent in the past four consecutive fiscal years, then allocations will be returned by VTA to the pool of 2016 MEASURE B funds allocated to the BIKE/PED E&E PROGRAM category for redistribution in the next allocation cycle pursuant to the formula above. E. All funds will be available to RECIPIENT on a reimbursement basis only. Rev 2.4.25 Page 5 of 19 Item 10: Staff Report Pg. 8 Packet Pg. 280 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and 6. VTA's OBLIGATIONS VTA will: Encouragement Program Funding Agreement J A. Annually report to the public the amount of BIKE/PED E&E PROGRAM revenues allocated and distributed to RECIPIENT. B. Annually report to the public a summary of E&E PROJECT evaluation metrics submitted by RECIPIENT, as required in Section II, Paragraph 4. C. Conduct an assessment regarding the effectiveness of the BIKE/PED E&E PROGRAM using approved metrics and data provided by RECIPIENT (pursuant to Section II, Paragraph 4) related to RECIPIENT's E&E PROJECT(s). D. Biennially, or however frequently as VTA determines is appropriate based upon the number of ongoing E&E PROJECTS, report to the public the effectiveness of the BIKE/PED E&E PROGRAM based on the assessment described immediately above in Section II, Paragraph 6(C). E. Remit the amount due to the RECIPIENT under an invoice within thirty (30) calendar days of receipt of a complete and proper, fully documented invoice complying with the requirements set forth herein. 7. RECIPIENT's OBLIGATIONS RECIPIENT must: A. Comply with 2016 Measure B reporting requirements. B. Ensure that all 2016 MEASURE B funds are expended on allowable BIKE/PED E&E PROGRAM expenditures as described above in Section II, Paragraph 3, ELIGIBLE USE OF FUNDS. C. Annually complete and submit to VTA, by October 1st of each year, RECIPIENT's proposed work program for the BIKE/PED E&E PROGRAM, in which RECIPIENT must set forth proposed E&E PROJECTS and develop all such E&E PROJECTS that are approved by VTA as eligible. RECIPIENT's proposed metrics and frequency of E&E PROJECT evaluation must be included with the proposed work program (see Section II, Paragraph 4); VTA must provide approval of the proposed metrics and frequency of evaluation. D. Annually submit to VTA, by October 1st of each year, a summary of the prior fiscal year's completed E&E PROJECTS. E. Submit to VTA, on a frequency as approved by VTA, the evaluation of the completed E&E PROJECTS pursuant to Section II, Paragraph 4. F. If applicable, annually submit to VTA, by October 1st of each year, an explanation of why no BIKE/PED E&E PROGRAM funds are planned for expenditure during the upcoming fiscal year. Rev 2.4.25 Page 6 of 19 Item 10: Staff Report Pg. 9 Packet Pg. 281 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and G. Annually complete and submit to VTA, by October 1st of each year, any a Encouragement Program ting requirements for the BIKE/PED E&E PROGRAM. L Funding Agreement H. Submit to VTA all records including contractors' invoices, miscellaneous invoices, and force account charges as substantiation for invoices submitted to VTA for reimbursement hereunder. I. Maintain financial records, books, documents, papers, accounting records, and other evidence pertaining to costs related to this AGREEMENT for five (5) years. RECIPIENT shall make such records available to VTA upon VTA's written request for review and audit purposes. Financial audits will be performed at VTA's sole discretion. J. Submit invoices to VTA, no more frequently than monthly, for reimbursement of eligible E&E PROJECT costs (see Section II, Paragraph 3) RECIPIENT must submit invoices within one year of the date RECIPIENT incurs the cost submitted on the invoice for reimbursement (unless otherwise approved by VTA in writing). K. At all times during this AGREEMENT, RECIPIENT must comply with the insurance requirements and specifications of the attached Attachment C, Insurance Requirements. RECIPIENT may, in its discretion, elect to self -insure, but any such self-insurance must meet the requirements and specifications in Attachment C. 8. INDEMNIFICATION Neither VTA nor any officer or employee thereof will be responsible for any damage or liability arising out of or relating to RECIPEINT's negligent acts or omissions, recklessness, or willful misconduct under or in connection with any work, authority, or jurisdiction associated with this AGREEMENT. Pursuant to California Government Code §895.4, RECIPIENT must fully defend, indemnify, and hold harmless VTA from all suits or actions of every name, kind, and description arising from an injury (as defined by California Government Code §810.8) arising out of or relating to RECIPEINT's negligent acts or omissions, recklessness, or willful misconduct under or in connection with any work, authority, or jurisdiction delegated to RECIPIENT under this AGREEMENT. This provision will survive the termination or expiration of this AGREEMENT. 9. INSURANCE At all times during this Agreement, RECIPIENT must comply with the insurance requirements and specifications of Attachment C, Insurance Requirements, attached hereto and incorporated herein. RECIPIENT may, in its discretion, elect to self -insure, but any such self-insurance must meet the requirements and specifications in Attachment C. 10. ADDITIONAL INSURED AND INDEMNITY PROVISION In any agreement executed between the RECIPIENT and a third party for purposes related in any way to the subject matter of this Agreement ("Third Party Contract"), RECIPIENT must require that VTA be named as (i) an additional insured on a primary and non-contributory basis with separation of insureds and waiver of subrogation on all policies of insurance, except when not applicable and (ii) an indemnified party in any indemnity provision contained in the Third Party Contract. Third Party Contracts must contain insurance requirements with coverages at least as broad as, and limits at least as great as, the requirements of Attachment C. Rev 2.4.25 Page 7 of 19 Item 10: Staff Report Pg. 10 Packet Pg. 282 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and 11. COMPLIANCE WITH APPLICABLE LAW In execution of any E&E PROJECT and performance of its responsibilities set must comply with all applicable requirements of local, state, and federal law. Encouragement Program Funding Agreement ENT 12. COMPLIANCE WITH 2016 MEASURE B REQUIREMENTS A. In its performance under this AGREEMENT, RECIPIENT must comply, and must ensure E&E PROJECT compliance, with all PROGRAM requirements including, but not limited to, the GUIDELINES and PROGRAM MANUAL. B. VTA may, in its sole discretion, make changes to the GUIDELINES and/or the PROGRAM MANUAL at any time. If VTA makes such changes, VTA will notify RECIPIENT within a reasonable time of such changes. 13. TERMINATION A. Either PARTY may at any time terminate this Agreement by giving ten (10) business days written notice of such termination to the other PARTY. Notice must identify the effective date of such cancellation and must be provided in accordance with the terms and conditions of this AGREEMENT. B. In the event of termination under this section, City must submit its final invoice to VTA within thirty (30) calendar days of the effective date of termination, and such invoice will be solely for ELIGIBLE COSTS RECIPIENT incurred prior to termination. 14. AUDITS AND RECORDS A. RECIPIENT must maintain, and must require their contractors to maintain, in accordance with generally accepted accounting principles and practices, complete books, accounts, records, and data pertaining to services performed under this AGREEMENT, including the costs of contract administration. Such documentation must be supported by properly executed payrolls, invoices, contracts, and vouchers evidencing in detail the nature and propriety of any charges and must be sufficient to allow a proper audit of services. All checks, payrolls, invoices, contracts, and other accounting documents pertaining in whole or in part to the services must be clearly identified and readily accessible. B. For the duration of the AGREEMENT, and for a period of five years after final payment, each PARTY and its representatives must have access during normal business hours to any books, accounts, records, data, and other relevant documents ("RECORDS") of the other PARTY that are pertinent to this AGREEMENT for audits, examinations, excerpts, and transactions. The other PARTY must furnish copies of the RECORDS upon request. 15. NOTICES / AUTHORIZED REPRESENTATIVES A. Notices. Any notice which may be required under this AGREEMENT (i) must be in writing, (ii) will be effective one (1) business day after personal service or delivery by certified mail, and (iii) must be given by personal service or certified mail the other PARTY'S AUTHORIZED REPRESENTATIVE at the addresses set forth below, or to such other address that may be specified in writing by a PARTY. Rev 2.4.25 Page 8 of 19 Item 10: Staff Report Pg. 11 Packet Pg. 283 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and B. Authorized Representatives. VTA: Marcella Rensi Deputy Director, Programming and Grants Santa Clara Valley Transportation Authority 3331 N First Street San Jose, CA 95134 Email: marcella.rensi@vta.org RECIPIENT: Lily Lim-Tsao Interim Chief Transportation Official Palo Alto 250 Hamilton Ave Palo Alto, CA, 94301 lily.limtsao@cityofpaloalto.org Encouragement Program Funding Agreement J Written notification to the other PARTY must be provided, in advance, for changes in the name or address of the individuals identified above. The individual identified above for RECIPIENT is RECIPIENT's BIKE/PED E&E PROGRAM Liaison ("LIAISON"). The LIAISON shall be (i) the liaison to VTA pertaining to implementation of this AGREEMENT and (ii) the contact for information about the BIKE/PED E&E PROGRAM and E&E PROJECTS. 16. GENERAL TERMS AND CONDITIONS A. Headings. The subject headings of the articles and paragraphs in this AGREEMENT are included for convenience only and will not affect the construction or interpretation of any of its provisions. B. Incorporation of Exhibits and Attachments. All exhibits and attachments referenced in this AGREEMENT are incorporated into it by this reference. C. Construction and Interpretation of Agreement. This AGREEMENT, and each of its provisions, terms, and conditions, has been reached as a result of negotiations between the PARTIES. Accordingly, each PARTY expressly acknowledges and agrees that (i) this AGREEMENT will not be deemed to have been authored, prepared, or drafted by any particular PARTY and (ii) the rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this AGREEMENT or in the resolution of disputes. D. Amendment. No alteration or variation of the terms of this AGREEMENT will be valid unless made in writing and signed by both of the PARTIES hereto, and no oral understanding or AGREEMENT not incorporated herein will be binding on any of the PARTIES hereto. E. Entire Agreement. This AGREEMENT constitutes the entire agreement between the PARTIES relating to the subject matter and supersedes all prior negotiations, contracts, agreements, or understandings, whether oral or written, of the PARTIES regarding the subject matter. Rev 2.4.25 Page 9 of 19 Item 10: Staff Report Pg. 12 Packet Pg. 284 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and F. Representation of Authority. Each PARTY to this AGREEMENT represents Encouragement Program ach person whose signature appears hereon has been duly authorized and Funding Agreement y to execute this AGREEMENT on behalf of the entity that is a PARTY to this AGREEMENT. G. No Waiver. The failure of either PARTY to insist upon the strict performance of any of the terms, covenant, and conditions of this AGREEMENT will not be deemed a waiver of any right or remedy that either PARTY may have, and will not be deemed a waiver of either PARTY's right to require strict performance of all of the terms, covenants, and conditions hereunder. H. Dispute Resolution. a. If a question or allegation arises regarding (i) interpretation of this AGREEMENT or its performance, or (ii) the alleged failure of a PARTY to perform, the PARTY raising the question or making the allegation must give written notice thereof to the other PARTY. The PARTIES must promptly meet in an effort to resolve the issues raised. If the PARTIES fail to resolve the issues raised, alternative forms of dispute resolution, including mediation, may be pursued by mutual agreement. It is the intent of the PARTIES to avoid litigation as a method of dispute resolution to the greatest extent possible. b. Notwithstanding the foregoing, nothing in this Paragraph 16 will be deemed to prevent a PARTY from filing suit or an administrative action to preserve its right to assert a claim within any applicable statute of limitations. To the extent practicable, the PARTIES will negotiate in good faith to create a tolling agreement to toll such statute(s) of limitations to allow for the PARTIES to engage in dispute resolution provisions of this AGREEMENT prior to filing of such actions. I. Severability. If any term, covenant, condition or provision of this AGREEMENT, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions and provisions of this AGREEMENT, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. J. Governing Law. The laws of the State of California will govern this AGREEMENT, as well as any claim that might arise between RECIPIENT and VTA, without regard to conflict of law provisions. K. Venue. Any lawsuit or legal action arising from this AGREEMENT must be commenced and prosecuted in the courts of Santa Clara County, California. RECIPIENT agrees to submit to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims. L. Use of Work. All PARTIES may retain a copy of all material produced under this AGREEMENT for use in their general activities. M. Attribution to VTA. RECIPIENT must include attribution to VTA that indicates part of the work was funded by PROGRAM Funds. This provision applies to any project or publication that was funded in part or in whole by PROGRAM Funds. Acceptable forms of attribution include 2016 MEASURE B's branding on E&E PROJECT -related documents, public information materials, and any other applicable documents. VTA will provide Program branding to RECIPIENT. Rev 2.4.25 Page 10 of 19 Item 10: Staff Report Pg. 13 Packet Pg. 285 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and N. Non-discrimination. The PARTIES and any contractors performing ser Encouragement Program the PARTIES ("CONTRACTORS") will not unlawfully discriminate or permit di Funding Agreement or allow harassment against any person or group of persons because of race, color, religious creed, national origin, ancestry, age (over 40), sex, gender, gender identity, gender expression, sexual orientation, marital status, pregnancy or childbirth (including related conditions), medical condition (including cancer), mental disability, physical disability (including HIV and AIDS), genetic information, or military and veteran's status, or in any manner prohibited by federal, state, or local laws. In addition, the PARTIES and CONTRACTORS must not unlawfully deny any of their employees family care leave to which they are entitled or discriminate against such employees on the basis of having to use family care leave. The PARTIES and CONTRACTORS must ensure that the evaluation and treatment of their employees and applicants for employment is free of such discrimination and harassment. O. Relationship of the Parties. It is understood that this is an AGREEMENT by and between independent parties and does not create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship other than that of independent contractor. P. Execution in Counterparts / Electronic Signature. This AGREEMENT may be executed in one or more counterparts, each of which will be deemed an original but all of which will constitute one and the same instrument. An electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term "electronic copy of a signed contract" refers to a copy of an original signed contract that meets the admissibility standards of a writing described in Evidence Code §1550. The term "electronically signed contract" means a contract that is executed by applying an electronic signature using technology approved by each of the Parties. Q. Authority to Execute Agreement. Each PARTY to this AGREEMENT represents and warrants that each person whose signature appears hereon has been duly authorized and has the full authority to execute this AGREEMENT on behalf of the entity that is a PARTY to this AGREEMENT. R. Third Party Beneficiaries. This AGREEMENT does not, and is not intended to, confer any rights or remedies upon any person or entity other than the PARTIES. S. Survival. All representations, warranties, and covenants contained in this AGREEMENT, or in any instrument, certificate, exhibit, or other writing intended by the PARTIES to survive this AGREEMENT, shall survive the termination or expiration of this AGREEMENT, including but not limited to all terms (1) providing for indemnification; (2) relating to the California Public Records Act; (3) relating to maintenance of data; and (4) relating to PARTIES' obligations upon and following termination or expiration of this AGREEMENT. Signatures of PARTIES on following page. Rev 2.4.25 Page 11 of 19 Item 10: Staff Report Pg. 14 Packet Pg. 286 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and IN WITNESS WHEREOF, VTA and RECIPIENT have caused their undersigned, duly al Encouragement Program Is to execute this AMENDED AND RESTATED FUNDING AGREEMENT as of the EFFECTI FundingAgreement SANTA CLARA VALLEY TRANSPORTATION AUTHORITY Carolyn M. Gonot General Manager/CEO Date Approved as to Form Evelynn Tran General Counsel Date Rev 2.4.25 CITY OF PALO ALTO Ed Shikada City Manager Date Approve as to Form Tim Shimizu Assistant City Attorney Date Page 12 of 19 Item 10: Staff Report Pg. 15 Packet Pg. 287 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and ATTACHMENT A Encouragement Program Funding Agreement Example Evaluation Requirement Metrics Evaluation metrics include, but are not limited to, the ones used below. • Project reach - A metric measuring the total number of people or entities that participated in the activity or received a physical item provided by the program. o Hypothetical Example: Online media safety campaign had 10,000 unique views, resulting in 2,000 people taking the "I will drive, walk, and bike safely and responsibly" pledge. • Mode shift - A metric measuring the change in the number or percentage of people who replaced another mode of transportation with walking or biking. o Hypothetical Example: At the end of the school year, 200 bicycles were counted in the bike cage, an increase of 20% over the number of bicycles counted at the beginning of the year. Behavior change - A metric measuring the change in the number or percentage of people who changed their travel habits, including but not limited to frequency of walking or biking. o Hypothetical Example: Individualized marketing packets were provided to 1,200 households. 200 households requested additional information. Before and after surveys showed that 5% of households that requested additional information switched to biking, walking, or taking transit more. • Safety improvements — A metric measuring the change in risky/safe behavior or the change in crashes. o Hypothetical Example: After the crosswalk sting, motorists were observed yielding to pedestrians 8 out of 10 times, an increase of 10% over the yielding rate before the crosswalk sting. However, these rates decreased over time, suggesting that continued events or infrastructure changes are needed to permanently improve driver behavior. • Community Engagement — A metric measuring the number or percentage of people who become involved in a program on an ongoing basis. o Hypothetical Example: At the end of five Train the Trainer events, of the 25 trainees, ten agree to lead Safe Routes to School activities at their schools. Rev 2.4.25 Page 13 of 19 Item 10: Staff Report Pg. 16 Packet Pg. 288 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and ATTATCHMENT B LOW POP CITES ALLOCATION SCHEDULE Encouragement Program Funding Agreement Cities that would receive less than $10,000 as a result of the allocation calculations are instead allocated $10,000 minimum per fiscal year. The minimum $10,000 allocation will continue through fiscal year 2028. Following fiscal year 2028, the minimum allocated to LOW POP CITIES will increase every biennial budget cycle. The allocation schedule starting fiscal year 2028 is as follows: Fiscal Year (FY) Allocation Amount to LOW POP CITIES FY 2028 $12,000 FY 2029 $12,000 FY 2030 $12,000 FY 2031 $12,000 FY 2032 $12,000 FY 2033 $12,000 FY 2034 $14,000 FY 2035 $14,000 FY 2036 $14,000 FY 2037 $14,000 FY 2038 $14,000 FY 2039 $14,000 FY 2040 $16,000 FY 2041 $16,000 FY 2042 $16,000 FY 2043 $16,000 FY 2044 $16,000 FY 2045 $16,000 FY 2046 $18,000 FY 2047 $18,000 Rev 2.4.25 Page 14 of 19 Item 10: Staff Report Pg. 17 Packet Pg. 289 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and ATTACHMENT C INSURANCE REQUIREMENTS Encouragement Program Funding Agreement J RECIPIENT'S ATTENTION IS DIRECTED TO THE INSURANCE REQUIREMENTS BELOW. IT IS HIGHLY RECOMMENDED THAT RECIPIENT CONFER WITH THEIR INSURANCE CARRIERS OR BROKERS IN ADVANCE OF PROPOSAL SUBMISSION TO DETERMINE THE AVAILABILITY OF INSURANCE CERTIFICATES AND ENDORSEMENTS REQUIRED BY THIS AGREEMENT. INSURANCE Without limiting RECIPIENT's obligation to indemnify and hold harmless VTA, RECIPIENT must procure and maintain for the duration of the AGREEMENT insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Work hereunder by RECIPIENT, its agents, representatives, or employees, or subcontractors. The cost of such insurance must be included in AGREEMENT price. In the event of any material change in the AGREEMENT Scope of Services, VTA reserves the right to change the insurance requirements set forth herein. RECIPIENT must furnish complete copies of all insurance policies, within three (3) business days of any request for such by VTA. A. Liability and Workers' Compensation Insurance 1. Minimum Scope of Coverage Coverage must be at least as broad as: a. Insurance Services Office General Liability coverage ("occurrence" form CG 0001). General Liability insurance written on a "claims made" basis is not acceptable. b. Insurance Services Office Business Auto Coverage, Insurance Services Office form number CA 0001, covering Automobile Liability, code 1 "any auto." Auto Liability written on a "claims - made" basis is not acceptable. c. Workers' Compensation insurance as required by the Labor Code of the State of California, and Employer's Liability insurance. d. Professional Liability, including limited contractual liability coverage, covering liability arising out of any negligent act, error, mistake or omission in the performance of RECIPIENT's services under this AGREEMENT. This coverage must be continuously maintained for a minimum of two (2) years following completion of this AGREEMENT. This coverage may be written on a "claims made" basis, if so, please see special provisions in Section B. 2. Minimum Limits of Insurance RECIPIENT must maintain limits no less than: Rev 2.4.25 Page 15 of 19 Item 10: Staff Report Pg. 18 Packet Pg. 290 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and a. General Liability (including Umbrella/Excess insurance): $2,000, Encouragement Program nce for bodily injury, personal injury, and property damage. If a Gener Funding Agreement orm with a general aggregate limit is used, either the general aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required occurrence limit. This requirement may be satisfied by a combination of General Liability insurance with Excess or Umbrella policies, but in no event may the General Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying policy, "Follow Form" coverage, and a "Drop Down". b. Automobile Liability $1,000,000 limit per accident for bodily injury and property damage. c. Workers' Compensation and Employer's Liability: Statutory Workers' Compensation limits and Employer's Liability limits of $1,000,000 per accident. d. Professional Liability: $2,000,000 each occurrence/aggregate minimum limit per claim. This requirement may be satisfied by a combination of Professional Liability insurance with Excess or Umbrella policies, but in no event may the Professional Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying policy, "Follow Form" coverage, and a "Drop Down" provision. 3. Self -Insured Retention The certificate of insurance must disclose the actual amount of any deductible or self -insured retention, or lack thereof, for all coverages required herein. Any self -insured retention or deductible in excess of $50,000 ($100,000 if RECIPIENT is a publicly -traded company) must be declared to and approved by VTA. If RECIPIENT is a governmental authority such as a state, municipality or special district, self-insurance is permitted. To apply for approval for a level of retention or deductible in excess of $50,000, RECIPIENT must provide a current financial report including balance sheets and income statements for the past three years, so that VTA can assess RECIPIENT's ability to pay claims falling within the self -insured retention or deductible. Upon review of the financial report, if deemed necessary by VTA in its sole discretion, VTA may elect one of the following options: to accept the existing self -insured retention or deductible; require the insurer to reduce or eliminate the self -insured retention or deductible as respects VTA, its directors, officers, officials, employees and volunteers; or to require RECIPIENT to procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Applicable costs resultingtherefrom will be borne solely by RECIPIENT. RECIPIENT may request execution of a nondisclosure agreement prior to submission of financial reports. B. Claims Made Provisions (not applicable to General Liability or Automobile Liability) Claims -made coverage is never acceptable for General Liability or Auto Liability. Claims -made may be considered for Professional, Environmental/Pollution, or Cyber Liability. If coverage is written on a claims -made basis, the Certificate of Insurance must clearly state so. In addition to all other coverage requirements, such policy must provide that: Rev 2.4.25 Page 16 of 19 Item 10: Staff Report Pg. 19 Packet Pg. 291 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and Encouragement Program 1. The policy must be in effect as of the date of this AGREEMENT and the Funding Agreement ,dust be no later than the date of this AGREEMENT. 2. If any policy is not renewed or the retroactive date of such policy is to be changed, RECIPIENT must obtain or cause to be obtained the broadest extended reporting period coverage available in the commercial insurance market. This extended reporting provision must cover at least two (2) years. 3. No prior acts exclusion maybe added to the policy during the contract period. 4. The policy allows for reporting of circumstances or incidents that might give rise to future claims. C. Other Provisions The policies must contain, or be endorsed to contain, the following provisions: 1. General Liability and Automobile Liability a. VTA, its directors, officers, officials, employees and volunteers are to be named as additional insureds as respects: liability arising out of activities performed by or on behalf of RECIPIENT, including VTA's general supervision of RECIPIENT; products and completed operations of RECIPIENT and its subcontractors; premises owned, occupied or used by RECIPIENT; or automobiles owned, leased, hired or borrowed by RECIPIENT. The coverage must contain no special limitations on the scope of protection afforded to VTA, its directors, officers, officials, employees, or volunteers. Additional Insured endorsements must provide coverage at least as broad as afforded by the combination of ISO CG 20 10 1001 and CG20371001. b. Any failure to comply with reporting provisions of the policies may not affect coverage provided to VTA, its directors, officers, officials, employees, or volunteers. c. RECIPIENT's insurance must apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. d. The General Liability General Aggregate limit must apply per project, not per policy. e. The General Liability policy must be endorsed to remove the exclusion for railroad liabilities, with coverage at least as broad as afforded by ISO CG 2417. 2. All Coverages a. The insurer must agree to waive all rights of subrogation against VTA, its directors, officers, officials, employees, and volunteers for losses arising from work performed by RECIPIENT and its subcontractors for VTA. Rev 2.4.25 Page 17 of 19 Item 10: Staff Report Pg. 20 Packet Pg. 292 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and RECIPIENT's insurance coverage must be primary insurance as resC�Funrd uagement Program ors, officers, officials, employees, and volunteers. Self-insurance oring Agreement Jg be maintained by VTA, its directors, officers, officials, employees, or volunteers may apply only as excess to RECIPIENT's insurance. RECIPIENT's insurance must not seek contribution from VTA's insurance program. 3. Other Insurance Provisions a. The Certificate must disclose the actual amount of the Deductible or Self -Insured Retention If any coverage forms or endorsements required by this AGREEMENT are updated by their publishers, whether they be the insurance carrier(s), the Insurance Services office, or the American Association of Insurance Services, during the duration of this AGREEMENT, VTA reserves the rights to require RECIPIENT to procure said coverage forms or endorsements using the updated versions upon the next renewal cycle. D. Acceptability of Insurers Insurance and bonds must be placed with insurers with an A.M. Best's rating of no less than A VII (financial strength rating of no less than A and financial size category of no less than VII), unless specific prior written approval has been granted by VTA. E. Certificates of Insurance RECIPIENT must furnish VTA with a Certificate of Insurance. The certificates for each insurance policy are to be signed by an authorized representative of that insurer. The certificates must be issued on a standard ACORD Form. The RECIPIENT must instruct their insurance broker/agent to submit all insurance certificates and required notices electronically in PDF format to Insurance.certificates@vta.org. All endorsements must be attached to the ACORD certificate in a single PDF document. The certificates must (1) identify the insurers, the types of insurance, the insurance limits, the SIRs/deductibles or lack thereof and the policy term, (2) include copies of all the actual policy endorsements required herewith, and (3) in the "Certificate Holder" box include: Santa Clara Valley Transportation Authority ("VTA") 3331 North First Street San Jose, CA 95134-1906 In the Description of Operations/LocationsNehicles/Special Items Box, the VTA Contract number must appear, the list of policies scheduled as underlying on the Umbrella/Excess policy must be listed, Certificate Holder must be named as additional insured, and Waiver of Subrogation must be indicated as endorsed to all policies as stated in the Contract Documents. Rev 2.4.25 Page 18 of 19 Item 10: Staff Report Pg. 21 Packet Pg. 293 of 309 Item 10 Attachment A - 2016 Measure B Bicycle & Pedestrian Education and It is a condition precedent to award of this AGREEMENT that all ins Encouragement Program and endorsements be received and approved by VTA before AGREEMENT exeL Funding Agreement Jy be performed until insurance is in full compliance. VTA reserves the rights to require complete, certified copies of all required insurance policies, at any time. If RECIPIENT receives notice that any of the insurance policies required by this Exhibit may be cancelled or coverage reduced for any reason whatsoever, RECIPIENT must immediately provide written notice to VTA that such insurance policy required by this Exhibit is canceled or coverage is reduced. F. Maintenance of Insurance If RECIPIENT fails to maintain insurance as required herein, VTA, at its option, may suspend payment for work performed and/or may order RECIPIENT to suspend work at RECIPIENT's expense until a new policy of insurance is in effect. Ed. Rev. 10-1-19 Rev 2.4.25 Page 19 of 19 Item 10: Staff Report Pg. 22 Packet Pg. 294 of 309 Item 11 Item 11 Staff Report City Council Staff Report Report Type: CONSENT CALENDAR CITY O F Lead Department: City Clerk PALO LTO Meeting Date: March 24, 2025 Report #:2503-4346 TITLE SECOND READING: Ordinance of the Council of the City of Palo Alto Creating New Chapter 10.66 (Pedestrian Only Streets and Community Streets) in Title 10 (Vehicles and Traffic) (FIRST READING: March 10, 2025 PASSED 7-0) BACKGROUND The City Council heard this item on March 10, 2025 for a first reading and approved it as amended on a 7-0 vote. The ordinance has been updated to reflect the City Council's action, and it is now before the City Council for a second reading. ATTACHMENTS Attachment A: Ordinance of the Council of the City of Palo Alto Creating New Chapter 10.66 (Pedestrian Only Streets and Community Streets) in Title 10 (Vehicles and Traffic) APPROVED BY: Mahealani Ah Yun, City Clerk Item 11: Staff Report Pg. 1 Packet Pg. 295 of 309 Item 11 *NOT YET APPROVED* Attachment A - Ordinance of the Council of the City of Palo Alto Creating New Ordinance No. Chapter 10.66 (Pedestrian Only Streets and Ordinance of the Council of the City of Palo Alto Creating New CH Community Streets) in (Pedestrian Only Streets and Community Streets) in Title 10 (V Title 10 (Vehicles and Traffic) Traffic) The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. In conjunction with this ordinance, the City is amending its Comprehensive Plan to create two new street types called "Pedestrian Only Streets" and "Community Streets." A portion of Ramona Street will be a Pedestrian Only Street, and a portion of California Avenue will be a Community Street. B. The City Council desires to delegate the regulation of such streets to the City Manager. In addition, the City Council desires to regulate the speed of bicycles and similar vehicles under existing PAMC section 10.64.220 (Speed limits on shared -use paths) and prohibit bicycles and similar vehicles on Pedestrian Only Streets. SECTION 2. New Chapter 10.66 (Pedestrian Only Streets and Community Streets) is hereby added to Title 10 (Vehicles and Traffic) to read as follows: Chapter 10.66 Pedestrian Only Streets and Community Streets 10.66.010 Definitions For the purpose of this Chapter, "Pedestrian Only Streets" and "Community Streets" shall have the same meaning as found in the City's Comprehensive Plan, as may be amended. 10.66.020 City Manager Authority to Create and Enforce Regulations The City Manager or designee may promulgate regulations to control vehicle access and usage of any street designated as a Pedestrian Only Street and Community Street. Such regulations shall be consistent with applicable laws and the allowable uses of these streets as defined in the Comprehensive Plan. Regulations shall be publicly available by posting them on the City's website. Any person who violates such regulations shall be liable for a violation of this Section. 10.66.030 Speed limits on Community Streets (a) No person shall ride or operate any bicycle, skateboard, or any other transportation vehicle or device in excess of eight miles per hour upon on any designated path for such vehicles on a Community Street when pedestrians are present. (b) No person shall operate any bicycle, skateboard, or any other transportation vehicle or device at a speed greater than is reasonable for safe operation, nor in any manner which may endanger the safety of others. 12720250226 ts24 Item 11: Staff Report Pg. 2 Packet Pg. 296 of 309 Item 11 *NOT YET APPROVED* Attachment A - Ordinance of the Council of the City of Palo Alto Creating New 10.66.040 No Bicycles or Skateboards on Pedestrian Only Streets Chapter 10.66 (Pedestrian No person shall ride or operate any bicycle, skateboard, or any other tra Only Streets and or Community Streets) in device on any street designated as a Pedestrian Only Street. Title 10 (Vehicles and Traffic) SECTION 3. Severability. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. Environmental Review In conformance with the California Environmental QualityAct (CEQA), the environmental impacts of this project were evaluated in an Environmental Impact Report Addendum entitled "City of Palo Alto Car Free Ramona Street and California Avenue Addendum to the Comprehensive Plan EIR" dated February 2025. This addendum supplements the analysis in the Environmental Impact Report (EIR) for the 2030 Comprehensive Plan (SCH #2014052101), which the Council considered and adopted, together with the related Mitigation Monitoring and Reporting Plan (MMRP) on November 13, 2017. In accordance with City Council Resolution 9721 and 9722. The addendum did not disclose any new significant impacts that were not previous evaluated and mitigated in the Comp plan EIR, for which a statement of overriding considerations was previously adopted. // // // // // // // 12720250226 ts24 Item 11: Staff Report Pg. 3 Packet Pg. 297 of 309 *NOT YET APPROVED* Item 11 Attachment A - Ordinance of the Council of the City of Palo Alto Creating New SECTION 5. Effective Date Chapter 10.66 (Pedestrian Only Streets and This Ordinance shall be effective 31 days after adoption. Community Streets) in Title 10 (Vehicles and Traffic) INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Assistant City Attorney City Manager Director of Transportation Director of Planning & Development Services 12720250226 ts24 Item 11: Staff Report Pg. 4 Packet Pg. 298 of 309 Item 12 Item 12 Staff Report CITY OF PALO ALTO City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Administrative Services Meeting Date: March 24, 2025 Report #:2411-3789 TITLE City of Palo Alto's Energy Risk Management Report for the second half of Fiscal Year 2024 (January 1, 2024 - June 30, 2024) CEQA Status — Not a Project. RECOMMENDATION This is an informational report and no City Council action is required. EXECUTIVE SUMMARY Staff continues to purchase electricity and gas in compliance with the City's Energy Risk Management Policies, Guidelines, and Procedures. This report is based on market prices and load and supply data as of June 30, 2024, the second half of Fiscal Year (FY) 2024. The projected cost of the City's fixed -price electricity purchases is $0.55 million lower than the market value of that electricity as of June 30, 2024 for the 12 -month period beginning July 1, 2024. During the second half of FY 2024 (January 1, 2024 through June 30, 2024) the City's credit exposure to fixed price contracts is minimal. The projected Electric Supply Operations Reserve is above the FY 2024 minimum guideline reserve level and the projected gas reserve is below the FY 2024 guideline reserve level range. The low gas operations reserve level at the end of FY 2024 is because of the gas price spike of FY 2023. Although gas prices stabilized in FY 2024, there were several reasons the reserve was more impacted in FY 2024 than in FY 2023. Specifically, carbon offset purchases from FY 2023 were made in FY 2024, and the transfer of prior years' Cap -and -Trade auction sales revenue from the Operations Reserve to the Cap -and -Trade reserve, which was a cost item, also occurred in FY 2024. Additionally, FY 2024 costs reflect the Council's adopted revised natural gas purchasing strategy for the FY 2024 winter months to include insurance against very high prices. The plan is to bring this reserve within the reserve guidelines in FY 2025. With the exception of the Gas reserve being below the minimum reserve guideline, there were no exceptions to the Energy Risk Management Policies, Guidelines, or Procedures during this reporting period. Item 12: Staff Report Pg. 1 Packet Pg. 299 of 309 Item 12 Item 12 Staff Report BACKGROUND The purpose of this report is to inform the Council about the status of the City's energy portfolio and transactions executed with energy suppliers for the second half of FY 2024. The City's Energy Risk Management Policy requires that staff report on a semi-annual basis on: 1) the City's energy portfolio; 2) the City's credit and market risk profile; 3) portfolio performance; and 4) other key market and risk information. The City's Energy Risk Management Policy describes the management organization, authority, and processes to monitor, measure, and control market risks. "Market risks" include price and counterparty credit risk. These are risks that the City is exposed to on a regular basis in procuring electric supplies, and to a lesser extent for gas supplies which are purchased at market rates via a monthly index price. The City's Energy Risk Management function, whose role is to monitor and mitigate the energy market risks, is a part of the Treasury Division of the Administrative Services Department. This semi-annual of FY 2024 Energy Risk Management report contains information on the following: • Electric Supplies • Hydroelectricity • Fixed -Price Forward Electricity Purchases • Gas Supplies • Credit Risk • Electric Forward Mark -to -Market Values • Electric and Gas Supply Operations Reserves Adequacy • Exceptions to Energy Risk Management Policies, Guidelines, or Procedures F-1101 riwii 1. Electric Supplies In order to serve the City's electric supply demands, the City obtains electricity from: hydroelectric resources (from Western and Calaveras Hydroelectric Projects); long-term renewable energy contracts (from landfill gas converted to electricity, wind, and solar projects); wholesale purchases which are carried out via fixed -priced forward market purchase contracts; and the electric spot market. Figure 1 below illustrates the projected sources and expected purchases of electricity supplies by month for the 36 months from July 1, 2024 to July 1, 2027, in megawatt -hours (MWh). The negative bars represent sales of excess power on the wholesale market. Item 12: Staff Report Pg. 2 Packet Pg. 300 of 309 Item 12 Item 12 Staff Report Figure 1- Electric Balance Geothermal& 140,000 Wholesale Iaaaa Wind 120,000 100,000 80,000 O = 60,000 Y 40,000 on v 20,000 0 -20,000 -40,000 Western Solar ' Landfill Calaveras =Total Load Hydroelectricity The cost of hydroelectricity received from Western over the 12 -month period ending June 30, 2024 is lower than the market value of electricity by $2.8 million. Hydroelectric power from Calaveras was expected to cost $8.3 million (as of June 30, 2024) more than the market value of electricity. Note that Calaveras provides benefits not reflected in the mark -to -market (MTM, defined in the following section) calculation, including, for example, ancillary services (e.g., the ability to regulate energy output when the electric grid needs change), and that much of the above -market costs are related to debt service on the cost of constructing the dam. This debt is due to be retired in 2032, and retirement will substantially improve the value of the project relative to the market price of electricity. Fixed -Price Forward Electricity Purchases The City, as of June 30, 2024, has purchased and sold fixed -priced supplies of electricity for the next 12 months totaling 62,657 MWh with an average price of $83.58 per MWh and totaling 36,960 with an average price of $41.29, respectively. The City contracted for these purchases with one of its approved counterparties: NextEra Energy Resources. The 12 -month MTM value of the City's forward transactions for wholesale power was $0.55 million for fiscal year 2024. A positive MTM means that the sales price for these transactions was lower than the market value as of June 30, 2024. The City tracks the mark to market value of its forward contracts to measure the value that would be lost due to a counterparty failing to deliver on its contractual commitments, forcing the City to purchase replacement electricity in the market. The exposure listed above is well within risk management guidelines and presents little risk to the City's financial outlook. Item 12: Staff Report Pg. 3 Packet Pg. 301 of 309 Item 12 Item 12 Staff Report The figures below represent the electric forward volumes (Figure 2) and MTM positions (Figure 3) for each electric supplier by month of delivery for all forward fixed -price electricity contracts over the 12 -month period ending July 1, 2025. Figure 2- Electric Forward Volumes ending as of 06/30/24 25,000 20,000 15,000 - 10,000 O = 5,000 CD CD 0 a0 d . . 1� .. App \ . . 0 - N W p A S i 7� p s g -5,000 N A N A N A N A N A N A N to N N N N N 10,000 15,000 -20,000 Figure 3 - Electric Mark -to -Market Values ending as of 06/30/24 2,000,000 1,500,000 Nextlra Energy esources 1,000,000 +J O Q500,000 O O Ln z a O O g n 3 I— o n . 0 ? r N A NJ A p A NJ U' {N/1 U1 U1 V1 VNi (500,000) (1,000,000) (1,500,000) Gas Supplies In order to serve the City's natural gas needs, the City purchases gas on the monthly and daily spot markets. The City purchases all of its forecasted gas needs for the month ahead at a price based on the published monthly spot market index price for that month. Within the month, the Item 12: Staff Report Pg. 4 Packet Pg. 302 of 309 Item 12 Item 12 Staff Report City's gas operator buys and sells gas to match the City's daily needs if the actual daily usage is different from the forecasted daily usage. Those daily transactions are made at an average price based on the published daily spot market index. These costs are passed through directly to customers using a monthly rate adjustment mechanism, leaving the City with little or no price risk or counterparty risk exposure for the gas utility. Credit Risk Staff monitors and reports on counterparty credit risk based on the major credit rating agencies (S&P and Moody's) scores, Ameresco has an 8.53 percent Expected Default Frequency (EDF) which is much higher than the recommended EDF level of 0.08%. Staff is continuing to monitor Ameresco's EDF and will continue to report to City Council in this semi-annual report. Table 1 below shows the EDF values for the City's renewable energy counterparties. Table 2 below shows the EDF values and credit exposure for the City's electric suppliers. There is virtually no credit exposure to the City's gas suppliers since the supplies are purchased on a short-term basis. Table 1- Renewable Counterparties Credit Ratings and EDFs as of 06/30/24 Source: Moody's EDF-X (formerly CreditEdge) website Table 2 - Credit Exposure and Expected Default Frequency of Electric Suppliers as of 06/30/24 Electric Forward Mark -to -Market Values It is important to note that, for contracts with renewable energy companies, Council waived the investment grade credit rating requirement of Section 2.30.340(d) of the Palo Alto Municipal Code, which applies to energy companies that do business with the City. In addition, the City does not pay for renewable energy until it is received, thereby reducing risk. An EDF of 0.08% or below indicate supplier's current expected default frequency falls within the investment grade range. An EDF above 0.08% indicates the supplier may have financial issues that require monitoring. Item 12: Staff Report Pg. 5 Packet Pg. 303 of 309 Item 12 Item 12 Staff Report Electric and Gas Supply Operations Reserves Adequacy As shown in Table 3 below, the Electric Supply Operations reserve's audited balance as of June 30, 2024 is $32.2 million, which is within the reserve guideline with $12.3 million above the minimum reserve guideline level. Contributing to this higher reserve are related to a favorable past litigation settlement of the Central Valley Project Improvement Act (CVPIA) operated by the U.S. Bureau of Reclamation and anticipates and increase in wholesale revenues. The plan is to transfer the excess reserves to other reserves (e.g., Special Projects, CIP, etc.). The audited Gas Operations reserve balance is $4.3 million, which is ($5.5) million below the minimum reserve guideline level. Table 3 - Electric Supply Operations and Gas Operations Reserve Levels for FY 2024 Exceptions to Energy Risk Management Policies, Guidelines, or Procedures Except for the Gas reserve being below the minimum reserve guideline, there were no exceptions to the Energy Risk Management Policies, Guidelines, or Procedures to report during the semi-annual of FY 2024. FISCAL/RESOURCE IMPACT This is an information report. STAKEHOLDER ENGAGEMENT ASD staff works internally with the Utilities Department and Moody's website to prepare this report. ENVIRONMENTAL REVIEW This item is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because the report is for informational purposes only with no action required by the Council. APPROVED BY: Lauren Lai, Administrative Services Director Item 12: Staff Report Pg. 6 Packet Pg. 304 of 309 Item AA1 Item AA1 Staff Report City Council Staff Report Report Type: ACTION ITEMS CITY O F Lead Department: City Manager PALO LTO Meeting Date: March 24, 2025 Report #:2503-4404 TITLE Potential Support or Sponsorship of a Senate Bill 457 (Becker) Regarding Housing Accountability Act Reforms RECOMMENDATION Staff recommends the City Council discuss and provide direction to: A. Approve a Support or Sponsorship position on SB 457; and B. Designate a City Council representative to provide testimony in support of the Bill or authorize the City Manager or their designee to serve this role. I_1Uw'9i Background and analysis on the proposed legislation are provided on the attached memorandum (Attachment A) from the City's legislative advocate, Townsand Public Affairs. FISCAL/RESOURCE IMPACT The recommended action has no direct fiscal impact. STAKEHOLDER ENGAGEMENT Staff has consulted with State Senator Becker's office on this matter. ENVIRONMENTAL REVIEW Not a project. ATTACHMENTS Attachment A: Memo from Townsend Public Affairs Regarding SB 457 APPROVED BY: Ed Shikada, City Manager Item AA1: Staff Report Pg. 1 Packet Pg. 305 of 309 TOWNSEND PUBLIC AFFAIRS EST TPA 1998 MEMORANDUM Item AA1 Attachment A - Memo from Townsend Public Affairs Regarding SB 457 To: City of Palo Alto Honorable Mayor Lauing, Vice Mayor Veenker, Members of the City Council Ed Shikada, City Manager Molly Stump, City Attorney From: Townsend Public Affairs Niccolo De Luca, Vice President Carlin Shelby, Senior Associate Date: March 19, 2025 Subject: SB 457 (Becker) — Housing Accountability Act Reforms The purpose of this memo is to provide an overview of recent changes to state law governing the timing, approval, and processing of `Builder's Remedy" applications provided within the Housing Accountability Act (HAA), and a legislative proposal from Senator Becker designed to close certain loopholes. During the 2024 Legislative Session, the Legislature passed several bills modifying the Housing Accountability Act (HAA), particularly regarding the Builder's Remedy provision. The HAA, first enacted in 1982, aims to prevent local jurisdictions from arbitrarily denying or unduly restricting housing development projects that contribute to meeting their housing needs. The law limits a city's ability to disapprove or reduce density in residential projects while still allowing the enforcement of objective standards and developer fees. A key focus of recent legislative reforms has been the Builder's Remedy, which prohibits local governments from denying housing developments that include at least 20% lower -income housing, even if they do not conform to local zoning —provided the jurisdiction lacks a compliant Housing Element. Recent legal interpretations and implementation have highlighted loopholes and inconsistencies, prompting legislative action. Key Legislative Action in 2024: AB 1886 (Alvarez, 2024) clarified that a Housing Element is only compliant after both: 1. The local jurisdiction adopts it; and 2. The California Department of Housing and Community Development (HCD) certifies it as compliant. • This measure was intended to address "self -certification," preventing cities from arguing that a Housing Element could be compliant without first receiving HCD approval. • However, this change could create discrepancies among cities based on the timeline for HCD review. It also extended the window for Builder's Remedy applications to be Item AA1: Staff Report Pg. 2 Packet Pg. 306 of 309 Item AA1 Attachment A - Memo from Townsend Public Affairs Regarding SB 457 submitted until HCD review was complete, even if a Housing Element was substantively unchanged from the date of agency adoption. In Palo Alto, the City Council adopted its revised Housing Element on April 15, 2024 and the final staff changes to the Housing Element were submitted to HCD on July 26, 2024. HCD completed its review and certified the Housing Element on August 20, 2024. In the time between Council adoption and HCD certification, the City received two SB-330 Preliminary Applications for Builder's Remedy projects (680 University Avenue and 2300 Geng Road). In addition, the City received a number of formal applications for Builder's Remedy projects (762 San Antonio Road, 3606 El Camino Real, 3781 El Camino Real, 3400 El Camino Real) and deemed two formal applications complete (762 San Antonio Road and 156 California Avenue). As these projects exceed the density of development anticipated in the City's Comprehensive Plan, some projects may not be adequately served by critical infrastructure such as the water utility supply needed for firefighting as well as domestic needs, sewer capacity to prevent backups or the necessity of major upgrades to mainline and treatment capacity, and storm drain capacity. Financing these infrastructure improvements can be particularly complex when existing systems are already strained, as not all costs can be attributed to a single developer. Local jurisdictions rely on long-term capital improvement plans and bond measures to fund upgrades in a strategic and fiscally responsible manner. However, Builder's Remedy projects, which exceed growth projections, can necessitate immediate and costly infrastructure investments, disrupting this careful planning. Assigning a fair share cost to developers is challenging when upgrades — such as increased water supply, sewer capacity, or storm drainage — require large-scale improvements ahead of schedule. In Palo Alto, several Builder's Remedy projects will require both on -site and off -site improvements to increase fire flow capacity. One project alone demands a 3,000 -gallon -per -minute increase, far exceeding current fire flow capacity. These unexpected infrastructure demands — whether for water supply, fire safety, sewer, or stormwater management — undermine well -planned municipal land use and financing strategies, placing an undue burden on local governments and taxpayers. In discussions with the office of Senator Becker, the City has worked to craft bill language to refine the Builder's Remedy framework and restore a more balanced approach that aligns compliance timelines with the procedural realities of local government adoption and state certification. SB 457 (Becker) proposes that a jurisdiction's Housing Element be considered compliant upon local adoption, provided that HCD ultimately certifies the adopted element as compliant. By making this distinction, SB 457 aims to eliminate the current window of uncertainty wherein developers can exploit the delay between adoption and HCD approval by submitting applications under the Builder's Remedy provision. The bill further clarifies that Builder's Remedy protections apply only to projects with a completed formal application submitted before the jurisdiction adopts a Housing Element that is later deemed compliant by HCD or a court. This measure seeks to prevent instances where developers file preliminary applications with minimal substantive detail solely to establish eligibility for the Builder's Remedy, even after the jurisdiction has completed the necessary analyses, policies, and programs required by state law. By ensuring that Builder's Remedy protections are only available Item AA1: Staff Report Pg. 3 Packet Pg. 307 of 309 Item AA1 Attachment A - Memo from Townsend Public Affairs Regarding SB 457 when a jurisdiction is genuinely out of compliance, the legislation reinforces the original intent of the remedy while preventing misuse that circumvents legitimate land use planning processes. The measure also ensures equitable treatment of local agencies by preventing jurisdictions from being subject to Builder's Remedy protections due to delays in HCD's administrative review process. Under current law, jurisdictions remain exposed to Builder's Remedy applications even after adopting a Housing Element that is later deemed compliant, simply because HCD has not yet completed its review. This bill eliminates this potential for inequity by recognizing a jurisdiction's good -faith adoption of a Housing Element as the operative date for compliance, contingent upon subsequent HCD approval. Additionally, SB 457 proposes to limit the extraordinary benefits of the Builder's Remedy to developers who have demonstrated a serious intent to construct much -needed housing. Currently, a developer may establish eligibility for the Builder's Remedy simply filing a preliminary application with minimal detail. A preliminary application secures development rights even if the project changes, so long as density or floor area do not change by more than 20%. While this flexibility is not normally problematic, in combination with the Builder's Remedy, which allows a developer to bypass all zoning and general plan regulations, it means the project described in a preliminary application has very little meaning. . The bill instead requires that a developer must submit a complete formal application to utilize the Builder's Remedy. This ensures that only serious developers with real housing plans can proceed with a project that disregards local policies. It also means that other developers will be required to comply with local policies and programs that are ultimately found to satisfy the state's high standards for promoting both fair housing and housing production goals. The proposed legislation will significantly improve clarity on the applicability of the Builder's Remedy in future RHNA cycles. The applicability of its provisions to applications already filed with the City of Palo Alto and other local jurisdictions will need to be reviewed on a case -by -case basis, including any phase -in provisions provided through the legislation. SB 457 will be amended to reflect the updated language during the week of March 24 and is scheduled for its first policy hearing in the Senate Housing Committee on April 1, 2025, at 3:00 PM. The measure has been double -referred and will also be considered by the Senate Local Government Committee. Stakeholder engagement efforts are ongoing, with continued discussions involving local jurisdictions, housing advocates, and the development community to refine the bill's provisions and ensure clarity in its implementation. The City of Palo Alto and its advocates remain engaged in monitoring the legislative process and advocating for refinements that ensure a fair and balanced application of the Builder's Remedy. The intent of this measure is not to weaken existing housing laws but to provide a rational and predictable framework that aligns compliance determinations with actual adoption dates, thus eliminating opportunities for speculative development while maintaining strong incentives for timely Housing Element adoption. Item AA1: Staff Report Pg. 4 Packet Pg. 308 of 309 Item AA1 Attachment A - Memo from Townsend Public Affairs Regarding SB 457 As the bill progresses through the legislative process, Townsend Public Affairs will continue to provide updates on any amendments and strategic opportunities for the City to participate in shaping the final language of SB 457. Given the City's active engagement with Senator Becker's office in developing the legislative language for SB 457, it is recommended that the City take a formal and sponsorship position (which, in turn, indicates a "support" position). By doing so, the City would serve as the lead stakeholder in advancing the measure and advocating for its passage. If the City Council agrees to this course of action, the City will co -champion the bill alongside Senator Becker. This effort would necessitate a representative from the City providing testimony on the technical merits of the legislation, as well as its potential impacts on local land use planning and housing policy. Given that this proposal originated from the City, it is common practice that Palo Alto serve as the bill "sponsor" which indicates to other members and stakeholders who the primary driver(s) of the measure are. Should the city only elect to "support" the bill, the measure would lack a sponsor, which would run contrary to the origination of the measure, which, in this case, is not a member sponsored bill. The requested City Council actions therefore include: A. Approve a Sponsorship position on SB 457; and B. Designate a City Council representative to provide testimony in support of the Bill or authorize the City Manager or their designee to serve this role. Item AA1: Staff Report Pg. 5 Packet Pg. 309 of 309