Loading...
HomeMy WebLinkAbout2014-02-10 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers February 10, 2014 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 February 10, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Study Session 6:00-7:00 PM 1. Measure E Update: The Energy/Compost Facility Request for Proposals (E/CF RFP) Identified Pricing for Privately-Funded Projects and Technologies to Jointly Handle Food Scraps, Yard Trimmings and Biosolids and Considered Processing at the Regional Water Quality Control Plant (RWQCP) and/or Using the 10-Acre Measure E Site as Well as Export Options. A Summary of the E/CF RFP Proposals, Integration with the Biosolids Facility Plan and a Proposed Organics Plan are Included in this Staff Report Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. 2 February 10, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. City Manager Comments 7:00-7:10 PM Council Member Questions, Comments and Announcements 7:10-7:25 PM Members of the public may not speak to the item(s) Oral Communications 7:25-7:40 PM Members of the public may speak to any item not on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 7:40-7:45 PM January 6, 2014 Consent Calendar 7:45-7:55 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 2. Approval of Contract with Standard Parking Corporation in the Amount of $120,000 for Operation of the Lot R Parking Garage Attendant Program and Adoption of a Budget Amendment Ordinance Amending the Fiscal Year 2014 University Avenue Parking Permit Fund Operating Budget to Provide Additional Appropriations of $120,000 (Staff request this item be continued to February 24, 2014) 3. Utilities Advisory Commission Recommendation that the Council of the City of Palo Alto Adopt a Resolution Determining that a Target for the City of Palo Alto Utilities to Procure Energy Storage Systems is Not Appropriate Due to Lack of Cost-effective Options 4. Approval of Nine On-Call Planning and Environmental Consulting Services Contracts for the Department of Planning and Community Environment to Support Current Planning, Special Projects, Advance Planning, and Environmental Review as Follows: Planning Services - 1) Dudek, 2) Arnold Mammarella, Architecture and Consulting, 3) The Planning Center/DC&E, 4) Metropolitan Planning Group; Environmental Services - 5) Dudek, 6) URS Corporation, 7) ICF International, 8) Turnstone Consulting, and 9) David J Powers & Associates in Amounts Not to Exceed $930,000 5. Staff Recommends that City Council Authorize the City Manager to Enter into an Agreement with the Peninsula Corridor Join Powers Board to Introduce the Caltrain Go Pass into the Civic Center Transportation Demand Management Program 3 February 10, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 6. Development Impact Fees: List of Public Facilities Capital Needs 7. Approval of a Contract With Spencon Construction, Inc. in The Amount of $2,170,412 for The FY 2014 Sidewalk, Curb and Gutter Repairs Project 8. Approval of Amendment No. 1 to Contract with MV Transportation to Extend the Term Until June 30, 2014 and Add $75,000 for Provision of Regular Shuttle Services for Crosstown Route and Additional Shuttle Service During the Construction of California Avenue Streetscape Project Action Items 7:55-10:00 PM Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 9. Parking Supply Recommendations. Staff recommends that Council accept the Final Report on the Downtown Parking Garage Study and authorize staff to take the following actions aimed at increasing the parking supply in the University Avenue and California Avenue Business Districts: 1. Authorize staff to begin design and environmental review of a new parking garage (240 car capacity) on Lot G located on Gilman Avenue 2. Authorize staff to solicit qualification statements for public-private partnerships to increase parking supplies on at least one existing surface parking lot in the University Avenue area and one in the California Avenue Business District 3. Authorize staff to pursue planning grants and begin planning work for a new transit mall expansion with a 478-space parking garage on Urban Lane, in partnership with the property owner and the Joint Powers Authority 4. Authorize staff to begin design and environmental review of a 200-space satellite parking facility along Embarcadero Road – East of Geng Road-Faber Place and in the Bay Lands Athletic Center parking lot or a comparable alternate location(s), with supporting shuttle service to the University Avenue Business District 5. Authorize staff to expand parking permit sales to South of Forest Avenue (SOFA) Business District Employees at the Lot CC – Civic Center and Lot CW – Cowper Street/Webster Street parking garages 6. Authorize staff to solicit proposals for the installation of parking garage access and revenue controls aimed at collecting “real time” data on parking lot and garage occupancy, introducing flexibility for transferable permits between employees, and to support payment options for downtown visitors who park longer than three hours. 4 February 10, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 5 February 10, 2014 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings State of the City Invitation Policy and Services Meeting Cancellation Infrastructure Meeting Special Council Closed Session Regional Housing Mandate Committee Meeting Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Evaluation of the Cost Effectiveness of Residential Gas-to-Electric Fuel Switching Options for Appliances and Vehicles Public Letters to Council SET 1 SET 2 City of Palo Alto (ID # 4051) City Council Staff Report Report Type: Study Session Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Informational Update on the Potential Energy/Compost Facility Title: Measure E Update: The Energy/Compost Facility Request for Proposals (E/CF RFP) Identified Pricing for Privately-Funded Projects and Technologies to Jointly Handle Food Scraps, Yard Trimmings and Biosolids and Considered Processing at the Regional Water Quality Control Plant (RWQCP) and/or Using the 10-Acre Measure E Site as well as Export Options. A summary of the E/CF RFP Proposals, Integration with the Biosolids Facility Plan and a Proposed Organics Plan are Included in this Staff Report From: City Manager Lead Department: Public Works This is a study session report and no Council action is required. Executive Summary This report provides an update on two ongoing and related initiatives: 1. The City’s request for proposals for an Energy/Compost Facility (or an Export Option) for food scraps, yard trimmings, and biosolids, (E/CF RFP) and 2. The City Consultant’s (CH2M HILL Engineers) preparation of a Draft Biosolids Facility Plan (BFP). The purpose of the E/CF RFP is to identify firm pricing for privately-funded projects and technologies to jointly handle food scraps, yard trimmings, and biosolids, at the Regional Water Quality Control Plant (RWQCP) and/or using the 10-acre Measure E site. The process to evaluate the Energy/Compost Facility RFP proposals, a summary of the proposals, and integration with the BFP, are included in this report. This report does not include a recommendation or a selection of a City of Palo Alto Page 2 proposal, because the technical evaluations and financial evaluations are not yet complete. The Energy/Compost Facility RFP process has resulted in three qualified and feasible project proposals. An option is to select one of these privately-owned and operated proposals. Staff is also considering an option other than those specified in the Energy/Compost Facility RFP, which would result in adopting a Proposed Organics Facilities Plan, specifying a group of technologies and utilizing a new procurement process. While staff is not seeking approval from Council at this stage, ultimately, staff anticipates recommending a Proposed Organics Facilities Plan, consisting of the following components: 1. A biosolids dewatering and truck load-out facility. This would allow for the earliest decommissioning of the existing incinerators and would serve as a back-up option for biosolids handling in emergency situations and increase the reliability and resiliency of the RWQCP; 2. A thermal hydrolysis, anaerobic digestion facility at the RWQCP initially for biosolids, and then for food scraps, when component three (below) is completed; 3. A food preprocessing system, either offsite or onsite compatible with the anaerobic digester at the RWQCP; and 4. A yard trimmings technology, consisting of either the current Aerobic Composting technology or a more advanced technology which would include energy production. Staff plans to return to Council with detailed cost information, environmental considerations, qualitative analysis, and a recommended approach in spring 2014. The recommended approach is likely to include additional detail for the four- component Proposed Organics Facilities Plan. Background The City will be making decisions on how to manage three organic “waste” streams, namely, biosolids from its sewage treatment plant at the RWQCP, yard trimmings, and food scraps. Biosolids are currently incinerated at the RWQCP; Council has directed Staff to decommission the incinerator as soon as practicable. Residential food scraps from residents are currently landfilled. The diversion of City of Palo Alto Page 3 residential food scraps from landfills is essential to achieving the Council-adopted Zero Waste Operational Plan’s goals. Food scraps from the commercial sector are currently sent to the ZBest composting facility south of Gilroy and aerobically composted. Residential yard trimmings are also aerobically composted at ZBest. The yard trimmings and food scraps are composted separately, and the finished compost product from each feed stock is marketed to different users. Energy/Compost Request For Proposals (E/CF RFP) Process In November 2011, Palo Alto voters approved Measure E, launching a process for consideration of an Energy/Compost Facility to jointly process food scraps, yard trimmings, and biosolids adjacent to the RWQCP. On July 2, 2012, Council approved an Action Plan for the consideration of an E/CF Facility or Export Option for the three feedstocks (Staff Report ID# 2557). The key component of the Action Plan was the development and issuance of a request for proposals (RFP) to solicit proposals from the private sector to establish firm pricing to design, build, own, operate, and maintain a facility at the RWQCP and/or use the 10-acre Measure E site or process the organic residuals off-site. For more information about the background and history of the E/CF Facility, please see Attachment B. To ensure the submittal of quality responses to the E/CF RFP, in August 2012, staff issued a company interest survey. Staff provided an opportunity for the public to comment on the performance specifications in October 2012. An e-mail notification of the E/CF RFP’s posting on the City’s “current solicitations” webpage was sent to an extensive industry e-mail list with over 90 contacts. On March 4, 2013, the E/CF RFP was released. 80 individuals, representing 49 different companies, participated in a pre-proposal informational webinar on March 12, 2013. Seven addenda were released between March and August 2013. The City also provided multiple site tours to prospective proposers. Six proposals were received on August 13, 2013. A panel of City staff as well as staff from Stanford University and the City of San Jose has been assisting with the technical and business-case review of the proposals. An additional citizen panel made up of six members of the community has been reviewing the technical parameters of the proposals. The members of the citizen panel represent both the groups that supported and opposed the November 2011 Ballot Measure E. The review process is not yet complete. This City of Palo Alto Page 4 Staff Report and the February Council Study Session are being presented prior to bringing the final proposal in order to inform Council and the Community of the current status and initiate discussion due to the complexities of the proposals. Biosolids Facility Plan Given the Council directive to retire the 42-year old incinerators at the RWQCP, Council approved a contract with CH2M HILL Engineers on January 14, 2013 (Staff Report ID# 3383) to complete the BFP. This Plan is almost complete and will ultimately contain recommendations for managing the solid residuals (Biosolids) from the RWQCP. A biosolids plan for the RWQCP is necessary regardless of whether an Energy/Compost Facility is ultimately designed and built. Discussion Overall Project Objectives  Allow the City to phase out the existing incinerator for biosolids  Reduce greenhouse gas emissions  Enhance the beneficial use of organic materials by creating renewable energy  Reduce landfill disposal  Provide economically competitive services for wastewater and refuse customers  Provide a reliable, long-term organics solution for the City Energy/Compost Facility Request for Proposal Six proposals were received on August 13, 2013:  Anaergia – key team members include: Lyles Construction, Kennedy/Jenks  BIOGAS Equity 2, Inc. – key team members include: enCO2, DPR Construction  ECOCORP – key team members include: OGIN Biogas, PCL Construction Services, Inc.  Harvest Power – key team members include: Entech gmbh, Environ, Layne Heavy Civil, Inc.  Synagro – key team members include: GreenWaste of Palo Alto City of Palo Alto Page 5  We Generation (DBA Cambi Services) – key team members include: Cambi, NO, MWH Constructors The analysis of proposals is being conducted in part by Alternative Resources, Inc. (ARI), a consultant to the City, and in part by the two review panels (Municipal Government and Community). ARI is focused on conformance with the minimum criteria and on quantitative analysis, while the review panels are focused on the qualitative analysis. CH2M Hill has provided specific technical analysis evaluating the efficacy of the biosolids processing technology. Two proposals were eliminated from further consideration because they did not meet the pass/fail minimum criteria. BIOGAS Equity 2 did not submit a complete proposal at the submittal deadline. ECOCORP failed to submit the necessary $100,000 bond or other financial surety in a timely manner to ensure project efficacy. The four remaining proposals were evaluated for the quality of the proposal, technical resources and experience, financial reserves and strength of the proposal, record or performance and reliability of technology, technical approach, and business proposal. These factors represent one-half of the evaluation score. The proposal cost (i.e., tipping fees) was evaluated independently from the technical and business portions of the proposals and represents the other one- half of the evaluation score. The scoring is not completed at this time, but it will be finalized and included in the spring 2014 staff report to Council. The staff review panel completed the initial qualitative and cost analysis to prepare an interview shortlist on October 21, 2013. Of the four proposals that met the minimum criteria evaluation, only Anaergia was removed from further consideration and not placed on the interview shortlist. Anaergia provided a well- documented and comprehensive proposal; however, Anaergia proposed a tipping fee more than double the next highest proposal. Given the 50 percent weight of the proposal costs, Anaergia’s proposal was not deemed competitive. The remaining three proposals of Harvest Power, Synagro, and We Generation, respectively, are technically viable proposals, fully satisfy the conditions of the RFP, and are summarized below. Representatives from these proposal teams were interviewed on November 15, 2013. City of Palo Alto Page 6 Harvest Power, based in Waltham, MA Key team members include: Entech gmbh, Environ, and Layne Heavy Civil, Inc. Technology:  Food Scraps and Biosolids: Wet Anaerobic Digestion and thermal drying on the RWQCP site  Yard Trimmings: Composting on a portion (less than 3.8 acres) of the 10-acre Measure E landfill/park site Considerations:  The only proposal to process all three waste streams on site  Food Scrap preprocessing is on site  Proposed an alternative to accept other communities’ food waste  Yields a Class A Biosolids product after drying  Renewable energy is created through the combustion of biogas  Positive greenhouse gas impact  Uses landfill gas  Proposed 20- and 30-year contract term options  Initial site design encroaches onto Byxbee Park and does not fully conform to Measure E Comparable Facilities: Harvest Power Orlando, is currently in start-up testing and scheduled to open in 2014 Synagro, based in Baltimore, MD Key team members include: GreenWaste of Palo Alto Technology:  Biosolids: Export to Synagro composting facility in Merced County (about 100 miles from Palo Alto)  Yard Trimmings and Food Scraps: Export to GreenWaste of Palo Alto’s sister company, Z-Best in Gilroy Considerations:  Export option for all three feed stocks  Yard Trimmings and Food Scraps are processed as they are processed currently  Utilizes existing processing facilities City of Palo Alto Page 7  No renewable energy is created  No landfill gas is used  While superior to the current RWQCP incinerators, overall negative greenhouse gas impact  Minimal disturbance to current RWQCP operations We Generation, Inc. (Cambi), based in Houston, TX Key team members include: Cambi, NO, MWH Constructors, We Care Organics Technology:  Food Scraps and Biosolids: Thermal Hydrolysis followed by Wet Anaerobic Digestion inside the RWQCP  Yard Trimmings: Export to Newby Island for Composting Considerations:  Uses land on the RWQCP only  Pre-processing of Food Scraps at the Shoreway Environmental Center in San Carlos  May accept additional communities’ food waste  Yields a Class A Biosolids product directly from the digesters  Uses landfill gas  Produces the most biogas of any anaerobic digestion technology  Positive greenhouse gas impact  Does not provide an on-site solution for Yard Trimmings Comparable Facilities: Blue Plains Advanced Wastewater Facility, DC Water, scheduled to open in 2014. Price ranges for the proposals are as follows (all prices are in $/wet ton): Feed Stock Proposal Range Current Price (all approx.) Food Scraps $60 - $110 $75 Yard Trimmings $25 - $60 $32 Biosolids (at 26% solids) $50 - $190 $70 - $86 A full-cost comparison and net present value of the three proposals under consideration along with current operations will be provided with the staff City of Palo Alto Page 8 recommendation in spring 2014. Other quantifiable factors (e.g. projected greenhouse gas emissions) will also be provided in the subsequent staff report. Attachment A provides an overview of the technologies, throughput, and output of the proposals. All of the listed proposals included the two required base cases – one with all three feed stocks and one with just food scraps and yard trimmings. The proposers were allowed to provide additional alternatives with different feed stock combinations or contract lengths at their own discretion. The table has eliminated the food scrap and yard trimmings only proposals, as the on-site options are not financially competitive. The table does not include the 30-year proposals from Harvest Power, because the proposals differ from the 20-year proposals in cost only. The 30-year proposal costs will be included in the spring 2014 staff report. Biosolids Facility Plan (BFP) Previous planning approved by Council (the Long Range Facilities Plan for the RWQCP) had narrowed the biosolids management to four options: onsite anaerobic digestion, offsite anaerobic digestion, onsite gasification, and offsite gasification through a regional coalition of wastewater agencies [i.e., the Bay Area Biosolids to Energy coalition that the City joined on December 10, 2012 (staff report ID# 3254)]. The Biosolids Facilities Planning effort included analysis of thermal drying and offsite composting options. CH2M HILL Engineers was hired to prepare the BFP and analyze the “Biosolids Only” options; the work on the BFP is almost complete. Gasification (of “biosolids only”) has been dropped from further consideration due to technology readiness concerns that will be detailed in the final report. A dewatering and truck load-out facility (approximately $12 million) is an appropriate initial component for all biosolids alternatives. A load-out facility was identified as an emergency response need in the Long Range Facilities Plan and for use while the RWQCP transitions away from the existing incinerators. The primary capital expense for the E/CF RFP proposal submitted by Synagro would be a dewatering and load-out facility. The Harvest Power and We Generation (Cambi) proposals also require a dewatering and truck load-out facility for digested biosolids and are compatible with a City-built facility. City of Palo Alto Page 9 The BFP also notes the efficacy of constructing an anaerobic digestion system as a technology that can be developed as a second component. Thermal hydrolysis with anaerobic digestion, the same technology proposed by We Generation (Cambi), scored the highest in the combined evaluation of cost and non-monetary factors in the BFP and was the BFP’s long-term recommendation. As noted in the BFP, the addition of food scraps to an anaerobic digester system will dramatically increase gas/energy production. Staff will need to identify the best preprocessing systems, define acceptable food waste characteristics, and modify solid waste collection to ensure that the digester will function optimally. All proposals and options for the treatment of biosolids will culminate in the beneficial reuse of Class A “Exceptional Quality” biosolids, the highest quality biosolids, as a fertilizer or soil amendment. The use of biosolids in agriculture is regulated by the USEPA. For more information on the uses of biosolids in agriculture, see attachments C and D. Recommendation Alternatives Under Consideration The E/CF RFP solicitation process has yielded three proposals with firm pricing for three privately-funded projects to handle food scraps, yard trimmings, and biosolids, together at the RWQCP and/or using the 10-acre Measure E site. An option is to select one of these privately owned and operated E/CF proposals. Staff is also considering options other than those specified in the E/CF RFP which may result in adopting a specific technology through a new procurement process. The first component of this alternative approach would address biosolids. Subsequent components would address energy generation, food scraps, and yard trimmings. While staff is not seeking a recommendation from Council at this stage, ultimately, staff anticipates making a recommendation consisting of the following components. This Proposed Organics Facilities Plan allows for concurrent planning and phased implementation: 1. Construct a dewatering and truck load-out facility. This would allow for the earliest decommissioning of the existing incinerator and would ultimately serve as a back-up option for biosolids handling and ensure the reliability and resiliency of the RWQCP; City of Palo Alto Page 10 2. Develop a roadmap for the construction of a thermal hydrolysis, anaerobic digestion facility at the RWQCP to initially process biosolids and then food scraps once component three (below) is completed; 3. Modify the solid waste collection system for the collection of residential food scraps while determining the best option for a combined residential and commercial food preprocessing system, either offsite or onsite, compatible with the anaerobic digester at the RWQCP; and 4. Continue research on options and new developments in the processing of yard trimmings for energy production. This plan would allow the City to continue processing yard trimmings south of Gilroy by ZBest until a different solution is identified. This path allows for accepting the biosolids and food scrap portions of the proposals. The construction of a biosolids dewatering and truck load-out facility is compatible with the technologies presented by the three proposals as well as the technologies included in the BFP. This facility would allow the City to decommission the incinerators and provide the necessary reliability and resilience in the event of a disaster or possible failure of a future anaerobic digester. This project could be completed by 2018. The City would enter into a short-term contract for sludge hauling, treatment, and disposal. The Incinerators would be retired and demolished. Because this component is not directly tied to the subsequent components it can be implemented without the potential delays that may arise. Concurrently, staff would begin the development of a roadmap for the development of an anaerobic digester at the RWQCP. The BFP identified the combination of thermal hydrolysis and wet anaerobic digestion (the technology specified by the We Generation (Cambi) proposal) as the optimal technology. Issues related to energy, partner costs, and site constraints will require additional time to contract and construct the digesters as compared to the dewatering and truck load-out facility. For this reason and the immediate need to decommission the incinerators, the two projects should not be combined. Nonetheless, the roadmap will outline the clear and concrete steps for the RWQCP digesters to be operational by 2019. City of Palo Alto Page 11 Whether under contract with one of the E/C Facility proposers or as part of a City owned and operated project, the digester would be designed to handle the projected wastewater flows for the City and its partner agencies through 2048 based on projections from the Association of Bay Area Governments (ABAG). The digesters will have additional capacity in the early operational years before the population catches up with the capacity. Design considerations will include evaluation of options for providing additional capacity at a future date. This initial, additional digester capacity can be utilized by digesting Palo Alto’s food scraps. The third component will first identify the optimal collection methods for the digestion of food scraps1. Preprocessing of food scraps will be necessary for use in the wet anaerobic digester. Staff will need to address the location of preprocessing (at the RWQCP or elsewhere) as well as the technology. The site and technology planning will be required after the RWQCP digesters are nearly completed. The digestion of food scraps must be phased into the development of the digesters and guarantee no negative outcomes to the RWQCP’s operations or its ability to meet strict permit obligations. The initial concepts behind Measure E were to find a technological solution where all three feed stocks, biosolids, food scraps, and yard trimmings, could be treated together to create energy. The E/CF RFP was designed to “test the market” to see if this technology was possible. None of the six proposals proposed combining all of the feed stocks into a shared vessel/tank. Of the three proposals under consideration, for yard trimmings all three proposed aerated static pile composting – the current method for composting the City’s yard trimmings. The yard trimmings would be composted separately from the other two feed stocks. Only one proposal, Harvest Power, proposed composting the yard trimmings on a portion of the 10-acre Measure E site. Staff believes that the benefits to onsite composting are not sufficiently greater than the current operations. The component addressing yard trimmings requires staff to continue examining emerging technologies to harness the energy potential within the yard trimmings while continuing to aerobically compost the yard trimmings. If a new technology becomes available within the duration of the Measure E provision, staff would 1 Staff has already begun looking into the collection of residential food scraps with the Residential Two-Cart Pilot Program currently underway in the Greenmeadow neighborhood. The pilot is scheduled to end in April 2014, and staff will provide an update to Council and the community on the findings and next steps later in the spring of 2014. The City already collects commercial food scraps, which are composted by ZBest in Gilroy. City of Palo Alto Page 12 present that to Council at such time. However, at the current time, offsite composting remains the best option for the City. The Proposed Organics Facilities Plan’s four distinct components allows for the accepting of a portion of an E/CF proposal. Another option for the City to consider is to cancel the RFP and consider a different project delivery mechanism to build an onsite anaerobic digester component for the processing of biosolids and food scraps. The E/CF RFP called for a public-private partnership approach, whereby the proposer would design, build, own, operate, and maintain the project. This project delivery mechanism was considered initially to minimize the City’s risk in developing new technologies, which were ultimately not included among the proposals. The on-site proposals utilize anaerobic digestion technology, which is common in the wastewater field and supported by the recommendations in the Biosolids Facilities Plan, and presents minimal risk to the City. The experience of other wastewater facilities suggests that anaerobic digesters are more cost- effective in the long-term when the public entity, like the City, is the owner- operator. A City-owned and operated facility provides greater potential to offset RWQCP operational costs through the generation of onsite energy. City of Palo Alto Page 13 The construction of a biosolids dewatering and truck load-out facility is an appropriate first step. This facility is fully compatible and complementary with all of the digester technologies. This first component allows for off-site biosolids management and elimination of the incinerator by 2018. Yard trimmings would continue to be processed, as they are currently processed, reserving the opportunity to investigate future processing technologies. The detailed next steps and roadmap for the biosolids, the food scraps, and yard trimmings components, along with full cost, environmental, and qualitative analysis of the proposals will be outlined in the spring 2014 report with a staff recommendation. Timeline Staff has presented the preliminary BFP findings to the RWQCP partner agencies’ staff. Two Palo Alto community meetings will be held to discuss the findings presented in this staff report. A decision by Council in spring 2014 could trigger the next phase of the Action Plan. Staff could begin both the negotiation process with the winning proposer(s) (should one or two be selected) and initiate the California Environmental Quality Act (CEQA) process, as directed. Alternately, Staff would initiate the proposed organics plan. A completed project may begin operations as early as 2018. Resource Impact Operating and Capital Improvement Project (CIP) costs from a project or projects would be funded from the Wastewater Treatment Fund and/or Refuse Fund operating budgets, as appropriate, and may require a rate increase. Staff will work aggressively to identify and secure grant funding to reduce project costs for a public or private facility. However, since grant funds are not a given, the funds should not be considered in the overall economic analysis of a project. Privately-Owned and Operated Energy/Compost Facility Accepting an Energy/Compost Facility proposal would result in changes to operating funds of the Wastewater Treatment Fund and/or Refuse Fund operating budgets. The private facilities would charge the funds a tipping fee based on an agreed upon minimum feedstock quantity at a specified quality level. City of Palo Alto Page 14 Harvest Power included both 20- and 30-year contract lengths in their proposal. Synagro proposed a 5-year contract length that could be expanded to 20 years. We Generation (Cambi) proposed a 20-year contract term. City Owned and Operated Biosolids Only Projects with a Food Scrap Option For a City-constructed biosolids project with the option to accept food scraps, any debt-financed project for biosolids would be funded by the Wastewater Treatment Fund capital budget. Plant partners would share in the planning costs, design costs, and construction costs. The Wastewater Treatment Fund recovers costs from the Palo Alto Wastewater Collection Fund and from the City’s five partners. The Wastewater Treatment Fund’s debt service expenses are recovered through partner billing; the billing share is based on a contract-defined treatment capacity allocation. The City’s treatment plant capacity share is 38.16%. Funding of design and construction requires debt financing. The design and construction project will need to be approved by Mountain View and Los Altos’ city councils, Stanford University, and the Board of the East Palo Alto Sanitary District as part of an agreement requirement with each of the Plant partners. The agreement with Los Altos Hills does not require partner approval for the construction project. The partners are aware of the critical need for a biosolids project to replace the incinerators, and the City continues to keep them informed of our progress. The State Water Resources Control Board (SWRCB), Division of Financial Assistance funds publicly-owned wastewater treatment projects with low-interest loans through the Clean Water State Revolving Fund (SRF). The City likely would apply for an agreement for funding. The SWRCB would review the application for funding eligibility and prepare a standard agreement for funding the project. After the drafting of the agreement, staff would return to Council for approval of the agreement. The terms of an SRF loan would be a 20-year term with the first payment due approximately one-year after construction completion. The SRF loan interest rate is one-half of the current state general obligation bond rate. As of October 2013, the SRF loan rate is 2.1% on a 20-year repayment term. The typical interest rate range is 2% to 3%. Energy Sensitivity Energy generated by an anaerobic digester could be used to offset the RWQCP onsite electric expenses, sold to the City of Palo Alto Utilities (PAU) under a Power Purchase Agreement (PPA), and/or wheeled to the open market. Should the City City of Palo Alto Page 15 elect to sell the renewable energy generated from an anaerobic digester project to CPAU, the sale price of energy sold to CPAU will have a significant impact on the overall economics of a project. For example, a one cent increase or decrease in the sale price of a kilowatt hour (kWh) could swing the annual operational costs of a project by several hundred thousand dollars. The distribution of revenues and expenses would positively or negatively impact each Enterprise Fund (i.e., wastewater, refuse, and electric) depending on how the price of electricity is set. Environmental Review The project’s CEQA process is expected to be either a Mitigated Negative Declaration (MND) or an Environmental Impact Report (EIR); the CEQA process is anticipated to be completed in approximately one-year. If Council selects a proposal that utilizes the 10-acres defined in Measure E, an EIR will be prepared. A completed contract and an EIR are scheduled for mid-2015. A “CEQA Plus” process is needed for eligibility for an SRF loan (discussed above). CEQA Plus is an environmental document that meets CEQA, plus thirteen federal environmental protection acts (e.g., the Endangered Species Act, National Historic Preservation Act, Clean Air Act, etc.), which is very similar to the federal NEPA environmental review process. The CEQA Plus process requires the document preparer to evaluate impacts subject to federal “cross-cutting” regulations, such as biological assessment for the US Fish and Wildlife Services species, a cultural resources report, an air quality analysis, a flood map, and so forth. The CEQA Plus process is administered by staff at the SWRCB as part of the SRF loan process. Attachments:  Attachment A E/C Proposal Matrix (DOCX)  Attachment B Deep Background (DOCX)  Atachment C WEF Land App Fact Sheet (PDF)  Attachment D Land Application and Compost Benefits (DOCX) Attachment A 1 RESPONDENT TECHNOLOGY PROCESS DESCRIPTION Will RWQCP Site be used? Will RWQCP De- watering be used? Percent Solids of Biosolids Used Will Landfill Site be used? Will Landfill Gas be used? Number of Units Electricity Output (kWh per year) Product Harvest Power Required Base Case (Food Scraps, Yard Trimmings and Biosolids) Anaerobic Digestion Anaerobic Digestion of Food Scraps and Biosolids in two digesters and composting of Yard Trimmings. Yes No 3.30% Yes 3.8 acres Yes Two Digesters 12,000,000 Compost and Granular Fertilizer Alternative (Additional Food Scraps and FOG from outside sources) Anaerobic Digestion Anaerobic Digestion of Food Scraps and Biosolids, including additional Food Scraps and FOG from outside sources. Yes No 3.30% Yes 3.8 acres Yes Two Digesters 17,000,000 Compost and Granular Fertilizer Synagro Required Base Case (Food Scraps, Yard Trimmings and Biosolids) Export Export No Yes 26% No No No No Compost Alternative (Biosolids Only) Export Export No Yes 26% No No No No Compost Attachment A 2 RESPONDENT TECHNOLOGY PROCESS DESCRIPTION Will RWQCP Site be used? Will RWQCP De- watering be used? Percent Solids of Biosolids Used Will Landfill Site be used? Will Landfill Gas be used? Number of Units Electricity Output (kWh per year) Product We Generation (Cambi) Required Base Case (Food Scraps, Yard Trimmings and Biosolids) Cambi Thermal Hydrolysis Process (THP) pretreatment, then Anaerobic Digestion Biosolids at 3.3% solids will be thickened to 15%-18% solids, and mixed with pre-processed Food Scraps. The mixture will be heated, and undergo the Thermal Hydrolysis Process (THP), which is heating and mixing at high temperature and high pressure, then a flash pressure drop and cooling. Next, the mixture will be digested in two anaerobic digesters at the RWQCP site. Yard Trimmings will be transported off site to the Newby Island for composting. Yes No 3.30% No Yes Two THP reactor tanks, one flash tank, and two anaerobic digesters 13,140,000 Soil, Wood Fuel, Compost, or Daily Cover Alternative (Food Scraps and Biosolids Only) Cambi Thermal Hydrolysis Process (THP) pretreatment, then Anaerobic Digestion Biosolids at 3.3% solids will be thickened to 15%-18% solids, and mixed with pre-processed Food Scraps. The mixture will be heated, and undergo the Thermal Hydrolysis Process (THP), which is heating and mixing at high temperature and high pressure, then a flash pressure drop and cooling. Next, the mixture will be digested in two anaerobic digesters at the RWQCP site. Yes No 3.30% No Yes Two THP reactor tanks, one flash tank, and two anaerobic digesters 13,140,000 Soil, Compost, or Daily Cover Attachment B Biosolids Palo Alto is the owner and operator of the Regional Water Quality Control Plant (RWQCP) that is funded by the six contributing jurisdictions (Partners). The Partners are: Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford University, and the East Palo Alto Sanitary District. The RWQCP treats approximately 21 million gallons per day of sewage and disposes of the resulting 18 dry tons per day of biosolids. The RWQCP currently treats the sewage sludge by high temperature combustion in multiple hearth incinerators. The incinerators were constructed in 1972 and have been in continuous operation for 43 years. Biosolids are currently reduced to inert ash and hauled to a hazardous waste landfill in Buttonwillow, CA. Potential Energy Compost Facility for Food Scraps, Yard Trimmings, and Biosolids On July 2, 2012, Council accepted the RWQCP’s Long Range Facilities Plan (LRFP) (staff report ID# 2914). Council directed staff to: 1) prepare a Biosolids Facilities Plan (BFP) to finalize a biosolids treatment and disposal option; 2) retire the RWQCP’s incinerators as soon as practical; and 3) evaluate biosolids treatment options that included potential yard trimmings, food scraps, and other organic treatment options arising from the Energy/Compost (E/C) Facility evaluation. The final options from the LRFP and other viable biosolids treatment or disposal options arising from private company proposals in the E/C Facility RFP process (staff report ID# 3269) are being evaluated and finalized in the BFP. While the RWQCP is an active facility, the Palo Alto composting facility, which was located on the Palo Alto Landfill, is now closed. The 126-acre closed landfill area resides within Byxbee Park, with 72-acres of the capped 75-acres now open to the public as parkland. The remaining 51 acres of landfill are still closed to the public; these 51 acres stopped receiving waste in 2011. The final landfill is now being capped (staff report ID# 3768). Yard trimmings are currently consolidated at the Sunnyvale Material Recovery Transfer Station (SMaRT Station) and transferred to the Z-Best composting facility south of Gilroy. Compostables collected from commercial facilities, which are made up primarily of food scraps, were first collected in 2009 and are also composted at the Z-Best facility. Attachment B Environmental concerns, loss of local composting at the landfill, opportunities for conversion of waste-to-energy, potential synergies related to biosolids, and retiring the incinerators, led to a citizen-initiated Ballot Measure “E”. On November 8, 2011, Measure E passed with a two-thirds majority. The measure undedicated a 10-acre rectangular area of Byxbee Park adjacent to the RWQCP for the consideration of an E/C Facility to utilize food scraps, yard trimmings, and biosolids. Council then directed staff to initiate a feasibility study for an E/C Facility. In August 2010, Council approved a contract with Alternative Resources, Inc. (ARI) to conduct the study (CMR:333:10). In September 2011, a Final Feasibility Report was presented to Council (Staff Report ID# 2557); it was concluded that an anaerobic digestion facility on the 10-acre site was feasible. On June 2, 2012, Council approved an Action Plan for the consideration of an E/C Facility or an Export Option for food scraps, yard trimmings, and biosolids (Staff Report ID# 2557). The Action Plan included the development of a Biosolids Facilities Plan (Staff Report ID# 3383) and the release of the Request for Proposals (RFP) for the Energy/Compost Facility or Export Option (Staff Report ID #3269). 1 What are biosolids? Every day, wastewater treatment facilities across the country treat billions of gallons of wastewater generated by homes and businesses. The treatment process produces liquid effluent that is discharged to water bodies or reused as well as a byproduct of solid residues (sewage sludge) that must be managed in an environmentally responsible manner. Although the terms “bio- solids” and “sewage sludge” are often used interchangeably, they are not the same. With further treatment, sewage sludge can yield biosolids, which is defined by the U.S. Environmen- tal Protection Agency (EPA) as “nutrient-rich organic materials resulting from the treatment of domestic sewage in a treatment facility... that can be recycled and applied as fertilizer to improve and maintain productive soils and stimulate plant growth.”1 What are the various options to manage solid residuals? Approximately 7,100,000 dry tons of solid residuals are gener- ated each year from the treatment process at the more than 16,000 municipal wastewater treatment facilities in the U.S.2 Since most U.S. wastewater treatment facilities are publicly owned and operated, management options are decided by local professionals. Behind the scenes, they must balance the needs of their communities for sanitation and public health protec- tion with environmentally sound and sustainable methods of residuals management. Approximately 55% of the total residu- als generated each year are further treated and land applied as biosolids. Other management options include incineration/pro- cessing for energy recovery or landfill disposal. 3 Are biosolids treated before they are land applied? Biosolids that are land applied have been treated to minimize odors and to reduce or eliminate pathogens. There are two classes of biosolids that are land applied, referred to as Class B and Class A. Class B biosolids are treated to achieve significant (i.e., 99%) pathogen reduction and subject to site use and ac- cess restrictions, and Class A biosolids are disinfected to a level that inactivates pathogens and are subject to fewer site-specific controls. If, in addition, heavy metal concentrations are suf- ficiently low, Class A biosolids can be bagged and distributed for home garden use without further regulation—referred to as Class A, EQ (exceptional quality) biosolids.4 Composted biosol- ids generally achieve Class A, EQ status. What are some of the benefits of biosolids land application? The benefits of biosolids for both soil and vegetation are numer- ous and well recognized.6 Biosolids provide primary nutrients (nitrogen and phosphorous) and secondary nutrients such as calcium, iron, magnesium and zinc. Also, the use of biosolids increases crop yields and maintains nutrients in the root zone and unlike chemical fertilizers, biosolids provide nitrogen that is released slowly over the growing season as the nutrient is mineralized and made available for plant uptake.7 Land applica- tion of biosolids can also offer net greenhouse gas benefits by recycling carbon to the soil and fertilizing vegetation for further carbon dioxide capture.8 What is the federal regulation that governs the management of biosolids and how was it developed? The federal regulation governing the management of biosolids is 40 CFR Part 503 and is based on the 1987 Clean Water Act amendments that directed EPA to research and promulgate regulations for use and disposal of sewage sludge.9 EPA under- took a comprehensive process to study land application and other biosolids management practices. Based on the results of its risk assessment, EPA identified and set numeric limits for the nine trace elements (heavy metals), which have high enough potential risk to require monitoring. EPA also mandated that treatment facilities use at least one of several alternative tech- nologies to significantly decrease or eliminate levels of patho- gens in biosolids.10 Do states implement their own land application programs? Land application is widely practiced in the U.S. In fact after EPA issued the Part 503 rule in 1993, most states implemented com- plementary land application programs to strengthen oversight and safety of the practice. Only nine states have no biosolids specific regulations and rely exclusively on Part 503. Q&A/Fact Sheet Land Application and Composting of Biosolids May 2010'( ater Environment FederatiolT the water quality people" 2 Land Application and Composting of Biosolids What is the scientific basis for biosolids land application? The broad weight of scientific evidence and opinion supports recycling biosolids to land as an environmentally responsible method of reuse when managed utilizing best practices and in compliance with the Part 503 rule. Federal policies supporting and promoting the beneficial recycling of biosolids are based upon science demonstrating the safety and benefits of such recycling. These policies are not driven by economics, and the choice to recycle biosolids remains a state or local decision. Has EPA requested any independent studies to determine if the science supports biosolids land application? Since the implementation of Part 503 rule, two reports of the National Research Council (NRC) of the National Academy of Sciences have considered whether land application of biosol- ids is safe and beneficial. In 1996, the NRC published Use of Reclaimed Water and Sewage Sludge in Food Crop Production, which concluded that the application of biosolids to farmland— when practiced in accordance with existing federal guidelines and regulations—presents negligible risk to the consumer, to crop production, and to the environment. The report concluded that current technology to remove pollutants from wastewater, coupled with existing regulations and guidelines governing the use of reclaimed wastewater and sludge in crop production, are adequate to protect human health and the environment.11 In 2000, EPA asked the NRC to review the science and meth- ods supporting Part 503 to address concerns regarding human health impacts of land application of biosolids. As a result of its “search for evidence on human health effects related to biosol- ids,” the NRC’s 2002 report concluded that “there is no docu- mented scientific evidence that the Part 503 rule has failed to protect public health“; “[a] causal association between biosolids exposures and adverse health outcomes has not been docu- mented“; and “there are no scientifically documented outbreaks or excess illnesses that have occurred from microorganisms in treated biosolids.”12 The NRC also observed that “persistent uncertainties” regarding the safety of land application neces- sitate more scientific research, but it did not call for any specific changes to Part 503. EPA continues to reevaluate the adequacy of the Part 503 regulations and has not found a need to establish more stringent requirements or regulate additional pollutants. Did EPA assess trace metals and chemicals in biosolids? After reviewing over 200 specific compounds and elements from an initial candidate list of thousands, EPA targeted at least 22 constituents for a formal risk assessment to examine the quanti- ties of the metals and chemicals in biosolids, their toxicity, routes of potential exposure to humans and the environment, and many other factors. The risk assessment ultimately determined that limits were advisable for nine trace elements (arsenic, cadmium, copper, lead, mercury, molybdenum, nickel, selenium, and zinc), primarily to protect against toxic effects to plants and entry into the food chain.13 A four-year study by the U.S. Geological Survey (USGS) of Denver Metro Wastewater Reclamation District land application sites measured the effects of the application of Class B biosolids on the nutrient and metal content of soils, groundwa- ter, and surface waters and found that “soil data indicated that biosolids have no measurable effect on the concentrations of constituents monitored.” Further, the study did not establish any adverse biosolids-related effects on soils, crops, or groundwater on or near the biosolids application site.14 How do biosolids programs and regulations reduce or mitigate the risk of these trace metals and chemicals? Current biosolids programs mitigate the risk of chemicals and trace metals in several ways. Federal guidelines limit the amount of biosolids that may be applied to the land, which en- sures that metal concentrations on biosolids-amended soils do not exceed safe levels. Trace chemicals that on occasion have been identified in biosolids have not been found in environ- mentally or toxicologically significant amounts; and, the trace amounts of these substances that may be present typically bind to soil constituents, limiting human exposure. 15 Industrial pretreatment programs required under the Clean Water Act also reduce or eliminate many hazardous chemicals entering the treatment facility.16 What does the scientific literature state about the potential risk of these contaminants? A 2005 literature review on the issue of trace contaminants con- cluded that, “because of the capacity of land-based systems to buffer the potential toxic effects of waste-associated organic contaminants and to contribute to their assimilation into the soil, the majority of studies conclude that they pose little or no risk to the environment when applied appropriately.”17 3 Land Application and Composting of Biosolids How are pathogens in biosolids regulated? As established by the Part 503 rule, treatment of biosolids to Class B or Class A standards eliminates 99% or more of the pathogens that may exist in sewage sludge. Ongoing research has continued to validate a technology-driven approach to re- ducing or eliminating pathogens in biosolids and shows low risk for the transmission of pathogens from land application sites to surrounding residents. No scientific studies have demonstrated any link between the existence of human pathogens in biosolids and illnesses in nearby residents. The conclusion that applica- tion of biosolids utilizing best management practices poses negligible health risks from pathogens is based on scientific understanding about pathogen survivability in the environment. Many pathogens do not survive passage through the collec- tion and treatment system and through the additional treatment processes that further disinfect solids and effluent.18 Further, pathogens are enteric organisms that prefer and need the con- ditions inside the human body to thrive. What does the scientific literature conclude about pathogens in biosolids? A recent review of biosolids pathogen research literature stated that “the overall conclusion we have reached based on all of our land-application studies over the past two decades and an in depth review of other relevant land application studies is that land application of Class B biosolids is sustainable. Specifically, the risks to human health posed by many microbiological enti- ties within biosolids have been shown to be low if current EPA regulatory guidelines are followed. In addition, risks from indi- rect exposures such as aerosolized pathogens or contaminated groundwaters appear to be particularly low.”19 This conclusion is consistent with the practical experience in the wastewater treatment sector where exposure to biosolids has not been associated with illness.20 Microbial risk assessment and control remains a priority for the scientific community, however, and pathogen-related issues continue to be closely monitored.21 What is the potential for contamination of water resources from biosolids land application? Like any nutrient-rich fertilizer, biosolids should be applied in ways that minimize risk of leaching of nutrients or other con- stituents to groundwater or runoff to nearby surface waters. Current land application programs have been successful in minimizing these risks through regulation and best manage- ment practices. For example, the amount of biosolids applied to a field is limited to the amount needed to meet the nitrogen requirement of the crop grown (referred to as the agronomic rate); biosolids may not be applied within a 10 meter setback from waterbodies; state regulations typically require site specific data on proposed land application sites so that sites with shal- low water tables or inappropriate soils will be precluded 22; and additional state requirements include limits on maximum slopes, prohibition on application during significant precipitation, and bans on biosolids application on standing water or wetlands. Have there been long-term studies on ground water safety where biosolids have been land-applied? Studies have concluded that there are no impacts on ground- water quality at properly managed biosolids application sites. For example, a 1999 study reported that after 20 years of land application, tests of deep wells at an agricultural research site demonstrated no evidence of nitrate leaching and negligible fecal coliform concentrations.23 Also, a 2008 literature survey concluded that “groundwater contamination from land applica- tion of biosolids does not appear to be likely.”24 Can odors from biosolids land-applied sites cause health problems? No data has shown that odors from biosolids cause toxicologi- cal effects on individuals.25 Most odors in biosolids are caused by sulfur compounds that only cause toxic effects in concen- trations vastly greater than that which triggers a smell. Further, gases with a possible toxic effect are not present in biosolids in concentrations that would endanger nearby residents. Although there has not been any observed health risks, site and process- specific stabilization or vector attraction reduction criteria are essential. Accordingly, local agencies invest significant resourc- es for odor control. What is being done to address complaints of alleged health impacts from individuals living near land-application sites? The Water Environment Research Foundation (WERF) has produced a draft investigative protocol entitled, Epidemiologic Surveillance and Investigation of Illness Reported by Neighbors of Biosolids Land Application.26 The protocol was developed for medical providers and public health officials to use when citizens report health symptoms that they attribute to the application of soil amendments such as fertilizer, biosolids, animal manures, and food residuals. The goal is to provide a practical, objective, and reliable protocol that will be broadly implemented. 4 Land Application and Composting of Biosolids How do biosolids differ from other fertilizers? Biosolids offer a sound alternative to chemical and manure- based fertilizers, which are often untreated or minimally treated before field application. Pathogen concentrations are magni- tudes higher in untreated manures than in biosolids and, unlike biosolids, pathogen concentrations in manures are not strictly regulated.27 Since they are unregulated, manure-based fertil- izers may pose a greater risk of transmitting pathogens or trace organic constituents such as antibiotics to soil or humans. Many chemical fertilizers are petroleum-based products, which increases the costs to farmers and contributes to the release of greenhouse gas emissions in the production cycle. Are there federal and state regulations for other fertilizers? Federal and state requirements for biosolids are significantly more stringent than the controls over the use of chemical fertilizers and manures. In many cases, untreated manure and chemical fertilizers may legally be applied in the setback areas where biosolids land application is prohibited. Why compost biosolids? According to the EPA28, composting is a viable, beneficial option in biosolids management. It is a proven method for pathogen reduction and results in a product that is easy to handle, store, and use. The end product is usually a Class A, humus-like material without detectable levels of pathogens that can be applied as a soil conditioner and fertilizer to gardens, food and feed crops, and rangelands. This compost provides large quantities of organic matter and nutrients (such as nitrogen and phosphorus) to the soil, improves soil texture, and elevates soil exchange capacity, all characteristics of a good organic fertil- izer. Biosolids compost is safe to use29 and generally has a high degree of acceptability by the public, making it a good alterna- tive to other bulk and bagged products available to homeown- ers, landscapers, farmers, and ranchers. How is biosolids compost regulated and is it safe? Composting of biosolids is an approved “Process to Further Reduce Pathogens (PRFP)” under EPA’s Part 503 biosolids regulations. Applying compost in accordance with Part 503 poses little risk to the environment or public health.30 In fact the use of biosolids compost can have a positive impact on the en- vironment. In addition to soil improving characteristics, reduced dependence on inorganic fertilizers can significantly decrease nitrate contamination of ground and surface waters often as- sociated with use of inorganic fertilizers. Are pathogens present in biosolids compost? Composting is not a sterilization process and a properly com- posted product maintains an active population of beneficial microorganisms that compete against the pathogenic members. Composting biosolids reduces bacterial and viral pathogens to non-detectable levels if the temperature of the compost is main- tained at greater than 55˚ C for three days or more. Do odors from biosolids compost pose a health risk? Odors from a composting operation can be a nuisance and a potential irritant but there is no documented link to health risks. In fact, offensive odors from composting sites are the primary source of public opposition to the practice. Although research shows that biosolids odors do not pose a health threat, many experts in the field of biosolids recycling be- lieve that biosolids generating and processing facilities have an ethical responsibility to control odors and protect nearby residents from exposure to such nuisances. Recently, a better understanding of the generation of compost odors has allowed engineers to develop means of capturing and treating these odors so that emissions from composting facilities do not cre- ate offsite odor nuisance conditions. Are there any initiatives to develop and implement best management practices for biosolids recycling? Wastewater treatment professionals are committed to pro- moting environmental stewardship and best management practices by utilities for their biosolids management programs. The Water Environment Federation (WEF) publishes technical books, peer reviewed journal articles and technical practice bulletins on issues relating to biosolids. WEF also sponsors annual conferences on biosolids management practices. Wastewater professionals also strongly support research to further understanding of sound biosolids management practic- es to ensure that these remain protective of public health and the environment. The Water Environment Research Foundation conducts on-going scientific research on biosolids manage- ment questions. In addition to these efforts, WEF, the National Association of Clean Water Agencies and the EPA founded the National Biosolids Partnership (NBP) to promote biosolids best management practices. The Partnership has created a certified environmental management system (EMS) for biosolids pro- grams that exemplifies the steps being taken at the local level to ensure biosolids quality and public participation in biosolids management decisions. Congress has provided support for this effort since 1999. 5 Land Application and Composting of Biosolids 1 EPA, Biosolids: Frequently Asked Questions, http://www.epa.gov/owm/mtb/biosolids/genqa.htm (last visited May 30, 2008), see also, EPA, Biosolids Recycling: Beneficial Technology for a Better Environment (1994). 2 2004 U.S. EPA data 3 North East Biosolids and Residuals Association (NEBRA), A National Biosolids Regulation, Quality, End Use & Disposal Survey (2007); www.nebiosolids.org. 4 40 C.F.R. § 503.10(g) (2008). 5 Ibid. NEBRA. 6 Eliot Epstein, Land Application of Sewage Sludge and Biosolids 143-158 (2003). 7 See generally Gary Pierzynski, Soils and Environmental Quality 174-80 (3d ed. 2005); Gary Pierzynski, Plant Nutrient Aspects of Sewage Sludge, in Sewage Sludge: Land Utilization and the Environment 21 (C.E. Clapp et al., eds. 1994). 8 Sally Brown & Peggy Leonard, Biosolids and Global Warming: Evaluating the Management Impacts, BioCycle, Aug. 2004, at 54, 58 (conducting a carbon accounting of the King County, WA, biosolids program and finding that “using biosolids as a substitute for commercial fertilizers results in a net savings in CO2 for both agricultural and forest application sites,” even without including the potential for biosolids to increase carbon reserves in soil). 9 Water Quality Act of 1987, Pub. L. No. 100-4, § 405, 101 Stat. 7, 72 (1987) (codified at 33 U.S.C. § 1345). 10 EPA, Standards for the Use or Disposal of Sewage Sludge, 58 Fed. Reg. 9,248 (Feb. 19, 1993) 11 National Research Council (NRC), Use of Reclaimed Water and Sewage Sludge in Food Crop Production (1996). 12 NRC, National Biosolids Applied to Land: Advancing Standards and Practices (2002). 13 EPA, A Guide to the Biosolids Risk Assessments for the Part 503 Rule (1995). 14 Tracy J.B. Yager, et.al., U.S. Geological Survey Scientific Investigations Report, Effects of Surface Applications of Biosolids on Soil, Crops, Groundwater, and Streambed Sediment Near Deer Trail, Colorado, 1999-2003, 5289 (2004). 15 Ian Pepper et al, Environmental and Pollution Science 459 (2nd. ed. 2006) See also R.Y. Surampalli et al., Long-term Land Application of Biosolids—A Case Study, 57 Water Sci. & Tech 345, 349 (2008) (finding “the cumulative metal loading rates after 10 years of biosolids application were far less than USEPA limits”) Gregory Evanylo et al., Bioavailability of Heavy Metals in Biosolids Amended Soil, 37 Comm’n in Soil Sci. & Plant Analysis 2157, 2163 (2006) (finding that crops grown in biosolid-amended soils had higher metal concentrations than a control, but that metal concentrations in all plants were within the values observed for uncontaminated soils); Rufus Chaney, Trace Metal Movement: Soil-Plant Systems and Bioavailability of Biosolids-Applied Metals in Sewage Sludge: Land Utilization and the Environment (1994). 16 Clean Water Act §§ 301(b)(2), 304(g) (33 U.S.C. §§ 1311(b) (2), 1314(g)); and, National Ass’n of Clean Water Agencies (NACWA), Biosolids Management: Options, Opportunities and Challenges 10-13 (2006) (case studies of reduction of metals in influent and biosolids in Los Angeles and greater Cleveland). 17 Michael Overcash et al., Beneficial Reuse and Sustainability: The Fate of Organic Compounds in Land-Applied Waste, 34 J. Envtl. Quality 29, 30 (2005). 18 Raina M. Maier et al., Environmental Microbiology 512-13 (2000). About WEF Formed in 1928, the Water Environment Federation (WEF) is a not-for-profit technical and educational organization with 36,000 individual members and 75 affiliated Member Associations representing water quality professionals around the world. WEF and its Member Associations proudly work to achieve our mission of preserving and enhancing the global water environment. Water Environment Federation 601 Wythe Street Alexandria, VA 22314 1-703-684-2400 www.wef.org References 6 Land Application and Composting of Biosolids 19 Ian Pepper, Huruy Zerzghi, John P. Brooks, and Charles P. Gerba, Sustainability of Land Application of Class B Biosolids, J. Envtl. Quality 37, 58-67 (2008). 20 Studies demonstrate that workers at wastewater treatment facilities, highly exposed to untreated sewage and biosolids, do not have significantly higher rates of illness than similar unexposed workers. California State Water Resources Control Board, Statewide Program Environmental Impact Review (EIR) covering General Waste Discharge Requirements for Biosolids Land Application (2004), (“Studies of the incidence of disease among wastewater personnel have indicated that they have no greater incidence of disease than the population in general.”). Similarly, no differences have been found in the health of farm families from farms using biosolids compared to the health of families on farms not using biosolids. Id. 21 For example, Water Environment Research Foundation is studying pathogen reactivation and regrowth. 22 The extent to which biosolids affect groundwater or surface water quality depends upon “a wide range of factors, including climate, topography, land use, soil characteristics, and the chemical composition and application rate of the biosolids” and therefore requires case-by-case analysis. Kathryn J. Draeger et al., Water Env’t Research Found., Watershed Effects of Biosolids Land Application: Literature Review 2-8 (1999). This is true of any fertilizer. Id. 23 See, e.g. Draeger et al., supra, at 3-13 (1999). 24 Ibid. Sustainability in Land Application of Biosolids (2008) 25 See Paul Chrostowki & Sarah Foster, Odor Perception and Health Effects, 76th Annual Water Environment Federation Technical Exhibition and Conference Workshop (2003). A 2004 literature review of the health effects of odors from municipal wastewater operations presented five reasons to conclude that odors do not cause illness: (1) odors do not cause signs of illness in healthy individuals; (2) odor acceptability varies with circumstances of exposure and the meaning people associate with the exposure; (3) below toxic levels of exposure, symptoms associated with odors involve no pathology; (4) symptoms are reduced almost immediately when the source of an odor is removed; and (5) nonphysical variables, such as anxiety and stress, seem to mediate symptoms from odors. William S. Cain and J. Enrique Cometto-Muñiz, Water Env’t Research Found., Identifying and Controlling Odor in the Municipal Wastewater Environment 6-1 (2004). 26 http://www.werf.org/AM/CustomSource/Downloads/ uGetExecutiveSummary.cfm?FILE=06HHE5PP. pdf&ContentFileID=4741 27 Lynne H. Moss et al., Comparing the Characteristics, Risks and Benefits of Soil Amendments and Fertilizers Used in Agriculture, 16th Annual Water Environment Federation Residuals and Biosolids Management Conference 14 (2002). 28 U.S. EPA Biosolids Technology Fact Sheet: Use of Composting for Biosolids Management 29 Ibid U.S. EPA Biosolids Technology Fact Sheet: Use of Composting for Biosolids Management 30 Hay, J.C., 1996. “Pathogen Destruction and Biosolids Composting.” BioCycle, Journal of Waste Recycling, 37(6):67-72. Attachment D What are Biosolids? Biosolids are the nutrient-rich organic material resulting from the wastewater treatment process. Biosolids are highly treated and regulated, and can be used beneficially in a number of applications. In California, the majority of biosolids generated are used in agricultural or horticultural applications. The term biosolids is generally used instead of the term “sludge” when solids are treated to standards forming a safe product that can then be beneficially used. Land Application Biosolids and biosolids-based composts are used in replacement or as a supplement to conventional fertilizers and soil amendments. This practice is known as land application, and in California, is regulated by federal, state, and local regulations and ordinances. The federal regulations distinguish between two classes of biosolids based on the pathogen density present in the final biosolids product – Class B biosolids have substantially reduced pathogen levels and Class A biosolids are virtually pathogen free. Class A biosolids can be used in all manner of applications, including food crops, while the use of Class B biosolids is restricted to certain types of crops and subject to specific management practices. Figure 1: Graze land crops grown with biosolids in Northern California Benefits of Land Application The benefits of land application are numerous, as the practice takes advantage of many of the inherent properties of biosolids. While research continues to better articulate these benefits, the principle advantages are summarized below. Improved Soil Tilth Soil tilth describes the suitability of soil for agriculture and includes factors such as the moisture content, degree of aeration, drainage, and stability of aggregated soil particles. Biosolids have been Attachment D demonstrated to improve soil tilth, particularly by improving the soil’s moisture holding capacity, enabling it to hold water like a sponge. In California, this is particularly important due to the fragility of water supplies and frequency of drought conditions. Biosolids can also improve the soil’s cation exchange capacity, allowing the soil to better retain positively charged ions such as calcium. Finally, biosolids application has been associated with increased microbial activity in the soil, which improves the overall soil health. Provision of Slow Release Nutrients While chemical fertilizers provide higher concentrations of nitrogen, phosphorus, and potassium, biosolids provide these macronutrients in an organic, slow-release, plant available form. Nutrients remain in the soil where they can be taken up by crops gradually over time, benefiting both the plant and the environment (since nutrients stay in the soil rather than getting washed out with rain or irrigation water). Biosolids also contain a valuable source of micronutrients – small doses of metals that are critical for plant growth. The value of biosolids as a fertilizer replacement has been estimated at around $36/dry ton. Short-Term Carbon Sequestration and Greenhouse Gas Benefits Research by Brown et al. (2010) has shown that the land application provides carbon offsets via carbon sequestration (Scope 1 emissions) and avoided chemical fertilizer use (Scope 3 emissions). While research is still ongoing to better quantify the carbon sequestration benefit, the ability of biosolids to bind carbon in the soil layer has been demonstrated. Chemical fertilizers are petroleum based and their production therefore contributes to GHG release. Anaerobic digestion, which is routinely used to produce biosolids for land application, captures methane gas, which can be beneficially used in onsite energy production. These benefits far outweigh the greenhouse gas (GHG) impacts of biosolids generation and transport. Ability to Reclaim Disturbed Sites Across the country, biosolids and biosolids compost have been shown to bring disturbed sites back to life. They have been successfully used in applications from mine reclamation to rebuilding soil health in urban soils. Cities such as Chicago and Cleveland have invested in long-term projects that make use of this benefit to restore soil health to the local environment. Stringent Regulatory Control While containing similar nutrients and beneficial properties to manures (see figure below), biosolids are more stringently regulated, particularly from a pathogen standpoint. Because manures are often minimally treated before application, they can pose a greater risk of transmitting pathogens. Attachment D Figure 2: Comparison of nutrient values between biosolids and manures (Courtesy: Andrew Carpenter, Northern Tilth) Benefits of Biosolids Compost Biosolids composts are treated to the highest level to reduce pathogens and odors and have utility as a fertilizer and as a soil conditioner. Biosolids composts not only provide limited levels of macronutrients, but more importantly, add significant organic matter or humus to the soil. Biosolids composts are extremely versatile and can be used in horticultural applications as well as agriculture and silviculture. The characteristics of biosolids composts are much different than the solids they are derived from, allowing ease of storage and handling with minimal nuisance or environmental risk. Turf and landscaping uses are generally one of the most common uses of composts. Field or container horticultural uses and agricultural land application for crop growth in farming settings are also common uses. The benefits of compost are most greatly demonstrated in soil type extremes such as sandy soils or clayey soils. The American Association of Plant Food Control Officials has verified the following list of compost benefits (Alexander, 2005). 1. Improves soil structure and porosity – creating a better plant root environment 2. Increases moisture infiltration and permeability, and reduces bulk density of heavy soils – improving moisture infiltration rates and reducing erosion and runoff 3. Improves the moisture holding capacity of light soils – reducing water loss and nutrient leaching, and improving moisture retention 4. Improves the cation exchange capacity (CEC) of soils 5. Supplies organic matter 6. Aids the proliferation of soil microbes 7. Supplies beneficial microorganisms to soils and growing media 8. Encourages vigorous root growth 9. Allows plants to more effectively utilize nutrients, while reducing nutrient loss by leaching 10. Enables soils to retain nutrients longer 11. Contains humus, assisting in soil aggregation and making nutrients more available for plant uptake 12. Buffers soil pH Attachment D Conclusions The Water Environment Federation (WEF) has concluded the following: The benefits of biosolids for both soil and vegetation are numerous and well recognized. Biosolids provide primary nutrients (nitrogen and phosphorous) and secondary nutrients such as calcium, iron, magnesium and zinc. Also, the use of biosolids increases crop yields and maintains nutrients in the root zone and unlike chemical fertilizers, biosolids provide nitrogen that is released slowly over the growing season as the nutrient is mineralized and made available for plant uptake. Land application of biosolids can also offer net greenhouse gas benefits by recycling carbon to the soil and fertilizing vegetation for further carbon dioxide capture. (The Water Environment Federation (WEF) is a not-for-profit technical and educational organization with 36,000 individual members and 75 affiliated Member Associations representing water quality professionals around the world. WEF and its Member Associations proudly work to achieve our mission of preserving and enhancing the global water environment.) City of Palo Alto (ID # 4488) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Lot R Parking Garage Attendant Program - Continued Item Title: Approval of Contract with Standard Parking Corporation in the Amount of $120,000 for Operation of the Lot R Parking Garage Attendant Program and Adoption of a Budget Amendment Ordinance Amending the Fiscal Year 2014 University Avenue Parking Permit Fund Operating Budget to Provide Additional Appropriations of $120,000(Staff request this item be continued to February 24, 2014) From: City Manager Lead Department: Planning and Community Environment Staff requests that this item be continued to date certain of February 24, 2014. City of Palo Alto (ID # 4384) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Do Not Set Energy Storage Procurement Targets Title: Utilities Advisory Commission Recommendation that the Council of the City of Palo Alto Adopt a Resolution Determining that a Target for the City of Palo Alto Utilities to Procure Energy Storage Systems is Not Appropriate Due to Lack of Cost-effective Options From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt a resolution determining that a target for the City of Palo Alto Utilities (CPAU) to procure energy storage systems is not appropriate due to lack of cost-effective options, a determination required under California law. This recommendation does not preclude CPAU from pursuing cost-effective energy storage based technologies that enhance utility operations. Executive Summary California’s energy storage law, (hereinafter referred to as Assembly Bill (AB) 2514),1 requires the governing board of each publicly-owned utility (POU) to “determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems...”2 In addition to requiring POUs to evaluate the feasibility of energy storage targets, AB 2514 also requires that“…[a]ll procurement of energy storage systems” by a POUs“…shall be cost-effective.”3 This report specifically examines the cost and benefit of various energy storage systems for local applications, both from the utility and customer perspective. Over the next five years, the costs of utility-owned and operated energy storage exceed the value of benefits, and are 1 AB 2514 (Chapter 469, Statutes of 2010). 2 Cal. Pub. Util. Code § 2836(b)(1), 3 Cal. Pub. Util. Code § 2836.6. City of Palo Alto Page 2 therefore not cost-effective for CPAU, its customers or the City. In addition, staff has determined that there is currently no need for the City to procure energy storage systems within Palo Alto for purposes of load-shifting, demand response, deferral of distribution system upgrades, or integration of distributed generation. Customer owned storage strategies to shift load from peak to off-peak hours using thermal energy storage were found to be cost-effective from the customer perspective in some cases. It is recommended that such load shifting strategies be encouraged in Palo Alto; however, no rebate or incentive is currently recommended for thermal energy storage since the systems are not cost-effective from the societal perspective. Given current and projected conditions, staff finds that neither the utility owned energy storage strategies, nor incentives for customer owned energy storage procurement are cost-effective options for the City. For these reasons, and to satisfy the City’s obligations under AB 2514 and Long Term Electric Acquisition Plan (LEAP), staff and the UAC recommend that the City Council decline to adopt an energy storage procurement target because energy storage, including thermal energy storage (TES), is not cost-effective, and therefore is inappropriate for CPAU, its customers, or the City at this time. CPAU will nevertheless encourage commercial customers to consider procurement of energy storage systems, including TES, where cost-effective. AB 2514 requires that the City reevaluate its determination concerning the need for an energy storage procurement target once every three (3) years.4 CPAU staff will return to the UAC and City Council to reassess the position recommended in this Staff Report within that time frame In the long term, energy storage is expected to have an important role in the statewide electric power system, and hence staff may propose that some funds be allocated to an energy storage pilot project in order for CPAU to gain experience with utility-owned energy storage installation and operation. A pilot program could be implemented within the parameters of the City’s existing Demand Response Program initiatives, maximizing value of electric vehicle storage capabilities, or optimizing use of solar photovoltaic (PV) output. As such opportunities arise, staff may recommend projects for UAC recommendation and City Council consideration and approval. 4 Cal. Pub. Util. Code § 2836(b)(3) City of Palo Alto Page 3 Background Energy Storage Systems: Definition and Need The fundamental function of energy storage systems is to absorb energy, store it for a period of time with minimal loss, and then release it. When deployed in the electric power system, energy storage provides flexibility that facilitates the real-time balance between electricity supply and demand. Maintaining this balance becomes more challenging as the portion of electricity coming from intermittent renewable energy sources grows. Typically this balance is achieved by keeping some generating capacity in reserve to ensure sufficient supply at all times and by adjusting the output of fast-responding resources like hydropower; however, energy storage systems have the potential to perform this role more efficiently and effectively. Rechargeable batteries are perhaps the most familiar energy storage technology. Large battery energy storage systems can be connected to the transmission grid to take up excess wind or sun power when demand for electricity is low, and release it when demand is high. Such a battery installation also provides valuable frequency regulation far more effectively than a typical generating facility. At the other end of the electric power system, customer-sited energy storage can reduce customer costs and increase reliability while also benefiting the utility by reducing peak demands on the distribution system. TES is the energy storage technology most commonly used for customer-sited applications.5 These systems are typically used to shift electricity use for commercial space cooling from peak to off-peak periods of the day. As the examples above suggest, a variety of technologies can be used for energy storage in a wide range of applications throughout the electric power system. The type, performance and location of an energy storage system determine the benefits it can provide. Energy Storage in California and Palo Alto Recent legislative and regulatory shifts along with continued growth in intermittent renewable energy and advances in energy storage technology all indicate that energy storage will play an increasing role in the electric infrastructure of the Western United States. Energy storage can provide a number of crucial services needed to achieve a resilient and low carbon electric power system. 5 Market Evaluation for Energy Storage in the United States, KEMA Inc. 2012 and 2013. City of Palo Alto Page 4 Approved in late 2010, California’s energy storage law, AB 2514, requires the governing board of each POU to “determine appropriate targets, if any, for the utility to procure viable and cost- effective energy storage systems.”6 As defined by the law, an energy storage system must absorb energy, store it for a period of time, and then dispatch that energy7. At this time, conventional hydropower is not eligible to meet investor-owned utility energy storage targets set by the California Public Utilities Commission (CPUC); however, the CPUC continues to consider the operational characteristics and potential uses for large pumped storage options in workshops and other forums. Energy storage procurement includes the use of energy storage devices that are owned by customers or other third parties. AB 2514 explicitly states that all energy storage procurement by POUs must be cost-effective.8 Because no cost-effective options exist, staff recommends that City Council decline to set an energy storage procurement target. If any targets are deemed appropriate, they must be adopted by the City Council by October 1, 2014. The City’s determinations regarding adoption of energy storage procurement targets, even the decision to decline to adopt a target, must be re-evaluated at least once every three years and must be reported to the California Energy Commission (CEC). In October 2013 the CPUC established an energy storage target of 1,325 megawatts for investor owned utilities (IOUs) by 2020, with installations required no later than the end of 2024.9 The CPUC decision also establishes a target for Community Choice Aggregators and electric service providers to procure energy storage equal to 1 percent of their annual 2020 peak load by 2020 with installation no later than 2024, consistent with the requirements for the IOUs.10 Additional legislative and regulatory drivers related to storage technologies are summarized in Attachment F. In 2011, the City of Palo Alto adopted its LEAP, which includes two implementation tasks concerning energy storage: Task 7 requires an assessment of the feasibility and cost- effectiveness of thermal energy storage for shifting load from on-peak to off-peak periods for demand response or for meeting any energy storage needs; and Task 21 calls for assessment of the need for and value of energy storage to support local renewable distributed generation 6 Cal. Pub. Util. Code § 2836(b)(1). 7 Cal. Pub. Util. Code 2835(a)(1)-(4). 8 Cal. Pub. Util. Code § 2836.6. 9 CPUC Decision 13-10-040 (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K533/79533378.PDF). 10 CPUC Decision 13-10-040 (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K533/79533378.PDF). City of Palo Alto Page 5 resources (Staff Report 2710). These tasks include a requirement to determine energy storage procurement targets in accordance with AB 2514. CPAU has not offered an energy storage program since the late 1980s, when a generous incentive program for TES was available through the Partners Program for commercial customers (see Attachment E for more details). These incentives were motivated by steep and ratcheted demand charges from PG&E that provided a large incentive for CPAU to shift load from peak to off-peak hours. However, these charges no longer apply. At least seven large commercial customers took advantage of the Partners Program’s TES incentives. Currently, only two of those systems are known to still exist, and neither is currently being used to shift cooling load. Other systems have been eliminated due to failures, space constraints, or lack of engaged operation and maintenance. Discussion The following section addresses the feasibility, need, and value of energy storage in Palo Alto. These are discussed through the framework of cost-effectiveness, as called for in the LEAP implementation plan, and form the basis for the recommendation from staff and the UAC that the City Council exercise its option under AB 2514 to decline to adopt energy storage procurement targets because such targets are not appropriate. A variety of applications are analyzed and compared with the applicable technology having the lowest cost. Wherever possible, analyses conducted by or for other California utilities are incorporated. City of Palo Alto Page 6 Review of Energy Storage Technologies A comprehensive description of the wide array of energy storage technologies is provided in Attachment C. The table below summarizes a few key parameters associated with the major energy storage technologies most widely available in the U.S. today. The cost of energy storage typically includes a power (kilowatt, or kW) component associated with the power conversion part of the system and an energy (kilowatt-hour, or kWh) component associated with the energy storage part of the system. Table 1: Energy Storage Technology Summary11 Technology Cost AC to AC Roundtrip Efficiency Notes Lead-Acid batteries $400/kW + $330/kWh 70-80% Most mature battery technology Li-ion batteries $400/kW + $600/kWh 85% Mature technology Na-S batteries $350/kW + $350/kWh 75-80% Production temporarily halted due to fire concerns Pumped Hydro $1,200/kW + $75/kWh 70-85% Accounts for greatest amount of energy storage today, typically large-scale Thermal Energy Storage $500 - 1,000/kW for 6 hours of load shift 95-100% Limited to cooling end uses and to customer-sited applications Energy Storage Applications and Benefits in Palo Alto As suggested previously, the benefits associated with energy storage, and hence its value, depend on the application. Figure 1 below summarizes benefits associated with different energy storage applications relevant to Palo Alto and considered in this analysis. The open circles in the figure depict applications that require a third-party aggregator to capture the benefit. For example, storage system located at electrical substations in Palo Alto could provide all the benefits except the benefit of providing an electrical customer with their utility bill reduction. However, a smaller storage system located at a customer premises could provide all the benefits, but most of the benefits can accrue only if a third-party can provide storage system aggregation service. 11 The information in this chart is from a variety of sources; cost data is primarily from Sandia Report No. SAND2011-2730, Energy Storage Systems Cost Update. Schoenung, http://prod.sandia.gov/techlib/access- control.cgi/2011/112730.pdf. More detailed version of Table 1 available in Appendix A. City of Palo Alto Page 7 Figure 1: Energy Storage Applications and Benefits for Palo Alto Attachment D describes each electrical energy storage application and benefit in detail before presenting the cost-effectiveness analysis and results for electrical energy storage in Palo Alto. TES is analyzed separately in Attachment E because of its unique association with building cooling needs and consequently its narrow set of benefits. Summary of Electrical Energy Storage Cost-Effectiveness Results As detailed in Attachment D, the least cost energy storage technology today is well over 25% more costly than the present value of energy storage in a the best-case application. In addition, Palo Alto does not have any high value applications such as substation or distribution feeder upgrade deferral. As a result, electrical energy storage is not yet cost effective for Palo Alto; however, battery technology is expected to improve over time, and energy storage using better technology may be cost effective in a 5 to 10 year timeframe. Based on a variety of factors including current CPAU load projections, rooftop PV penetration, and distribution system capacity, the analysis did not find a compelling need to establish energy storage goals for CPAU at this time. While the growth of large-scale renewable energy will increase the need for grid balancing services which energy storage can provide, meeting this need is in the domain of the California Independent System Operator (CAISO), the transmission grid operator. CPAU’s 54 MW share of the Calaveras hydroelectric project and associated reservoir storage has the capability to adequately meet Palo Alto’s load balancing needs within the CAISO grid over the next 5 years. City of Palo Alto Page 8 Summary of TES Cost-Effectiveness Commercial Customer Perspective The most cost-effective TES scenario is for commercial customers who are able to use a TES system to reduce the size of their cooling equipment. Due to the capital cost savings associated with this scenario, a simple payback of less than one year for TES is possible. If this capital cost savings is not possible due to the current condition or design of the cooling system, a TES system can achieve a simple payback of 6.1 years, which is still a potentially cost-effective investment. These results do not include the value of space taken up by a TES system, which can significantly reduce the cost-effectiveness of TES. For the complete analysis of TES system options, see Attachment E. One surprising finding was that customer bill savings resulting from a TES system are higher under the standard rate than the time-of-use rate (TOU). In both instances, the majority of savings are due to reduced demand charges—and demand charges under the standard rate are significantly higher than under the TOU rate. This finding merits further investigation. Utility Perspective A customer-sited TES, when operated to reduce a customer’s bills, will also result in avoided costs to the utility due to a reduction in peak energy and capacity purchases. Staff’s analysis found that for the same TES system, the utility’s avoided costs are approximately 1/3 to 1/4 as large as the customer bill savings. Hence, the customer load shifting that occurs with a TES system may result in other customers subsidizing the load shifting customer. Any incentive for load shifting could further exacerbate this ratepayer impact and would require thorough analysis of the rate structure offered. Finally, a program to install customer-sited, but utility-owned and operated, TES systems was considered. This model has been used effectively by other California utilities to reduce peak loads. These systems can be cost-effective for utilities that are facing a need to build new, expensive generation capacity. For Palo Alto, it was found that such systems are not economically viable, with net present values far below zero. Recommendations 1. Do Not Establish An Energy Storage Systems Procurement Target for Palo Alto To satisfy the City’s obligations under AB 2514 and the LEAP, staff and the UAC recommend that the City Council decline to set an energy storage systems procurement target, because such a target is not cost-effective. As no current energy storage applications are cost-effective or are anticipated to be cost-effective in the next five years, staff recommends that Council City of Palo Alto Page 9 decline to set targets for the utility to procure “viable and cost-effective energy storage systems.” This determination must be revisited at least every three years pursuant to AB 2514. Although Energy storage is not currently cost-effective, there are other strategies currently being undertaken by CPAU to address the challenge of matching electrical demand and supply, including a demand response program, in which participating customers curtail their load for a period in response to a signal from the utility. Also underway are programs that target electric vehicle charging, either reducing such loads at critical times through demand response, or more permanently through rates which favor off-peak charging. Such programs to shift load and curtail peak load also benefit customers through bill savings and by lowering the overall system costs to customers. 2. Incentives for TES Not Recommended Since TES systems are not cost-effective from the societal perspective, staff recommends that no incentives for TES be adopted at this time. 3. Encourage Commercial Customers to Consider Energy Storage Systems Where Cost- effective As TES and other load shifting strategies can be cost-effective for Palo Alto commercial electric ratepayers, the City should encourage its customers to evaluate such systems. Emphasis should be placed on new construction or system upgrade opportunities where capital cost savings can be realized. Commission Review and Recommendation The UAC discussed staff’s recommendation at its December 4, 2013 meeting. Commissioners stated that they supported staff’s recommendation that the City not establish a goal to acquire energy storage because they are not cost-effective, but the UAC remained interested in whether those technologies may become cost-effective in the future. One Commissioner suggested that CPAU consider testing energy storage technologies under the Utilities Emerging Technologies Test Bed Program. The UAC voted unanimously (5-0, with Chair Cook and Commissioner Waldfogel absent) to recommend that the City Council decline to set an energy storage procurement target for CPAU because such a target is not cost-effective. The excerpted notes from the UAC’s December 4, 2013 meeting are provided as Attachment B. City of Palo Alto Page 10 Resource Impact The recommended action to not establish an energy storage procurement target has no budgetary or staff resource impacts. Policy Implications The recommended action sets new Council policy. This policy will be revisited every three years as required by AB 2514. Environmental Review The decision not to adopt energy storage procurement targets or incentives for TES does not meet the definition of a project, pursuant to Public Resources Code Section 21065, thus no California Environmental Quality Act review is required. Next Steps If the City Council declines to adopt an energy storage target for CPAU at this time, the City’s determination will be communicated to the CEC. Staff will continue to evaluate the value and application of energy storage options on a case-by-case basis as they arise, and bring the decision not to establish energy storage procurement targets back to the UAC and the City Council within three (3) years as required by AB 2514. Attachments:  Attachment A: Resolution (PDF)  Attachment B: Excerpted Notes from the UAC Meeting of December 4, 2013 (PDF)  Attachment C: Energy Storage Technologies and Applications (PDF)  Attachment D: Electric Energy Storage in Palo Alto (PDF)  Attachment E: Thermal Energy Storage in Palo Alto (PDF)  Attachment F: Energy Storage Regulations, Policies and Incentives (PDF) *NOT YET APPROVED* Attachment A 140130 dm 0180036 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Determining that a Target for the City of Palo Alto Utilities to Procure Energy Storage Systems is Not Appropriate Due to Lack of Cost-Effective Options R E C I T A L S A. California’s energy storage law, hereinafter referred to as Assembly Bill (AB) 2514, requires the governing board of each local publicly-owned electric utility (POU) to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems. B. In addition to requiring POUs to evaluate the feasibility of energy storage targets, AB 2514 also requires that all procurement of energy storage systems by a POU be cost- effective. C. To conform to California Public Utilities Code § 2836(b)(1) and § 2836.6, and consistent with the City’s Long-Term Acquisition Plan (LEAP), staff undertook a study to determine the viability and cost-effectiveness of energy storage to serve electric utility customers in Palo Alto, which included an investigation into a variety of energy storage technologies and their viability and cost-effectiveness. D. Based on that study, staff found that the least cost energy storage technology today is more costly than the present value of energy storage in the best case application, even when a variety of factors including current CPAU load projections, rooftop PV penetration, and distribution system capacity were considered, such that energy storage systems are not cost- effective at this time. E. At its December 4, 2013 meeting, the UAC unanimously recommended that the City Council decline to set an energy storage procurement target for the City of Palo Alto or provide rebate incentives for thermal energy storage because such targets and incentives are not cost-effective. F. The Council has reviewed staff’s study, the resulting staff report and the UAC’s recommendation. G. Based on that review, Council determines that that a target for the City of Palo Alto Utilities to procure energy storage systems is not appropriate due to lack of cost-effective energy storage options. H. AB 2514 requires Palo Alto to reevaluate this determination concerning the need for an energy storage procurement target once every three years. *NOT YET APPROVED* Attachment A 140130 dm 0180036 2 The Council of the City of Palo Alto (“City”) RESOLVES as follows: SECTION 1. To satisfy the City’s obligations pursuant to AB 2514 and LEAP, the Council determines that setting a target for the City of Palo Alto Utilities to procure energy storage systems is not appropriate due to lack of cost-effective energy storage system options. SECTION 2. The Council will reevaluate its decision not to set an energy storage system procurement target for the City of Palo Alto Utilities within three years, as required by AB 2514. SECTION 3. The Council finds that the adoption of this resolution is not subject to California Environmental Quality Act review because it does not constitute a project under California Public Resources Code section 21065. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _______________________ Senior Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services ATTACHMENT B EXCERPTED FINAL MINUTES OF THE DECEMBER 4, 2013 UTILITIES ADVISORY COMMISSION MEETING ITEM 3: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution Declining to Set an Energy Procurement Target for the City of Palo Alto Utilities or Provide Thermal Energy Storage Rebate Incentives Because Such Targets and Incentives are Not Cost-Effective Director Fong acknowledged Senior Resource Planner Shiva Swaminathan and intern Larsen Plano who worked on the report. Commissioner Eglash stated that he enjoyed the report and learned a lot about storage. He supports the conclusion. He stated that it takes lot of energy to build a battery, which is an issue and we can find ourselves in a situation that we invest so much energy to build the product that it takes a lot of time to recover that energy. So if Palo Alto wants to do things "right" as a leader, we think about cost and energy! Commissioner Eglash added that the technologies described in the report are active areas of research and he encouraged CPAU to consider testing these technologies under the emerging technologies program. Commissioner Hall stated that the report was very helpful and well-constructed. He asked which applications would be beneficial in Palo Alto if there was a change in the characteristics of the system in the future. Swaminathan replied that the storage technologies could become valuable because of their ability to ramp up and down quickly to integrate variable renewable energy sources such as wind and solar. The market price for those services, called "regulation", would have to increase substantially before the storage technologies would be cost effective. In addition, if loads grow on some of the City's electric feeders, adding storage at a substation could alleviate the load on the feeders. However, this was not expected in the next 10 years. Swaminathan added that the cost of these technologies would have to fall considerably before they were cost effective in Palo Alto. ACTION: Commissioner Eglash made a motion to recommend that the UAC recommend that Council decline to set an energy procurement target for CPAU. Commissioner Hall seconded the motion. The motion carried unanimously (5-0) with Chair Cook and Commissioner Waldfogel absent. Attachment C A1 ATTACHMENT C ENERGY STORAGE TECHNOLOGIES AND APPLICATIONS OVERVIEW AND ORGANIZATION A description of the various energy storage technologies is given in this attachment. The technologies are categorized according to the fundamental method of energy storage as summarized in the following list. • Primary Fuel Energy Storage: systems which store energy in the form of primary fuels used as inputs for electricity generation – Technologies: Natural gas storage, Concentrated Solar Power Molten Salt tanks – Applications: Generating facilities only • Electrical Energy Storage: systems which store energy in the form of moving or stationary electrical charge after it has been generated – Technologies: Batteries, Capacitors, Superconducting magnetic energy storage – Applications: can be used anywhere in the electric power system: Generation, Transmission, Distribution, or Customer • Non-electrical Energy Storage for Reconversion to Electrical Energy: systems which convert electrical energy to another form for storage, and then convert it back to electricity upon release – Technologies: Pumped hydro, Compressed air energy storage, Hydrogen, flywheel – Applications: can be used anywhere in the system, but mostly large facilities connected to the transmission grid due to economies of scale • Non-electrical Energy Storage for Direct Use: systems which convert electrical energy to another form for storage, and then use that energy without reconversion – Thermal (heat or cool) – Applications: Customer-sited only • Unconventional “Energy Storage”: systems which provide many of the same benefits of energy storage while not meeting the definition of energy storage – Time-shifting loads/DR, EV Batteries, Conventional Hydro – Applications: these technologies have applications where electricity is added or removed from the system: generation and customer sites. The primary sources for this section are several recent reports which describe the broad range of energy storage technologies, from sources such as Sandia National Lab1, the Electric Power Research Institute2,3, and the U.S. Congressional Research Service4 1 Energy Storage Systems Cost Update. S. Sohoenung. Sandia Report SAND2011-2730. April 2011. 2 EPRI-DOE Handbook of Energy Storage for Transmission and Distribution Applications, EPRI, Palo Alto, CA, and the U.S. Department of Energy, Washington, DC: 2003. 1001834. 3 Electric Energy Storage Technology Options: A White Paper Primer on Applications, Costs, and Benefits. EPRI, Palo Alto, CA, 2010. 1020676. Attachment C A2 The table below summarizes key parameters associated with the major energy storage technologies most widely available in today. Technology U.S. Installed 5 Energy Density Cycle Life Cost AC to AC Roundtrip Efficiency Notes Lead-Acid batteries 45 MW 35 Wh/kg 4,000, depends on depth of discharge $400/kW + $330/kWh 70-80% Most mature battery technology Li-ion batteries 55 MW 70-200 Wh/kg Similar to Lead- Acid $400/kW + $600/kWh 85% Mature technology Na-S batteries 18 MW 150 Wh/kg 4500 $350/kWh + $350/kW 75-80% Production temporarily halted due to fire concerns Pumped Hydro 500 MW N/A $1,200/kW + $75/kWh 70-85% Accounts for greatest amount of energy storage today, typically large scale Thermal Energy Storage 1,000 MW 15 Wh/kg 7,000Wh/ m2 15-20 years $500 - 1,000/kW for 6 hours of load shift. . 95-100% Limited to cooling end uses and to customer sited applications Table C1: Energy Storage Technologies PRIMARY FUEL ENERGY STORAGE Natural Gas Storage One doesn’t normally think of natural gas storage in the context of energy storage; however, the network of natural gas pipelines has much in common with the electric transmission network. A constant pressure in the pipelines must be maintained, and supply into the system must balance the removal of gas at industrial facilities, power plants, and local distributors like the City of Palo Alto Utilities (CPAU). Natural gas storage facilities can be thought of as a battery for the natural gas system – when demand is low the storage is charged, and when demand is high the storage is discharged. In this way, natural gas storage can mitigate circumstances where gas production is mismatched with demand. In 2010, the US had over 8.7 trillion cubic feet of natural gas storage capacity, which is nearly 4% of annual natural gas consumption.6 4 Energy Storage for Power Grids and Electric Transportation: A Technology Assessment. P. Parfomak, Congressional Research Service Document 7-5700. March 27, 2012. 5 Market Evaluation for Energy Storage in the United States, Kema Inc. 2012. 6 http://www.eia.gov/dnav/ng/ng_stor_cap_dcu_nus_a.htm andhttp://www.eia.gov/dnav/ng/ng_cons_sum_dcu_nus_a.htm Attachment C A3 Similarly, most coal-fired power plants have a stockpile of coal that would allow the plant to operate one to two months.7 When viewed in the context of electricity production, natural gas storage is not unlike conventional hydroelectricity. Stored natural gas is analogous to the water behind a dam, and the generators in a gas plant are turned by a gas combustion powered turbine rather than a water powered turbine. Of course, the environmental impacts of these two generating facilities are very different. Concentrated Solar Power Molten Salt Tanks Concentrating Solar Power (CSP) facilities have much in common with conventional natural gas and coal power plants: they all use heat to make steam which runs a turbine to turn a generator. CSP uses mirrors to concentrate sunlight on a receiver containing a fluid – either a high-temperature oil or a molten salt. The fluid, once heated via the concentrated sunlight, is then used to make steam. As with natural gas or coal plants, the energy source used to run a CSP plant – very hot fluid – can be stored. By charging and discharging hot fluid stored in an insulated tank, these facilities are able to manage an imbalance of energy supply (from the sun) with energy demand (from the grid). The tanks can be sized to enable the plant to maintain its output for a short period – say 30 minutes of cloud cover – or even many hours after the sun has set. Several large thermal energy storage systems for CSP are under construction, including the 250 MW Solana facility with 6 hours of storage in Arizona. When this project begins operation in 2013, CSP thermal energy storage will likely be second only to pumped hydro in capacity connected to the U.S. electric grid.8 ELECTRICAL ENERGY STORAGE Batteries A simple rechargeable battery may be the first energy storage device that comes to mind; indeed electric batteries were invented about 100 years before the modern electric grid took shape. Batteries take advantage of reversible chemical reactions to store and release electrical energy. When discharging, a reaction which generates a flow of electrons (i.e. electrical current) converts chemical energy to electrical energy. This reaction is reversed during charging. The common lead-acid battery provides a good example of typical battery construction and operation. Two metal plates, a negative plate (anode) made of lead and a positive plate (cathode) made of lead oxide, are surrounded by a sulfuric acid solution. This solution is an electrolyte, that is, it contains free ions. At the negative plate, the electrolyte causes an 7 http://www.eia.gov/todayinenergy/detail.cfm?id=6490 8 http://www.abengoasolar.com/corp/web/en/nuestras_plantas/plantas_en_construccion/estados_unidos/ and Market Evaluation for Energy Storage in the United States, Kema Inc. 2012. Attachment C A4 oxidation reaction which frees electrons giving it a negative charge. At the positive plate, the electrolyte causes a reduction reaction which needs free electrons to occur, giving it a positive charge. If the positive and negative plates are connected, electrons will flow from the negative plate, where there are excess free electrons, to the positive plate, where there is a need for electrons. This electrical current can then be used to supply power to an electric load such as a light bulb (i.e. to do work). These reactions will continue until the electrolyte is depleted, at which point the battery is fully discharged. Figure C1: Lead Acid Battery Reactions9 In order to recharge the battery, a current is applied in the opposite direction, and the chemical reactions are reversed: electrons are supplied to the negative plate while they are removed from the positive plate. This recharging process continues until the electrolyte is fully restored to its original state, at which point the battery is recharged and ready to provide a supply electric power once again. 9 http://hyperphysics.phy-astr.gsu.edu/hbase/electric/leadacid.html Attachment C A5 The strength with which electrons are repulsed from the anode and attracted to the cathode determines the voltage at which the battery operates. A common 12 volt lead-acid car battery has six such pairs of positive and negative plates, each contributing 2 volts. Typical battery construction is illustrated in the figure below. Figure C2: Lead Acid Battery Construction10 Most other batteries are variations on this simple design using different materials, each with its own advantages and disadvantages. Cost, energy density, and battery life are typically the most important performance characteristics. Other characteristics that vary for different battery types include performance degradation at high or low temperatures, charge retention, and toxicity levels. Lead-acid batteries use inexpensive and recyclable materials, yet their lead is heavy and toxic, and they degrade quickly when subject to deep discharging. The other batteries described below seek to improve upon these two primary disadvantages of lead-acid batteries – energy density and short cycle life. The major battery technologies are summarized in the table below. Type Chemistry Notes Lead- Acid Lead anode/Sulfuric acid electrolyte/ Lead-oxide Cathode Mature technology, highly recyclable Nickel cadmium (Ni-Cd) or metal alloy (NiMH) anode/Ni- based cathode/potassium hydroxide electrolyte Phased out due to toxicity of Cadmium Li-ion carbon-based anode/lithium salt based electrolyte/ various metal compounds for cathode Mature Na-S molten sodium anode/ solid ceramic beta-alumina electrolyte/liquid sulfur cathode Operates near 600° F. Production temp. halted for redesign due to fire risk11 Table C2: Battery Technologies 10 http://www.thebatterybank.co.uk/page_1283687216680.html 11 http://www.ngk.co.jp/english/announce/111031_nas.html Attachment C A6 Flow batteries are distinguished from the batteries described above in that the electrolyte is stored separately from the cell or cells where the reactions occur. As electrolyte in the reaction chamber is depleted during discharge it is continually replaced with an incoming flow of electrolyte. A similar process uses electrolyte flow to recharge the battery. One advantage of this type of system is that it enables the amount of energy storage (kWh), which is determined by the amount of electrolyte, to be sized independently from the power output of the battery (kW), which is determined by the size and number of reaction cells. While several demonstration systems have been installed, realistic cost and performance data is not yet available for flow batteries. Capacitors A capacitor is an energy storage device which stores energy in the electric field which develops between two statically charged plates that are separated by an insulator. A current applied to a capacitor will “charge” the capacitor by causing electrons to build up on one plate and to be driven away from the other plate, resulting in a static charge imbalance between the two plates. If the charging current is removed, current will flow in the opposite direction as electrons are driven away from the negative plate and return to the positive plate. As the capacitor discharges, static charge imbalance decreases between the plates, resulting in a decreasing voltage. The capacitor is completely discharged when there is no longer a static charge imbalance between the plates and the voltage reaches zero. The primary advantages of capacitors are a result of the fact that, unlike batteries, charging and discharging does not involve a chemical reaction taking place on the surface of the plates. This results in a much higher cycle life, and also allows capacitors to be charged and discharged at a much faster rate than batteries, producing very high power; however, capacitors are unable to store as much energy as a battery, thus they can deliver power only for very short periods. Capacitors have been integrated with battery storage systems so that the capacitor is used when frequent or rapid charge/discharge is required, while the battery is used for longer-term needs. For example, an uninterruptible power supply may use capacitors to respond to sub- second interruptions, while the battery is deployed if an interruption lasts longer.12 SMES Similar to capacitors, superconducting magnetic energy storage (SMES) devices are characterized by an ability to repeatedly and rapidly deliver very high levels of power, but only for several seconds. Rather than storing energy in the electric field generated by stationary electrons as in a capacitor, a SMES device stores energy in the magnetic field generated by moving electrons. The SMES is charged by inducing a DC current in a closed coil of superconductive wire. With their very low resistance, these wires can maintain a very high current, and thus a very strong magnetic field, with little loss. When discharging, this current is applied to a capacitor, creating a DC voltage.12 12 http://www.energy.ca.gov/distgen/equipment/energy_storage/energy_storage.html Attachment C A7 SMES devices have only been deployed in demonstration projects and are more expensive than batteries and capacitors, mainly due to costs of the superconducting coil and the auxiliary devices needed to keep it a low temperature—as low as -450° F—needed to achieve superconductivity. Researchers are looking for ways to achieve higher temperature operation. NON-ELECTRICAL ENERGY STORAGE FOR RECONVERSION TO ELECTRICAL ENERGY Pumped hydro Like conventional hydro, pumped hydro, stores the potential energy of water in a reservoir at a high elevation and discharges by allowing the water to flow through a turbine; however, as the name implies, pumped hydro uses pumps (which consume electricity) to move water to a high elevation rather than the natural hydrologic cycle. By using electricity to run the pumps, pumped hydro is directly analogous to a battery—it converts electrical energy into potential energy when charging, and then reverses the process to generate electricity when “discharging.” Pumped hydro facilities are much larger and generally more economical than any other energy storage device available today. As a result the vast majority of current grid connected energy storage is pumped hydro, some 500 MW, in the U.S. CAES Compressed Air Energy Storage (CAES) takes advantage of the same type of underground caverns that are often used for natural gas storage. In CAES, electricity is consumed by compressors which are used to fill the cavern with high pressure air. When discharging, this pressurized air is mixed with natural gas and used to power a turbine. The primary difference between CAES and conventional gas-fired combustion turbines is that the compression stage is performed independently, enabling this part of the process to occur when the turbine is not operating. CAES facilities can be easily scaled and are able ramp output very quickly, enabling them to provide load following and load leveling and to help mitigate high ramp events resulting from variability in generation from renewable resources (e.g. wind and solar). Because natural gas is consumed during the discharge process, CAES is a hybrid storage/generation technology. To produce 1 kWh of electricity a CAES typically requires 0.6 to 0.8 kWh of input to power the compressors and 3,900 to 4,400 Btu (1.1 to 1.2 kWh) of natural gas. Since CAES is based on very well established technology, it can be a very cost effective energy storage option when inexpensive electricity is used to pressurize the cavern and cheap natural gas is used to “discharge” the system. While only one 110 MW CAES facility exists in the U.S., many are in planning stages. Current projects seek to use a wider variety of storage formations, while other projects are exploring ways to eliminate or reduce the need for natural gas. Hydrogen A variety of processes using either electricity or fossil fuels can be used to produce hydrogen, which can then be stored in tanks or geologic formations much like natural gas. The stored Attachment C A8 hydrogen can then be consumed, typically in a fuel cell, to generate electricity. While much of the associated technology is mature, the round trip efficiency of the entire process is less than 50%. Other hurdles to hydrogen energy storage include expensive material requirements and the low density of hydrogen gas, requiring large storage volumes or very high compression of the gas to store large amounts of energy. Sizing of hydrogen system components is very flexible, and hydrogen storage can be used in a variety of applications, from vehicle-scale to grid-scale systems. One grid-level hydrogen demonstration project on a remote Canadian island uses excess wind energy to generate hydrogen for later use, enabling wind power to replace much more of the island’s diesel-based power than otherwise possible.13 Flywheel The flywheel many are most likely familiar with—the large metal disk attached to an engine output shaft—can be thought of as an energy storage device. It “charges” when a firing cylinder forces the flywheel around and “discharges” as its rotational inertia keeps the crankshaft rotating in between the engine’s power strokes. This ability to smooth the supply and demand of energy is a primary function of energy storage in the electric power system as well. Several recent demonstration projects have shown that flywheels can be used effectively to help balance the electrical grid. In these devices, an electric motor speeds up a large flywheel when charging. Thanks to low friction bearings, the kinetic energy of the rotating flywheel can be maintained for long periods with minimal losses. When discharging, the motor becomes a generator, converting the flywheel’s kinetic energy back to electricity as it slows the wheel. Flywheels can be very rapidly charged and discharged repeatedly without causing any damage; however, they do not have a very high energy density. Thus, like capacitors, they can very quickly deliver a high power, but only for a brief period of time. This makes them ideal for supplying the quick, short bursts of power delivery and consumption that are necessary for regulating grid frequency. While flywheels have some advantages over batteries and capacitors in terms of lifetime reliability and material toxicity and availability, it remains to be seen whether they will be cost competitive. NON-ELECTRICAL ENERGY STORAGE FOR DIRECT USE Thermal Energy Storage As described in Attachment C, there can be benefits to storing energy at the utility customer’s site. Customers can store electrical energy using batteries, for instance, but energy can also be stored in other useful forms for use at a future time. In fact, the most common technology for customer-sited energy storage14 converts electrical energy to thermal energy, which is stored 13 http://canmetenergy.nrcan.gc.ca/renewables/wind/464 14 Market Evaluation for Energy Storage in the United States, Kema Inc. 2012 Attachment C A9 by cooling a large amount of material, typically water.15 This cold water is maintained at the desired temperature in an insulated container until it is used at a later time to provide cooling for a building or industrial process. Thermal energy storage (TES) for heating and cooling looks much like thermal energy storage for future electricity generation using CSP as described previously. However, the thermal energy stored in thermal energy in heating and cooling applications is created by consuming electricity at a customer site, where it is used directly to offset electricity consumption at a later time. By avoiding the conversion of energy from electricity to some storage medium and then back to electricity, both of these forms of energy storage are highly efficient. The common refrigerator and water heater are, in essence, thermal energy storage systems. Consider the water coming out of your shower head each morning. Typically that water is coming from the hot water tank, and was actually heated by the electric element or gas burner at some point before you turned on the shower. In other words, the water heater converted gas or electricity to thermal energy in the hot water storage tank, and you used that stored energy when you called for hot water. Refrigerators can also be considered an energy storage device: it is charging when the compressor is on and discharging when sitting idle. Today the vast majority of these appliances are not controlled in a way that takes advantage of the services that energy storage can offer, such as peak load shifting, demand response, or frequency regulation; however, smart meter-enabled water heaters that can shift water heating electricity consumption to off-peak times have been available for several years, and energy storage appliances such as water heaters and refrigerators that can also automatically provide demand response or frequency regulation services are under development. Large commercial refrigeration facilities can be operated in “thermal freewheeling” mode where the unit is cooled below its setpoint and then turned off for a period in response to high energy prices or a demand response signal. In commercial buildings, large TES systems can be used to provide space cooling, typically by cooling a volume of water with a chiller, a device using the same vapor compression cycle as a refrigerator. The water may be cooled to near freezing, or in ice storage systems, the water is actually frozen. Ice storage systems take advantage of water’s latent heat of fusion, which gives them 3 to 9 times greater energy storage density than a chilled water system16. Other TES systems use a thermal storage medium other than water, which freezes at a higher temperature, yielding energy storage densities between that of chilled water and ice. These systems are operated such that the chiller is run at night, taking advantage of off-peak electricity to chill or freeze water. The cold storage medium is then used during the day to 15 Thermal energy is characterized by a difference in temperature just like potential energy is characterized by a difference in height. Both forms of energy can be used to perform work. 16 Buildings on Ice: making the Case for Thermal Energy Storage. W. Wilson, Environmental Building News. July, 2009 Attachment C A10 provide air conditioning instead of using peak electricity to run the building’s air conditioning system. TES systems can be designed to provide up to 100% of the building’s cooling load during the peak period. Whether TES provides all or part of the building’s cooling load, it enables significant amounts of electric load to be shifted from peak to off peak hours of the day. TES systems which shift only part of a building’s cooling load have the added benefit of requiring a smaller chiller or allowing more efficient use of existing chillers. TES systems can also be used to shift heating electricity load. Small residential electric storage heaters which warm bricks overnight for use during the day have been used for many years in the UK to shift heating load and take advantage of time of use rates. In the U.S. this is less common as electricity is not typically used for building heating and winter peaks are less severe. Other thermal energy storage systems may use large areas of the earth or groundwater as the storage medium. Ground source heat pumps, for example, store heat in the ground over the summer, and pull heat out of the ground during winter. Such Underground Thermal Energy Storage (UTES) is being explored today for seasonal load shifting as well as shorter timescale energy storage cycles. UNCONVENTIONAL “ENERGY STORAGE” Conventional Hydro Conventional hydropower is not an energy storage technology as typically conceived, because it is not “charged” using a part of the engineered energy system such as a conventional fuel or electricity. Rather, hydropower is “charged” by the natural hydrologic cycle depositing rainwater on elevated terrain. In conventional hydropower facilities this elevated water is stored behind a dam, and when power is needed, the water is allowed to flow thorough a turbine that turns a generator. The stored potential energy of elevated water is thus converted into electricity. Clearly, conventional hydropower has many characteristics in common with energy storage devices: the size of the reservoir behind the dam is analogous to stored electrolyte in a flow battery or the geologic cavern in a CAES – it determines the quantity of energy (kWh) that can be stored. The size and number of the turbines determines how much power (kW) can be delivered at any given time. Conventional hydro is not able to perform load shifting as other energy storage technologies do, but it does have the ability to deliver significant amounts of power very quickly. With this high ramp rate, conventional hydroelectric facilities can provide many of the other services that energy storage provides, such as reserves, frequency regulation and mitigation of the intermittency of renewable power. In fact the Calaveras Hydro Facility, which is partly owned by Palo Alto, provides frequency regulation to the California Independent System Operator (CAISO) transmission grid and adequately covers CPAU’s load serving obligations. Attachment C A11 EV Batteries While most battery energy storage installations are stationary, batteries can provide useful services to the electric power system wherever they are. And with the increasing use of electric vehicles (EVs), many have proposed using EV batteries to provide some benefit to the electric system while plugged in. This “Vehicle-to-Grid” technology could control EV charging so that it occurs at times that are beneficial to the grid, such as periods of excess wind generation or in the brief instances where the grid frequency is too high, providing frequency regulation services. Similarly, EV charging could be curtailed at times that are potentially harmful, such as during a demand response event. Some even propose using EVs to supply power to the grid, although increasing the number of cycles for an EV battery could reduce its life. While the technical challenges of vehicle-to-grid technology may not be great, controlling such a large number of distributed, customer-owned devices presents some operational and regulatory difficulty for grid operators Time-shifting loads and Demand Response These strategies look at the grid stability issue from the perspective of adjusting demand rather than supply. Electrical loads are commonly reduced on demand through demand response programs similar to the one begun in Palo Alto in 2011; however, enabling demand response to provide similar services to energy storage requires automation and quick response times. Loads can respond to a demand response signal by time-shifting energy use, for example, by adjusting the cycles of heating, cooling or refrigeration equipment, or by simply eliminating unnecessary loads such as escalators. The Demand Response program helped Palo Alto reduce customer summer peak loads by 600 kW in 2013. Attachment D B1 ATTACHMENT D ELECTRIC ENERGY STORAGE IN PALO ALTO INTRODUCTION This attachment describes the cost-effectiveness analysis for electric energy storage in Palo Alto. Thermal energy storage is analyzed separately in Attachment C because the applications and benefits of these two technologies are quite different. This attachment reviews the various applications of electric energy storage and reviews the associated benefits. The value of each benefit is quantified and compared to the cost of a system which would provide those benefits at least cost. This attachment begins with an explanation of the larger electric power system and how it benefits from energy storage because many of the benefits, and hence value, of energy storage are associated with the stability of the larger electric power system. THE MODERN ELECTRIC POWER SYSTEM The electric grid, a network of high voltage transmission lines blanketing North America, makes up the backbone of our modern electric power system. For the most part, power is added to the system through large central power generating stations, and it is removed at substations from which power is fed out to local customers on a utility’s distribution network. Generating stations and distribution substations exist throughout this network, but it can be helpful to illustrate the system in a linear fashion as below. Figure D1: Electric Power System1 The voltage and frequency of the electric grid must be maintained within a very narrow range to ensure that the electric devices that are connected to the system – both those that produce 1 http://www.ferc.gov/industries/electric/indus-act/reliability/blackout/ch1-3.pdf Attachment D B2 electric power and those that consume it – are able to operate. As a result, the consumption of energy by customers must be precisely balanced in real time with supply. Typically this balance is achieved by adjusting the output of fast-responding resources like hydropower to match the chaotic, short-term fluctuations in demand as devices are turned on and off and by keeping some generating capacity in reserve to ensure sufficient supply at all times, even if a large generator fails suddenly. The California Independent System Operator (CAISO) coordinates this real-time balance of demand and supply in most of the state. Through CAISO markets, electric generators can provide services such as “regulation” or “spinning reserve” in addition to simply supplying electric energy. These services are needed to ensure instantaneous balancing electrical loads and generation to maintain system reliability. Load following describes the process of generators providing power to meet the predictable variations in demand over a day, such as the “morning ramp” – an increase in load as customers start the day. This is a long-timescale service provided over a period of hours. At the other extreme is “frequency regulation”, a service that requires generators to adjust their output in a matter of seconds by automatic control to match the random and unpredictable variations in load as devices are turned on and off. In Figure D2 below, the actual system load fluctuates randomly from minute to minute but is steadily rising on average. The overall supply of power slowly ramps as it follows the average load (load following), while the frequency regulation service (magnified) responds to this short time-scale fluctuation in actual load. Figure D2: Load Following and Frequency Regulation2 2 http://www.ornl.gov/~webworks/cppr/y2001/rpt/122302.pdf Attachment D B3 Ancillary services are those that enable response to these unpredictable variations and events affecting the system. These services are delineated by the speed and duration with which the generator responds, as summarized in the table below. Figure D3: Ancillary Services3 This delicate balancing act is made more difficult as total demand for electricity increases faster than the capacity to supply it reliably. During periods of peak load, when the demand is highest, older, less efficient and less reliable units must be called on while at the same time certain parts of the transmission or distribution system may approach their maximum carrying capacity. Maintaining grid stability is also more difficult as more electricity is supplied by renewable sources. The output from most renewable energy technologies deployed today, namely wind and solar power, can fluctuate significantly within a very short period as difficult-to-predict changes in the weather occur. In California, the need for generating capacity reserved for frequency regulation will grow from 419 MW in 2009 to 1,114 MW by 2020 due to increased variable generation sources needed to 3 http://www.ornl.gov/~webworks/cppr/y2001/rpt/122302.pdf Attachment D B4 meet California’s renewable portfolio standard.4 In response to this need, the California Public Utilities Commission (CPUC) is currently revising its Resource Adequacy rules to incorporate requirements for utilities to purchase “flexible capacity” in much the same way that local capacity is required currently.5 With its ownership of the 54 MW share of the Calaveras Hydroelectric Project, Palo Alto has sufficient flexible generation capacity to meet load serving obligations on the grid. THE NEED FOR ENERGY STORAGE As the need for services that help balance electricity supply and demand is increasing, regulators and grid operators are looking to energy storage as a part of the solution. In very broad terms, energy storage systems absorb energy, store it for a period of time with minimal loss, and then release it. By charging and discharging energy, these systems facilitate the real- time balance between supply and demand, ensuring a stable electric grid. The services that can be provided by energy storage depend fundamentally on how it performs: how much power it can supply (alternatively, how quickly it can charge and discharge), and the duration for which it can supply its rated power (Alternatively, the total amount of energy it can absorb). Hence, energy storage systems are rated both in units of power (watts, kW, or MW) and units of energy (watt-hours, kWh, or MWh). A 10 kW battery with 5 hours of storage will be able to provide 10 kilowatts of power (enough to supply around 10 homes) and it will have a storage capacity of 50 kWh. A water storage tank is a helpful analogue: the size of the tank represents the amount of energy that can be stored (kWh), while the speed with which the tank can be filled or emptied represents the power rating (kW). A number of other parameters are used to characterize energy storage system performance: how many charge/discharge cycles they can perform before needing replacement (cycle life); how quickly they can reach a desired power level (ramp rate), and the amount of energy loss between charging and discharge (round-trip efficiency). Most of these parameters are also affected by temperature and system age. The performance of an energy storage system determines the services it is able to provide. A system that can quickly ramp up but is unable to store large amounts of energy, such as a flywheel bank, will be very effective at managing short imbalances between supply and demand (e.g. frequency regulation). A less nimble system with far greater energy storage capacity, like a pumped hydro facility, can be very effective at mitigating peak demand problems by charging with off-peak energy and discharging during peak periods. Figure B4 below plots many different technologies on these two parameters – power and duration – and suggests the types of applications that are best matched with different energy storage system capabilities. 4 ISO Study of Operational Requirements and Market Impacts at 33% RPS, Continued Discussion and Refinement of Step 1 and Step 2 Simulation Methodology. CAISO Slides presented at CPUC Renewable Integration Workshop on October 22, 2010 5 http://www.caiso.com/Documents/RevisedDraftFinalProposal-FlexibleCapacityProcurement.pdf Attachment D B5 Figure D4: Performance of Several Energy Storage Technologies6 The location of an energy storage system within the electric power system will also determine the needs that the energy storage system can meet. For example, a large energy storage system sited at a solar plant could be used to smooth the plant’s output by counteracting significant fluctuations due to changes in weather. This battery can do little to provide uninterrupted power to a utility customer who needs energy storage to ensure that critical systems are not affected by temporary service interruptions. Some energy storage technologies are limited in this regard: TES is limited to customer locations where heating or cooling is needed, for example. Others, such as batteries, can be deployed at a wide variety of scales and locations. Figure B5 below summarizes energy storage applications at each point in the electric power delivery system. In California, larger energy storage systems on the utility-side of the meter can also participate in CAISO markets and provide a variety of market-based services, such as frequency regulation, as indicated. 6 Rastler D., Electricity Energy Storage Technical Options, EPRI Technical Update, December 2010. Attachment D B6 Figure D5 Energy Storage Benefits Based on Location7 Each service provides a different benefit to the system and each has a different value. In most cases, an energy storage system can be operated so that it provides more than one service or benefit. 7 (CPUC Energy Storage Proceeding R.10-12-007, Energy Storage Framework Staff Proposal, 4/3/2012) Attachment D B7 Note that CAISO is responsible for ensuring grid stability. Thus the CAISO is responsible for procuring ancillary services needed to balance variable energy resources, such as wind power, used by Palo Alto. Palo Alto does not have to directly procure such services to balance the output from the resources that provide electricity to CPAU. The cost of ancillary services needed to balance the system is charged to Palo Alto by the CAISO and, at the same time, the CAISO provides credit for ancillary services provided by Palo Alto’s Calaveras hydro project to the transmission grid. COST EFFECTIVENESS ANALYSIS As suggested previously, the benefits associated with energy storage, and hence its value, depend on the application. The chart below summarizes benefits associated with different energy storage applications relevant to Palo Alto and considered in this analysis. Figure D6: Energy Storage Applications and Benefits for Palo Alto Each electrical energy storage application and benefit is described in detail below. Outside Palo Alto refers to energy storage systems that Palo Alto may purchase or procure services from that are connected to the transmission grid outside of Palo Alto. These systems can provide system-wide benefits such as ancillary services like frequency regulation or voltage control, which are required by CAISO to maintain grid stability. Energy storage systems can also be used to meet or offset Palo Alto’s requirements to purchase capacity in accordance with California’s resource adequacy rules. Grid connected energy storage systems can also be used to benefit Palo Alto by enabling energy price arbitrage – purchasing cheap energy, storing it, and using it during high price periods. Attachment D B8 Substation refers to energy storage systems installed at a substation within Palo Alto. In addition to the benefits above, a local system can reduce loads on the distribution network, potentially enabling deferral of a distribution system upgrade. A mobile system may provide multiple deferrals. Opportunities to use energy storage to avoid costly upgrades at the 9 CPAU substations were not found to exist currently for CPAU, and are unlikely in the near future based on 10-year load projections. Analysis of the loading of the 59 main feeder lines also resulted in the same conclusion. Hence, these potential benefits do not contribute to the value of energy storage systems in this analysis. Local energy storage can also enable increased levels of distributed generation—DG Integration. In particular, energy storage can enable high levels of solar PV on a particular feeder by preventing instabilities that are associated with high levels of PV.8 This benefit helps Palo Alto meet its renewable energy goals with local solar power while maintaining system reliability. However, given available rooftop space, land use patterns and regulations in Palo Alto, a scenario where such instabilities arise is highly unlikely in the next 5-10 years. A substation based storage system can also be used in the event of an outage to maintain service to certain customers who would otherwise experience an interruption. This reliability benefit also includes mitigation of momentary disruptions that would otherwise impact power quality. For a city-owned and sited energy storage system to provide revenue through ancillary services, Palo Alto or a third party such as NCPA must provide the appropriate controls, communication capabilities, and certifications to participate in this CAISO market. There has been some interest by a Palo Alto based R&D organization to participate in a research project in this regard. Distribution, also known as Community Energy Systems (CES), refers to small energy storage systems distributed along a feeder similar to the transformers that supply customers. As these systems are closer to the customer, they can provide even greater reliability improvements; however, smaller energy storage devices such as these would need to be controlled in aggregate to provide system-benefits such as frequency regulation. Customer Energy Management refers to an application of energy storage on the customer side of the meter, which can be used strategically by the customer to reduce electric utility bills by shifting load from peak to off-peak, reducing peak demand charges and arbitraging energy costs, if on a time-of-use rate. A customer-sited system used in this way will also result in avoided costs for the utility by effectively performing price arbitrage for the utility as well. 8 Verschueren, T.; Mets, K.; Meersman, B.; Strobbe, M.; Develder, C.; Vandevelde, L.; , "Assessment and mitigation of voltage violations by solar panels in a residential distribution grid," Smart Grid Communications. (SmartGridComm), 2011 IEEE International Conference on , vol., no., pp.540-545, 17-20 Oct. 2011. http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=6102381&isnumber=6102296 Attachment D B9 If Palo Alto is able to manage or direct customer-sited energy storage, it can potentially provide other local benefits such as enabling upgrade deferrals. Customer TES refers to customer-sited thermal energy storage systems. As described in Attachment C, these systems shift cooling energy use, providing customer bill savings. Similarly, they provide reliability, but only for space cooling systems, as indicated by the half circle. If Palo Alto is able to target the deployment of TES systems to areas where a distribution upgrade would otherwise be necessary, it may enable an upgrade deferral. Value of Utility-Owned Electrical Energy Storage The cost-effectiveness analysis of utility-owned energy storage systems other than TES draws heavily upon a 2012 analysis done for SMUD by Electric Power Research Institute and Energy + Environmental Economics.9 Table B1 below summarizes the value associated with the various energy storage benefits described previously. Table B1 also includes the values assumed in the SMUD analysis alongside values for each benefit that are specific to Palo Alto. All energy storage benefits have the same or less value for Palo Alto except those accruing to the customer through bill savings. Benefit SMUD typical value Palo Alto typical value Frequency Regulation $11.60/MWh reg. up / $8.38/MWh reg. down Same (CAISO Market Value) Voltage Control $1.05/kVAR Same (CAISO Market Value) Capacity $30/kW-year $21/kW-year Distribution Deferral $100-$158/kW-year (hypothetical) $0 Arbitrage $0.05 to $0.30/kWh $0.02 to $03/kWh Reliability $0.10/kW to $189/kW Assumed Same Bill Reduction $6.10/kW demand, $0.01 to $0.14/kWh shifted $20.11 - $6.81/kW demand, $0.014 to $0.031/kWh shifted Table D1: Comparison of Values of Energy Storage Benefits Utility-Owned Electrical Energy Storage Cost-effectiveness Based on the values associated with the benefits provided by energy storage, it is possible to estimate the net present value of an energy storage system. This analysis draws upon the SMUD study, which used an hourly model to maximize the value attained by energy storage systems in various applications over a 15 year anticipated lifetime. The modeling results for SMUD indicate that the most valuable utility-owned energy storage systems were 1) a substation-sited 1 MW, 2-hour, transportable battery achieving multiple deferral benefits while also earning revenue through frequency regulation services, and 2) 9 Benefit Analysis of Energy Storage: Case Study with Sacramento Municipal Utility District. EPRI, Palo Alto, CA: 2011.1023591. Attachment D B10 distributed energy storage systems controlled in aggregate to earn revenue through frequency regulation. The total present value per installed kWh for both scenarios is presented below using SMUD expected values for each type of benefit. (“Target” refers to the results using typical values; “High” refers to results using niche market values, 95th percentile and other maximum assumptions.) Figure D7: SMUD Present Value of Mobile Substation Battery & Aggregate Control CES10 The value of frequency regulation and power reliability are assumed to be the same for SMUD and Palo Alto; however, the values associated with other benefits of energy storage are significantly higher for SMUD than for Palo Alto. Given this information, it is estimated that the present value of these two high-value energy storage applications are approximately $400/kWh. Based on the cost information presented in the table below, the cheapest battery technology available today to deliver the services modeled above (1 MW, 2-hr) would cost approximately $525/kWh, over 25% higher than the anticipated present value of the best-case energy storage applications presented above. This also does not include the costs associated with installation, developing the capability to sell frequency regulation in CAISO markets. Nor does it include costs associated with developing systems to manage distributed batteries in aggregate, which is needed to realize the value of frequency regulation for the Community Energy Storage scenario. 10 Benefit Analysis of Energy Storage: Case Study with Sacramento Municipal Utility District. EPRI, Palo Alto, CA: 2011. 1023591. Attachment D B11 It is anticipated that the costs of energy storage will decrease with time – one report indicates that energy storage installed costs will approach $500/kWh by 2022.11 In this timeframe it is also anticipated that the energy storage industry will grow significantly.12 Technology Cost Cost of 1 MW, 2-hr system (Cost per kWh) – hardware only Notes Lead-Acid batteries $400/kW + $330 per kWh $1,060,000 ($530/kWh) Li-ion batteries $400/kW + $600 per kWh $1,600,000 ($800/kWh) Na-S batteries $350/kW + $350 per kWh $1,050,000 ($525/kWh) Production temporarily halted due to fire concerns Pumped Hydro $1,200/kW + $75 per kWh $1,350,000 ($675/kWh) Not applicable for local installations Thermal Energy Storage $500 - 1,000/kW for 6 hr. N/A Limited to cooling end uses, thus unable to provide many benefits included. See Attachment C. Table D2: Energy Technology Summary Given the results above, energy storage is clearly not cost effective for Palo Alto today; however, energy storage may be cost effective in the 5- to 10-year timeframe. In that time energy storage will likely play a more significant role in the electric power system; however, there is not currently a foreseeable need for energy storage for Palo Alto. There may be benefits to initiating an energy storage pilot project in Palo Alto, enabling CPAU to become familiar with the development and operation of energy storage in the event that a need or legislative mandate for energy storage does arise. 11 https://portal.luxresearchinc.com/research/report_excerpt/10801 12 For Example see http://www.irena.org/DocumentDownloads/Publications/Electricity%20Storage%20- %20Technology%20Brief.pdf and http://www.pikeresearch.com/research/energy-storage-on-the-grid Attachment E C1 ATTACHMENT E THERMAL ENERGY STORAGE IN PALO ALTO Palo Alto Historical Thermal Energy Storage Incentive Program In the late ‘80s and early ‘90s the City of Palo Alto Utility (CPAU) had a generous incentive program for thermal energy storage (TES) through its Partners Program for commercial customers. The program offered a rebate which varied year to year from $250 to $425 per kW of projected demand reduction, with caps ranging from $100,000 to $250,000 per project. A 50% cost share of feasibility studies, capped at $5,000, was offered as well. Additionally, the commercial rate schedules were modified so that demand charges for customers with a TES system would only be based on their maximum demand from noon to 6 pm so that TES customers were not penalized for high demand leading up to the peak period. These TES incentives were motivated by steep and ratcheted demand charges imposed by PG&E on CPAU at that time. At least seven commercial customers took advantage of the TES incentives: CPI; Loral; Roche (now VMware); Channing House; Varian; Lockheed; and Alza (now Wilson Sonsini). Currently, only two of those systems are known to still exist, Loral and VMware, and neither is being used to shift cooling load. Other systems have been dismantled or decommissioned due to failures, need for space, or presumably a lack of engaged operation and maintenance. The Loral TES system serves Building #3 on the Loral campus and was designed to shift the entire peak period cooling load, enabling the chillers, condenser water pumps and cooling tower fans to be off between noon and 6 pm. The system was designed by Transphase Inc. and uses their encapsulated eutectic salt phase change system to provide 4,320 ton-hours of cooling energy storage in unpressurized below-ground tanks. The energy storage loop is a secondary water loop off of the original chilled water cooling loop which is fed by two parallel 400 ton chillers. A pressure-sustaining valve maintains pressure in the primary loop while two parallel pumps on the return side of the energy storage tanks inject water back into the primary loop. Flow in the two loops is decoupled by a normally open bypass. The chillers were intended to charge the TES during the night and to cover any morning cooling requirements so that the entire storage capacity would be available during the 6-hour peak period. The Transphase operation manual recommends timing the charging cycle such that the final stages of charging would occur concurrent with morning cooling loads, ensuring that the chillers would not operate under inefficient, low-load conditions at this point. The chillers were intended to supply water at 42 F during the charging phase—cool enough to freeze the eutectic salt storage medium. During discharge, a storage inlet water temperature of 46 degrees or higher would begin to melt the storage medium and extract cooling capacity from the TES system. Attachment E C2 The current Facilities Manager was involved in the original operation of the TES. In a recent conversation he recalled that the building temperature would creep up during the six-hour chiller lock out period, indicating either insufficient storage capacity or that the TES was not at full capacity at noon. The latter case could be due to insufficient charging time during off-peak periods or due to some discharge during prior to the peak period. Sometime after the TES was installed, the primary function of Building # 3 changed from office to manufacturing, requiring constant temperatures 24 hours a day. At this time the chiller operation schedule was changed such that one of the chillers is on 24/7, and the second chiller is manually brought online when the operator is notified that indoor temperatures are too high. The cooling water flow is directed as originally designed, and the TES loop pumps are kept on to ensure that the storage loop and tank don’t stagnate. With only one chiller operating, its 42 degree supply water is mixed with return water resulting in a chilled water loop supply temperature of 46 degrees and return water temperature of 55 to 60 degrees. At these temperatures, the storage medium will not freeze; however the storage tanks do provide significant thermal inertia to keep CHW supply temperatures low during a temporary outage (highlighting another benefit TES systems can provide) Based on meter data for the entire facility, the summer and winter peak loads are not significantly different, although major load cycling is observed during winter. The facility load typically peaks at around 4,000 kW between 2 and 5 pm. If the TES still has storage capacity, one option to more effectively use the system would be to shift some or all cooling load during this period to reduce demand charges. The TES could be charged by operating the second chiller for a several hours prior to 12 pm, then allowing some discharge while only one chiller is operating from 12 to 2, before locking out both chillers from 2pm to 5 pm. At minimum, such a strategy should be possible during winter. The TES system at VMware is a more typical ice storage system: there is an independent ice storage loop with a chiller able to supply glycol at 22o F to two 17,000 gallon ice tanks. The water in the ice tanks is pumped through a heat exchanger to provide cooling to the building chilled water (CHW) loop during the discharge cycle. The glycol loop is also able to provide cooling to the building CHW loop directly through a separate heat exchanger. The CHW loop is fed by three 400 ton centrifugal chillers, and when discharging, the TES was able to cool the return water enough to turn off the 3rd chiller under peak load conditions. This system had been used as designed from the initial commissioning in 1989 to 2009, when issues with the reliability of the system controls and increasing building loads caused VMware to stop using the TES for ice storage. Currently, the 150 ton glycol chiller is used to create 42 degree glycol which meets cooling loads directly via the glycol loop heat exchanger during low-load periods. Under high-load conditions, the glycol chiller is turned off, and a newer 800 ton chiller is brought online. Attachment E C3 Thermal Energy Storage Modeling Simple paybacks for several chiller-based TES systems are calculated below for a large commercial customer on both the standard and time of use rates. The TES is assumed to last for 20 years without major upgrades. For simplicity it is assumed that cooling is required whenever the outside air temperature is 55° F or higher. It is also assumed that peak cooling loads will be required in any month where temperatures exceed 65° F. Table E1 below indicates the annual cooling hours based on temperature data for June 2009 through July 2012. Time period Annual Cooling Hours (base 55° F) Summer Peak (12-6 p.m., M-F) 788 Summer Mid and Off-Peak 3,023 Winter Peak (8 a.m – 9 p.m, M-F) 877 Winter Off-Peak 543 Table E1: Annual Cooling Hours in Palo Alto During these hours, it is assumed that a chiller would operate under 50% part load, on average. It is also assumed that the chiller has an efficiency of 0.7 kW/ton, a typical integrated part load value for centrifugal chillers. With these assumptions it is possible to approximate hourly chiller energy consumption over a year. The first TES system analyzed is an incremental addition to an existing cooling system with a 400 ton chiller, and is designed to enable the chiller to be fully off from noon to 6 p.m. each day. The energy use associated with cooling during this period is then shifted from peak to off- peak period, under the assumption that the net roundtrip efficiency of the TES is 100% (see Attachment A). Under the TOU rate, this energy shift results in customer bill reductions; for customers on the standard rate it has no impact. It is also assumed that peak demand between noon and 6 p.m. is reduced by the full chiller electric load – 280 kW for a 400 ton chiller at 0.7 kW/ton—in any month where temperatures exceed 65° F. The second analysis focuses on a partial storage TES system which meets the portion of the cooling load in excess of 200 tons from noon to 6 p.m. each day. By only meeting a portion of the load, a smaller TES system is used which can be charged by a smaller chiller during off-peak periods. Hence the partial storage TES enables capital cost savings if installed along with a smaller chiller. This analysis assumes that the chiller can be downsized from 400 to 200 tons and that 50% of the cooling energy from noon to 6 p.m. each day is shifted from peak to off peak. Peak load for demand charges are assumed to be reduced by 140 kW in any month where temperatures exceed 65° F. Attachment E C4 Customer-Owned Thermal Energy Storage Cost Effectiveness A standard rule of thumb cost for ice storage is $100/ton-hour of storage capacity, so a typical six-hour TES system costs $600/ton. With a chiller efficiency of 0.7 kW/ton this is equivalent to $857/kW, which is consistent with a 2008 EPRI report that found ice storage installations cost between $500 and $1,000 per kW avoided.1 For this analysis, the full storage system, requiring 2,400 ton-hours of storage, was assumed to cost $240,000. The partial storage system, requiring 1,200 ton-hours of storage, was assumed to cost $120,000; however, this system also enables a $100,000 reduction in capital costs compared to a conventional chilled water system by enabling a chiller size reduction of 200 tons.2 On net, the partial storage TES system cost is $20,000. Standard Rate For customers on the standard large commercial rate, the primary benefit of a TES system is a reduction in demand charges. The demand charge used in this analysis is CPAU’s current demand charge multiplied by 1.06 to account for projected increases in the total cost of energy over the 20-year system life.3 The standard demand and demand charge savings for the full and partial TES systems are summarized below. Monthly Demand Rates Full Storage TES Annual Demand Savings Partial Storage TES Annual Demand Savings Summer $20.11/kW $34,000/yr. $17,000/yr. Winter $12.23/kW $17,000/yr. $8,500/yr. Total: $51,000/yr. $25,500/yr. Table E2: TES Annual Savings – Standard Rate In addition to the standard rate demand charge savings, customers with TES also benefit from increased reliability of the cooling system because a TES is less susceptible to performance degradation under high temperature conditions. No good documentation of the value of this benefit could be found for this analysis, however, and it is not included. For customers on CPAU’s standard large commercial rate, this analysis finds that a full storage TES system costing $240,000 and saving $51,000 per year has a simple payback of 4.7 years. A partial storage TES system with a net installed cost of $20,000 and saving $25,500 per year has a simple payback of less than one year under the same rate. 1 Electric Power Research Institute (EPRI), “Thermal Energy Storage Technology Brief,” No. 1016084, Palo Alto, CA, November 2008. 2 Centrifugal chiller costs from the following site were used with adjustments for inflation: http://smud.apogee.net/comsuite/content/ces/?utilid=smud&id=1084 3 This factor is based on current 20 year energy cost projections for Palo Alto Attachment E C5 Time-of-Use (TOU) Rate For customers on CPAU’s large commercial TOU rate, a TES system also delivers bill savings by shifting energy consumption from high-price periods to low-price periods. However, TOU demand rates are significantly lower under the TOU rate, resulting in lower savings overall when compared to the standard rate. The table below summarizes the avoided demand and energy charges and annual savings for customers with a full storage and partial storage TES system on the TOU rate. Demand Rate Full Storage TES Demand Charge Savings Partial Storage TES Demand Charge Savings Summer $13.24/kW $22,000/yr. $11,000/yr. Winter $6.81/kW $9,500/yr. $5,000/yr. On vs. Off-peak Energy Rate Differential Energy Charge Savings Energy Charge Savings Summer $0.03061/kWh $3,400/yr. $1,700/yr. Winter $0.01409/kWh $1,700/yr. $860/yr. Total: $37,000/yr. $18,500/yr. Table E3: TES Annual Savings – TOU rate For customers on CPAU’s large commercial TOU rate, this analysis finds that a full storage TES system costing $240,000 and saving $37,000 per year has a simple payback of 6.5 years. A partial storage TES system with a net installed cost of $20,000 and saving $18,500 per year has a simple payback of 1.1 years under the TOU rate. Again, no value is attributed to increased cooling reliability. Value of Space It is important to note that the costs used above do not include the value of space taken up by the TES system. An average space requirement, based on several common TES systems, is estimated at 0.6 square feet per ton-hour of storage capacity. The full storage TES system analyzed here is estimated to require 1,440 square feet—a substantial area. Value of space will vary considerably from project to project, depending on other potential uses of the space. A very significant opportunity cost may be associated with certain potential TES spaces, such as parking spaces or storage. In a very simple sensitivity analysis, a hypothetical value of space was established at 50% of the average $/square foot asking price for current commercial and industrial leases being offered in Palo Alto. Incorporating this cost into the analysis significantly impacted the results: the most cost effective system, a partial storage TES system under the standard rate, achieved a simple payback of 5.9 years as compared to less than one year without this cost. Demand Response A TES system could potentially be used to enable customers to participate in demand response (DR) curtailment events; however, under the current DR program, a TES system used for Attachment E C6 demand response could not be used to shift load on a regular basis as demand response is measured as a deviation from the customer’s typical usage. Under the best case this would earn the customer $7,000/year in DR incentives – not enough to be cost effective.4 Alternatively, TES participants in DR could simply be given the $7,000 incentive each year if the system is confirmed to be operational, under the assumption that the load shifting performed by the TES system is avoiding the need for an equivalent amount of demand response. This approach would require a real time confirmation that the system is operating and chillers are off during DR events via remote monitoring. Incentives An incentive for TES could be justified if the societal benefits of TES exceed the societal costs. Such an analysis is equivalent to the Total Resource Cost, or Societal, test, which is used to evaluate demand-side management (efficiency) programs. The societal benefits are the value of avoided costs to the City of Palo Alto due to the TES. By shifting load, a TES system enables CPAU to purchase less peak energy and capacity, resulting in the avoided costs summarized below. Benefit Value5 Full Storage TES Annual CPAU Avoided Cost Partial Storage TES Annual CPAU Avoided Cost Avoided Local Capacity Purchase6 $21/peak kW-yr. $6,000/yr. $3,000/yr. Summer Energy shift from peak to off-peak7 $0.02654/kWh shifted $4,000/yr. $2,000/yr. Winter Energy Shift from peak to off-peak7 $0.01720/kWh shifted $3,000/yr. $1,500/yr. Total: $13,000/yr. $6,500/yr. 20 year Present Value: $176,000 $88,000 Table E4: CPAU Avoided Costs The societal cost for TES is simply the additional installed cost of equipment: $240,000 for a full storage system and $120,000 for a partial storage system or $20,000 with capital cost savings included. Consequently, a full storage TES system has a societal benefit/cost ratio of 0.73. A partial storage TES system also has a societal benefit/cost ratio of 0.73, unless the partial storage system enables capital cost savings, in which case the ratio is 4.4. 4 Assuming 50 DR hours in a year with a payment of $0.50/kWh, based on current CPAU DR program. 5 20 year average values based on current CPAU avoided cost model. This table does not include any avoided system upgrade benefits. 6 The Local Resource Adequacy (LRA) benefit is 1/2 multiplied by a 20-year projected average of local capacity cost. 7 The energy cost differentials between peak and off-peak include 4.9% T&D losses as well as the projected 20-year average cost of energy, RPS premium and transmission access charges based on current voltage. Attachment E C7 In both cases, however, the annual avoided cost for Palo Alto is 1/3 to 1/4 as large as the annual customer bill savings. Thus the load shifting achieved by TES results in a monetary transfer from other customers to the load shifting customer, and any incentive for load shifting would further this ratepayer impact. For this reason an incentive may not be justified. Other utilities, including PG&E, are able to provide a ratepayer-neutral incentive due to avoided costs exceeding customer bill savings. An analysis conducted by for California’s IOUs found that ratepayer-neutral incentives for TES could be justified because the IOU’s avoided costs were higher than customer bill savings in some cases.8 In that analysis, a typical 6-hour TES would avoid approximately $2,200 per kW of peak load reduction in present value. This same system would avoid only $570/kW for Palo Alto. TES Cost Effectiveness Results The table below summarizes the customer cost effectiveness analysis of both full and partial storage TES under standard and TOU rates and also with a $7,000/year DR incentive: Scenario System Cost Annual Savings Simple Payback Full TES, Standard Rate $240,000 $51,000 4.7 years Full TES, Standard Rate + DR $240,000 $58,000 4.1 years Partial TES, Standard Rate $20,000 $25,500 < 1 year Partial TES Standard Rate + DR $20,000 $32,500 < 1 year Full TES, TOU Rate $240,000 $37,000 6.5 years Full TES, TOU Rate + DR $240,000 $44,000 5.5 years Partial TES, TOU Rate $20,000 $18,500 1.1 years Partial TES, TOU Rate + DR $20,000 $25,500 < 1 year Table E5: Customer Cost Effectiveness Summary Utility-Owned and Operated Thermal Energy Storage In recent years another model for deploying TES has emerged which is based on utility- ownership and control. This model reflects the fact that reliable load shifting is far more valuable to a capacity constrained utility than it is from a ratepayer’s point of view. For utilities which are facing investments in distribution system upgrades or new generating capacity, a reliable reduction in peak loads can be incredibly valuable. The utility-ownership model has been developed by Ice Energy, which makes packaged roof-top ice storage units that integrate with refrigerant-based (direct exchange, or DX) roof top units (RTUs) commonly found in commercial cooling applications. The Ice Energy product, called Ice Bear, has a dedicated compressor for charging its ice storage unit overnight. When called on by the utility, the Ice Bear will shut down the RTU compressor 8 Energy + Environmental Economics and StrateGen. Statewide Joint IOU Study of Permanent Load Shifting. December 2010. Attachment E C8 and condenser fans and provide cooling by sending ice-cooled refrigerant through a new evaporator coil placed in series with the RTU’s existing coil. Ice Bears are designed to integrate with RTUs ranging from 4 to 20 tons of cooling capacity and are designed to replace the RTU for 6 hours. For example, an Ice Bear designed to integrate with a 5-ton RTU would have 5 tons of capacity with 30 ton-hours of ice storage. This distributed ice storage solution does not have the economies of scale inherent in larger, chiller-based TES systems; however, it benefits from a simple modular design. After first attempting to sell Ice Bears directly to building owners, Ice Energy found that utility ownership was a more viable model. The utility contracts with Ice Energy to provide a certain amount of capacity displacement, and Ice Energy then delivers on the contract through a combination of Ice Bear installations, direct load control, and energy efficient upgrades for older RTUs. Direct load control (DLC) is achieved by using the Ice Bear controls to shut down certain other loads that have the appropriate communication capabilities (typically other RTUs that aren’t compatible with the Ice Bear evaporator coil). The utility has control over the scheduling and operation of the Ice Bears and the other DLC loads through a web-based dashboard provided by Ice Energy. A typical contract may stipulate 5 MW of load displacement. The first step of the program is to do a comprehensive survey of commercial customers to evaluate the potential for retrofits and Ice Bear installations. Generally 60% of the load reduction is achieved through permanent load shifting (PLS) using Ice Bears. Approximately 20% is achieved through DLC and approximately 20% through permanent load reduction due to RTU energy efficient upgrades. Customers participating in the program typically agree to a certain level of DLC, for example, a RTU compressor may be turned off for a maximum of 30 minutes twice a day. Ice Energy has found that customers typically see 5-10% reductions in overall energy cost, but participation in the program is generally driven by the need to replace old equipment or the need for reliable cooling on the hottest days rather than energy savings. Ice Bears are installed free of charge, and replacement RTUs can be provided at a discount of 20 – 30%. Typical Ice Energy costs under this model are provided in the table below. Note that the per-kW cost of the Ice Energy program is significantly higher than the typical $500 - $1,000/kW cost of chiller-based TES systems. Also note that these costs reflect a mix of PLS, DLC and energy efficiency. Hard Costs $2,100/kW Soft Costs (assessments, marketing, shipping, tax) $200/kW Annual Maintenance and Operation Costs $60/kW-yr Table E6: Ice Energy Costs Based on an estimate of the number of roof top units in Palo Alto, a hypothetical Ice Energy project is described in the table below. For simplicity it is assumed that all RTUs are 5 ton Attachment E C9 capacity with an actual efficiency of 1.3 kW/ton. As in the earlier analysis, it is assumed that an RTU will run at full capacity whenever the outside temperature is above 55 degrees. Program Specifications Program Contract Capacity: 2,170 kW Ice Bear / Permanent Load Shift (PLS) Contribution 1300 kW Energy Efficiency (EE) Contribution 435 kW Direct Load Control (DLC) Contribution 435 kW Program Costs First Year Cost: $4,991,320 Annual Operating Cost: $130,210/yr. Table E7: Ice Energy Program Costs9 The benefits provided by such a program vary considerably based on a utility’s marginal costs of peak capacity. For CPAU, the avoided costs are summarized table C4, while the annual benefit of such a program is summarized in TableC8 below. The capacity benefit is provided by the PLS, EE and DLC components of the program. Load shifting benefits are provided by the PLS component only. Energy reduction benefits (a permanent reduction in energy purchases) are provided by the EE component only. Program Benefit Annual Avoided Cost Local Resource Adequacy Capacity: $46,000 Summer Load Shift: $33,000 Winter Load Shift: $5,000 Summer Peak Energy Reduction: $55,000 Summer Off-Peak Energy Reduction: $30,000 Winter Peak Energy Reduction: $12,000 Winter Off-Peak Energy Reduction: $50 Total Annual Benefit: $181,000 Table E8: Ice Energy Program Annual Benefit Given the program’s first costs, annual operating cost, and annual avoided cost, assuming a program life of 20 years and a CPAU discount rate of 4%/year, the program has a net present value of -$4,146,590 and a simple payback of 95 years. Such a program would not be cost effective given CPAU’s current cost structure; however, a more targeted program could target a specific area of CPAU territory where peak load shifting could enable distribution system upgrades to be deferred. At present, no upgrade deferral opportunities are imminent or projected for five to ten years. 9 These are taken from an Ice Energy proposal to Arizona Public Service and a spreadsheet provided to CPAU by Ice Energy. Attachment E C10 The table below summarizes the results for an Ice Energy system program if a hypothetical distribution system upgrade deferral opportunity existed. The project assumes a contracted load reduction capacity of 500 kW enabling a $500,00010 system upgrade to be deferred for the 20-year life of the program. Targeted Program Description Program Contract Capacity: 500 kW First Year Cost: $1,150,000 Annual Operating Cost: $30,000/year Program Benefits Annual Direct Savings $41,650 Avoided System Upgrade: $500,000 Program Cost Effectiveness Year 1 Cash flow -$608,350 Year 2-20 Cash flow $11,650/year Program Simple Payback: 52 yrs Program NPV: -$455,380 Table E9: Ice Energy Program Value with a Hypothetical Distribution System Upgrade Deferral The hypothetical scenario described above is still not cost effective due to the city’s current cost projections. The program doesn’t reach a positive net present value until the cost of the avoided upgrade reaches nearly $1,000,000. With the very high costs of a program similar to that provided by Ice Energy and the low avoided costs for Palo Alto, this model for TES deployment is not viable. Even under a hypothetical scenario which captures an opportunity to defer a distribution system upgrade, such a program is not cost effective. 10 A distribution feeder replacement is typically in the hundreds of thousands. Attachment F D1 ATTACHMENT F ENERGY STORAGE REGULATION, POLICIES & INCENTIVES Energy Storage Regulations and Policies California’s Energy Storage Law (hereinafter referred to as Assembly Bill (AB) 2514)1 and the associated regulations are among many current policies designed to encourage energy storage. In October 2013 the California Public Utilities Commission (CPUC) established an energy storage target of 1,325 megawatts (MW) for the Investor-Owned Utilities (IOUs), including Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas and Electric.2 The CPUC Decision requires the IOUs to meet the 1,325 MW target by 2020, with installations required no later than the end of 2024.3 The CPUC decision also establishes a target for Community Choice Aggregators and electric service providers to procure energy storage equal to 1 percent of their annual 2020 peak load by 2020 with installation no later than 2024, consistent with the requirements for the IOUs4. Laws promoting energy storage in New York and Texas have also been passed, although these do not specifically require energy storage targets. At the federal level, legislation that could provide a 20% investment tax credit for grid-connected energy storage systems and a 30% credit for behind-the-meter systems has been introduced.5 The Federal Energy Regulatory Commission (FERC) is also seeking to level the playing field for energy storage to participate in energy markets. In 2007 and 2008, FERC issued Orders 890 and 719, which opened the door for non-generation resources such as energy storage to participate in ancillary services markets. In response, the California Independent System Operator (CAISO) made changes to its ancillary services operating and technical requirements to enable these non-traditional resources to participate, such as reducing the minimum size and output duration capability for eligible resources.6 FERC recently enacted Order 755 specifically addressing frequency regulation services. As described in Attachment A, some energy storage technologies are able to provide frequency regulation services more quickly and accurately than conventional generating facilities; however, markets for frequency regulation services typically do not differentiate between more effective regulation providers. FERC Order 755 attempts to rectify this by requiring appropriate “pay for performance” in organized ancillary services markets. A June 2012 FERC notice proposes rules to reduce other barriers that prevent energy storage facilities from participating 1 AB 2514 (Chapter 469, Statutes of 2010). 2 CPUC Decision 13-10-040 (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K533/79533378.PDF) 3 CPUC Decision 13-10-040 (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K533/79533378.PDF) 4 CPUC Decision 13-10-040 (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K533/79533378.PDF). 5 http://info.a123systems.com/blog/bid/127815/STORAGE-Act-of-2012-What-it-Means-for-Grid-Energy-Storage 6 2020 Strategic Analysis of Energy Storage in California, 2011. Public Interest Energy Research for the CEC. CEC‐500‐2011‐047. Attachment F D2 in markets for ancillary services as well as imposing similar pay for performance requirements on transmission providers in traditionally regulated states. Energy Storage Incentives and Investments in California All of California’s IOUs provide incentives to customers to reduce load during system-wide peak periods. Building owners who install energy storage systems that provide peak load reduction can receive these incentives. Commercial new construction7 and building retrofit8 programs provide a $100/kW incentive for peak demand reduction while the California Advanced Homes Program provides a $75-$225/kW incentive for new residential buildings.9 In 2009, the CPUC ruled that California’s IOUs must develop a Permanent Load Shift (PLS) program to encourage thermal energy storage (TES) directly. A statewide pilot PLS program from 2008-2011 provided $500/kW of peak demand reduction. Based on a 2010 study of PLS benefits, the IOUs recently submitted a new PLS program proposal with the following incentive levels:10 Utility Incentive Budget Incentive Rate (Capped at 50% of project cost) PG&E $13,500,000 $360/kW SCE $12,708,150 $675/kW SDG&E $2,235,000 $513/kW Table F1: IOU-proposed Incentives for PLS This proposed IOU program imposes extensive rules on participants which restrict the eligible TES systems, require an hourly model of system performance by a Professional Engineer, lock participants in to a designated rate for 5 years, and require participants to instrument the system and submit quarterly reports to the utility demonstrating that it is operating as required by the program. Pushback from energy storage advocates may result in changes to the final program. Customers of California’s IOUs are also eligible for the Self Generation Incentive Program (SGIP), which was revised in 2011 to extend a $2/Watt incentive to energy storage systems. Previously, this incentive had only been available for energy storage systems paired with an 7 http://www.savingsbydesign.com/book/savings-design-online-program-handbook#booknode-435 8 http://www.pge.com/mybusiness/energysavingsrebates/rebatesincentives/ief/ and http://www.aesc- inc.com/download/spc/2012SPCDocs/UnifiedManual/Customized%201.0%20Policy.pdf 9 http://www.californiaadvancedhomes.com/about-cahp 10 2012 – 2014 Statewide Permanent Load Shifting Program Proposal. Jointly submitted to CPUC by PG&E, SDG&E, SCE on July 30, 2012 Attachment F D3 eligible renewable energy generating system.11 Only “advanced” energy storage technologies not eligible for other incentives qualify, however.12 California’s IOUs are also actively involved in energy storage project development. PG&E is in the early stages of developing pumped hydro and compressed air energy storage facilities, with the support of grants from the Department of Energy. Southern California Edison is developing a 32 MWh Li-ion battery to be installed at a Tehachapi Wind Resource Area substation to provide a number of grid-level services and demonstrate the effectiveness of energy storage for wind integration in a transmission-constrained area.13 Publicly Owned Utilities (POUs) are also active in promoting energy storage. SMUD offers an Air Conditioning Custom Incentive for commercial building peak load reduction of $200/kW.14 Additionally, SMUD has received grants for energy storage demonstration projects, including a 500 kW/6-hr. battery at SMUD headquarters, and a series of distributed batteries serving the Anatolia Solar Smart Homes development.15 CPAU is too small to conduct research and development on its own and relies on the large IOUs and POUs for research on energy storage technologies. CPAU monitors these research efforts and follows technology development in the energy storage field. The Los Angeles Department of Water and Power (LADWP), in 2010, announced a partnership with a Chinese battery manufacturer to install a 5-10 MW battery for power reliability and wind integration at the LADWP’s Tehachapi wind facility.9 A number of POUs have also developed programs around the Ice Energy model of thermal energy storage described in Attachment C. Redding Electric Utility has a 6 MW contract with Ice Energy while Southern California Public Power Authority (SCCPA) has contracted for 53 MW for its various members. One SCPPA member, the City of Burbank, also offers an $800/kW TES incentive based on the Ice Energy system but any TES system is eligible; however, the incentive is capped at 25% of the project cost. 11 http://gigaom.com/cleantech/regulators-change-fuel-cell-incentives-how-that-affects-bloom-energy/ 12 http://docs.cpuc.ca.gov/Published/Graphics/165317.pdf 13 2020 Strategic Analysis of Energy Storage in California, 2011. Public Interest Energy Research for the CEC. CEC‐500‐2011‐047. 14 https://www.smud.org/en/business/save-energy/rebates-incentives-financing/incentives-for-heating-and- cooling/customized-incentives-air-conditioning.htm 15 https://www.smud.org/en/about-smud/news-media/news-releases/2012-06-29.htm and https://www.smud.org/en/about-smud/news-media/smud-updates/2012-06-01-housing-development-looks-to- the-future.htm City of Palo Alto (ID # 4018) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Award of Planning and Environmental Services Support Contracts T itle: Approval of Nine On-Call Planning and Environmental Consulting Services Contracts for the Department of Planning and Community Environment to Support Current Planning, Special Projects, Advance Planning, and Environmental Review as Follows: Planning Services - 1) Dudek, 2) Arnold Mammarella, Architecture and Consulting, 3) The Planning Center/DC&E, 4) Metropolitan Planning Group; Environmental Services - 5) Dudek, 6) URS Corporation, 7) ICF International, 8) Turnstone Consulting, and 9) David J Powers & Associates in Amounts Not to Exceed $930,000 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the City Manager or his designee: 1. To execute nine contracts with the nine firms for the provision of on-call planning and environmental consulting services necessary to support the day-to-day work of the Planning and Community Environment Department over the next three years in a total to not exceed the cumulative amount of $930,000 and 2. To the extent the consultants seek exceptions from the City’s standard Professional Services contract, authorize the City Manager or designee to negotiate language acceptable as to form by the City Attorney and City’s Risk Manager Executive Summary The Planning and Community Environment Department (PCE) routinely uses consultants to secure specific expertise and to help with fluctuations in the day-to-day workload. The current contracts are now expiring, and the department released two Requests for Proposals (RFPs): one for Planning Support Services and one for Environmental Support Services. The purpose of these RFPs was to create an “on-call” consultant list for each of these areas, allowing the City of Palo Alto Page 2 Department to access specific expertise and consultant support on an as needed basis. Staff now requests Council to authorize the City Manager or his designee to execute the attached three-year contracts with the selected consultants. Background PCE has historically maintained contracts with several consultants to provide the various on-call services. In recent years, the department has relied on the use of on-call service providers to meet performance objectives and to address increases in workloads as the economy has rebounded and development activity has accelerated. Initially, consultants were mostly used for residential architectural reviews, although in the past year, consultants have been increasingly called upon to help with environmental evaluations and project reviews. Discussion From time to time the Planning Division requires assistance from consultants with environmental review or other professional planning expertise. PCE has been using the services of contract planners to access specific skills and as a way to increase the Department’s capacity when workloads increase. The Department’s existing contracts will expire shortly, although staff anticipates that the need for consultant planning services to support day-to-day Department activities will remain strong. New contracts are needed to ensure continued service delivery that is efficient, reliable, accurate, responsive, and cost-effective. Consultants are used as project managers to manage applications for planning entitlements or as independent technical consultants. The City issued RFPs to identify consultants with extensive experience working with public entities to provide expertise in project planning and environmental review services. Executing contracts with the firms selected as a result of the RFPs will create an “on call” list of consultants that can be used on short notice when the Department’s workload requires their assistance. This will allow Department staff to quickly access the professional skills and assistance that is needed in a particular situation. Twenty-six proposals were received: fifteen for environmental services and eleven for planning services. Based on the department’s evaluation of proposals, five were selected for the provision of environmental services and four for planning services. These consultants are: Planning Services - 1) Dudek, 2) Arnold Mammarella, Architecture and Consulting, 3) The Planning Center/DC&E, 4) Metropolitan Planning Group; Environmental Services – 5) Dudek, 6) URS Corporation, 7) ICF International, 8) Turnstone Consulting, and 9) David J. Powers & Associates. The scope of services for the planning services is attached as Exhibit A and the scope of services City of Palo Alto Page 3 for the environmental services is attached as Exhibit B. Contracts signed by the selected firms are forthcoming for execution by the City Manager pending Council approval. Once the “on-call” contracts are executed, the consultants will be utilized as needed and will be chosen for a project dependent upon project need and firm expertise. These will be three year, on-call contracts, with a cumulative contract limit of $930,000. The consultant’s work under each individual contract will have to be authorized by the City in advance, allowing flexibility to address program need, but ensuring that no more than $930,000 will be spent on all of these contracts combined over three years. Consultants selected are not guaranteed work, but are available if/as needed for work up to the contracted amount over the course of the three year term. Resource Impact Utilizing consultants for specific assistance is an efficient and effective use of resources, allowing the Department to quickly access needed technical skills and address fluctuations in workload. One third of the cost of the recommended contracts is budgeted in the Fiscal Year 2014 Operating Budget, and is expected to be sufficient to cover the cost of services needed to support routine current planning work and incidental advance planning activities. No additional funds for “on-call” services are needed or requested this fiscal year. Additional funding may be needed for major projects such as the Comprehensive Plan, and these will be addressed in future agenda items. Also, based on the type and number of incoming projects, the department may request a funding increase for “on-call” consultant services during the Fiscal Year 2015 budget process. Attachments:  Exhibit A: Contract Scope of Services for Planning On-call Contracts (PDF)  Exhibit B: Contract Scope of Services for Environmental On-call Contracts (PDF) SCOPE OF SERVICES ON-CALL PLANNING CONTRACT CONSULTANT shall provide expertise in planning and planning review on an on-call basis. CONSULTANT staff will serve as project managers (planning entitlements and CEQA/NEPA documents) or as independent technical consultants. CONSULTANT shall, as needed:  Serve as Project Manager for planning entitlements and CEQA/NEPA documents  Provide planning and planning review expertise  Meet with CITY staff for project status and updates  Process, review and manage routine and complex development entitlements, including re- zonings, Coordinated Area Plans, subdivision maps, and associated environmental review as needed.  Implement the Comprehensive Plan, the Zoning Code, Coordinated Area Plans, and other CITY documents, policies, and programs, including the Single Family Individual Review program, as may be applicable, to ensure compliance with its guidelines.  Coordinate work related to planning applications for projects in environmentally sensitive areas.  Coordinate with Planning staff and staff of other city departments, consultants, and outside agencies during project reviews and processing.  Visit project sites.  Prepare written staff reports, ordinances, resolutions, records of land use action, development permit decision letters, conditions of approval, development agreements, environmental documents, and/or other related documents.  Attend and give presentations at meetings with applicants, consultants, and the public as needed, including public hearings.  Attend and participate in the City’s Development Review Committee (DRC) and preliminary review meetings as needed.  Prepare and deliver verbal presentations to the Planning and Transportation Commission, City Council, Architectural Review Board, and/or other City Boards and Committees as needed.  Coordinate implementation of development applications during the construction phase (conditions of approval, etc.), as well as tracks conditions after developments have been occupied, to ensure continued compliance with approval conditions and mitigation measures.  Prepare maps, graphs, models, presentations, power points, reports, and supporting technical documents.  Respond to inquiries from general public, CITY staff, and other public agencies about the projects assigned and CITY’S Comprehensive Plan, the Zoning Code, design guidelines, Coordinated Area Plans, and other CITY documents, policies, and programs.  Coordinate annexation applications including related plan services, pre-zoning and other LAFCO related documents.  Work with the Code Enforcement Division to resolve code issues.  Perform green building related tasks, including but not limited to the review of development plans for compliance with CITY’s and State green building requirements.  Oversee the monitoring and maintenance of applicable hardware, software, telephone, and/or other related inventory items.  Perform related duties and responsibilities, including assistance staffing the planning counter, when required. CONSULTANT’S staff shall possess the following:  Five or more years of professional planning work experience in the public sector.  Demonstrable experience in project management in current and/or long range planning, including preparation of notices of completeness and decision letters, staff reports, and (for the long range planning consultants) documents such as General Plan Amendments, Zoning Amendments, Specific Plans, and other planning studies.  Ability to work independently, follow directions, seeking clarification prior to completion of work assignment, analyze quantitative data and qualitative information, and think creatively and critically.  Demonstrable experience dealing with the public, architects, and applicants during the public review process of entitlement applications.  Ability to write well-organized reports regarding complex planning issues.  Ability to make professional presentations to the Council, CITY Commissions, and boards.  Ability to coordinate and provide assistance, plan checking, and site inspections. For the green building consultants, ensure compliance with State and CITY’S sustainability requirements.  Ability to staff the front counter and answer basic zoning and development questions. Costs of CONSULTANT training will be borne by CONSULTANT unless requested by and specific to the CITY. All documents, notes, presentations, and correspondence generated by CONSULTANT as part of this contract are property of CITY. SCOPE OF SERVICES CONSULTANT shall provide expertise in environmental review on an on-call basis. CONSULTANT staff will serve as project managers (planning entitlements and CEQA/NEPA documents) or as independent technical consultants. CONSULTANT shall, as needed:  Serve as project manager for planning entitlements and CEQA/NEPA documents  Meet with CITY staff for project status and updates  Provide environmental review services and technical expertise  Prepare CEQA and/or NEPA studies and documents, (EIR, EIS, MND, ND and CE), in accordance with Local, State, and Federal Statutes  Provide accurate and defensible environmental determinations.  Review and/or prepare (and/or use sub-consultants, as needed) technical documents including but not limited to the following:  Cultural and Historical Evaluations  Biological studies  Noise Studies  Air Quality Studies  Transportation Studies  Water Quality/Supply Studies  Stormwater/Wastewater Control and Management  Hazards and Hazardous Materials Studies  Green House Gas emissions  Prepare Environmental Mitigation Studies/Reports  Coordinate with Planning Staff, other CITY departments, sub-consultants, and outside agencies  Coordinate and distribute environmental documents and notices  Prepare Mitigation Monitoring and Reporting Program (MMRP)  Attend and give presentations at public meetings, when applicable and upon request  Respond to public inquiries as directed by planning staff  Perform related duties and responsibilities as required CONSULTANT staff shall possess the following: • Demonstrable CEQA experience in terms of (1) writing Initial Studies, CEQA resolutions, and related material; (2) evaluating EIRs for consistency and compliance with CEQA; and (3) monitoring mitigation compliance  Ability to manage the environmental review process in close coordination with CITY staff and outside agencies.  Experience working with the public, applicants and CITY’S various commissions and boards during the public review process. Although not necessary, CITY prefers CONSULTANT staff to have experience in planning review. Costs of CONSULTANT training will be borne by CONSULTANT unless requested by and specific to the CITY. All documents, notes, presentations, and correspondence generated by CONSULTANT as part of this contract are property of CITY. City of Palo Alto (ID # 4285) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Caltrain Go Pass Pilot Program and Agreement Title: Staff Recommends that City Council Authorize the City Manager to Enter into an Agreement with the Peninsula Corridor Join Powers Board to Introduce the Caltrain Go Pass into the Civic Center Transportation Demand Management Program From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the City Manager to enter into an Agreement with the Peninsula Corridor Joint Powers Board to participate in the Caltrain Go Pass Program. Participation would allow the City to implement a 9-month trial program that provides free train passes to City employees. The program will provide an incentive to ride public transit, reduce automobile trips and also free up parking in the Civic Center Garage. Executive Summary As part of the City’s growing Transportation Demand Management (TDM) program, Staff is recommending City participation in the Caltrain Go Pass Program. City employees participating in the program would receive a free Go Pass in exchange for surrendering their City-issued parking permit, freeing up spots in the Civic Center Garage. Staff would monitor the program during the trial period to confirm the number of spots made available in the garage to determine whether the program should be continued. Background At the March 18th meeting, Council directed staff to explore a variety of strategies aimed at increasing the supply and availability of downtown parking:  Implement an attendant parking trial at select downtown parking garages or lots (Lot R City of Palo Alto Page 2 – High St Garage);  City commitment to reduce 50-100 employee permit spaces in the City Hall garage;  Evaluation of potential public-private partnerships for a new parking garage at Lot P;  Evaluation of restrictions on the creation/use of transfer development rights (TDRs); and  Elimination of revising zoning exemptions from parking requirements.  Initiation parking restrictions and/or permit parking in adjacent residential neighborhoods. Staff has made progress on each of the above items since:  City staff has developed a Request for Proposals (RFP) to solicit bids from vendors to operate an attendant parking program at Lot R and options for expansion of the program into Lot S (Bryant St Garage), Lot CW (Cowper-Webster Garage), and Lot CC (Civic Center Garage) if successful. The RFP was active during the development of this staff report and is available online at: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=37471  The proposed Go Pass Program responds to the Council’s direction to reduce the number of currently occupied permit spaces in the City Hall and adjacent downtown parking spaces by 50-100 vehicles.  City Council discussed a public-private development proposal at Lot P on June 10, 2013 and directed staff to continue to explore public-private partnerships for construction of garages within the Downtown and California Avenue Business Districts. Staff is currently developing RFPs for policy input and consideration in 2014.  City Council updated its TDR and Parking Exemption policies on October 21, 2013 and restricted the development of future TDRs and parking exemptions.  Staff introduced a framework for Residential Permit Parking Districts in January 2014, and will be developing an ordinance for an RPP process, as well as conducting stakeholder engagement for a Downtown RPP District, in 2014. In researching opportunities to reduce the Civic Center employee permit space demand, staff initiated discussions with Caltrain to discuss opportunities for trial Go Pass Programs not only for City employees downtown but also for the Greater Downtown districts. However, the City’s request for a demonstration Caltrain program for the Greater Downtown was not approved by Caltrain staff, which cited current high Caltrain ridership at University Station and the concern of providing equitable programs with active participating companies. Given Caltrain’s decision, staff submitted a Letter of Intent for the City to participate in the Go Pass program to continue to reduce permit parking demand within the city hall garage (Attachment A). City of Palo Alto Page 3 The Caltrain Go Pass Program allows employees of partnering employers to ride Caltrain through all zones, any day of the week, without boarding restrictions, in return for a fixed rate paid by the partnering employer. The fee structure is currently consistent to all participating employers and includes one of the two fee options, whichever is greater: 1. Minimum participation fee of $13,750, or 2. $165 per eligible employee. Eligible employees include any regular employee working more than 20 hours per week, excluding contractors, temporary employees, interns, and consultants The Civic Center currently includes 466 full-time or permanent part-time employees. The estimated cost for participation into the program is: 466 employees x $124.50 (prorated) per employee = $58,017. The Caltrain Go Pass agreement and fee schedule is provided in Attachment B. Discussion Implementing a Caltrain Go Pass program can be an effective Transportation Demand Management tool as it helps reduce employee parking demand and vehicle trips. Twenty-two Palo Alto-based companies currently participate in the Go Pass Program in addition to Stanford University and the Stanford University Medical Center. Since the start of Stanford University’s participation into the Go Pass Program, the University has realized a transit ridership increase from 8% to 28% for employees. For Civic Center employees (City Hall, Police Department, Development Center, and Downtown Library) who live within a mile of Caltrain stations, the Go Pass Program could provide a viable alternative to solo driving. The City currently has an estimated fifty employees regularly taking Caltrain for some portion of their travel mode, about thirty of whom receive benefits through the Commuter Check Program. The City’s current costs for the pre-tax commute program benefits for Caltrain participants average $40 per participant per month, or $480 per year. The City would continue to provide commute incentives for riding bikes ($20/month), van-pooling (25% of monthly costs up to $60) or carpooling ($30/month), since distance between residence and a Caltrain station preclude riding Caltrain for the majority of City employees. The City Manager has asked that we review those incentive programs too in order to see if we can achieve more uptake and traffic offset. Table 1 below highlights the current cost for an employee traveling to work via Caltrain with a 2-zone monthly pass, such as San Mateo to Palo Alto or San Jose Diridon to Palo Alto, and City of Palo Alto Page 4 shows the net financial benefit of participation in the Go Pass program: Table 1 Civic Center Employee - Caltrain Ridership Analysis Total No. of Working Days in Palo Alto 196 days Caltrain Monthly Pass Cost (2 Zone) – San Jose to Palo Alto $126 Annual Cost of 2 Zone Pass (12 months) per Rider $1,512 Current Employee Benefit for Annual Parking Permit -$466 Employee Benefit to Participate in Go Pass Program: +$1,046 Proposed Civic Center Go Pass Program The Civic Center Go Pass Program is proposed to be offered as an incentive to reduce motor vehicle commute travel to Palo Alto and to free up parking permits currently held by employees. The specifics of the program include the following: 1. Parking Permit Release Staff recommends offering Caltrain Go Passes to employees in exchange for the return of their parking permit. Currently there are 437 parking permits issued to City of Palo Alto employees for Downtown lots, almost all of which are used at Lot CC (Civic Center). Go Pass will be offered to all benefits-eligible Civic Center employees. 2. Emergency Day Pass Parking Employees participating in the program may at times be required to drive to work to accommodate scheduled family or personal matters. Recognizing that the loss of a parking permit may discourage employees from opting into the program, Staff proposes making available up to two (2) Emergency Day Pass Parking Permits for participating employees each month. The Emergency Day Pass would only be valid at Permit Parking spaces at Lot CW (Cowper-Webster). Typical Day Passes sold by the City allow purchases to park in either 3-Hour Visitor or Permit parking spaces for the day purchased. The Emergency Parking Permits would be released by Revenue Collections. When three or more Emergency Day Passes are required by an employee they will be made available at a discounted price of $10.00 per pass. It is important to note that the actual cost of a permit is $17.50 and the City of Palo Alto Page 5 staff is proposing to offer a subsidized daily pass with a $7.50 subsidy. Timeline Employer participation into the Program is introduced quarterly. Palo Alto is scheduled to opt into the program on April 1, 2014, if the program is approved by Council. Resource Impact The cost of the nine-month trial Civic Center Go Pass Program is $58,017, based on a pro-rated annual rate of $124.50 per employee. If, after assessing the program at the end of the Trial the City decides to continue the program, the City would be responsible for any annual cost increases. The cost of the program would be paid for through the City’s General Benefits Fund. Table 2 shows the projected expenditures and costs of the program. Table 2 ASSUMPTIONS: 50 employees opt into the program. Each employee purchases one (1) parking permit per month in addition to the two free passes. REVENUES: Total Revenue expected from permit sales 50 employees x $10 permit x 9 months $ 4,500 Employees turning in annual parking permits: $466 x 50 eligible employees $23,300 Total Revenues: $27,800 EXPENSES: Total fee payable to Caltrain for trial program: $58,017 Cost to City for issuing additional parking permits $3,375 Estimated costs of additional parking permits, assuming a bulk permit purchase: $2,300 Total Expenses: $63,691 City of Palo Alto Page 6 NET COST TO CITY: $35,892 With each additional employee opting into the program with the revenues and costs outlined in the table above, the cost of the program would go down by $489. With these assumptions, if 123 employees opted into the program, it would be cost neutral. This expense will run through the General Benefits and Insurance Fund. There are sufficient resources within this fund to support this additional expense. More importantly, the costs of building a new parking space in a garage is $50,000-60,000 per space. We should look at the slim costs and 50-100 go pass uptake possibility, the program is hugely cost effective. Policy Implications The Civic Center Go Pass Program supports the Council 2013 priority of Parking and Transportation improvements within the Downtown community, and also to the Comp plan Goal T-1, Less Reliance on Single-Occupancy Vehicles. The program demonstrates the City’s commitment to a more comprehensive Transportation Demand Management program which will reduce burden on existing parking infrastructure and encourage a cleaner, healthier and more livable Downtown. Attachments:  Attachment A: Caltrain Executed Go Pass Agreement and Invoice (PDF)  Attachment B: Palo Alto Go Pass Letter of Intent (PDF) To:City of Palo Alto Date:January 21, 2014 Planning & Community Environment Dept. Address:Attn: Jessica Sullivan Invoice:312 GP 250 Hamilton Ave. Palo Alto, CA 94301 DATE DESCRIPTION AMOUNT 01/21/14 58,017.00$ 58,017.00$ TOTAL DUE INVOICE 650.508.6292 Peninsula Corridor Joint Powers Board Attn: Dept. 35160-02 P.O. Box 39000 San Francisco, CA 94139 2014 Go Pass Program - Initial Fee (466) Employees at $124.50 (Pro-rated April 1) Checks should be made payable to Caltrain. Payments should be mailed to the address above. Late fees apply to payments received after 30 days from the date of the invoice. PENINSULA CORRIDOR JOINT POWERS BOARD 2014 CAL TRAIN GO PASS AGREEMENT Company Name: City of Palo Alto Address: 250 Hamilton. Palo Alto. CA 94301 Billing/Notice Address (if different from above): __________________________ _ Contact Person: Jessica Sullivan Email: jessica.sullivan@cityofpaloalto .org Phone: 650.329.2453 Fax: 650.329.2154 Number of Employees working more than 20 hours per week as defined below: 466 Options o Include staff working less than 20 hours per week: __ (number) o Include interns: ___ (number) Total Payment $58.017.00 Number of Worksites: 1 Full payment for all Go Pass s·tickers shall be due prior to JPB issuing stickers. All staff working more than 20 hours per week, excluding temporary employees, interns, contractors and consultants, are considered "Employees" for the purpose of this Agreement. Notwithstanding the foregoing, if one or both of the Options offered above is selected, employees working less than 20 hours per week and/or interns will be considered "Employees" under this Agreement. The total cost of participating in the Go Pass program will be the greater of $13,750 or $165 per Employee, which includes a non-refundable Administration Fee (the "Administration Fee") of $3 per Employee. If the number of Employees increases during 2014, the cost of additional Go Pass stickers will be a pro-rated per-employee amount based on the pro-rata schedule on page 5 of this Agreement. Company may share the cost of participation in the Go Pass program with its Employees, but the cost to a particular Employee cannot be higher than the first-time replacement rate stated in Section 9 below. Agreement Term: April 1, 2014 through December 31,2014 Company agrees to the attached terms and conditions BY:---~~~~=-r,~~-J~----------­ Print N Its: _=..t....L-'--4--~.......,..'-'-"'oru;.....=; ___ :..L..L-r--=:....I..-----'---7'-'ror<..='- By: _________________________ ~~_ Print Name: _______________ _ Its: _____________________________ _ * If Company is a corporation or limited liability cpmpany, two corporate officers must sign on behalf of the corporation as follows: 1) the chairman of the board, president or vice-president; and 2) the secretary, assistant secretary, chief financial officer, or assistant treasurer. In the alternative, this Agreement may be executed by a single officer or a person other than an officer provided that evidence satisfactory to the JPB is provided demonstrating that such individual is authorized to bind the corporation (e.g. a copy of a certified resolution from the corporation's board or a copy of the corporation's bylaws). PEN INSULA CORRIDOR JOINT POWERS BOARD lBy~1PtI ttM ~ Print Name: Rita P. Haskin Its: Executive Officer, Customer Service and Marketing 5974444.1 2 5974444.1 TERMS AND CONDITIONS This Go Pass Agreement (“Agreement”) is made between the Peninsula Corridor Joint Powers Board, a public agency ("JPB") and the employer (“Company”) identified on page 1 of this Agreement. 1. PROGRAM: JPB operates the “Caltrain” rail service between San Francisco and Gilroy, California, and Company desires to provide a transit benefit for use on Caltrain to all of the Company's regular employees working more than 20 hours per week as well as all employees working less than 20 hours a week and/or interns provided Company selects one or more Options identified on Page 1 of the Agreement (hereafter referred to as “Employees”), in the form of a sticker affixed to a valid Company-issued employee photo identification card (hereafter referred to as "Go Pass"). In order to facilitate the Caltrain Go Pass Program (“Program”) JPB shall provide the necessary stickers and accept the Go Pass as valid fare media for travel on the Caltrain system. 2. ELIGIBLE PARTICIPANTS: Only individual companies are eligible to participate in the Program. Companies with multiple locations, branches or campuses are eligible to participate in the Program and must provide an employee count for each individual company site. However, such companies must enroll in the Program under a single Go Pass Agreement and designate a single corporate contact and administrator. Such companies’ employees at non-participating locations are not eligible to participate in the Program. Temporary employees, contractors and consultants of participating companies are not eligible to participate in the Go Pass Program. If one or both of the Options identified on Page 1 are not selected, interns and/or employees working less than 20 hours per week are also not eligible to participate in the Go Pass Program. 3. ELIGIBLE EMPLOYEE VERIFICATION: Go Passes must be purchased for each and every Employee at each Company work site participating in the program (“Participating Site(s)”). Company will be required, prior to the JPB issuing the Go Pass stickers, to provide JPB with a Letter of Intent (“Letter”) signed by the Human Resources Director or an officer of the Company verifying the then-current number of Employees of the Company at each Participating Site. If there are multiple Participating Sites, the Letter must indicate the individual work site address and the number of then-current Employees at each site. Neither Company nor any of its affiliates shall be required to participate in the Program with respect to other work sites other than the Participating Site(s) identified in the Letter. 4. Go PASS IDENTIFICATION: Company must have an official Company-issued photo ID card in order to participate in the Program and must supply a copy of that ID card to the JPB for review. Any company that doesn’t have a photo ID card must create one. The ID card must display a clear employee photo, employee name, have a 1” x 1” square space for the Go Pass sticker and display the Company name, logo or both. The ID cannot contain Caltrain’s logo as part of the design. If the ID changes, it is the Company’s responsibility to submit the new version to the JPB. The JPB will produce and issue serialized Go Pass stickers which will be distributed to Company so that Company can affix them to the Company-issued Employee ID card. Company shall place the Go Pass sticker on each eligible Employee’s ID card, preferably on the front; Company shall not distribute the Go Pass stickers to Employees, as this practice may lead to unauthorized use of the sticker. Company shall be responsible for retaining the Employee’s ID card or removing the Go Pass sticker from an Employee’s ID card when an Employee Go Pass holder leaves the employment of the Company or relocates to non-participating location. Returned ID cards or stickers shall be presented to the JPB for verification upon request. A photocopy of the identification card with the Go Pass sticker attached is acceptable as proof that the Go Pass is no longer in use by an Employee who has left the employment of Company. All Go Pass stickers allotted to the Company at the beginning of the Company’s participation in the Program that are not issued to Employees are to be returned to the JPB by December 15 of the Agreement year. 5. PROGRAM RECORDS: Company will create and maintain a file of documents to be available for review upon JPB request (“Go Pass File”). The Go Pass File must include a report listing the qualifying Employees by name as of the date this Agreement is signed. The Company shall maintain in its Go Pass File a log (Go Pass Log) of its Employees who currently hold Go Passes. The Go Pass Log shall include the Employee’s first and last name, unique serial number for the individual pass each Employee holds, pass status, date of issue, date of Employee separation, if applicable, and any other pertinent information. 6. SURVEY AND ACKNOWLEDGEMENT: Prior to affixing the Go Pass sticker to the Employee’s Company-issued ID card, Company shall require each Employee receiving a Go Pass to complete an online questionnaire. Once the survey is complete, Company administrator will receive an e-mail confirmation from the Employee via the JPB. As part of completing the survey, the Employee will be required to acknowledge that he or she understands the proper use of the Go Pass. The surveys may be used to analyze the success of the Program and develop ridership projections for the Program. However, the surveys are subject to disclosure under requests made pursuant to the California Public Records Act. Prior to disclosing surveys, any identifying information concerning the Company and/or the Employee shall be redacted. 7. PROGRAM ANALYSIS AND AUDIT: JPB reserves the right to audit Company’s Go Pass Program at any point during the Program year with five (5) working days' notice. The purpose of the audit is to ensure that appropriate accounting, sticker distribution and security procedures are in place. JPB has the right to audit any internal Company Go Pass- 3 5974444.1 associated records, including Company’s Go Pass File. A current list of qualifying Employees shall be provided to the JPB upon request. Within 10 working days of receipt of any audit report from the JPB, Company must, in conjunction with JPB staff, develop a mutually agreeable action plan to satisfy any audit findings. If no mutually agreeable plan can be developed, JPB may terminate the Program upon 10-days’ notice pursuant to the terms of Section 12, Termination. 8. PARKING PERMITS: Monthly parking permits for Caltrain lots may be purchased through any Caltrain station Ticket Vending Machine (TVM). Go Pass holders will be required to complete an application for an access code in order to purchase the permit through the TVM. 9. LOST, STOLEN, DAMAGED AND REPLACEMENT Go PASSES: For lost or stolen Go Passes, JPB will charge a $165 first-time replacement fee. Company must submit to the JPB documentation including the Employee name and Go Pass serial number. For stolen Go Passes, the JPB will replace the Go Pass at no additional charge provided that a police report is supplied to the JPB which describes the Go Pass as stolen. If the same Employee loses the Go Pass or has the Go Pass stolen a second time, the replacement fee will be $250 regardless of whether a police report is provided to the JPB. If a replacement Go Pass is issued and then the original is found, JPB will not provide a refund. Company may not resell the Go Passes to employees at a rate higher than the replacement fee. A Go Pass will not be issued as a replacement for lost or stolen Go Passes a third time. For damaged Go Passes: If the Company or an Employee damages a Company-issued ID card and thus renders the Go Pass sticker unusable, or if the sticker itself is damaged, a replacement Go Pass sticker may be issued to the Employee or taken from the Company’s Go Pass inventory, provided that the Company documents that the Go Pass sticker has been taken out of circulation in its Go Pass File. Company must retain the damaged ID card or Go Pass sticker in its Go Pass File. If no additional stickers remain in the Company inventory, the Company shall return damaged Go Pass stickers or ID cards, or a photocopy, with complete documentation to the JPB prior to the JPB issuing a replacement Go Pass sticker to Company at no charge. This courtesy will be extended no more than two times per Employee per calendar year, after which the replacement cost for a damaged Go Pass sticker will be $165. For Separated Employees: If the Employee separates with the Company, Company shall retain the separated Employee ID card or Go Pass sticker in its Go Pass File and document that the Go Pass sticker has been taken out of circulation in its Go Pass Log (See Section 5 above). If no additional stickers remain in the Company inventory, the Company shall return separated employee Go Pass stickers or ID cards, or a photocopy, prior to the JPB issuing a replacement Go Pass sticker to Company at no charge. For Missing Go Passes: Company shall be responsible for safeguarding the Go Pass stickers prior to distribution to Employees and shall be liable for any loss of Go Pass stickers. Replacement Go Pass stickers shall be issued under the lost terms above. 10. QUARTERLY REPORTING: Company must submit a quarterly report to JPB by 3/1/14, 6/1/14, 9/1/14 and 12/1/14. The quarterly report must list all lost, stolen, damaged and replacement Go Passes issued and separated Employees. It must include the reason for replacement, if applicable, Employee name and corresponding Go Pass serial number and the current number of Employees working at the work site(s) enrolled in the program. Company may submit its Go Pass Log (See Section 5 above) in lieu of the quarterly report. 11. PAYMENT: Company must submit payment for any invoices within 30 days of the date shown on the invoice. Payments after 60 days will be charged a late fee of $5 per day. 12. TERMINATION: Either party may terminate this Agreement by giving the other party written notice at least 90 days prior to the desired termination date, which shall be the last day of a calendar month. If either party terminates the Agreement pursuant to this provision, JPB shall refund to Company a pro-rata portion of Company’s total payment in accordance with the Proration Schedule attached to and incorporated in this Agreement as Exhibit A, less the Administration Fee, as listed on Page 1, within 30 days of the termination date, provided that within 10 working days of the effective termination date: (a) all undistributed Go Passes issued to Company are returned to JPB and (b) Company verifies in writing that it has made every Good faith effort to collect or destroy all Go Passes that have been distributed to employees. In the event Company fails to comply with the terms of this Agreement, JPB may terminate this Agreement with 15 days’ notice. Non-compliance by Company may make Company ineligible to participate in the Go Pass program in subsequent years. This Agreement shall automatically terminate if Company discontinues its business at the Participating Site(s). 13. MISUSE OF Go PASS: The Go Pass constitutes a Go Pass sticker affixed to a valid, Company-issued employee photo ID card. Any other use of the Go Pass sticker is prohibited and will not be valid for fare on Caltrain. All Go Pass holders shall be subject to JPB's fare inspection regulations. JPB may confiscate and/or destroy the Go Pass stickers and pursue claims or demands against, or seek prosecution of, anyone who duplicates, alters, transfers, sells or commits unauthorized use of the Go Pass. Unauthorized use of the Go Pass includes, but is not limited to, allowing a non-eligible person to use a Go Pass or affixing a Go Pass sticker to any form of identification other than a valid Company-issued employee ID card. JPB agrees not to pursue any claims or demands against Company for an Employee's unauthorized use of the Go Pass, unless the unauthorized use is the result of Company's failure to follow the sticker issuance procedures in 4 5974444.1 Section 4, gross negligence or willful misconduct. JPB may cancel any individual Go Pass if it has reason to believe that the Go Pass was issued and/or used in a manner that fails to comply with the requirements herein. JPB will notify Company if it has any such concerns and, after appropriate investigation, revoke those passes in question. Company agrees to cooperate with JPB in such an investigation, including assisting the JPB in determining the identity of the Employee(s) who are alleged to have misused the Go Pass. Company waives all remedies and rights to refunds for any Go Passes revoked for misuse. 14. PROTECTION OF PRIVACY: JPB acknowledges that it may review documents in the Go Pass File or other materials that contain personal or confidential information about the Company or the Employee (“Information”). Except as required to administer the Go Pass Program in accordance with this Agreement or as otherwise required by law, JPB agrees not to use or to disclose to third parties the Information. JPB may use Company’s name in promotion of the Go Pass Program. Notwithstanding the foregoing, JPB shall be free to use and disclose to third parties information in an aggregate format that does not personally identify an Employee. 15. ENTIRE AGREEMENT: This contract contains the entire Agreement between the parties hereto for the term specified on Page 1 of this Agreement and cannot be changed or altered except by written agreement signed by both parties hereto. Neither party shall be bound by any oral agreement or other understandings contrary to or in addition to the terms and conditions as stated herein. 16. SUCCESSORS AND ASSIGNS: The terms, covenants and conditions contained in this Agreement shall bind and inure to the benefit of Company and JPB and, except as otherwise provided herein, their personal representatives and successors and assigns. 17. NO THIRD-PARTY BENEFICIARIES: There are no third-party beneficiaries to this Agreement. 18. NO JOINT VENTURE: It is expressly agreed that Company is not, in any way or for any purpose, a partner of the JPB in the conduct of JPB’s business or a member of a joint enterprise with JPB, and does not assume any responsibility for JPB’s conduct or performance of this Agreement. It is expressly agreed that JPB is not, in any way or for any purpose, a partner of the Company in the conduct of Company’s business or a member of a joint enterprise with Company, and does not assume any responsibility for Company’s conduct or performance of this Agreement. 19. ATTORNEYS’ FEES: In the event that either JPB or Company fails to perform any of its obligations under this Agreement or in the event a dispute arises concerning the meaning or interpretation of any provision of this Agreement, the defaulting Party or the Party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other Party in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys’ fees. 20. GOVERNING LAW: This Agreement shall be governed and construed in accordance with the laws of the State of California. Any action relating to, and all disputes arising under, this Agreement shall be instituted and prosecuted in a court of competent jurisdiction in the State of California. 21. NOTICES: All notices, payments, requests, demands and other communications to be made or given to Company under this Agreement shall be addressed as shown on page 1 of this Agreement. All notices, payments, requests, demands and other communications to be made or given to JPB shall be addressed as follows: To JPB: Peninsula Corridor Joint Powers Board (Caltrain) 1250 San Carlos Ave. San Carlos, CA 94070-1306 Attn: Rita Haskin, Executive Officer, Customer Service & Marketing 5974444.1 Exhibit A Proration Schedule Effective Termination Date (falling in month) Portion of Total Fee Returned per Employee (less administration fees) February $148.50 March $135.00 April $121.50 May $108.00 June $94.50 July $81.00 August $67.50 September $54.00 October $40.50 November $27.00 December $13.50 January 21, 2014 Melissa Wicklow Samtrans I Caltrain I TA 1250 San Carlos Avenue San Carlos, CA 94070 Subject: Letter of Intent to Participate in Caltrain GoPass Program Dear Ms. Wicklow, The City of Palo Alto is requesting participation into the Caltrain GoPass Program for the Civic Center site at 250 Hamilton Avenue. The City is excited to introduce this benefit to its employees and to demonstrate to local employers the City's commitment to reduce regional congestion on roadways while reducing employee parking demand. Palo Alto has required GoPass participation as part of Transportation Demand Management plans for several recent projects and through this Letter of Intent is now committed to participating as an employer on its own. The Civic Center site includes a total of 466 full-time or permanent part-time employees working 20 hours per week or more. Attached is a letter from the Director of Human Resources documenting the employee count for your records. Please draft contracts for the City's participation in the GoPass Program for 2014 and coordinate signature of the contracts through the Transportation Division: Jessica Sullivan Planning & Community Environment Department 250 Hamilton Avenue Palo Alto, CA 94301 0: (650) 329-2136 Following City Council approval of the contract, GoPasses will be distributed to employees making a commitment to choose Caltrain as their preferred travel mode to work. If you have any questions, please contact Jessica Sullivan, Parking Manager, at (650) 329-2453. Sincerely, Ja e~.i~ Ity Manager U CityOfPaloAlto .org Printed with soy-based inks on 100% recycled paper processed without chlorine. January 21,2014 City of Palo Alto Parking Manager Planning and Community Environment Dear Melissa, Ci!y-of Palo Alto Department of Human Resources This letter will confirm that there are 466 employees who work in Downtown Palo Alto at City Hall, the Development Center or the Downtown Library. We are supportive of the City's effort to explore a TDM program for City employees to encourage use of public transportation for commuting to and from work. Thank you, ~801M~ Sandra Blanch Assistant Director Human Resources City of Palo Alto Printed with soy-based inks on 100% recycled paper processed without chlorine PO. Box 102.50 Palo Alto, CA 94303 City of Palo Alto (ID # 4430) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Development Impact Fees: Needs List Title: Development Impact Fees: List of Public Facilities Capital Needs From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff requests that City Council review and approve the attached Development Impact Fee (DIF) Project Needs List (Attachment A) prior to having the City’s consultant prepare the quantitative analyses and narratives needed to update some categories of the City’s Development Impact Fees. BACKGROUND Though Council approval of the Needs List is not required by law, it is a recommended step toward ensuring maximum transparency and public involvement, thereby enhancing the comprehensiveness of the City’s Development Impact Fee program. The Finance Committee reviewed this list and accompanying report on November 5, 2013, and agreed to submit the list for Council consideration. Note that the capital needs outlined in the Project Needs List indicate that the City should consider updating its transportation, and general government facilities impact fees, and examine the possibility of a new public safety DIF. Housing impact fees were not included in this analysis and will be considered separately at a later date. Under California law, cities and other local agencies may exact Development Impact Fees on proposed development which must be paid as a condition of development approval. Development Impact Fees (“DIFs”) were enacted under Assembly Bill 1600 by the California Legislature in 1987 and codified under California Government Code §66000 et. seq., also referred to as the Mitigation Fee Act (the “Act” or “AB 1600”). City of Palo Alto Page 2 Development Impact Fees are not ongoing fees or taxes; they are one-time fees, paid at the time of construction. Impact fees are not special assessments, nor are they permitted to cover ongoing operations and maintenance costs. The use of impact fees is effectively restricted to public capital improvements. The fees are collected by local governmental agencies to pay for infrastructure or capital facilities needed to serve new development. Because impact fees are collected during the development approval process, the fees are typically paid by developers, builders, or other property owners who are seeking to develop property, as a way of paying their “fair share” of needed capital facilities. The City of Palo’s current DIFs are listed in Attachment B. Cities typically identify a number of exemptions to DIFs, which reflect policy decisions addressed at the time each impact fee was enacted or amended by City Council. Developments may be exempt from all or some impact fees, depending upon the intended use. For instance, 100% affordable housing projects (not a mix of market rate and below market rate) are exempt from current impact fees, as are home remodels or expansions. A brief summary of Palo Alto’s current DIFs (detailed in Attachment B) follows, with enactment dates in parentheses: 1. Housing Impact Fees for commercial and industrial projects (1984 and updated 2004) 2. Traffic Impact fees in the Stanford Research Park and San Antonio/East Bayshore areas (1989) 3. In-lieu parking fee for downtown development (1995) 4. Parks (2002) 5. Community Centers (2002) 6. Libraries (2002) 7. Transportation (2007) Last year, the City contracted with David Taussig & Associates, Inc (“DTA”) to (a) review the City’s impact fees and evaluate the existing program’s general compliance with current legal requirements, (b) compare the City’s fee categories and levels with those in comparable cities, (c) work with City staff to identify existing and projected facilities and major equipment needs, and (d) recommend options and methods to annually adjust impact fees. In May 2012, DTA submitted to staff the results of a Comparative Development Impact Fee Survey which evaluated the City’s existing DIF programs in relation to those maintained by the following eight (8) cities – Cupertino, Fremont, Menlo Park, Mountain View, Redwood City, San Mateo, Santa Clara, and Sunnyvale. The survey data revealed that the City’s cumulative impact fees for residential development are relatively similar to other cities, and that its non- City of Palo Alto Page 3 residential fees are high compared to other jurisdictions. In particular, the City’s DIFs for transportation are on the low side, and there is no DIF for public safety. DTA recommended that the City review and update its transportation, general government facilities impact fees, and examine the possibility of a new public safety DIF. Note that the evaluation of the City’s housing impact fees is not included in DTA’s current contract scope, but is included as a program under the recently adopted Updated Housing Element. DISCUSSION The next step in this process is to identify the City’s projected facilities and major equipment needs in the three categories identified above: transportation, general city government facilities, and public safety. The attached Public Facility Capital Needs List (Attachment A) is the product of discussions between Public Works, Police, Fire, Community Services, and Administrative Services Departments; and a thorough review of the FY 2014 Adopted Capital Budget, the Infrastructure Blue Ribbon Task Force (“IBRC”) recommendations, and the work to date of the Council Infrastructure Committee. The Needs List identifies the City’s capital needs (through a Target Year of 2035) within the selected categories. Staff presents this to the Council for discussion, comment, and approval. Staff asks that the Council keep in mind that this list is meant to be more inclusive than exclusive. It is also a snapshot in time, i.e., there is no possible way the City and DTA can properly catalogue all of the City’s needs over the next 21 years. DTA has indicated that the standard of review is that the City should utilize the “best information that it has available at the time.” The specific projects the Needs List includes, as well as funding requirements it indicates, are likely to change over time. It is suggested that the City revisit the Needs List and its AB 1600 program at least every five (5) years to ensure the appropriate legal nexus and ultimately the health and defensibility of the AB 1600 program. This “snapshot” list serves as the denominator of “Total Needs” which can then be utilized to calculate the “fair share” of facilities costs attributable to new development through 2035. Once Council members’ comments are considered and incorporated into the Needs List, DTA will proceed to its next phase – developing and documenting methodologies for calculating new fee amounts in a manner that complies with all nexus requirements of AB 1600. DTA has prepared over 300 AB 1600 Nexus Studies; their clients have included nearly every major City, County, and urban center in the State of California. Staff will then present their recommendations to Council for approval. City of Palo Alto Page 4 RESOURCE IMPACT Development Impact Fees provide funding for capital improvements to mitigate the impacts of new development on the community and a specific public facility. The revenues received each year vary based on the amount of development (both residential and non-residential) occurring in Palo Alto during that timeframe. Recommended changes to the fees will be presented to Council in future meetings. POLICY IMPLICATIONS Council has the authority to charge new development for its relative share of the cost of specific public facilities, as calculated based on a Nexus Study. Council also has the authority, for policy reasons, to restructure fees based on articulated City policies. The information provided in this report allows Council to take the next step towards re-evaluating and adjusting the City’s Development Impact Fees. Attachments:  Attachment A: Public Facility Capital Needs List (PDF)  Attachment B: Current Impact Fees (PDF)  Attachment C: Excerpt from the November 5, 2013 Finance Committee Minutes (PDF) {1}{2}{3} Facility Name Total Cost for Facility Off-setting Revenues Net Cost to City A. TRANSPORTATION 1 Bike/Pedestrian Plan $22,250,000 ($6,000,000)$16,250,000 2 Citywide Traffic System Upgrade $453,000 $0 $453,000 3 California Avenue Parking Garage $16,500,000 $0 $16,500,000 4 Charleston/Arastradero Corridor $9,750,000 ($2,270,000)$7,480,000 5 Citywide Traffic Signal ITS Upgrade $5,345,000 ($650,000)$4,695,000 6 Downtown Parking Garage (new)$18,400,000 $0 $18,400,000 7 El Camino Medican Landscape Improvements $1,086,000 ($30,000)$1,056,000 8 Highway 101 Bike/Ped. Bridge $10,000,000 ($8,350,000)$1,650,000 9 Newell Road/San Francisquito Creek Bridge Upgrade $2,500,000 ($2,500,000)$0 10 Safe Routes to School $2,200,000 ($528,000)$1,672,000 11 Traffice Management & Parking Improvements in non-Safe Routes to School Neighborhoods $4,950,000 ($225,000)$4,725,000 12 Sign Reflectivity Upgrade $1,100,000 ($50,000)$1,050,000 13 Street Lights, Streets and Sidewalk Improvements $13,130,000 ($140,000)$12,990,000 14 Thermoplastic Marking & Striping $1,650,000 ($75,000)$1,575,000 15 Benches, Signage, Fencing, Walkways, Perim. Landscaping $3,300,000 ($150,000)$3,150,000 16 Transportation Revenues not yet Committed ($489,245)($489,245) TOTAL - TRANSPORTATION 112,614,000$ (21,457,245)$ 91,156,755$ B. PUBLIC SAFETY FACILITIES 1. Police Facilities 1 Public Safety Building ("PSB") - Replace (44,850 square feet)$57,000,000 $0 $57,000,000 Subtotal $57,000,000 $0 $57,000,000 2. Fire Facilities 2 Fire Station 3 (Rinconada Park - built 1948) - Replace $6,700,000 $0 $6,700,000 3 Fire Station 4 (Meadow/Middlefield - built 1953) - Replace $7,500,000 $0 $7,500,000 4 Rescue Vehicle $750,000 $0 $750,000 5 BC Van (x 2)$200,000 $0 $200,000 6 Fire Trucks (x 2)$2,000,000 $0 $2,000,000 7 Type III Engine (x 2)$800,000 $0 $800,000 8 Training Tower & Related Land Acquisition $8,000,000 $0 $8,000,000 9 Type I Engine (x 8) - 2024 $4,200,000 $0 $4,200,000 10 Ambulances (x 4) - 2022-2025 $1,300,000 $0 $1,300,000 11 Vehicles (Van, Trucks, Engines, Ambulances)$9,250,000 $0 $9,250,000 Subtotal $31,450,000 $0 $31,450,000 12 Pubic Safety Revenues not yet Committed $0 $0 TOTAL PUBLIC SAFETY FACILITIES $88,450,000 $0 $88,450,000 ATTACHMENT B CITY OF PALO ALTO DEVELOPMENT IMPACT FEE PROGRAM PUBLIC FACILITIES NEEDS LIST THROUGH 2035 1 {1}{2}{3} Facility Name Total Cost for Facility Off-setting Revenues Net Cost to City ATTACHMENT B CITY OF PALO ALTO DEVELOPMENT IMPACT FEE PROGRAM PUBLIC FACILITIES NEEDS LIST THROUGH 2035 1 Acquisition of Post Office*TBD $0 - 2 Acquisition of New Computers $750,000 ($75,000)$675,000 3 Buildings Systems Improvements $6,300,000 ($100,000)$6,200,000 4 Civic Center Plaza Deck $16,000,000 $0 $16,000,000 5 Municipal Services Center Improvements (through 2020) $ 1,991,000 $0 $1,991,000 6 Municipal Services Center - Replace (after 2020)$93,000,000 ($32,550,000)$60,450,000 7 Ventura Buildings Improvements $690,000 $0 $690,000 8 General Government Revenues not yet Committed $0 $0 TOTAL GENERAL GOVERNMENT FACILITIES 118,731,000$ (32,725,000)$ 86,006,000$ GRAND TOTAL $319,795,000 ($54,182,245)$265,612,755 Note: *Funds required for acquisition of Post Office not included. C. GENERAL GOVERNMENT FACILITIES (COMMUNITY CENTER, INFORMATION TECHONOLOGY, PUBLIC ART, ETC.) 2 City of Palo Alto Development Impact Fees As per FY 2014 Adopted Municipal Fee Schedule page 17-3 Type of Project Parks Community Centers Libraries Housing Total Fees (NIC Transp.)Transportation Residential - New Homes Only* Single family < 3,000 sq. feet $10,638/residence $2,758/residence $963/residence EXEMPT $14,359/res. $3,197 per net new PM peak hr trip Single family >3,000 sq. feet $15,885/residence $4,129/residence $1,434/residence EXEMPT $21,448/res. $3,197 per net new PM peak hr trip Multi-family </= 900 sq. feet $3,521/unit $916/unit $316/unit EXEMPT $4,753/unit $3,197 per net new PM peak hr trip Multi-family >900 sq. feet $6,963/unit $1,815/unit $565/unit EXEMPT $9,343/unit $3,197 per net new PM peak hr trip Non-residential Commercial/Industrial $4,517 per 1,000 sq ft or fraction thereof $255 per 1,000 sq ft or fraction thereof $243 per 1,000 sq ft or fraction thereof $18.89 per sq ft $23.89 per net new sq ft $3,197 per net new PM peak hr trip Hotel/Motel $2,043 per 1,000 sq ft or fraction thereof $115 per 1,000 sq ft or fraction thereof $102 per 1,000 sq ft or fraction thereof $18.89 per sq ft $21.15 per net new sq ft $3,197 per net new PM peak hr trip Residential Subdivisions of over 50 parcels Single-family Multi-family Special Zones Traffic Impact Fee Stanford Research Park/El Camino Real CS Zone $11.08 per net new sq ft San Antonio/West Bayshore Area $2.28 per sq ft Charleston/Arastradero Commercial $0.34 per sq ft Charleston/Arastradero Residential $1,168 per unit Parking in-lieu fee for Downtown Assessment District $60,750 per parking space Note: "Single-family" is defined as a single dwelling unit that does not share a common wall with another dwelling unit Fee Category Parkland Dedication Fee *Square footage refers to living area, not lot size. 555 sq ft of parkland/unit or $58,366/unit in-lieu fee 382 sq ft of parkland/unit or $40,187/unit in-lieu fee MINUTES Page 5 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Mr. Rossmann reported that Staff wanted to prospectively determine fees by reviewing costs and estimating activity levels, especially in the classroom environment. A class with 20 students provided a lower cost per student than a class with 10 students. Typically the level of youth participation in classes was much higher than adult participation; higher participation led to higher revenue. The Cost Recovery Level was also higher because the cost was constant. Chair Burt understood the Cost Recovery Level for youth programs was lower. Mr. Rossmann indicated it was 80 percent. Chair Burt agreed that higher participation led to a higher Cost Recovery Level. Mr. Rossmann explained that Staff determined fees by prospectively reviewing budgeted costs and the estimated activity level. The report was very useful and provided insight; however, he was hesitant to use it as the guiding factor from a Cost Recovery Level perspective. Chair Burt agreed the report would inform rather than stipulate how the Committee set the structures. MOTION PASSED: 4-0 2. Development Impact Fees: Approval of List of Public Facilities Capital Needs. Lalo Perez, Director of Administrative Services and Chief Financial Officer reported that Development Impact Fees (DIF) were designed to allow agencies to recapture the additional cost of services required as a result of new development. A DIF was only applied to Capital Costs. A Nexus Study was required to demonstrate that the proposed fee was appropriately scaled to match the likely increase in cost. Staff proposed two new fees: a Public Safety Fee and a General Government Facility Fee. Only Transportation Fees were updated because other Development Fees were at the appropriate levels within the preliminary review. The Capital Needs List was to be used to calculate and update proposed new fees. The Finance Committee (Committee) needed to review and approve the Capital Needs List. Council approval of the Capital Needs List was not required; however, the Committee was able to recommend the Council review it. The Capital Needs List contained more projects than the Infrastructure Committee Project List MINUTES Page 6 of 39 Finance Committee Regular Meeting Minutes 11/5/13 because the Infrastructure Committee focused on projects that were prioritized but had no funding. The Committee was able to include projects that could conceivably be performed within the designated time period. The List included projects funded primarily through the Capital Improvements Program (CIP) Budget on a pay-as-you-go basis. The cost of a project was able to be reduced by any revenue identified for that project. If a project was partially funded through the five-year plan, then the Capital Needs List contained only the delta. If the City received new funding for projects included on the Capital Needs List, the project cost needed to be adjusted at a later point in time. Nate Perez, Vice President, David Taussig and Associates (DTA), explained that DIF’s were not utilized to cure existing deficiencies or for operations and maintenance. They were only utilized for Capital Projects. The standard for projects was a useful life of five years or longer. DIF’s were a function of California Law, which demanded a certain level of proportionality and nexus. The methodologies proposed for the Nexus Study could be difficult, but the nexus depended on the given fee category being analyzed. Chair Burt requested Mr. Nate Perez comment on the voluntary aspect of fees. Mr. Nate Perez indicated the term "voluntary" was a term used to mean art. The exactions were made legal by Assembly Bill (AB) 1600. The Bill was oriented to the development community. Vice Mayor Shepherd asked if the collection of DIF’s were voluntary for the City. Mr. Nate Perez replied yes. Chair Burt asked if “voluntary” applied to the City or to those paying the fees. Mr. Nate Perez stated the voluntary comment referred to the development community, who were responsible for paying the fees in order to obtain a building permit. Staff requested DTA provide a comparative survey of peer cities in the South Bay Area. Cities preferred to charge DIF’s at an average level; however, none committed to reducing fees to an average level. Among South Bay cities, fees averaged between $30,000 and $40,000 for a single-family dwelling unit. He felt that the City's fees did not inhibit the City's attractiveness to the development community; a small change in any one of the fees changed that. The City's fees were slightly high, but were manageable. The Water Fee was a significant amount and negatively MINUTES Page 7 of 39 Finance Committee Regular Meeting Minutes 11/5/13 impacted the City. Vice Mayor Shepherd requested clarification of Water Fee. Mr. Nate Perez meant the Water Sewer Hookup Fee for new homes. Impact Fees typically included Housing Fees, Transportation Fees, Water and Sewer Fees, and Capital Facilities Fees. The City was very competitive with respect to Capital Facilities Fees. Vice Mayor Shepherd asked why the Affordable Housing Fee was not included in the list of fees. Mr. Nate Perez explained that it was an In-lieu Fee. A developer who constructed one single-family home was not necessarily conditioned to pay an Affordable Housing Fee. Vice Mayor Shepherd understood developers paid the fee when they built homes. Mr. Nate Perez indicated cities had different triggers for fees. Some cities required fees for each project, some required fees for projects of more than 50 parcels. Chair Burt recommended information from Santa Clara not be included in the presentation, as it skewed the data. Vice Mayor Shepherd inquired about the process for collecting Capital Facility Fees. Mr. Nate Perez stated that was similar to the General Government Fee he proposed for a Municipal Services Building. He thought that would be a good fee for the City to begin collecting. Chair Burt requested Staff comment on the drivers for the amount of the Water Sewer Hookup Fee. Mr. Lalo Perez did not have specific details, but recalled the Council reviewed it approximately five years ago to establish the range and accept the percentage. Chair Burt wanted the City to have Park Fees comparable to Park Fees collected by other cities and not be inhibited by a High Water Hookup Fee. Mr. Nate Perez suspected that the high cost of the new water system and MINUTES Page 8 of 39 Finance Committee Regular Meeting Minutes 11/5/13 the extension of water pipes was a driver of the fee. Perhaps some elements of the City were not served quite as well as other elements. Mr. Lalo Perez believed the cost resulted from building up the reservoirs, but he said he would review the matter. Chair Burt felt the City had two major capital categories: rebuilding the Hetch-Hetchy system and emergency water supplies. Mr. Lalo Perez noted the City did not have funding when the fee was established. Chair Burt asked if the City could charge new hookups for an existing system. Mr. Nate Perez replied no. The allocation occurred in the setting of the fee level because the numerator was the cost of the new system, and the denominator was the number of new homes or new nonresidential square footage. Chair Burt inquired whether the City could charge for the new system after it being built. Mr. Nate Perez reported once the system was built, the City could charge the homes and the demographics contained within the study. The projections within the study were based upon the number of homes and nonresidential square footage. Chair Burt asked if the City could implement a fee if construction of the system was based upon a future projected need. Mr. Nate Perez answered yes. Mr. Lalo Perez requested time to confirm the correct information regarding the hookup fee, given the amount of the fee. Vice Mayor Shepherd asked Staff to explain the Fire Facility Fee charged by Menlo Park. Mr. Nate Perez assumed it was utilized for additional fire capital improvements. Vice Mayor Shepherd inquired whether the fee would be used for capital improvements to Menlo Park's fire stations. MINUTES Page 9 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Mr. Nate Perez responded yes. Vice Mayor Shepherd indicated Palo Alto did not charge that fee. Mr. Lalo Perez proposed a General Government Fee that could capture those types of things. Vice Mayor Shepherd asked if the fee was used for development. Mr. Nate Perez replied that the fee could only be utilized for new development. In light of Palo Alto's unique nature, he was suggesting maximum fees. The City Council always retained the authority to charge lower fees. The Citywide Transportation Fee, approximately $3,000 per single family home, was able to be slightly increased. He suggested two new fee categories to help cover some costs of capital improvements. He said a Public Safety Fee could be utilized for a new Public Safety Building, some new fire stations, some new rescue vans, and things such as that. A General Government Fee was utilized for a Municipal Service Center. Funds generated by those fees were able to be used to assist the City in meeting some costs. Vice Mayor Shepherd inquired if the proposed increase to the Community Facility Fee could be used to pay for some fire and police capital improvements. Mr. Lalo Perez answered no. It was meant for community centers. Mr. Nate Perez was not comfortable putting municipal buildings in the Community Facility category. Vice Mayor Shepherd noted funds generated by fees would be appropriated and then used for the CIP Budget. She asked if those funds were differentiated from General Fund dollars allocated to CIP. Mr. Lalo Perez responded yes because Staff identified the source of funding that came from a fee. Mr. Nate Perez reported some communities did not have as many fees as others. The draft Capital Needs List was meant to be expansive and inclusive and was prepared using the best information Staff had. If there were no projects on the Capital Needs List, then there could be no fees. As circumstances changed, projects had the potential to be removed from and added to the Capital Needs List. MINUTES Page 10 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Council Member Berman thought it was better for the Capital Needs List to be as inclusive as possible Mr. Nate Perez was not able to target a fee level and then work backwards to determine funding for improvement projects. He tried to be inclusive of projects, calculated some draft fees, and circulated draft fees to the Committee for its impressions. Council Member Berman stated fees would not provide sufficient funds to build a new Municipal Services Center or Public Safety Building; yet, the two projects were being considered in determining the amount of fees. He inquired about the process for setting fees. Mr. Nate Perez explained that the bottom line numbers were the numerator, and the number of shared new homes and nonresidential square feet over the next 20 years was the denominator. He thought fees should be controlled, mitigated, and moderately increased to provide more revenue without jeopardizing the City's relationship with the development community. Chair Burt wanted to consider setting a fee level that would cause new development to pay for its proportionate share of the cost of the additional capital improvements needed to sustain the community. That was the fair framework and was the objective discussion. Mr. Lalo Perez reported that was the Council's practice in the past. There were different discussions as to having a percentage of the fee be the fee itself, and that depended on the type of fee. Chair Burt recalled that the discussion of a Park Impact Fee was based on two acres per 1,000 people, and that was embedded in the Comprehensive Plan as an objective. The Council was not able to have a Policy Objective of what they thought was correct for the community. He thought a 10 percent increase in car trips could cause a 20 or 30 percent increase in congestion. The question then became whether new developments paid for 10 percent of the total number of car trips or for the 30 percent increase in congestion. The guidance was that the City could not charge fees based on the 30 percent of congestion. He was interested in framing the levels of fees in that manner. Mr. Nate Perez indicated the Transportation Fee would be reviewed for trips and congestion. The City currently based its Park Impact Fee on five acres per 1,000 people and the Parkland Dedication Fee was technically different MINUTES Page 11 of 39 Finance Committee Regular Meeting Minutes 11/5/13 than the Park Impact Fee. He noted that one or the other could be charged. Vice Mayor Shepherd asked if funds from a Parkland Dedication Fee were utilized to purchase parkland, rather than maintenance of parks. Mr. Nate Perez explained a developer above 50 parcels paid the Dedication Fee or gave up the land. An individual homeowner paid the Park Impact Fee. For Capital Facilities and General Government Fees, the Nexus Study reviewed the increase in persons served and calls for service from police and fire. Chair Burt noted the Committee's Agenda Item was to review the Capital Needs List. Council Member Berman inquired about the lack of new police vehicles under police facilities. The category contained only the Public Safety Building, while the fire category contained multiple projects. Mr. Lalo Perez reported the majority of police vehicles were embedded in fleet replacement. The amount of funds estimated at the time fire vehicles were enrolled in fleet replacement did not align with the cost. Council Member Berman asked if the cost of replacing police vehicles was contained within the Budget. Chair Burt assumed the City retained fire trucks far longer than police vehicles. Mr. Lalo Perez indicated fire engines were typically retained 15 years, as opposed to three years for police vehicles. Chair Burt stated projects enduring less than five years did not qualify under the capital definition. Vice Mayor Shepherd noted the Capital Needs List contained only one parking garage, when many parking improvements were needed to reduce neighborhood overflow. Mr. Lalo Perez clarified that the Capital Needs List contained two parking garages. Staff did not have a study to verify the number of garages needed; therefore, they used the best information they had. Vice Mayor Shepherd inquired whether the City could collect a fee to construct a Public Safety Building when the amount of fees generated would MINUTES Page 12 of 39 Finance Committee Regular Meeting Minutes 11/5/13 not pay to construct it. Mr. Lalo Perez reported the Capital Needs List could not contain items that the Council knew would not be constructed. The City needed a Public Safety Building; he thought it could be funded through other means and Staff had a reasonable cost estimate. Vice Mayor Shepherd referenced the $16 million cost for the Civic Center plaza deck, and inquired whether the Capital Needs List included a project to seismically retrofit the building. Mr. Eggleston indicated Staff was not planning a project to seismically retrofit the building. Mr. Lalo Perez understood the building was retrofitted through the elevator shafts in the early 1990s. He was unaware of additional requirements since that occurred. Chair Burt remarked that a higher level of seismic retrofitting was required for buildings providing essential services than for buildings providing general services. Mr. Lalo Perez believed the work in the 1990s took care of the tower but not necessarily the wing. Vice Mayor Shepherd asked if the retrofit included City Hall. Mr. Lalo Perez did not believe so, but said he would have to check on that. Chair Burt felt there were two possible thresholds. One was whether the upgrade in the 1990s met the current requirements for general services. The second threshold was whether the upgrade met the highest seismic standard for essential services. Mr. Lalo Perez said he would review construction records. Chair Burt was interested in including seismic retrofitting as a long-term capital need. Mr. Lalo Perez agreed it would be a reasonable project to include if an additional retrofit was needed to meet current standards. Mr. Nate Perez stated new residents would obviously benefit from that project. MINUTES Page 13 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Council Member Schmid referenced the quote from the Act regarding inclusion of public improvements and public services; however, Mr. Nate Perez indicated the Council could only utilize funds for capital investments. He requested clarification. Mr. Nate Perez reported a category of public services under water and sewer would qualify for the DIFs. For the City's purposes, public services were not able to be included on the list. Council Member Schmid noted that the Staff Report did not state that public services were excluded. Vice Mayor Shepherd questioned the inclusion of $750,000 for computers. Council Member Schmid reiterated that the Act included public services. Mr. Nate Perez stated use of DIFs was restricted to capital improvements. Council Member Schmid asked why grade crossings were not included on the Capital Needs List. The Council voted to fund a detailed study. Chair Burt indicated the Council did not make a policy decision to include grade crossings in long-term capital plans at the current time. Council Member Schmid remarked that the Capital Needs List was inclusive to 2035. Chair Burt explained that the Capital Needs List was inclusive of work identified as a prospective project. Council Member Schmid felt grade crossings could become a viable project before the Nexus Study was presented in the spring of 2014. Chair Burt agreed the Council could move the grade separation issue from a possibility to an intention. He expected that at that point in time, it would be included in the Capital Needs List. Council Member Schmid believed development would enhance the need for the program. He requested Staff review the timeline. Vice Mayor Shepherd questioned the inclusion of computers on the Capital Needs List. MINUTES Page 14 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Mr. Nate Perez reported Information Technology (IT) upgrades were identified as projects. Vice Mayor Shepherd noted the Item was listed as an acquisition of new computers, not IT upgrades, and asked if the description needed to be changed. Mr. Lalo Perez stated that he would work on that. If the Committee preferred to refer the Item to the Council, it could probably be presented to the Council in January 2014. He mentioned that David Taussig and Associates and Staff could present the Nexus Study to the Council or return to the Committee. If the Nexus Study returned to the Committee, then Staff needed to implement a faster track. The final study was to be presented to the Council for approval in April 2014. Next, Staff was going to discuss how to incorporate DIFs into the proposed 2015 Budget process during the Budget hearings in May 2014. DIFs were to be presented to the Council in June 2014 and implemented in July. Council Member Schmid expressed concern about the focus on the Capital Needs List rather than on the elements of the nexus that were apparent in Attachment A. A number of critical questions needed discussion. The Council discussed that the assessment of four workers per 1,000 square feet could be a misstatement. That assessment was a critical part of the nexus study. The study had a tremendous impact on parking structures, roadways, and transportation. Chair Burt asked to which study Council Member Schmid was referring. Council Member Schmid commented that the Transportation Fee and Traffic Impact Fee implied certain assumptions about development. Vice Mayor Shepherd believed Council Member Schmid was referring to a study to change the assessment of four workers per 1,000 square foot. Council Member Schmid referenced the Planning Director's statement in January 2013 that the City needed to update the Traffic and Parking Study because the numbers were outdated. Chair Burt was unclear to which study he was referring as the Planning Director's statement was a specific study in a specific timeframe. He agreed there was an issue. He understood the City historically framed Impact Fees as dollars per square foot. The Council was not sure that was the correct metric. If the Council implemented a Business License Tax linked to number of employees, then businesses with differing employees per square foot MINUTES Page 15 of 39 Finance Committee Regular Meeting Minutes 11/5/13 needed to pay the same amount per square foot but would suffer radically different impacts. Council Member Schmid reported the table contained four or five assumptions about things that had tremendous impacts on the nexus. He asked when the Council would have an opportunity to discuss that within the timeline. Mr. Nate Perez requested updated demographics from the Planning Department three times. He mentioned that the demographics would be front and center in the Nexus Study. He had competing demographic data sources, which he vetted and adjusted to reflect Council Member Schmid's concerns. He noted that he could provide a review of demographics as well. Council Member Schmid expressed an interest in an actual number and a methodology to vet that number. Mr. Lalo Perez noted DTA recommended updating the Citywide Transportation Fee. He inquired whether Council Member Schmid's concern would be part of the Nexus Study review, even though Staff did not propose updating all fees. Mr. Nate Perez indicated Council Member Schmid was concerned that utilizing the existing Transportation Fee Study with new demographics would result in a different fee without changing the improvements. Council Member Schmid was asking DTA to review both the improvements and the demographics. Council Member Schmid inquired whether that would be part of the March 2014 presentation to the Council. Mr. Lalo Perez indicated that was the Committee's decision. The intent of the timeline was to update the Capital Needs List as soon as possible to be able to collect fees from projects creating incremental impacts. The Committee was able to direct Staff with respect to a different timeline. Council Member Schmid was concerned that the information would be overshadowed by the proposed Budget. Chair Burt concurred that there was an issue. He asked if the Nexus Study could be presented to the Committee before the Council. Mr. Lalo Perez indicated Staff could present it to the Committee prior to the Council. MINUTES Page 16 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Chair Burt wanted the Committee to review the Nexus Study without delaying the timeline. Mr. Lalo Perez needed to ensure Staff could meet the timeline and would notify the Committee in the January 2014 update. Mr. Nate Perez noted that providing a Capital Needs List before the Nexus Study seemed bizarre. Chair Burt expressed concern with respect to new residents versus commercial space and employees. He was not able to recall whether certain fees were apportioned. Public Safety and Transportation Fees were able to be fully apportioned to new employees. He thought new employees living outside Palo Alto would probably not utilize parks, community centers, and libraries as much as residents. Utilizing the same ratio between Residential and Commercial Fees most likely did not apply equally for each category. Mr. Nate Perez concurred that the same ratio did not always apply equally. Vice Mayor Shepherd asked if Staff recommended the Committee to approve the Capital Needs List. Mr. Lalo Perez answered yes. Vice Mayor Shepherd felt the Item should be presented to the Council on the Consent Calendar to make the Council aware of the Capital Needs List and its contents. She asked if the Capital Needs List would be final when it was presented to the Council. Mr. Lalo Perez reported the Capital Needs List would be final once the Council approved it. Vice Mayor Shepherd inquired whether projects could be added to the Capital Needs List once the Council approved it. Mr. Lalo Perez believed the timeline would be delayed if projects were added to the Capital Needs List. Chair Burt noted the Staff recommendation implied it would be presented to the Council. Vice Mayor Shepherd asked if Staff wanted to present the Item to the Council as an Action Item. MINUTES Page 17 of 39 Finance Committee Regular Meeting Minutes 11/5/13 Mr. Lalo Perez indicated that was the Committee's decision. If it was a Consent Item, the Council could provide Staff with comments or remove it from Consent Calendar. Chair Burt explained that if the Committee voted unanimously, the Item would be placed on the Consent Calendar; although, the Mayor and City Manager were able to move it to an Action Item. Council Member Schmid felt the Item was too important for the Consent Calendar and that the Council needed to review the list to prepare for the Nexus Study. MOTION: Council Member Schmid moved, seconded by Vice Mayor Shepherd to recommend the City Council approve, on the Action Agenda, the Development Impact Fee Capital Needs List. Vice Mayor Shepherd suggested the Staff Report to the Council feature the proposed new fees. Chair Burt referenced the fact that the City had not charged fees for major remodels. The definition of major remodel was revised a few years ago. He wished to have a valid distinction made for remodeling. Vice Mayor Shepherd understood an Impact Fee applied to a new family building a new place to live in Palo Alto. Chair Burt indicated that was not a definition, but it was useful for discussion. He noted the comparisons to other cities did not include a percentage of the value of the constructed property. That was a better indication of whether fees were at or below the mean. He inquired whether that metric would be appropriate for comparing fees. Mr. Nate Perez added that he could utilize the appraised value to provide that information. MOTION PASSED: 4-0 3a. (Formerly Agenda Item Number 1) Audit of Contract Oversight: Trenching and the Installation of Electric Substructure. Houman Boussina, Acting City Auditor reviewed the Utilities Department's $1.9 million contract with Casey Construction to determine if the Utilities Department effectively managed its contract in accordance with contract City of Palo Alto (ID # 4316) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: FY 2014 Sidewalk, Curb and Gutter Repairs Project Title: Approval of a Contract With Spencon Construction, Inc. In The Amount of $2,170,412 For The FY 2014 Sidewalk, Curb and Gutter Repairs Project From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve and authorize the City Manager or his designee to execute the attached contract with Spencon Construction, Inc.(Attachment A) in the amount of $2,170,412 for FY 2014 Sidewalk, Curb and Gutter Repairs Project,Sidewalk Repairs Project PO-89003, Curb & Gutter Repairs Project PO-12001, and Street Maintenance Project PE-86070; and 2.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Spencon Construction, Inc.for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $217,000. Discussion Project Description The work to be performed under this contract is for sidewalk,curb, gutter, and asphalt pavement repairs; and Portland cement concrete and asphalt recycling. The sidewalk, curb, and gutter repairs locations are shown on the attached Location Maps and Location Lists (Attachment B). The three separate capital City of Palo Alto Page 2 projects have been combined for administrative efficiency and as an attempt to generate lower bid prices for a larger quantity of concrete work. The curb and gutter project represents approximately $222,850 of the total proposed contract award amount. The ongoing sidewalk portion of this contract will address sidewalk deficiencies in Sidewalk Replacement Districts 15, 35, and half of 33 that encompass Walnut Grove, Palo Alto Orchards, Green Acres, Southgate,and portions of Charleston Meadow and Ventura neighborhoods. Each year this project addresses one or two of the 23 Sidewalk Replacement Districts. With the increase in funding this year, this project was able to address more than two districts. The current cycle traversing the City (District by District) started in 1986. At the end of this proposed contract, four Sidewalk Replacement Districts will remain to be addressed by the ongoing program. The curb and gutter portion of the project includes repairs of more than forty curb and gutter locations throughout the City that have been lifted by tree roots and have ponding problems. These curb and gutter locations are selected from a list of locations reported by the public and evaluated by Public Works staff. This project concentrates on curb and gutter repair requests that are not corrected by other projects such as the annual street maintenance overlay project. The Curb and Gutter Repair Project began in 2012 and is an ongoing project. In order to minimize disruption and maintain safety for students the work near schools will be done during the school spring and summer breaks. The schools affected are Gunn High School, Terman Middle School and Briones Elementary School. The project also includes sidewalk repairs in intensive-use areas in the University Avenue downtown area and twenty “hot-spot” sidewalk replacements outside the Sidewalk Replacement Districts. “Hot-spot” sidewalk locations are identified through feedback received from the public and are typically performed by the City in-house crew;however, twenty “hot-spot” locations will be repaired by this project and will reduce the backlog in the list of “hot-spot” locations. Work in downtown and other intensive use areas will be stopped during lunch hours to City of Palo Alto Page 3 minimize the inconvenience to restaurants, merchants and the public. Staff will also use other outreach methods such as NextdoorNeighbor and the City’s website to notify the public. In addition, staff will interface with the Palo Alto Downtown Business and Professional Association, neighborhood associations, and other organizations and businesses as appropriate. This contract also includes the construction of eighty-eight curb ramps with detectable warning surfaces in compliance with the American with Disabilities Act (ADA). The ramps will include street names stamped on the curb ramp and a standardized detectable warning surface feature to warn visually impaired people of potential hazards in their path of travel. Detectable warning surfaces used in this project will consist of a surface of truncated domes aligned in a square grid pattern; are yellow in color at yellow crosswalks and dark grey in color at all other locations. Yellow panels will be used where dark grey panels do not provide the required contrast ratio. The domes are in compliance with Federal Highway Administration requirements enforcing the use of truncated domes on Federal, State and local level projects and also in accordance with the 2007 Public Works Standard Drawings and Specifications. Bid Process On November 26, 2013, a notice inviting formal bids (IFB) for the FY 2014 Sidewalk, Curb and Gutter Repairs Project was posted at City Hall, and sent to 10 builder’s exchanges and six contractors. The bidding period was twenty one days. Bids were received from 6 qualified contractors on December 17, 2013 as listed on the attached Bid Summary (Attachment C). Summary of Bid Process Bid Name/Number FY 2014 Sidewalk, Curb & Gutter Repairs / IFB #152497 Proposed Length of Project 365 calendar days Number of Bids Mailed to Contractors 6 Number of Bids Mailed to 10 City of Palo Alto Page 4 Builder’s Exchanges Total Days to Respond to Bid 21 Pre-Bid Meeting?No Number of Company Attendees at Pre-Bid Meeting NA Number of Bids Received:6 Bid Price Range From a low of $2,170,412 to a high of $4,925,207 Bids ranged from a high of $4,925,207 to a low bid of $2,170,412. The low bid is 3% below the engineer’s estimate of $2,241,810, while the high bid is 120% above the engineer’s estimate. Staff has reviewed all bids and recommends that the bid of $2,170,412 submitted by Spencon Construction, Inc.be accepted and that Spencon Construction, Inc.be declared the lowest responsible bidder. Funding is available to award all three Add Alternates in the amount of $93,300.Add Alternates #1 & #2 provide for additional locations for sidewalk repair, and Add Alternate #3 provides for additional locations for curb and gutter repair. Therefore,staff is recommending including these in the contract for a total of $2,170,412. Per the instructions on the IFB, the Add Alternates were not considered in the basis for award. This was also made clear to the bidders on the actual bid form. The change order amount of $217,000, which equals 10 percent of the total contract, is requested for related, additional but unforeseen work which may develop during the project. Staff checked references supplied by the contractor for previous work performed and found no significant complaints. Staff also checked with the Contractor's State License Board and found that the contractor has an active license on file and has no outstanding complaints. Project Coordination The work included in this contract was coordinated with other capital projects at the monthly Utilities/Public Works department street work coordination meetings and by use of the GIS project coordination program. The purpose of the monthly City of Palo Alto Page 5 street work coordination meeting is to coordinate the installation, replacement, and repairs of City’s subsurface infrastructure (utilities) and street and sidewalk improvements with the annual street maintenance plan. The FY 2014 Sidewalk, Curb and Gutter Repairs Project has no conflicts with the other upcoming Public Works and Utility projects. Resource Impact Funds for this project are available in Capital Improvement Program (CIP) Projects:PO-89003 Sidewalk Repairs, PO-12001 Curb & Gutter Repairs, and PE- 86070 Street Maintenance. The funding allocation is as follows: Funding Source Contract Contingency Total Encumbrance 1 PO-89003 $1,415,910 $141,500 $1,557,410 2 PO-12001 $222,849 $22,500 $245,349 3 PE-86070 $531,653 $53,000 $584,653 Totals $2,170,412 $217,000 $2,387,412 Environmental Review This project is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301c of the CEQA guidelines as repair, maintenance and/or minor alteration of the existing facilities and no further environmental review is necessary. Attachments: ·A -Contract (PDF) ·B -Maps & Street List (PDF) ·C -Bid Summaries (PDF) Invitation for Bid (IFB) Package 1 Rev. July 2012 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT Contract No. C14152497 City of Palo Alto and Spencon Construction, Inc. PROJECT FY 2014 Sidewalk, Curb and Gutter Repairs Project Invitation for Bid (IFB) Package 2 Rev. July 2012 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1. INCORPORATION OF RECITALS AND DEFINITIONS……………………………….. .................... 5 1.1 Recitals .............................................................................................................. 5 1.2 Definitions .......................................................................................................... 5 SECTION 2. THE PROJECT……………………………………………………………………………… .............................. 5 SECTION 3. THE CONTRACT DOCUMENTS…………………………………………………………. ......................... 5 3.1 List of Documents …………………………………………………………………………………………. ..... 5 3.2 Order of Precedence …………………………………………………………………………… ............... 6 SECTION 4. THE WORK ………………………………………………………………………………….............................. 7 SECTION 5. PROJECT TEAM ………………………………………………………………………….. ............................. 7 SECTION 6. TIME OF COMPLETION ………………………………………………………………….. .......................... 7 6.1 Time Is of Essence ....................................................................................... ……… 7 6.2 Commencement of Work .................................................................................... 7 6.3 Contract Time ..................................................................................................... 7 6.4 Liquidated Damages ........................................................................................... 7 6.4.1 Entitlement……………………………………………………………………………………………. 7 6.4.2 Daily Amount…………………………………………………………………………………………. 8 6.4.3 Exclusive Remedy………………………………………………………………………………….. 8 6.4.4 Other Remedies…………………………………………………………………………………... 8 6.5 Adjustments to Contract Time ......................................................................... … 8 SECTION 7. COMPENSATION TO CONTRACTOR………………………………………………………………………... 8 7.1 Contract Sum ……………………………………………………………………………………………………… 1 7.2 Full Compensation …………………………………………………………………………………………….. 9 7.3 Compensation for Extra or Deleted Work …………………………………………………………….9 7.3.1 Self Performed Work………………………………………………………………………………… 9 7.3.2 Subcontractors…………………………………………………………………………………………. 9 SECTION 8. STANDARD OF CARE .................................................................................................. 9 SECTION 9. INDEMNIFICATION .................................................................................................... 10 9.1 Hold Harmless…………………………………………………………………………………………………….. 10 9.2 Survival………………………………………………………………………………………………………………. 10 SECTION 10. NONDISCRIMINATION ............................................................................................. 10 SECTION 11. INSURANCE AND BONDS ......................................................................................... 10 Invitation for Bid (IFB) Package 3 Rev. July 2012 CONSTRUCTION CONTRACT SECTION 12. PROHIBITION AGAINST TRANSFERS ......................................................................... 11 SECTION 13. NOTICES .................................................................................................................. 11 13.1 Method of Notice ………………………………………………………………………………………………..11 13.2 Notice Recipients ................................................................................................ 11 13.3 Change of Address .............................................................................................. 12 14.1 Resolution of Contract Disputes .......................................................................... 12 14.2 Resolution of Other Disputes .............................................................................. 12 14.2.1 Non-Contract Disputes ……………………………………………………………………………….12 14.2.2 Litigation, City Election ……………………………………………………...........................13 14.3 Submission of Contract Dispute …………………………………………………………………………..13 14.3.1 By Contractor …………………………………………………………………………………………. 13 14.3.2 By City ……………………………………………………………………………………………………. 13 14.4 Contract Dispute Resolution Process .............................................................. …… 13 14.4.1 Direct Negotiation………………………………………………………………………… ………….13 14.4.2 Deferral of Contract Disputes ………………………………………………………………… 14 14.4.3 Mediation ………………………………………………………………………………………………….14 14.4.4 Binding Arbitration ……………………………………………………………………………………15 14.5 Non-Waiver …………………………………………………………………………………………………………16 SECTION 15. DEFAULT ................................................................................................................. 16 15.1 Notice of Default ................................................................................................ 16 15.2 Opportunity to Cure Default ............................................................................... 16 SECTION 16. CITY'S RIGHTS AND REMEDIES ................................................................................. 16 16.1 Remedies Upon Default ...................................................................................... 16 16.1.1 Delete Certain Servic………………………………………………………...........................16 16.1.2 Perform and Withhold ……………………………………………………………………………. 16 16.1.3 Suspend The Construction Contract ………………………………………………………….16 16.1.4 Terminate the Construction Contract for Default ……………………………………..17 16.1.5 Invoke the Performance Bond ………………………………………………………………….17 16.1.6 Additional Provisions ……………………………………………………………………………….17 16.2 Delays by Sureties .............................................................................................. 17 16.3 Damages to City ................................................................................................. 17 16.3.1 For Contractor's Default …………………………………………………………………………..17 16.3.2 Compensation for Losses ………………………………………………………………………….17 16.5 Suspension by City for Convenience .................................................................... 18 16.6 Termination Without Cause ................................................................................ 18 Invitation for Bid (IFB) Package 4 Rev. July 2012 CONSTRUCTION CONTRACT 16.6.1 Compensation ………………………………………………………………………………………….18 16.6.2 Subcontractors …………………………………………………………………………………………18 16.7 Contractor’s Duties Upon Termination ................................................................ 19 SECTION 17. CONTRACTOR'S RIGHTS AND REMEDIES .................................................................. 19 17.1 Contractor’s Remedies ........................................................................................ 19 17.1.1 For Work Stoppage ………………………………………………………………………………….. 19 17.1.2 For City's Non-Payment …………………………………………………………………………… 19 17.2 Damages to Contractor ....................................................................................... 19 SECTION 18. ACCOUNTING RECORDS .......................................................................................... 19 18.1 Financial Management and City Access ......................................................... ……. 19 18.2 Compliance with City Requests ....................................................................... …. 20 SECTION 19. INDEPENDENT PARTIES ........................................................................................... 20 SECTION 20. NUISANCE ............................................................................................................... 20 SECTION 21. PERMITS AND LICENSES........................................................................................... 20 SECTION 22. WAIVER .................................................................................................................. 20 SECTION 23. GOVERNING LAW .................................................................................................... 20 SECTION 24. COMPLETE AGREEMENT .......................................................................................... 21 SECTION 25. SURVIVAL OF CONTRACT ......................................................................................... 21 SECTION 26. PREVAILING WAGES ................................................................................................ 21 SECTION 27. NON APPROPRIATION ............................................................................................. 21 SECTION 28. GOVERNMENTAL POWERS ...................................................................................... 21 SECTION 29. ATTORNEY FEES ...................................................................................................... 21 SECTION 30. COUNTERPARTS ...................................................................................................... 22 SECTION 31. SEVERABILITY .......................................................................................................... 22 Invitation for Bid (IFB) Package 5 Rev. July 2012 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on February 10, 2014 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and SPENCON CONSTRUCTION, INC. ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a Corporation duly organized and in good standing in the State of California, Contractor’s License Number 820205. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On November 26, 2013, City issued an Invitation for Bids (IFB) to contractors for the FY 2014 Sidewalk, Curb And Gutter Repairs (“Project”). In response to the IFB, Contractor submitted a bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Bid Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the construction of the FY 2014 Sidewalk, Curb and Gutter Repairs ("Project"). SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Change Orders Invitation for Bid (IFB) Package 6 Rev. July 2012 CONSTRUCTION CONTRACT 3) Contract 4) Project Plans and Drawings 5) Technical Specifications 6) Special Provisions 7) Notice Inviting Bids 8) Instructions to Bidders 9) General Conditions 10) Bidding Addenda 11) Invitation for Bids 12) Contractor's Bid/Non-Collusion Affidavit 13) Reports listed in the Bidding Documents 14) Public Works Department’s Standard Drawings and Specifications dated 2007 and updated from time to time 15) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards dated 2005 and updated from time to time 16) City of Palo Alto Traffic Control Requirements 17) City of Palo Alto Truck Route Map and Regulations 18) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 19) Performance and Payment Bonds 20) Insurance Forms 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. Invitation for Bid (IFB) Package 7 Rev. July 2012 CONSTRUCTION CONTRACT SECTION 4 THE WORK. The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other things necessary for Contractor to perform its obligations and complete the Project, including, without limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable Code Requirements. SECTION 5 PROJECT TEAM. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Project requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed not later than . within Three Hundred Sixty Five calendar days (365) after the commencement date specified in City’s Notice to Proceed. 6.4 Liquidated Damages. 6.4.1 Entitlement. City and Contractor acknowledge and agree that if Contractor fails to fully and satisfactorily complete the Work within the Contract Time, City will suffer, as a result of Contractor’s failure, substantial damages which are both extremely difficult and impracticable to ascertain. Such damages may include, but are not limited to: (i) Loss of public confidence in City and its contractors and consultants. (ii) Loss of public use of public facilities. (iii) Extended disruption to public. Invitation for Bid (IFB) Package 8 Rev. July 2012 CONSTRUCTION CONTRACT 6.4.2 Daily Amount. City and Contractor have reasonably endeavored, but failed, to ascertain the actual damage that City will incur if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time. Therefore, the parties agree that in addition to all other damages to which City may be entitled other than delay damages, in the event Contractor shall fail to achieve Substantial Completion of the entire Work within the Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per day for each Day occurring after the expiration of the Contract Time until Contractor achieves Substantial Completion of the entire Work. The liquidated damages amount is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. 6.4.3 Exclusive Remedy. City and Contractor acknowledge and agree that this liquidated damages provision shall be City’s only remedy for delay damages caused by Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.4.4 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and agreed to by Change Order executed by City and Contractor in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. Invitation for Bid (IFB) Package 1 Rev. July 2012 CONSTRUCTION CONTRACT 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Two Million One Hundred Seventy Thousand Four Hundred Twelve Dollars ($2,170,412). [This amount includes the Base Bid and Add Alternates : #1 $47,600, #2 $22,600, & #3 $23,100.] / / / / Invitation for Bid (IFB) Package 9 Rev. July 2012 CONSTRUCTION CONTRACT 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work. The Contract Sum may only be adjusted for Change Orders issued, executed and satisfactorily performed in accordance with the requirements of the Contract Documents. 7.3 Compensation for Extra or Deleted Work. The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving Extra Work or Deleted Work based on one or more of the following methods to be selected by City: 1. Unit prices stated in the Contract Documents or agreed upon by City and Contractor, which unit prices shall be deemed to include Contractor Markup and Subcontractor/Sub-subcontractor Markups permitted by this Section. 2. A lump sum agreed upon by City and Contractor, based on the estimated Allowable Costs and Contractor Markup and Subcontractor Markup computed in accordance with this Section. 3. Contractor’s Allowable Costs, plus Contractor Markup and Subcontractor Markups applicable to such Extra Work computed in accordance with this Section. Contractor Markup and Subcontractor/Sub-subcontractor Markups set forth herein are the full amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors and Sub-subcontractors, of every Tier. When using this payment methodology, Contractor Markup and Subcontractor/Sub-subcontractor Markups, which shall not be compounded, shall be computed as follows: 7.3.1 Markup Self-Performed Work. 10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by Contractor with its own forces. 7.3.2 Markup for Work Performed by Subcontractors. 15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by a first Tier Subcontractor. SECTION 8 STANDARD OF CARE. Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. Invitation for Bid (IFB) Package 10 Rev. July 2012 CONSTRUCTION CONTRACT SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and all Losses arising directly or indirectly from, or in any manner relating to any of, the following: (i) Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub- subcontractors, of any tier; (ii) Performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of any of the obligations under the Contract Documents; (iii) The construction activities of Contractor or its Subcontractors or Sub-subcontractors, of any tier, either on the Site or on other properties; (iv) The payment or nonpayment by Contractor to any of its employees, Subcontractors or Sub-subcontractors of any tier, for Work performed on or off the Site for the Project; and (v) Any personal injury, property damage or economic loss to third persons associated with the performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of the Work. However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses resulting from the sole or active negligence or willful misconduct of the Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. As set 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 will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Failure to do so shall be deemed a material breach of this Construction Contract. Invitation for Bid (IFB) Package 11 Rev. July 2012 CONSTRUCTION CONTRACT SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract based upon the stated experience and qualifications of the Contractor and its subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (v) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Administration 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Holly Boyd Or Invitation for Bid (IFB) Package 12 Rev. July 2012 CONSTRUCTION CONTRACT City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. All notices, demands, requests or approvals from City to Contractor shall be addressed to: Spencon Construction, Inc. P.O. Box 1220 Danville, Ca 94526 Attn: Steve Stahl 925.984.2581 13.3 Change of Address. In the event of any change of address, the moving party shall notify the other party of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. SECTION 14 DISPUTE RESOLUTION. 14.1 Resolution of Contract Disputes. Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section 14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such Contract Disputes. 14.2 Resolution of Other Disputes. 14.2.1 Non-Contract Disputes. Contract Disputes shall not include any of the following: (i) Penalties or forfeitures prescribed by statute or regulation imposed by a governmental agency; (ii) Third party tort claims for personal injury, property damage or death relating to any Work performed by Contractor or its Subcontractors or Sub-subcontractors of any tier; (iii) False claims liability under California Government Code Section 12650, et. seq.; (iv) Defects in the Work first discovered by City after Final Payment by City to Contractor; (v) Stop notices; or (vi) The right of City to specific performance or injunctive relief to compel performance of any provision of the Contract Documents. Invitation for Bid (IFB) Package 13 Rev. July 2012 CONSTRUCTION CONTRACT 14.2.2 Litigation, City Election. Matters that do not constitute Contract Disputes shall be resolved by way of an action filed in the Superior Court of the State of California, County of Santa Clara, and shall not be subject to the Contract Dispute Resolution Process. However, the City reserves the right, in its sole and absolute discretion, to treat such disputes as Contract Disputes. Upon written notice by City of its election as provided in the preceding sentence, such dispute shall be submitted by the parties and finally decided pursuant to the Contract Dispute Resolution Process in the manner as required for Contract Disputes, including, without limitation, City’s right under Paragraph 14.4.2 to defer resolution and final determination until after Final Completion of the Work. 14.3 Submission of Contract Dispute. 14.3.1 By Contractor. Contractors may commence the Contract Dispute Resolution Process upon City's written response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.10 of the General Conditions. Contractor shall submit a written Statement of Contract Dispute (as set forth below) to City within seven (7) Days after City rejects all or a portion of Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a timely manner shall result in City’s decision by City on the Claim becoming final and binding. Contractor’s Statement of Contract Dispute shall be signed under penalty of perjury and shall state with specificity the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the asserted effect on the Contract Sum and the Contract Time. The Statement of Contract Dispute shall include adequate supporting data to substantiate the disputed Claim. Adequate supporting data for a Contract Dispute relating to an adjustment of the Contract Time shall include both of the following: (i) All of the scheduling data required to be submitted by Contractor under the Contract Documents to obtain extensions of time and adjustments to the Contract Time and (ii) A detailed, event-by-event description of the impact of each event on completion of Work. Adequate data to support a Statement of Contract Dispute involving an adjustment of the Contract Sum must include both of the following: (a) A detailed cost breakdown and (b) Supporting cost data in such form and including such information and other supporting data as required under the Contract Documents for submission of Change Order Requests and Claims. 14.3.2 By City. City's right to commence the Contract Dispute Resolution Process shall arise at any time following City's actual discovery of the circumstances giving rise to the Contract Dispute. City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor. A Statement of Contract Dispute submitted by City shall state the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the damages or other relief claimed by City as a result of such events. 14.4 Contract Dispute Resolution Process. The parties shall utilize each of the following steps in the Contract Dispute Resolution Process in the sequence they appear below. Each party shall participate fully and in good faith in each step in the Contract Dispute Resolution Process, and good faith effort shall be a condition precedent to the right of each party to proceed to the next step in the process. 14.4.1 Direct Negotiations. Designated representatives of City and Contractor shall meet as soon as possible (but not later than ten (10) Days after receipt of the Statement of Contract Dispute) in a good Invitation for Bid (IFB) Package 14 Rev. July 2012 CONSTRUCTION CONTRACT faith effort to negotiate a resolution to the Contract Dispute. Each party shall be represented in such negotiations by an authorized representative with full knowledge of the details of the Claims or defenses being asserted by such party in the negotiations, and with full authority to resolve such Contract Dispute then and there, subject only to City’s obligation to obtain administrative and/or City Council approval of any agreed settlement or resolution. If the Contract Dispute involves the assertion of a right or claim by a Subcontractor or Sub-subcontractor, of any tier, against Contractor that is in turn being asserted by Contractor against City (“Pass-Through Claim”), then the Subcontractor or Sub-Subcontractor shall also have a representative attend the negotiations, with the same authority and knowledge as described above. Upon completion of the meeting, if the Contract Dispute is not resolved, the parties may either continue the negotiations or any party may declare negotiations ended. All discussions that occur during such negotiations and all documents prepared solely for the purpose of such negotiations shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.2 Deferral of Contract Disputes. Following the completion of the negotiations required by Paragraph 14.4.1, all unresolved Contract Disputes shall be deferred pending Final Completion of the Project, subject to City’s right, in its sole and absolute discretion, to require that the Contract Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that have been deferred until Final Completion shall be consolidated within a reasonable time after Final Completion and thereafter pursued to resolution pursuant to this Contract Dispute Resolution Process. The parties can continue informal negotiations of Contract Disputes; provided, however, that such informal negotiations shall not be alter the provisions of the Agreement deferring final determination and resolution of unresolved Contract Disputes until after Final Completion. 14.4.3 Mediation. If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph 14.4.1, the parties shall submit the Contract Dispute to non-binding mediation before a mutually acceptable third party mediator. .1 Qualifications of Mediator. The parties shall endeavor to select a mediator who is a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in mediating public works construction disputes. In addition, the mediator shall have at least twenty (20) hours of formal training in mediation skills. .2 Submission to Mediation and Selection of Mediator. The party initiating mediation of a Contract Dispute shall provide written notice to the other party of its decision to mediate. In the event the parties are unable to agree upon a mediator within fifteen (15) Days after the receipt of such written notice, then the parties shall submit the matter to the American Arbitration Association (AAA) at its San Francisco Regional Office for selection of a mediator in accordance with the AAA Construction Industry Mediation Rules. .3 Mediation Process. The location of the mediation shall be at the offices of City. The costs of mediation shall be shared equally by both parties. The mediator shall provide an independent assessment on the merits of the Contract Dispute and recommendations for resolution. All discussions that occur during the mediation and all documents prepared solely for the purpose of the mediation shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. Invitation for Bid (IFB) Package 15 Rev. July 2012 CONSTRUCTION CONTRACT 14.4.4 Binding Arbitration. If the Contract Dispute is not resolved by mediation, then any party may submit the Contract Dispute for final and binding arbitration pursuant to the provisions of California Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be final and may be entered as a judgment by any court of competent jurisdiction. Such arbitration shall be conducted in accordance with the following: .1 Arbitration Initiation. The arbitration shall be initiated by filing a complaint in arbitration in accordance with the regulations promulgated pursuant to California Public Contract Code Section 10240.5. .2 Qualifications of the Arbitrator. The arbitrator shall be approved by all parties. The arbitrator shall be a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in arbitrating public works construction disputes. In addition, the arbitrator shall have at least twenty (20) hours of formal training in arbitration skills. In the event the parties cannot agree upon an arbitrator, the provisions of California Public Contract Code Section 10240.3 shall be followed in selecting an arbitrator possessing the qualifications required herein. .3 Hearing Days and Location. Arbitration hearings shall be held at the offices of City and shall, except for good cause shown to and determined by the arbitrator, be conducted on consecutive business days, without interruption or continuance. .4 Hearing Delays. Arbitration hearings shall not be delayed except upon good cause shown. .5 Recording Hearings. All hearings to receive evidence shall be recorded by a certified stenographic reporter, with the costs thereof borne equally by City and Contractor and allocated by the arbitrator in the final award. .6 Limitation of Depositions. The parties may conduct discovery in accordance with the provisions of section 10240.11 of the Public Contract Code; provided, however, that depositions shall be limited to both of the following: (i) Ten (10) percipient witnesses for each party and 5 expert witnesses per party. Upon a showing of good cause, the arbitrator may increase the number of permitted depositions. An individual who is both percipient and expert shall, for purposes of applying the foregoing numerical limitation only, be deemed an expert. Expert reports shall be exchanged prior to receipt of evidence, in accordance with the direction of the arbitrator, and expert reports (including initial and rebuttal reports) not so submitted shall not be admissible as evidence. .7 Authority of the Arbitrator. The arbitrator shall have the authority to hear dispositive motions and issue interim orders and interim or executory awards. Invitation for Bid (IFB) Package 16 Rev. July 2012 CONSTRUCTION CONTRACT .8 Waiver of Jury Trial. Contractor and City each voluntarily waives its right to a jury trial with respect to any Contract Dispute that is subject to binding arbitration in accordance with the provisions of this Paragraph 14.4.4. Contractor shall include this provision in its contracts with its Subcontractors who provide any portion of the Work. 14.5 Non-Waiver. Participation in the Contract Dispute Resolution Process shall not waive, release or compromise any defense of City, including, without limitation, any defense based on the assertion that the rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by Contractor due to Contractor’s failure to comply with the Contract Documents, including, without limitation, Contractor’s failure to comply with any time periods for providing notice of requests for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting documentation of Claims. SECTION 15 DEFAULT. 15.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract. 15.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. SECTION 16 CITY'S RIGHTS AND REMEDIES. 16.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 15, then City may pursue any remedies available under law or equity, including, without limitation, the following: 16.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 16.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 16.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no Invitation for Bid (IFB) Package 17 Rev. July 2012 CONSTRUCTION CONTRACT obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 16.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 15. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 16.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 16.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 16.2 Delays by Sureties. Without limiting to any of City’s other rights or remedies, City has the right to suspend the performance of the Work by Contractor’s sureties in the event of any of the following: (i) The sureties’ failure to begin Work within a reasonable time in such manner as to insure full compliance with the Construction Contract within the Contract Time; (ii) The sureties’ abandonment of the Work; (iii) If at any time City is of the opinion the sureties’ Work is unnecessarily or unreasonably delaying the Work; (iv) The sureties’ violation of any terms of the Construction Contract; (v) The sureties’ failure to perform according to the Contract Documents; or (vi) The sureties’ failure to follow City’s instructions for completion of the Work within the Contract Time. 16.3 Damages to City. 16.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 16.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the Project. If City incurs Losses due to Contractor’s default, then the amount of Losses shall be deducted from the amounts withheld. Should the amount withheld exceed the amount deducted, the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the difference and shall promptly remit same to City. Invitation for Bid (IFB) Package 18 Rev. July 2012 CONSTRUCTION CONTRACT 16.4 Suspension by City for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 16.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole by giving thirty (30) Days written notice to Contractor. The compensation allowed under this Paragraph 16.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. 16.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 16.5, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors and Sub-subcontractors for: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. 16.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. Invitation for Bid (IFB) Package 19 Rev. July 2012 CONSTRUCTION CONTRACT 16.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description, in writing no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES. 17.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 17.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 17.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 17.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 16.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 18 ACCOUNTING RECORDS. 18.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally Invitation for Bid (IFB) Package 20 Rev. July 2012 CONSTRUCTION CONTRACT accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) final payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. 18.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 18 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 18.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 19 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. SECTION 20 NUISANCE. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 21 PERMITS AND LICENSES. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 22 WAIVER. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. SECTION 23 GOVERNING LAW. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California. Invitation for Bid (IFB) Package 21 Rev. July 2012 CONSTRUCTION CONTRACT SECTION 24 COMPLETE AGREEMENT. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 25 SURVIVAL OF CONTRACT. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 26 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. Or The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations. Copies of these rates may be obtained at cost at the Purchasing office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of the Labor Code. SECTION 27 NON APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 28 AUTHORITY. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 29 ATTORNEY FEES. Each Party shall bear its own costs, including attorney’s fees through the completion of mediation. If the claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2, 22 Invitation for Bid (IFB) Package Rev. July 2012 CONSTRUCTION CONTRACT the prevailing party in any action brought to enforce the provision of this Agreement may recover its reasonable costs and attorney’s fees expended in connection with that action. The prevailing party shall 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 attorney’s’ fees paid to third parties. SECTION 30 COUNTERPARTS This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 31 SEVERABILITY. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO ____________________________ Purchasing Manager City Manager APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney APPROVED: ___________________________ Public Works Director CONTRACTOR SPENCON CONSTRUCTION, INC. By:___________________________ Name:_________________________ Title:________________________ City of Palo Alto (ID # 4417) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Amendment MV Transportation Contract Title: Approval of Amendment No. 1 to Contract with MV Transportation to Extend the Term Until June 30, 2014 and Add $75,000 for Provision of Regular Shuttle Services for Crosstown Route and Additional Shuttle Service During the Construction of California Avenue Streetscape Project From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve and authorize the City Manager to execute Amendment No. One (Attachment A) with MV Transportation to extend the term until June 30th, 2014 and add $75,000 for provision of regular shuttle services for the Crosstown Shuttle Route and additional shuttle service during the construction of the California Avenue Streetscape project. Background The City of Palo Alto has provided two community shuttle routes since 1999, the Crosstown Shuttle connecting the University Avenue Downtown Business District and the Midtown District and the Embarcadero Shuttle route connecting the University Avenue Caltrain Station with the business parks east of Highway 101 along Embarcadero Road. The Crosstown Route, in addition to serving the Midtown District, also serves both JLS and Jordan middle schools during the morning and afternoon bell schedules. The Crosstown Shuttle route is funded and managed 100% by the City. In January 2011, the City Council approved a three year contract with MV Transportation to provide service for the Crosstown shuttle until February 28th, 2014. A Request for Proposals (RFP) will be released in February 2014 to select a new shuttle service provider for Crosstown Shuttle route for operation from July 2014 until June 2017. The RFP release was delayed to introduce additional route options for consideration of the Council and will be discussed in February 2014 as part of an agenda item about Transportation Demand Management strategies. City of Palo Alto Page 2 The Embarcadero Shuttle connects the business parks on the east side of the City along Embarcadero Road to the University Avenue Caltrain Station. The City continues to contract with the Peninsula Corridor Joint Powers Board (JPB) for the Embarcadero Shuttle, which is a part of the Caltrain peak hour commuter shuttle program and is subsidized heavily by the JPB. The JPB contract was extended by the Council on January 13, 2014 to match the proposed June 30, 2014 term of the MV Transportation contract. Discussion In order to provide continuing operation of the Crosstown shuttle route during the RFP and vendor selection process for future services, staff is requesting that the Council approve the attached amendment to the MV Transportation Agreement (C11138195) for the next four months. Staff also recommends providing additional shuttle service to California Avenue Business District during the construction of California Avenue Streetscape project. The California Avenue Streetscape Project includes improvements between El Camino Real and the Caltrain Station at Park Avenue. The construction of this project is expected to begin in March 2014. City Staff has been working with merchants to develop and implement a business protection plan to increase patronage to the California Avenue Business District during construction activities. One of the elements of this plan is the use of City Shuttle to provide a connection between the Business District and Stanford Research Park. The proposed shuttle route as shown in attachment B was developed in conjunction with merchants input. The shuttle will operate from 11:30am- 1:30pm, Monday through Friday, with stops along Page Mill Road, Porter Drive, Hanover Street, Hansen Way, Park Boulevard and California Avenue. The service will help in reducing the number of cars in the construction zone, yet directing customers to stores and restaurants. The proposed contract extension will maintain the California Avenue shuttle route through June 30th and the operator(s) identified as part of the upcoming RFP process will maintain the route through the remainder of the construction of the California Avenue Streetscape project. Resource Impact The total contract amendment recommended in this report is $75,000. The contract extension cost of $50,000 for regular Crosstown Shuttle service was included in the Planning and Community Environment Department’s FY 2014 Operating Budget. The additional shuttle service for the California Avenue Business District will cost $25,000. There were no funds specifically earmarked for the California Avenue Business District shuttle cost in the Planning and Community Environment Department’s FY 2014 Operating Budget; however there are sufficient resources within the department to absorb this additional one-time cost. No City of Palo Alto Page 3 additional resources are required to cover the service and operating costs for the Crosstown Shuttle until June 30, 2014 or for shuttle services to California Avenue business district. The extension of this agreement with MV Transportation will not impact the contract with JPB that provides service for the Embarcadero shuttle. Policy Implications This request is consistent with existing Council direction to continue and expand the Palo Alto shuttle project. Environmental Review On August 2, 1999, the City Council approved a Negative Declaration finding the shuttle project would not result in any significant environmental impact. The extension of the existing contract and the addition of temporary service during California Streetscape project construction will not result in any new impacts that were not previously considered, and no additional review under CEQA is required. Attachments:  Attachment A: MV Transportation Contract Amendment 2 (PDF) Professional Services Rev. Nov. 1, 2011 1 AMENDMENT NO. 2 TO CONTRACT NO. C11138195 BETWEEN THE CITY OF PALO ALTO AND MV TRANSPORTATION, INC. This Amendment No. 2 to Contract No. C11138195 (“Contract”) is entered into on the 10th day of February, 2014, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MV TRANSPORTATION, INC., a California corporation, located at 5910 N. Central Expressway., Suite 1145, Dallas TX., 75206, Telephone (972) 391-4600 (“CONSULTANT”). R E C I T A L S: WHEREAS, the Contract was entered into between the parties for the provision of bus shuttle services between the Palo Alto Caltrain Station and destinations throughout the City of Palo Alto; and WHEREAS, CITY intends extend the term to June 30, 2014; and WHEREAS, CITY intends to increase the compensation from $480,744.00 by $75,000.00 to $555,744.00; and WHEREAS, CITY intends to increase the scope to include additional shuttle routes per EXHIBIT “A1”; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2014 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. Section 4 is hereby amended to read as follows: “SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”& “A1”, including both payment for professional services and reimbursable expenses, shall not exceed Five Hundred Fifty Five Thousand Seven Hundred Forty Four Dollars ($555,744.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. EXHIBIT “A1” ADDITIONAL SCOPE OF WORK Description of Services CONSULTANT shall operate shuttle buses for CITY on the Crosstown, the Special School Commute Service and Lunch time California Avenue business district routes in Palo Alto, in accordance with the schedules and routing determined by CITY. The schedules, hours of operation and routes may occasionally be altered by CITY. The shuttle routes operate Monday through Friday, excluding some holidays. The school service route operates when Palo Alto schools are in session according to the Palo Alto School District Calendar. The temporary California Avenue Business district shuttle route operates from 11:30am-1:30pm, Monday through Friday, to serve customers during the construction of streetscape project on California Avenue. CONSULTANT shall be responsible for providing all personnel and equipment needed for the service. Shuttle Route Operating Hours Total Service Hours/Vehicle Crosstown Shuttle 7:40 am-5:20 pm 9.6667 School Commute Service 7:50 am-8:01 am 0.95 8:03 am-8:25 am 3:15 pm-3:37 pm California Avenue Service 11:30 am-1:30 pm 2 Term The term of this contract shall be from March 1st, 2014 to June 30th, 2014. CITY requires a start date for Lunch time California Avenue route beginning from March 3rd, 2014. Compensation CITY will pay CONSULTANT an hourly rate of $56.56 per hour for each bus operated in this service. EXHIBIT "A1" ADDITIONAL SCOPE OF WORK EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this 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 described in Exhibit “A & A1” (“Services”) and reimbursable expenses shall not exceed $555,744.00. CONSULTANT agrees to complete all Services, including reimbursable expenses, within this amount. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $0.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. EXHIBIT “C-1” HOURLY RATE SCHEDULE Vehicle Service Approximate Other Misc. Costs Contingency Hourly Rate Rate Service Hours (GPS, Bus Wraps) Year 1 2425 2,860.00 11,500.0 60.18 Year 2 2815 360.00 57.02 Year 3 2815 360.00 56.56 Year 3 Four Month 1325 56.56 Extension Maintenance Technician 20.63 Vehicle Service Worker 9.00 City of Palo Alto (ID # 4374) City Council Staff Report Report Type: Action Items Meeting Date: 2/10/2014 City of Palo Alto Page 1 Summary Title: Parking Supply Strategies and Recommendations Title: Parking Supply Recommendations. Staff recommends that Council accept the Final Report on the Downtown Parking Garage Study and authorize staff to take the following actions aimed at increasing the parking supply in the University Avenue and California Avenue Business Districts: 1. Authorize staff to begin design and environmental review of a new parking garage (240 car capacity) on Lot G located on Gilman Avenue 2. Authorize staff to solicit qualification statements for public-private partnerships to increase parking supplies on at least one existing surface parking lot in the University Avenue area and one in the California Avenue Business District 3. Authorize staff to pursue planning grants and begin planning work for a new transit mall expansion with a 478-space parking garage on Urban Lane, in partnership with the property owner and the Joint Powers Authority 4. Authorize staff to begin design and environmental review of a 200-space satellite parking facility along Embarcadero Road – East of Geng Road-Faber Place and in the Bay Lands Athletic Center parking lot or a comparable alternate location(s), with supporting shuttle service to the University Avenue Business District 5. Authorize staff to expand parking permit sales to South of Forest Avenue (SOFA) Business District Employees at the Lot CC – Civic Center and Lot CW – Cowper Street/Webster Street parking garages 6. Authorize staff to solicit proposals for the installation of parking garage access and revenue controls aimed at collecting “real time” data on parking lot and garage occupancy, introducing flexibility for transferable permits between employees, and to support payment options for downtown visitors who park longer than three hours. From: City Manager Lead Department: Planning and Community Environment Recommendation City of Palo Alto Page 2 Staff recommends that Council accept the Final Report on the Downtown Parking Garage Study prepared by Sandis Engineering and authorize staff to take the following actions aimed at increasing parking supplies in the University Avenue and California Avenue Business Districts: 1. Authorize staff to begin design and environmental review of a new parking garage (240 car capacity) on Lot G located on Gilman Avenue; 2. Authorize staff to solicit qualification statements for public-private partnerships to increase parking supplies on at least one existing surface parking lot in the University Avenue area and one in the California Avenue Business District; 3. Authorize staff to pursue planning grants and begin planning work for a transit mall expansion and 478-space parking garage on Urban Lane, in partnership with the property owner and the Joint Powers Authority; 4. Authorize staff to begin design and environmental review of a 200-space satellite parking facility along Embarcadero Road – East of Geng Road-Faber Place and in the Baylands Athletic Center parking lot or a comparable alternate location(s), with supporting shuttle service to the University Avenue Business District; 5. Authorize staff to expand parking permit sales to South of Forest Avenue (SOFA) Business District Employees at the Lot CC – Civic Center and Lot CW – Cowper Street/Webster Street parking garages; and 6. Authorize staff to solicit proposals for the installation of parking garage access and revenue controls aimed at collecting “real time” data on parking lot and garage occupancy, introducing flexibility for transferable permits between employees, and supporting payment options for downtown visitors who park longer than three hours. Background The City began actively monitoring its downtown parking supply in 2010 with semi-annual parking occupancy counts of both on-street parking and off-street parking facilities within the Greater Downtown Area. Since that time community interest and concern regarding parking supply for both the University Avenue and California Avenue business districts has grown, especially for the Downtown University Districts. To help address parking supply concerns, the City partnered with Sandis Engineering to complete a feasibility study for parking garage construction opportunities at several Downtown surface parking lots. The Council received an update on the study on May 18, 2013 and provided staff with direction to complete the report. The final report and recommendations on the Parking Garage Study are presented within this report. To help build supply at existing garages, in the Fall of 2013 staff released a Request for Proposals to identify a preferred Parking Operator to implement a Parking Attendant Program at Lot R – High Street (South). A separate staff report (#4375) recommends award of a one- year trial project to Standard Parking Corporation for the Lot R Parking Attendant Program and includes pricing to expand the program for up to a total of three years at the Downtown garages. The City anticipates at least 42 additional parking permits being released at Lot R as a City of Palo Alto Page 3 result of the Parking Attendant Program. The first year trial program at Lot R will cost approximately $120,000 and is being funded through the University Avenue Parking Permit Fund. In addition to the parking supply initiatives presented as part of this report, Staff is also developing a set of Transportation Demand Management (TDM) strategies in response to Council direction on October 3, 2013 to develop TDM focused around improving alternative transportation mode options for both local and commuter employees in the city. Those strategies are outlined in staff report 4373 and will be presented to Council on February 24, 2014. Discussion Parking Garage Study The City partnered with the Sandis Engineering/HNH Pacific Team to study opportunities for construction of new parking garages in the University Avenue Downtown Business District on the site of existing surface parking lots. The City selected six locations for inclusion in the study based on locations where parking permit demand was the highest. One of the sites studied includes the Urban Lane Caltrain Parking Lot currently used by Caltrain for Park-and-Ride operations to support Caltrain ridership. The six surface parking lots studied include:  Lot E – Gilman Street  Lot G – Gilman Street  Lot M – High Street/Emerson Street  Lot O – Waverly Street/Hamilton Avenue  Lot P – High Street  Lot U – Urban Lane Caltrain permitted the City to include Urban Lane in the parking garage study and is supportive of the City advancing additional planning work to help identify opportunities that better support both rail operations and adjacent land uses. Parking garage construction at all sites is feasible but construction has either near-term construction or long-term land use impacts. The study includes a Parking Garage Constructability Analysis that considered the following constructability factors:  Access Points  Construction & Staging Impacts  Adjacent Land Use  Adjacent Property Impacts  Site Utility Impacts  Net Stall Gain  Cost per Stall City of Palo Alto Page 4  Site Potential for Development The Final Report – Downtown Parking Structure Feasibility Study is provided in Attachment A. The results of the parking garage study are summarized in Table 1 below and note the existing parking space counts by both Hourly and Permit allocation. As part of the parking garage option the following parking options are shown: the minimum “Structure” parking that can be provided in marked spaces in the garage, additional “Sub-Level” parking space count if subterranean parking were considered as part of the design, and additional “Stack” parking space count if a parking attendant operator were used to park vehicles within aisles of the garage. The results are also summarized by constructability ranking. Table 1 Downtown Parking Structure Feasibility Study Findings The study identifies a combined Lot EG as the preferred parking garage site because of the limited construction impacts both during and following construction to downtown businesses and its central location. However, the Downtown Farmer’s Market is currently held at this location and would be displaced as part of the construction. During the May 18, 2013 study session for this project, several Council members expressed concern regarding the massing of such a structure with a span over Gilman Avenue. For this reason, staff is not recommending that Lot EG be further advanced, and is instead recommending that Lot G be selected as the preferred site of a new parking structure. Lot G on Gilman Avenue is located directly behind the U.S. Post Office and can provide a minimum of 166 parking spaces. If subterranean parking and parking attendant operations are also implemented, a garage in this location could park up to 240 vehicles. Note that these figures are the total parking for the garage, so that the incremental increase figures over the existing 53 surface lot spaces are 113 and 187 spaces. Attachment A includes massing concepts for a proposed parking structure at Lot G in addition to typical floor layouts. Rank Lot Location Existing Parking Supply Structured Parking Supply Options Hourly Permit Total Structure Sub- Level Stack Total 1 EG Gilman Street - 87 87 268 30 88 386 2 G Gilman Street - 53 53 166 30 44 240 3 U Urban Lane 164 - 164 478 - - 478 4 D Hamilton/Waverley 86 - 86 300 60 85 445 5 O Emerson/High 78 - 78 223 45 52 320 6 E Gilman Street - 34 34 75 - 37 112 7 P High Street 51 - 54 140 55 53 248 City of Palo Alto Page 5 Recommendation No. 1 Staff recommends that Council authorize staff to begin design and environmental review on the Lot G parking garage concept. It should be noted that any new garage will increase parking permit supply. Construction of additional parking supply outside of the current parking assessment district also ensures that any new supply can serve additional business interests such as SOFA. Currently, parking permits are only sold to employees working within the Parking Assessment District Boundary in Attachment B. Public-Private Partnerships to Build Additional Parking Supply The Downtown Parking Garage Feasibility Study was a fruitful exercise for the city to help in identifying potential parking supply options on surface parking lot facilities. In April 2013 the City received an unsolicited proposal from Keenan Development Group to build a parking garage on Lot P – High Street as part of a private development project at 135 Hamilton Avenue located on the corner of Hamilton Avenue & High Street. The Council did not support the proposal but encouraged staff to consider innovative strategies such as public-private partnerships to help provide additional parking supply for the downtown. The Lot EG concepts in the Downtown Parking Garage Feasibility Study include concepts for a mixed-used office/parking garage at this site. Following the May 2013 study session on the Downtown Parking Garage Feasibility, the City also received interest from developers for public-private partnerships at other sites including Lot E and Lot G on Gilman Street as well as Lot D on Hamilton Avenue & Waverley Street. The City has also at various times considered including one or more City-owned parking lots in its inventory of housing sites to accommodate multifamily housing. Public-Private partnership opportunities can help provide an increase in City-permit parking supply as part of a lease agreement, while providing opportunities for unique development projects that contribute to the vitality of Downtown and/or California Avenue. Recommendation No. 2 Staff recommends that Council authorize staff to solicit Statements of Qualifications (SOQs) from private developers to expand parking supply alternatives at existing surface parking lots. Following receipts of the SOQs the City could choose to enter into discussions with one or more developers to identify development concepts that are both financially feasible to the city and that increase parking supply for Downtown and/or the California Avenue area. Staff would return to Council for policy direction before proceeding with planning and development of a public-private proposal. Urban Lane Transit Mall Expansion and Parking Garage City of Palo Alto Page 6 Staff introduced the concept of transit mall expansion and new parking garage on Urban Lane in Spring 2013 as part of a suite of grant proposal opportunities available for the One Bay Area Grant (OBAG) program. Urban Lane is located west of the Caltrain tracks between Palo Alto Medical Foundation (PAMF) and University Avenue. Urban Lane currently operates as a surface parking lot for Caltrain Park and Ride users and supports informal layover activities by the Stanford Marguerite Shuttle Program. Caltrain holds a long-term lease interest to the site but the property is owned by Stanford University. Caltrain supported planning activities to help identify better long-term land use options for the site when the project was proposed as an OBAG project. Any project at the site would require Stanford University approval and reintroduce lease negotiations with Caltrain if the activities were anything other than “rail supporting”. Based on the findings of the Downtown Parking Garage Study, transit mall expansion and a new parking garage on Urban Lane could support up to 17 new bus stops and layover facilities and up to 478 parking spaces. The current surface parking lot has 164 parking spaces. Recommendation No. 3 Staff recommends that Council direct staff to begin planning for the transit mall expansion and new parking garage on Urban Lane, in partnership with the property owner and lease holder. Both the Valley Transportation Authority (VTA) and Metropolitan Transportation Commission (MTC) have active calls-for-projects to support land use planning activities. The Urban Lane Transit Mall Expansion and Parking Garage project may qualify for these types of grant programs and staff recommends seeking funds through these and other routes. Satellite Parking Facilities Council expressed interest in identifying opportunities for satellite parking facilities to provide alternatives for downtown employees who may not be able to afford the cost of a parking permit, and also as a strategy to reduce traffic in Downtown. Staff is actively investigating sites where satellite parking can be supported and has identified the Embarcadero Road Satellite Parking Concept provided in Attachment C as one opportunity. This location does require a robust shuttle program to take commuters to and from Downtown. The Embarcadero Shuttle operated by Caltrain currently provides peak hour service only between the University Avenue Caltrain Station and the Embarcadero Business Park. As part of TDM strategies recommended separately to Council, staff will be recommending that the City consider taking over management of the Embarcadero Shuttle in order to provide enhanced service to the Embarcadero Business Park Area and to provide support for a potential satellite parking facility in that area. A full-time Embarcadero Shuttle would also support business activities in the Edgewood Plaza area. The Embarcadero Road Satellite Parking Concept includes restriping of Embarcadero Road from a 4-lane facility to 2-lanes with 90-degree diagonal parking on one side of the street (north City of Palo Alto Page 7 side), widened bicycle lane facilities, and speed humps to support vehicle speed reductions on Embarcadero Road. The satellite parking concept also takes advantage of underutilized parking in the Baylands Athletic Parking Lot located on Geng Road allowing for up to 200 satellite parking spaces. Comparable alternative sites could also be considered. Recommendation No. 4 Staff recommends that Council authorize staff to begin design and environmental review of the Embarcadero Road Satellite Parking Facility Concept to further develop feasibility of the concept and to identify cost estimates. Staff anticipates a traffic study for this project as well as an extensive community outreach process with adjacent business and property owners and the recreation facility users of the Baylands. Alternative sites will also be considered. The Embarcadero Road Satellite Parking concept does not include any parking within the Baylands Nature Preserve but staff anticipates community concern about the introduction of additional vehicles close to the preserve. Staff will continue to explore other satellite parking concepts in conjunction with the Palo Alto Shuttle Program. Parking Permit Sales to SOFA District Employees at Lot CC and Lot CW Parking permit sales in the Downtown area are currently prioritized for employees who work within the Parking Assessment District Boundary (Attachment B). Prioritizing permit sales to parking assessment district employees is due to an agreement between the City and the business leaders who helped establish the Parking Assessment District, which pays back the bonds that funded garage construction at Lots R – Bryant and S – Alma/High. As the City introduces additional parking supply to the community, making that supply available to employees working in or near all areas of Downtown and SOFA is critical to help minimize intrusion into adjacent neighborhoods. By policy, SOFA employees are currently not able to purchase parking permits within the parking assessment district. SOFA employees must park off-street on private lots where they work, at limited permit parking permit spaces available at 800 High Street, or on-street. The existing parking garages at Lot CC – Civic Center and Lot CW – Cowper/Webster were part of the City’s parking program prior to the formation of the parking assessment district. Introducing SOFA employee permit parking at these sites is the best option for expanding access to parking lots for these employees. Recommendation No. 5 Staff recommends that Council authorize the sale of parking permits to SOFA District employees at Lot CC – Civic Center and Lot CW – Cowper Street/Webster Street. Parking Garage Access and Revenue Controls City of Palo Alto Page 8 To date, all of the existing surface parking lots and garages in the Downtown Parking Program are open facilities, either dedicated Permit Parking spaces or 3-Hour Visitor Parking spaces during normal business hours (8AM-5PM). During nights and weekends all parking spaces in the Downtown Parking Program are available for visitor or downtown employee use without time or permit restrictions. Active management by the Parking Enforcement Unit is required to cite persons parking without valid parking permits or that park beyond the 3-Hour Color Zone parking restriction limits. The introduction of Parking Garage Access and Revenue Controls could help to manage parking supply and support Parking Guidance System (PGS) solutions. An example of PGS systems are dynamic signage at garage entries which highlights the available hourly or permit supply available at that facility. After business hours, when permit parking supply becomes available for general visitor parking, the dynamic signage can be updated to encourage visitor parking. All parking garage access and revenue control options allow the garages to continue to offer a 3-Hour Free Parking period, but also allow for a fee beyond that period. Parking Access and Revenue Collection systems, when merged with Parking Permit Data, can allow business users to transfer their permits to a different employee when the regular permit holder is not using it. Most companies that reimburse employees the cost of their parking permits pay the City directly for the cost of the permit but the permit remains under the ownership of the individual and is typically dedicated to one vehicle. However, with the implementation of these technology strategies, if more employees in the business account enter the garage, then the normal parking fee for use of the garage can be transferred to the business account. In this way, the technology can maximize the effectiveness of the permit usage. Recommendation No.6 Staff recommends that Council authorize staff to solicit proposals for the installation of parking garage and access revenue controls aimed at collecting “real time” data on parking lot and garage occupancy, introduce flexibility for transferable permits between employees, and to support payment options for downtown visitors who park longer than three hours. Policy Implications The expansion of parking supply is consistent with the following Comprehensive Plan Goals, Policies, and Programs:  Goal T-8 Attractive, Convenient Public and Private Parking Facilities  Policy T-45 Provide sufficient parking in the University Avenue/Downtown and California Avenue Business Districts to address long-range needs City of Palo Alto Page 9  Program T-49 Implement a comprehensive program of parking supply and demand management strategies for Downtown Palo Alto  Program T-52 Evaluate options to ensure maximum use of the City parking structures in the University Avenue/Downtown and California Avenue areas. Resource Impact Each of the six parking supply strategies include a different resource impact to the City: Recommendation No. 1: Begin Design/Environmental Review of Lot G Parking Garage The cost to advance design and complete an environmental assessment of a Lot G Parking Garage is estimated at up to $1.5M. Funds would become available later this year through the Parking In- Lieu Fee Program. The program currently has $664,609 in payments and an additional $3,802,200 is anticipated from approved and active construction development projects including the 101 Lytton/Gateway Project. This should bring the grand total of the in-lieu fund to $4,466,809, most of which should be received in 2014. A Budget Amendment Ordinance will be brought forward for City Council consideration at the time a contract is awarded for the design and environmental assessment. The cost of constructing a Lot G Parking Garage is estimated in the study included as Attachment A, and will be refined as the design work proceeds. Recommendation No. 2: Solicit SOQs for Public-Private Partnerships to Build Parking Supply The release of a Statement of Qualifications Statement solicitation has no financial commitments to the City but does allow the City to explore funding strategies to build additional parking supply. Depending on the SOQs received, additional discussions between the City and the developers would identify any financial requirements to establish a partnership. At a minimum, staff anticipates the land value of existing surface parking lots being a partnership element of the City to advance a partnership opportunity. Recommendation No. 3: Urban Lane Transit Mall and Parking Garage Planning Staff anticipates the cost of a planning and preliminary design for an Urban Lane Transit Mall and Parking Garage project to cost up to $250,000. If the project were advanced to full environmental assessment and design the project may cost up to $2.0M. Currently there is not an identified funding source for this design work. Staff City of Palo Alto Page 10 will pursue grant opportunities as a potential strategy for funding this work. Recommendation No. 4: Satellite Parking Facility at Embarcadero Rd Staff estimates the cost to prepare designs and complete environmental assessment of the Embarcadero Rd Satellite Parking project to cost up to $75,000. Funds are currently available for this project in the Parking & Transportation Improvements CIP (PL-12000) to support this cost. Recommendation No. 5: Release Permit Parking for SOFA District at Lot CC and Lot CW The release of parking permits to SOFA District employees at Lot CC and Lot CW would not cost the city any additional funds. Revenues from permit sales include the cost of permit production and staff costs for administration of permit distribution. The release of parking permits to SOFA District employees may exacerbate the demand for parking permits, however, particularly as additional TDM Strategies such as Residential Permit Parking are introduced. Recommendation No. 5: Parking Garage Access and Revenue Controls Development of a Request for Proposals (RFP) to solicit technology solutions can be completed using existing staff resources. While the true costs will not be known until responses to the RFP are received, staff estimates the cost to introduce parking garage and access revenue controls will cost up to $300,000 per garage. Such an improvement may also introduce new revenues to the Parking Permit Program and help to expand parking garage supply opportunities, but additional study is required. A funding strategy for the access and revenue controls will be brought back to the City Council for consideration when the contract is awarded. Timeline Following approval on the recommendations identified in this report, staff will return to Council with a timeline schedule for Parking Supply and Transportation Demand Management strategies. Environmental Review None of the proposed actions constitute final decisions to commit resources to a particular course of action, and all will require environmental review pursuant to the California Environmental Quality Act (CEQA) before a final decision is made. Attachments:  Attachment A: 2013-01-20 - City of Palo Alto Parking Garage Feasibility Study (PDF) City of Palo Alto Page 11  Attachment B: Palo Alto Parking Map Color (PDF)  Attachment C: Plan Line Concept - Embarcadero at Hwy 101 - Satellite Parking DRAFT (PDF)  Attachment D: Summary of Available Downtown Parking Data (will be submitted in a late packet on Feb. 6, 2014) (DOCX)  Attachment E: Public Correspondence (PDF) January 20,2014HNA/PACIFICCity of Palo Alto SANDIS PALO ALTO, CALIFORNIA City of Palo Alto T-1N.T.S.       City of Palo Alto Parking Garage Feasibility Study Executive Summary In order to address additional parking demand within the City of Palo Alto Downtown Area, the City has requested a study to analyze the feasibility of constructing a parking garage on an existing surface parking lot. The six existing surface lots included in this analysis are as follows: Lot D, located on the northeast corner of Hamilton Ave and Waverly St; Lot E, located along the western side of Gilman St between Hamilton Ave and Forest Ave; Lot G, located along the western side of Gilman St between Hamilton Ave and Forest Ave; Lot O, abutting High St and Emerson St between Lytton Ave and University Ave; Lot P, located along the eastern side of High St between University Ave and Hamilton Ave; and Lot U, located along Urban Ln immediately east of University Circle. All existing lots are City-owned with the exception of Lot U, which is owned by Stanford with a lease to Caltrain. The study included three main elements: A Preliminary Feasibility Analysis, 3D Model Analysis, and Constructability Factors Comparison. The Preliminary Feasibility Analysis involved the documentation of adjacent land uses, utility constraints, and development constraints. The 3D Model Analysis component created 3D models to help determine probable parking garage layouts and massing concepts to aid in decision making and budget analysis. Lastly, the Constructability Factors Comparison was prepared to aid in prioritizing construction of the parking structures. A comparison matrix was developed using a rating system that focused on eight site constraints. These constraints include: Access Points, Construction and Staging Impacts, Adjacent Land Use, Adjacent Property Impacts, Site Utility Impacts, Net Stall Gain, Cost per Stall, and Site Potential for Development. Table 1 below provides a summary of the existing and proposed stall counts for each lot as well as additional alternatives evaluated as part of this study. These alternatives include subterranean parking levels, a valet component, transit elements, and commercial space incorporated into the proposed structures. Not all alternatives were evaluated for each lot. Based on the results of the feasibility study, Lot G was determined to be viable for construction of a parking structure and is recommended for design development. Lot U was also determined to be desirable for construction and further planning phases are recommended to further develop potential layouts. It should be noted that a structure developed on combined Lots E and G scored well and was determined to be desirable for construction, however, because of Council input at the May 2013 Study Session it is currently not being recommended for further analysis. Table 1: Summary of Parking Spaces Counts within Each Parking Garage    Lot D Lot E Lot G Lot E/G Lot O Lot P Lot U  Existing Surface Lot 86 34 53 87 78 51 164  Proposed Gargage (P‐1 thru P‐5) 300 75 166 268 223 140 478  Total Net Gain 214 41 113 181 145 89 314  % Increase of Parking 249% 121% 213% 208% 186% 175% 191%  Subterranean (B‐1)* 60 ‐ 30 30 45 55 ‐  ΔProposed w/ Commercial Space* ‐ ‐ ‐ ‐23 ‐ ‐ ‐  Valet Parking* 68 37 44 88 52 42 ‐  Subterranean Valet Parking* 17 ‐ ‐ ‐ ‐ 11 ‐  ΔValet w/ Commercial Space* ‐ ‐ ‐ ‐10 ‐ ‐ ‐  Transit Substituted with Parking* ‐ ‐ ‐ ‐ ‐ ‐ 111  Total Max Net Gain* 359 78 187 299 242 197 425  % Increase of Parking* 417% 229% 353% 344% 310% 386% 259%  *Optional Parking Measure    Table 1 Notes:  Existing Surface Lot: The number of parking spaces within the existing surface lot.  Proposed Garage (P‐1 thru P‐5): The number of parking spaces within the proposed parking garage.  Total Net Gain: The total number of additional parking spaces that the parking garage would provide over the existing parking lot.  % Increase of Parking: The percentage increase in the number of parking spaces provided by the parking garage over the existing parking lot.  Subterranean (B‐1): The number of parking spaces within the three subterranean parking levels.  ΔProposed w/ Commercial Space: The number of parking spaces subtracted from the Proposed Garage parking count      with the substitution of commercial space.  Valet Parking: The number of valet parking spaces added to the Proposed Garage parking count with the addition of valet parking.  Subterranean Valet Parking: The number of valet parking spaces added to the subterranean parking levels.  ΔValet w/ Commercial Space: The number of valet parking spaces removed due to the substitution of parking spaces with commercial space.  Transit Substituted with Parking: The number of parking spaces added to the original Proposed Garage parking count with the     substitution of transit parking with vehicle parking.  Total Max Net Gain: The maximum amount of parking that can be achieved within the proposed parking garage.  % Increase of Parking: The percentage increase in the number of parking spaces.          Introduction   This Parking Garage Feasibility Study provides analysis of parking garage construction at existing surface parking lots in and around Downtown Palo Alto. In an effort to help prioritize parking supply projects, this study focuses on six parking  garage site location options within the western and southern portions of Downtown Palo Alto. These areas were found to experience the highest parking permit demand based on parking permit sales and wait list durations. The six study sites  include five existing City of Palo Alto surface parking lots (Lots D, E, G, O, and P) and one existing Caltrain parking lot (Lot U) on Urban Lane. See Figure 1 below. Lots E and G on Gilman Avenue are analyzed both individually and as a combined  site—Lot E/G.   The Parking Garage Feasibility Study includes the following elements for each of the six study sites:  1) Preliminary Feasibility Analysis: To document adjacent land uses, utility constraints, and development  constraints due to existing easements and zoning restrictions.  2) 3D Model Analysis: To help determine likely parking garage layouts and massing concepts for the purposes of  aiding in decision making and budget analysis.  3) Constructability Factors Comparison: To aid in prioritizing construction, a set of Constructability Factors was  developed for direct comparison between the study sites to evaluate the short‐term construction impacts and  long‐term operations of each site. Figure 1. Map of Parking Lot Study Sites in Downtown Palo Alto  Overview    Eight constraints were utilized for evaluating the feasibility of constructing a parking garage on each of the existing surface lots included in this study. These specific constraints were chosen based on discussions with City Staff, review of  existing sites, and input from City Council members during a Study Session held on May 20, 2013.  The information used in evaluating the existing sites for each constraint was collected from several sources including County Assessor’s parcel information, as‐built drawings/record documents, site surveys, traffic and parking studies,  environmental assessment reports, geotechnical reports, and field visits to the existing sites. Below is a list of the eight constraints utilized for this study:  Access Points Number of potential access points to and from the site.  Construction and  Staging Impacts    Potential for impacts to surround businesses and other  facilities during construction.  Adjacent Land Use Type of land use of surround building. Adjacent Property  Impacts    Impacts to surrounding facilities resulting from the  construction of a proposed parking garage.  Site Utility Impacts Existing utility lines/structure required to  rerouted/relocated prior to construction of a structure.  Net Space Gain Quantity of parking spaces gained by constructing a  structure compared to the existing parking lot space  count.    Cost per Space Cost per parking space in proposed garage.  Site Potential for  Development  Potential of site to be developed for an alternative land use.             A Constructability Constraint Matrix has been developed that includes the eight constraints to which each lot has been evaluated. A rating system was developed using 1 as a low value and 10 as a high value in order to evaluate the strengths  and weaknesses of each lot being considered for a garage. A constraint importance factor was also used to weight specific constraints dependent on which constraints the analysis determined to be more significant to the construction of a  garage, see Figure 2 ‐ Site Constructability Constraint Matrix. The matrix rates the study sites as following for construction of additional parking supply:  1. Lot G (Gilman/Waverly)  2. Lot D (Hamilton/Waverly)  3. Lot O (Emerson/High)  4. Lot U (Urban Lane)  5. Lot E (Gilman/Bryant)  6. Lot P (High/Hamilton)       Lot D  Lot E Lot G Lot O Lot P Lot U  Lot E/G    Hamilton/Waverly Gilman/Bryant Gilman/Waverly Emerson/High High/Hamilton Urban Lane Gilman A. Type of Construction Concrete or Steel Concrete or  Steel  Concrete or  Steel  Concrete or  Steel  Concrete or  Steel  Concrete or  Steel  Concrete or  Steel  B. Lot Size 29,200 SF 11,500 SF 16,875 SF 22,500 SF 15,982 SF 63,598 SF 28,375 SF C. Existing Spaces 86 34 53 78 51 164 87 D. Total Proposed Spaces 300 75 166 223 140 478 268 E. Net Space Gain 214 41 113 145 89 314 181 F. Space Gain % 249% 121%213%186%175%191% 208% G. Estimated  Cost/Space $43,335 $33,210 $41,354 $39,501 $38,620 $39,907 $41,029 H. Cost/Space per added spaces* $60,750 $60,750 $60,750 $60,750 $60,750 $60,750 $60,750 I. ROM Construction Cost* $13,000,500 $2,490,750 $6,864,750 $8,808,750 $5,406,750 $19,075,000 $10,995,750    Constraint   Maximum  Potential  Constraint Value  Constraint  Importance  Factor     1) Adjacent Property Impacts 10 1.3 7 9 9 3 4 10 9 2)  Construction and Staging  Impacts 10 1.2 5 5 5 3 1 3 7  3) Access Points 10 1.2 10 7 7 10 5 6 7 4) Adjacent Land Use 10 1.3 5 5 10 10 10 10 10 5) Site Utility Impacts 10 1.2 5 10 10 5 3 1 10 6) Net Space Gain 10 1.5 10 2 7 7 5 10 10 7) Cost/Space 10 1.3 9 3 6 9 8 4 7 8) Site Potential for Development 10 1.0 5 5 5 5 5 5 7   Total Weighted Site Constraint Points 71 57 74 66 52 63 85   Maximum Weighted Value 100 *Construction Cost/Stall based on City of Palo Alto "Parking in Lieu" fee. FIGURE 2 ‐ Site Constructability Constraint Matrix  Review of Figure 2 will indicate that Lot G (Gilman/Waverly) and Lot D (Hamilton/Waverly) rate the best out of the seven scenarios evaluated for feasibility of constructing a parking garage. Lot G has minimal impacts to existing utilities,  adjacent properties, and provides an additional 113 parking spaces compared to the existing lot space count. Lot D has moderate impacts to existing utilities and minimal impacts to adjacent properties. The net space gain is estimated to be  214 spaces. It should also be noted that a parking garage on combined Lots E and G was rated the highest out of all seven scenarios evaluated. A combined Lot E/G parking garage would involve the construction of separate structures on Lots  E and G that would connect with one another and span Gilman Street  for levels three through five.    Constraint Scoring Methodology  1)High (1) Medium (5) Low (10)  2)High (1) Medium (5) Low (10)  3)1 (5) 1‐2 (7) 2 (10)  4)Single (5) Mixed Use (10)  5)High (1) Medium (5) Low (10)  6)Based on Space Percent Increase  7)High (1) Medium (5) Low (10)  8)High (1) Medium (5) Low (10)  Site Constructability Constraints      Lot D (Hamilton/Waverly)    The existing Lot D is located on the north east corner of Hamilton and Waverley. The lot is 29,200ft2 in area and has 86 existing parking spaces. The layout of the lot includes  angled parking with a one‐way drive aisle for circulation. A public restroom facility is located on the eastern corner of the lot. Lot D is currently limited to two‐hour hourly parking,  with no permit parking provided.  Access Points There are two separate access points for ingress and egress along both Hamilton and Waverly for a total of four existing access points.   Construction and Staging Impacts Lot D serves restaurant and retail uses along Waverly Street and provides rear‐entry parking to the CVS market. During construction, parking would be displaced, along with alley  access for loading and unloading, to the adjacent businesses. The public restroom facility would be permanently removed; however facilities could be incorporated into the future  garage design.   Adjacent Land Use Lot D is abutted by four separate parcels. These include AT&T and Excel Aviation (Lot 102), Palo Alto Sport Shop and Toy World Inc. (Lot 83), Congdon & Crome and The Prolific Oven (Lot 84), and the Tai Pan Restaurant (Lot 85).   Adjacent Property Impacts Potential impacts to surrounding lots caused by the construction of a parking garage on Lot D include the following:    The natural light passing through the glass block clearstory on the southwest corner of Lot 102, set back from the exterior wall plane at the first level, could potentially be limited by a solid, fire rated wall.    The triangular area at the north end of the site adjacent to Lot 83 has existing transformers and a trash area that will need to have its access maintained.    The back of Lot 85 has a rear door and some trash bins which will need their access maintained from the public right of way.    The structures adjacent to Lot D have unprotected second story openings which could potentially have their natural light limited and views obstructed by a solid, fire rated wall. Specifically, Lot 85 has openings that natural light passes  through, set back from the exterior face of the wall, which would likely be impacted by a parking garage’s solid, fire rated walls. Existing surface mounted awnings at the second building level of Lot 85 may need to be removed.   Roof drains for the adjacent structures discharge into the surface parking lot of Lot D. If a garage is constructed on Lot D then alternate paths to discharge the rainwater to the street gutter might need to be provided.   Site Utility Impacts Lot D contains four street light poles and active high voltage electric, street light, and fiber optics lines running north‐south through the site. The site is enclosed by active electric, water, gas, and sewer lines to the south and active water, gas,  sewer, and storm drain to the east. The construction of a parking garage at this lot would require the relocation of the existing fiber optic and high voltage electric lines. See Exhibit D.U.1 for a schematic overview of the existing utilities  present within the extents of Lot D.   Net Space Gain Lot D currently has 86 parking spaces. Based on conceptual layouts prepared for this lot, a five‐story garage would have a capacity of 300 spaces, yielding a net space gain of 214 spaces. See Exhibit DA.1 for an overview of this conceptual  layout as well as a level by level breakdown of the space count within the garage. If three additional levels of subterranean parking were to be provided as part of a garage at this location, with 61 parking spaces per subterranean level,  approximately 96 additional spaces could be realized for a possible net gain of 396 spaces. If further parking were to be required at this location, a parking attendant/valet program could be applied to this garage to provide an additional 17  parked vehicles per level, excluding the ground level, to realize a possible net gain of 368 spaces with the five‐story garage. With a parking attendant/valet program and three additional subterranean levels, the possible maximum net parking  gain would be 430 spaces.  Cost per Space The rough order of magnitude (ROM) estimate of cost for the construction of a five‐story garage is approximately $13 million.  Site Constructability Constraints      Lot E (Gilman/Bryant)    The existing Lot E is located along the western side of Gilman Street between Hamilton Avenue and Forest Avenue, across from Lot G (Gilman/Waverley). The lot is 11,500ft2 in  area and has 34 existing parking spaces. There are three one‐way lanes with angled parking located on each side of the lanes. Lot E is currently restricted to permit holders  between the hours of 8:00am – 5:00pm, Monday through Friday. Parking within this lot becomes open to the public outside of these hours.  Access Points Lot E has two driveways, each driveway providing separated ingress and egress points to Gilman Street. A privately‐owned parking lot with an access easement through Lot E, for  egress operations, also provides access to the lot.  Construction and Staging Impacts During construction the privately‐owned parking lot adjacent to Lot E would lose its egress access during construction, impacting the operations of the privately‐owned parking lot.   Adjacent Land Use Lot E is abutted by four separate parcels. These include: The Chocolate Garage (Lot 32), Holbrook Global Strategies (Lot 35), a privately‐owned parking lot (Lot 36), and Chase Bank, Globespan Capital Partners, a parking lot, and WCC Services  (Lot 96). The adjacent parcel zoning types include CD‐C (P) and PF.   Adjacent Property Impacts The construction of a parking garage within the extents of Lot E has the potential to cause the following impacts to the neighboring parcels:    Adjacent structures could potentially have their natural light and ventilation limited due to the greater height of an adjacent parking garage. In addition to this, the views from existing windows of the adjacent structures would likely  be obstructed by a solid, fire rated wall.   There is a mature tree on Lot 35 which will not be able to be trimmed sufficiently to maintain its health since the tree is located in close proximity of a common property line.  Site Utility Impacts Lot E has several existing site light poles and lines within its extents. Development would require demolition of the existing light poles. Active water, fiber optic, sewer, electric, and street light lines, as well as active and abandoned gas lines  run north‐south along Gilman Street. The impacts to existing utilities caused by the construction of a garage would not be significant. See Exhibit E.U.1 for additional information.  Net Space Gain Lot E currently has 34 parking spaces. Constructing a five‐story parking garage within the lot extents would yield 75 total spaces. The net gain of parking spaces would be 41 spaces. Subterranean parking at this lot was not explored due to the  limited lot size. If further parking were to be required at this location, a parking attendant/valet program could be applied to this garage to provide an additional 7 to 10 parked vehicles per level, excluding the ground level, to realize a possible  net gain of 78 spaces with the five‐story garage.  Cost per Space The rough order of magnitude (ROM) estimate of construction costs for the construction of a five‐story garage is approximately $2.5 million.  Site Constructability Constraints      Lot G (Gilman/Waverley)    The existing Lot G is located along the eastern edge of Gilman, between Hamilton Avenue and Forest Avenue, across from Lot E (Gilman/Bryant). The lot is 16,875ft2 in area and  has 53 existing parking spaces. Lot G is currently restricted to permit holders between the hours of 8:00am – 5:00pm, Monday through Friday. Parking within this lot becomes  open to the public outside of these hours.  Access Points Lot G has three driveways fronting Gilman Street—two provide ingress access to the lot while the third provides egress access.   Construction and Staging Impacts Lot G has limited construction and staging impacts except for the loss of parking during construction.   Adjacent Land Use The Lot G parcel abuts five nearby parcels along its borders. These include: A United States Post Office facility (Lot 2), a residential property (Lot 21), Cambria Corporation (Lot 22),  Better Chinese Restaurant (Lot 23), a residential property, Stanford Financial Co. Realtors, High Gear Media, Aufmuth Law Corporation, and California Land Management Lot (62).  Adjacent Property Impacts Potential impacts to the existing neighboring properties include:   Adjacent structures on Lots 21, 22, and 23 could potentially have their natural light and ventilation limited and their views obstructed by a solid, fire rated wall.   Lot 62 has a storm water drain coming from the recreation/pool area that terminates onto Lot G which will need to be redirected or accommodated.   The existing structure on Lot 2 could potentially have its natural light and ventilation limited. The residential units on the east face of the existing structure will also have their natural light and ventilation limited and views obstructed  by a solid, fire rated wall if the proposed garage wall is on or near the property line.    The adjacent post office to the north on Lot 2 has a grade separation that is lower than Lot G to accommodate a truck loading dock. This will require lowered foundations for the proposed parking garage, unless the proposed garage  has a basement.   Site Utility Impacts Lot G has several existing site light poles and lines within its extents which would need to be demolished as part of the development. Active water, fiber optic, sewer, electric, and street light lines, as well as active and abandoned gas lines run  north‐south along Gilman Street. The impacts to existing utilities caused by the construction of a parking garage would not be significant. See Exhibit G.U.1 for additional information.  Net Space Gain There are currently 53 existing parking spaces within the extents of Lot G. Constructing a five‐story parking garage on Lot G would provide a total of 166 parking spaces, yielding a net space gain of 113 spaces. If further parking were to be  required at this location, a parking attendant/valet program could be applied to this garage to provide an additional 11 parked vehicles per level, excluding the ground level, to realize a possible net gain of 157 spaces with the five‐story  garage.  Cost per Space The ROM cost for a five‐story garage on Lot G is estimated to be approximately $6.86 Million.             Site Constructability Constraints      Lot O (Emerson/High)    Lot O abuts High Street and Emerson Street in between Lytton and University Avenue. The lot is 22,500ft2 in area and has 78 existing parking spaces. There are two one‐way drive  aisles providing access to angled parking spaces located on both sides of each aisle. There is no internal circulation drive‐aisle within Lot O. Drivers currently have to exit the  parking lot, enter onto either Emerson or High before re‐entering the parking lot. Lot O is currently limited to two‐hour hourly parking, with no permit parking provided.  Access Points There are separated ingress and egress points on both sides of the parking lot abutting Emerson Street and High Street, for a total of four access points to the existing lot.   Construction and Staging Impacts Many of the adjacent parcels to Lot O include rear‐entry access from the parking lot. During construction of a potential parking garage, rear‐entry access to these businesses  would be denied. Construction would also impact access to existing trash enclosures.   Adjacent Land Use Lot O is abutted by six separate parcels. These include: Landmark Aquarius Theatre (Lot 26), Lavanda Restaurant and Wine Bar (Lot 28), Palo Alto Bicycles and Commercenet (Lot 29), T‐Mobile, Loving Hut, Lanza Technology Ventures, Edward  Jones, and Shazam Entertainment (Lot 30), a currently vacant office (Lot 31), the Kingdom Hall of Jehovah’s Witnesses (Lot 32).  Adjacent Property Impacts The development and construction of a parking garage on Lot O may potentially have the following impacts to neighboring parcels:    The adjacent parcels all have rear doors, loading areas, and trash areas which may need their access to the public right‐of‐way maintained.   Existing structures with unprotected openings on Lot 29 could potentially have their natural light limited and views obstructed by a solid, fire rated wall.    Lot 31 has switchgear enclosures and transformers outside of the building adjacent to Lot O which will need to have their access maintained. There are existing structures with unprotected story openings on all four levels that  could potentially have their natural light limited and views obstructed by a solid, fire rated wall.   Lot 32 has a recessed alcove with a sliding gate that appears to be an emergency exit from the building as well as storage for cleaning supplies. Given this, public right of way access may need to be maintained to this area.    There is a gap between the building on Lot 26 and Lot 29 used for storage and may contain electrical service equipment, which will need its accessed maintained.   Site Utility Impacts Lot O contains active electric, street light, and fiber optic lines running east‐west. An abandoned gas line runs through the southwest corner of the lot. There are also two light poles located within Lot O. The construction of a parking garage at  this lot would require the relocation of the existing fiber optic and high voltage lines. See Exhibit O.U.1 for additional existing utility information.   Net Space Gain Lot O currently contains 78 existing parking spaces. Constructing a five‐story parking garage on this lot would yield 223 spaces. The net gain of parking spaces at this site would be 145 spaces. If further parking were to be required at this  location, a parking attendant/valet program could be applied to this garage to provide an additional 13 parked vehicles per level, excluding the ground level, to realize a possible net gain of 197 spaces with the five‐story garage.  Cost per Space The rough order of magnitude (ROM) cost for constructing a parking garage on Lot O is estimated to be approximately $8.8 Million.  Site Constructability Constraints      Lot P (High/Hamilton)    Lot P is located along High Street, in between University Avenue and Hamilton Avenue. The lot is 15,982ft2 in area and has 51 existing parking spaces. There are three one‐way  drive aisles within the site, with angled parking on both sides of each aisle. Lot P is currently limited to two‐hour hourly parking, with no permit parking provided.   Access Points Lot P has two ingress points and one egress point along High Street.   Construction and Staging Impacts Lot P provides rear‐entry access for loading activities to adjacent restaurant and retail uses along Emerson Street, during construction loading activities in this area would be  restricted.   Adjacent Land Use Lot P is adjacent to 10 parcels. The facilities located on the parcels include: Amber Dhara, Palantir Technologies, Livegreene, Black Diamond Sports, Selix Formal Wear Lot (45), Sprout Café (Lot 46), Jungle Digital Imaging, Michael Patrick  Partners, Inc., Shalon Ventures (Lot 79), Mac’s Smoke Shop, Inc. (Lot 80), Bell’s College Bookstore (Lot 81), Kim’s Nail Care (Lot 82), Gravity Bistro (Lot 83), Lyfe Kitchen (Lot 85), Vivo Ventures, LLC., Nikkei, Firelake Capital Management,  LLC.(Lot 86), and a vacant office building (Lot 97).  Adjacent Property Impacts Impacts to parcels neighboring the Lot P parcel include the following:    An existing 17ft‐6in wide alley along the east side of Lot P, used for vehicular and pedestrian access for the existing commercial businesses in Lots 97, 79, 80, 81, 82, and 83, would be abutted by the proposed parking garage. Access to  this alley would need to be maintained both during and after the construction of a parking garage.    Lot 85 has an existing three level commercial office building adjacent to Lot P with door openings and unprotected upper level windows on the exterior wall plane along with a trash enclosure at the ground level.   Openings on all three levels of the structure on Lot 85 that do not front the alley will potentially have their natural light limited and views obstructed by a solid, fire rated wall.   Lot 86 has unprotected story openings on the upper two levels that could potentially have their natural light limited and view obstructed by a solid, fire rated wall.   Lot 86 also has a fourth level patio deck on the north side facing Lot P. This patio will potentially have its natural light and ventilation limited and views obstructed by a solid fire wall.  Site Utility Impacts There is an active gas line running north‐south through the center of Lot P. Lot P contains three light poles and active street light electric lines. Active high voltage electric lines run through the northwest and southeast corners of the lot. Lot P  is enclosed by active fiber optic and high voltage electric lines on the north and west sides, and fiber optic, electric, gas, water, and sewer lines on the south side. The construction of a parking garage on Lot P would require the removal of gas  lines, and could potentially require the removal of high voltage and fiber optic lines depending on building setbacks. See Exhibit P.U.1 for additional information.   Net Space Gain Lot P currently has 51 parking spaces. Based on conceptual layouts prepared for this lot, a five‐story garage would have a capacity of 140 spaces, yielding a net space gain of 89 spaces. See Exhibit PA.1 for an overview of this conceptual layout  as well as a level by level breakdown of the space count within the garage. If three additional levels of subterranean parking were to be provided as part of a garage at this location, with 27‐28 parking spaces per subterranean level, 83  additional spaces could be realized for a possible net gain of 170 spaces. If further parking were to be required at this location, a parking attendant/valet program could be applied to this garage to provide an additional 9‐11 parked vehicles  per level, excluding the ground level, to realize a possible net gain of 182 spaces with the five‐story garage. With a parking attendant/valet program and three additional subterranean levels, the possible maximum net parking gain would be  245 spaces.  Cost per Space The rough order of magnitude (ROM) cost for a five‐story parking garage on Lot P is estimated at $5.4 million.   Site Constructability Constraints      Lot U (Urban/University)    Lot U is located along Urban Lane between University Circle and the Palo Alto Medical Foundation (PAMF). The lot runs adjacent to the Caltrain tracks to the north and the Palo  Alto Sheraton property to the south. The Lot is 63,598ft2 in area and has 164 existing parking spaces. There is a single two‐way drive aisle running the extents of the lot with angled  parking on each side of the aisle. Lot U provides park‐and‐ride parking for Caltrain users. The lot is operated and maintained by Caltrain through a long‐term easement from  Stanford University.  Access Points There is a two‐way access point at University Circle and Urban Lane.  Construction and Staging Impacts During construction, the Caltrain park‐and‐ride lot would be temporarily unavailable. Lot U currently provides connection between PAMF and University Avenue that would be  temporarily unavailable during construction, thus increasing demand to the El Camino Real & University Avenue interchange. Stanford University currently uses Lot U as layover  parking for Marguerite Shuttles.  Adjacent Land Use Facilities located on parcels adjacent to Lot U include: The Palo Alto Sheraton, Caltrain Station and tracks, and Palo Alto Medical Foundation (PAMF)  Adjacent Property Impacts   Impacts to parcels neighboring the Lot P parcel include the following:    The proposed garage will need to be set back from the western property line to allow for unprotected openings that require natural ventilation. This would constrain the parking garage in length and width, reducing the natural  ventilation of the garage. Without the requisite ventilation, the garage cannot qualify as an “open parking garage” and may need to be considered an “enclosed garage” and thus would require mechanical ventilation.   The north and south ends will need to be at least 10ft from the property lines to allow for unprotected openings since neither property on these ends appear to be part of a public right of way.    The west and south sides of Lot U have utility poles and overhead utility lines that located on or near the property. If these utilities remain in place, the possible area for a potential parking garage will be reduced. Relocating these  utilities should be considered in an effort to maximize potential garage space.   Site Utility Impacts Lot U contains active gas, water, and sewer lines running north‐south in addition to active storm drain and overhead electric lines running east‐west along the southern border. In addition, there are active water, gas, sewer, and storm drain  lines as well as active overhead fiber optic lines running east‐west immediately south of Lot U. A number of utilities, including the overhead fiber optic and electric lines would need to be relocated if a parking garage were to be constructed  on this lot. See Figure U.U.1 for additional information.   Net Space Gain Lot U currently has 164 existing parking spaces. The construction of a five‐story parking garage would yield a total of 478 parking spaces for a net gain of 314 spaces. This proposed conceptual garage design includes 15 bus spaces on the  ground floor to be utilized for transit loading, unloading, and layover. The 478 parking spaces would be located on Levels P‐2 through P‐5. Subterranean parking was not considered at this site due to concerns related to excessive loading of  the structural elements from the heavy transit vehicle uses on the ground floor.  Cost per Space The rough order of magnitude (ROM) cost estimated for constructing a five‐story parking garage on the Urban Lane site is $19.1 Million.      Conceptual Garage Designs This section of the report will provide an overview of the conceptual parking garage designs prepared for the five study sites (Lot D, Lot E, Lot G, Combined Lot E/G, Lot O, Lot P, and Lot U). The site constructability constraints described above  were taken into consideration during the development of the conceptual designs described below.   Lot D The conceptual parking garage on Lot D will be 119,107ft2, consist of five levels, and provide 300 parking spaces (for a net gain of 214 spaces). Level P‐1 will provide 14 standard spaces, seven ADA spaces, 15 electric vehicle spaces, and nine  LEFE (Low Emission Fuel Efficient) vehicle spaces. There are also bicycle lockers, bicycle racks, a storage room, and an electrical room located on P‐1. Levels P‐2, P‐3, and P‐4 have identical floor plans and each provide 63 standard  perpendicular parking spaces. Level P‐5 (top level) has a similar floor plan and will provide an additional three spaces, for a total of 66 spaces, due to its lack of an up‐ramp. Vehicular access points (ingress and egress) for the garage will be  along Hamilton and Waverley.   A subterranean option for Lot D was also explored during this study. The basement, B‐1, has a similar floor plan as the other levels and will provide an additional 61 parking spaces, bringing the net gain of 274 spaces. The basement level will  include a storage room, an electrical room, and an intake and exhaust shaft. Public restroom facilities inside the parking garage will be located at the corner of Hamilton Avenue and Waverley Street. Stairs and elevators will be located within  the garage at the corner of Hamilton/Waverley and the northern end of the garage.   The site constraints for Lot D, identified above, have been addressed in the conceptual design and are described  below.  Existing vehicular and pedestrian access to the alley at the north end of the site will be maintained. To achieve this,  the garage will be set back 2ft‐6in from the alley (or 10ft from centerline of the alley) so as to allow the unprotected  openings on the existing adjacent structures to retain their natural light and ventilation. This setback of the garage  will increase the alley width to 17ft‐6in along the length of the garage wall.  An existing mature pine tree at the northwest corner of Lot D and Lot 85 will need to be removed to allow for the  construction of a proposed parking garage. Existing trees on Lot D along Hamilton Avenue will also need to be  removed.  The proposed garage will need to be set back 2ft from the property line along Lot 102 (AT&T building) to allow for  sufficient clearance between existing adjacent building foundations that might encroach into Lot D and thus allow  for the proposed garage to have concentric foundations. The setback would also provide limited construction access  between the existing and proposed buildings. No openings (unprotected or protected) are allowed due to this  separation distance.   The garage will be set back 16ft from Lots 84 and 85 to allow for the creation of a service alley, which will double as  a means of egress, connecting the existing businesses to the public right of way. The service alley will provide the  10ft of separation distance from the face of the parking garage such that the garage will be able to meet the  required 10‐25% of unprotected openings per story for the garage to remain naturally ventilated.   A 5ft setback of the proposed garage from Lot 85 will allow for an egress path to the public right of way from the  rear of Lots 84 and 85, create enough space for the required 10‐25% of unprotected openings in the structure of the  garage as discussed above, allow natural light into the existing building, and should provide sufficient space for the  garage to clear adjacent building foundations that might encroach into Lot D.       Lot E The conceptual parking lot on Lot E will be 49,452ft2, consist of five levels, and provide 75 parking spaces (with a net gain of 41 spaces). Two points of vehicular access to the garage will be located along Gilman Street. Level P‐1 will consist of  eight standard parking spaces, three ADA spaces, four electric vehicle spaces, and two LEFE vehicle spaces. Bicycle racks, bicycle lockers, a trash area, and an electrical room will be located toward the corner of the garage near Lots 35 and 32.  The access point to the ramp will be located at the eastern side of the garage toward Forest Avenue. Levels P‐2, P‐3, and P‐4 all share the same floor plan and will provide 14 spaces each. Level P‐5 shares a similar floor plan to the levels below  it and will provide 16 spaces.  The site constraints for Lot E, identified above, have been addressed in the conceptual design described below.  Existing trees on Lot E along Gilman Street and adjacent to Lot 96 will need to be removed. Existing street trees along Gilman Street will be able to remain if they do not substantially interfere with the construction of the garage. An existing  mature tree in the southwest portion of Lot E near Lot 35 will need to be sufficiently trimmed or entirely removed if it proves to substantially interfere with the design and construction of the proposed garage.  The proposed garage will be set back 3ft from Lots 96, 36, 35, and 32 to allow for the required 10‐25% of unprotected openings per story to encourage natural ventilation. The 3ft setback should be sufficient to clear adjacent building  foundations that might encroach into Lot E allowing for the proposed garage to have concentric foundations as well as creating construction access between the existing and proposed buildings. Constructing the proposed garage with a 3ft  setback instead of directly on the property line adjacent to Lot 32 will provide space to allow natural light to enter the existing building on Lot 32.          Lot G The conceptual parking lot on Lot G will be 74,818ft2, consist of five levels, and provide 166 parking spaces (with a net gain of 113 spaces). One point of vehicular access to the garage will be located along Gilman Street. Level P‐1 will consist of  three standard parking spaces, six ADA spaces, nine electric vehicle spaces, and five LEFE vehicle spaces. Bicycle racks, bicycle lockers, and an electrical room will be located toward the corner of the garage near Lots 62 and 23. Levels P‐2, P‐3,  and P‐4 all share the same floor plan and will provide 37 spaces each. Level P‐5 shares a similar floor plan to the levels below it and will provide 32 spaces.  The site constraints for Lot G, identified above, have been addressed in the conceptual design described below.  Existing trees on Lot G along Gilman Street will need to be removed. Existing street trees along Gilman Street will be able to remain if they do not substantially interfere with the construction of the garage. Two existing mature trees in the  northeast portion of Lot G near Lot 35 will need to be removed to allow for the construction of the proposed garage. An existing mature tree on Lot 22 near Lot G will need to be sufficiently trimmed or entirely removed if it proves to  substantially interfere with the design and construction of the proposed garage. A tree located in the southeast corner will need to be completely removed.  The proposed garage will be set back 3ft from Lots 2, 21, 22, 23, and 62 to allow for the required 10‐25% of unprotected openings per story to encourage natural ventilation. The 3ft setback should be sufficient to clear adjacent building  foundations that might encroach into Lot G allowing for the proposed garage to have concentric foundations as well as creating construction access between the existing and proposed buildings. Constructing the proposed garage with a 3ft  setback instead of directly on the property line adjacent to the surrounding lots will provide space to allow natural light to enter the existing buildings.        Lot E/G After analyzing Lot E and Lot G independently, it was decided that the construction of a parking garage on the combined lots would be analyzed as well. For the first two levels, P‐1 and P‐2, the garage would be separated by the alleyway that  bisects Lots E and G. Beginning at the third level, P‐3, the garage would become one continuous structure up to the top floor, P‐5.The proposed garage will be a total of 136,963ft2, consist of five levels, and provide 268 parking spaces (for a  net gain of 181 spaces).   Level P‐1 will provide a total of nine standard parking spaces, nine ADA spaces, 14 electric vehicle spaces, and eight LEFE vehicle spaces. Of the spaces listed above, eight standard spaces, three ADA spaces, four electric spaces, and two LEFE  spaces will be located on the Lot E side of Level P‐1. There will be two vehicular access points on the Lot E side along Gilman Street. One access point will directly lead to a ramp up to the upper levels, while the other will lead to parking only  on Level P‐1. Bicycle racks, bicycle lockers, a storage room, and an electrical room will be located on P‐1 of the parking garage. Stairs and an elevator will be located on the northern edge of the garage near Hamilton Avenue. The existing  vehicular egress point of the parking on Lot 36 will be maintained through the lower level of the garage. On the Lot G side, there will be one vehicular two‐way access point onto Gilman Street. Stairs and an elevator will be located at each end  of the lot along Gilman Street.   Level P‐2 of the parking garage will provide a total of 51 standard parking spaces. Of the 51 spaces, 14 spaces of will be located on the Lot E side of the garage. Levels P‐3 and P‐4 are identical to each other and will provide a total of 59 parking  spaces each. Of those 59 spaces per level, 14 spaces will be located on Lot E, and another 10 spaces will be along the bridge connecting the two halves of the parking garage. Level P‐5 of the garage will provide a total of 59 spaces .Of those 59  spaces, 14 spaces will be located on the Lot E side of the garage, and another 10 spaces will be along the bridge.   There is an option available to convert Level P‐1 on Lot E into 6,200ft2 of commercial space. This would displace 17  spaces and thus reduce the total net parking gain to 158 parking spaces for the combined Lot E/G.   The site constraints for Lot E/G, identified above, have been addressed in the conceptual design and are described  below.  Existing trees within Lots E and G will need to be removed to make room for the proposed parking garage. However,  existing trees along Gilman Street could potentially remain if their location does not substantially interfere with  construction requirements. The existing mature tree in the southwest corner of Lot 35 will need to be sufficiently  trimmed. Two more mature trees located in the northeast corner and one in the southeast corner of Lot G will need  to be removed. An existing mature tree on the east of Lot 22 will need to be either sufficiently trimmed or  completely removed depending on specific site conditions and construction requirements.  A setback distance of 3ft along the north, west, and south property lines will be required from the face of the  parking garage such that the garage will have available space to meet the required 10‐25% of unprotected openings  per story for the garage to remain naturally ventilated. The 3ft setback should also be sufficient to clear adjacent  building foundations that might encroach into Lot E and thus allow for the garage to have concentric foundations as  well as providing some construction access between the existing and proposed buildings.   The portion of the garage on Lot E will be set back 3ft from the property line adjacent to Lot 32 to allow for more  natural light to enter the existing building. The portion of the garage on Lot G will be set back 3ft from the property  line adjacent to Lots 21, 22, 23, and 62 to allow for more natural light.      Lot O The Lot O garage will be 95,112ft2, consist of five levels, and provide 223 parking spaces (with a net gain of 145 spaces). Vehicular access to the garage, along with stairs and elevators, will be located at both High Street and Emerson Street.  Level P‐1 will consist of 10 standard parking spaces, seven ADA spaces, 12 electric vehicle spaces, and seven LEFE vehicle spaces. Bicycle racks, bicycle lockers, a trash area, and an electrical room will be located toward the High Street access  point. The ramps will be located on the northern side of the garage toward Lytton Avenue. There is a possibility of turning Level P‐1 into a commercial/retail space. This would eliminate all potential parking spaces (including bicycle lockers and  bicycle racks) on this level. Levels P‐2, P‐3, and P‐4 all share the same floor plan and will provide 46 spaces each. Level P‐5 shares a similar floor plan to the levels below it and will provide 49 spaces.  There is an option to build 5,000ft2 of commercial space on the eastern side of Lot O toward Emerson Street. This, however, would reduce the number of parking spaces on Level P‐1 to 23 spaces and reduce the net gain parking total to 132  spaces. Those 23 spaces would be composed of seven ADA spaces, 11 electric spaces, and seven LEFE spaces).  The site constraints for Lot O, identified above, have been addressed in the conceptual design described below.  Existing trees on Lot O along High Street and Emerson Street will need to be removed. Existing street trees along High Street will be able to remain if they do not substantially interfere with the construction of the garage.   The proposed garage will be set back 5ft from Lots 26 and 32 to allow for an egress path to the public right of way from the existing building exits located in alcoves adjacent to Lot O at the center of the property. Setting the proposed garage  5ft from the property line will also allow for the required 10‐25% of unprotected openings per story on this wall line to allow for natural light to enter the garage and encourage natural ventilation. This setback will also allow for access to the  existing electrical meter service area between the existing buildings. The 5ft setback should be sufficient to clear adjacent building foundations that might encroach into Lot O allowing for the proposed garage to have concentric foundations  as well as creating access for construction access between the existing and proposed buildings.   The proposed garage will be set back 7ft from Lots 28, 29, 30, and 31 to allow for the creation of a pedestrian  alleyway providing access to the existing adjacent businesses. The walkway could double as exiting egress to the  public right of way from the rear doors of those buildings as well as access to the businesses from the proposed  parking garage. This setback will also create the space to allow for the required10‐25% of unprotected openings per  story on this wall line allowing natural light to enter the garage and encourage natural ventilation. It will also allow  for more natural light and ventilation into the existing adjacent buildings. The 7ft setback should be sufficient to  clear adjacent building foundations that might encroach into Lot O and will allow for the proposed garage to have  concentric foundations as well as provide construction access between the existing and proposed buildings.  The pedestrian alleyway will unlikely be able to accommodate current trash, loading, and service areas from the rear  doors of the existing businesses. A common trash area will be incorporated into the proposed garage design so  these businesses have direct access from High Street. Access to this trash area will be from the 7ft alley way, into,  and then through the proposed parking garage. A loading only zone should be created along either High Street or  Emerson Street. Deliveries can utilize the 7ft pedestrian alley way leading to the rear of the existing businesses. The  7ft setback should be sufficient to maintain natural lighting and ventilation to the upper level openings on the  existing buildings of Lots 29, 30, and 31.  Switchgear enclosures and transformers are currently located outside of the building on Lot 31. Depending on the  access requirements, this electrical service equipment may or may not be able to remain in place if the proposed  garage is located 7ft from the property line.       Lot P The Lot P garage will be 70,700ft2, consist of five levels, and provide 140 parking spaces (with a net gain of 89 spaces). Two way vehicular access will be provided on High Street with one ingress and one exit. Stairs will be located on both sides  of the lot and an elevator on the northern end of High Street toward University. Level P‐1 will provide five ADA spaces and eight electric vehicle spaces. Level P‐2 will provide 25 standard spaces and four LEFE vehicle spaces. Levels P‐3 and P‐4  will each provide 32 standard space. Level P‐5 will provide 34 standard spaces. Each level shares a similar floor plan with one ramp and two lanes going up and down on each level. Because Level P‐5 will be the top floor, it will have no ramp  running up to a level above it, thus allowing for two extra parking spaces.   There is an option to build an additional basement, B‐1, level. This level will have a similar floor plan as the other levels and provide 27 standard parking spaces, increasing the net gain to 114 spaces. Since Level B‐1 will be underground and  thus lacking natural ventilation, it will be required to have two exhaust shafts on each corner, one intake shaft, and an electrical room. Should more parking still be required at this location, two more basement levels could be constructed to  provide 28 parking spaces per floor.  The site constraints for Lot P, identified above, have been addresses in the conceptual design described below.  A 15ft wide alley exists at the north end of the site that has been incorporated into the surface parking of Lot P and is not discernible without consulting the County Assessor’s Map. This alley provides access to the existing 17ft‐6in wide alley  at the east side of the site that is maintained for services and pedestrian access to the existing businesses on Lots 97, 79, 80, 81, 82, and 83. The 15ft alley on the north is to be reclaimed to provide access to the existing east side alley as well  as to provide the existing building on Lot 45 with access to its fire department connection, service and trash area, and to maintain unprotected openings along the southern wall of the existing building. The proposed parking garage will be set  back on the north side of Lot P 5ft and on the east side of Lot P 2.5ft from the 15ft wide alley (10ft to centerline of the alley) to allow natural light to enter into and natural ventilation to flow past the unprotected openings of the garage which  would increase the alley width to 20ft.  Setting the proposed garage 3ft from the property line on the south of Lot P will allow for the required 10‐25% of  unprotected openings per story on this wall line to allow for natural light to enter the garage and encourage natural  ventilation. The 3ft setback should be sufficient to clear adjacent building foundations that might encroach into Lot P  and will thus allow for the proposed garage to have concentric foundations as well as providing construction access  between the existing and proposed buildings.  The 3ft setback should also be sufficient to maintain the upper level openings on the existing buildings on Lots 85  and 86.The existing trees along High Street and within Lot P will be removed. The garage will be required to be  notched around an existing electrical transformer at the southwest corner of Lot P to allow it to remain in place.       Lot U The Lot U garage will include five levels and provide a total of 551 parking spaces (with a net gain of 387 new spaces). Vehicular access will be located on the first level along Urban Lane.   There will be pedestrian access ways to the Caltrain station, University Avenue, the Homer Tunnel, and Downtown. Pedestrians will have access to stairs on both ends of the garage and elevators towards the west end of the garage near  University Avenue. A covered walkway will be part of the proposed parking garage on the ground level running parallel to the garage. Each end of the garage will have a spiral ramp leading up to the next level. Level P‐1 will accommodate nine  angled bus loading/unloading spaces, with a potential for a bus layover area. Level P‐2 will have one lane traveling in each direction and perpendicular parking along both sides of the garage. It will provide a total of 133 spaces. Levels P‐3, P‐4,  and P‐5 have similar floor plans. Levels P‐3 and P‐4 will both provide 138 spaces each and P‐5 (top level, uncovered) will provide 142 spaces.  An alternative design was prepared such that the bus loading spaces in Level P‐1 are replaced with 133 regular parking spaces. This change would increase the total number of parking spaces to 684 and a net gain of 520 spaces.              Parking Management Systems This section of the report will discuss potential parking management systems that may be implemented into the new parking garage and the different types of technology involved with these systems. Installing a parking management system  can significantly lower the time spent on searching for available parking, thus reducing emissions. Parking data collected from these systems could also be analyzed to detect parking trends and thus used to make occupancy, planning, and  financial decisions.       Parking Guidance System The parking guidance system is a facility based parking management system designed to inform drivers of the number of spaces  available in various parking facilities. Displays could provide specific numbers of available spaces or indicate whether they are full or  open. The benefits of having such a system is that they provide drivers with more information to easily locate available parking,  reduce vehicle miles traveled and emissions, and collect parking data in each facility which could be used to detect trends in the  area. In order to implement this system, the locations of the displays need to first be identified. Some considerations include sight  distances, potential for driver distraction, and reaction times. Next, a method for transmitting information onto the displays, the  type of information displayed (“full/open”, name of parking facility, parking rates), and the type of display technology need to be  determined. The costs associated with this system include operations and maintenance costs, which are typically bundled with the  O&M costs of the entire parking facility. Costs for external displays are limited to electricity used to power signs and occasional  maintenance.        Space Availability by Level The level based parking management system is designed to guide drivers to specific levels within a multi‐level parking facility that have  available spaces. Upon entering the parking garage, a display indicates the number of spaces available on each level. Entrances on each level  also have displays that indicate the amount of availably spaces on that particular level. This system benefits the driver by reducing the  amount of time spent looking for parking and vehicle miles traveled. Data collected could also be used to detect trends in the facility.   Implementation of such a system first requires a means to obtain information on parking availability. This is typically done using induction  loop detectors embedded in the pavement at each entry and exit point on each level. The operation of the loop detectors should not be  affected by either the reinforcing steel in the structure or vehicles passing by in nearby adjacent lanes. The preferred sensor technology  should be installed during construction of the facility if possible to reduce costs. System displays should be located so that drivers will be able  to see them at low speeds. Finally, the display technology needs to be selected. The cost of this system greatly depends on whether the  system is to be installed as part of the construction of new garage or placed within an existing garage. The installation of vehicle detectors and  induction loops approximately costs about $900‐$1,100 per loop. Additional costs will be incurred due to the installation of other elements  including connections to a central computer, displays, etc.  SWARCO North America, Parking Solutions – Structure Entry  SWARCO North America, Parking Solutions –Approach        Space Availability by Aisle/Section The aisle/section based parking management system will guide drivers of a particular level toward aisles with available parking  within a multilevel parking facility. At the entrance to each level, displays indicate available spaces in each direction. At the beginning  and end of each aisle, a display indicates available spaces in the aisle. The display could provide specific number of available spaces  or green or red signal indicating whether space is available or occupied. This system will reduce the amount of time spent locating  available parking. Data collected within the garage could be used to detect trends inside the facility and thus influence decision  making with regards to occupancy, planning, and financial decisions. The cost of this system greatly depends on whether the system  is to be installed as part of the construction of new garage or placed within an existing garage. Using a machine‐vision system to  detect parked cars will cost approximately $400 per space. There are also O&M costs to maintain detection equipment and display  signs.             Parking Availability by Space The aisle based parking management system will guide drivers directly to the individual available parking space. Drivers entering a garage will  be directed by a series of displays indicating available spaces on each level. Upon entering each level, the displays will indicate the available  spaces in each direction. At each aisle, a display will indicate the number of available spaces in the aisle. Ceiling mounted lights above each  space will indicate if the space is occupied (red), available (green), or ADA (blue). The information from individual space detectors update the  availability information displayed at the entrance to garage, levels, and aisles. It will also allow the garage to have dead‐end aisles, reducing  the need for continuous circulation capabilities. Data collected could be used to identify trends inside the facility and thus influence decision  making with regards to occupancy, planning, and financial decisions.  The costs will vary depending if the system is installed during construction or as part of an existing garage. The cost for individual space  monitors and displays for aisles, zones, levels, and entrances and a conduit for data transmission connecting individual detectors is  approximately $1,100 per space. There are also O&M costs to maintain detection equipment and display signs.     Parking Attendant Program The parking attendant based parking management system will require drivers to leave their vehicle with a parking attendant, typically on the ground floor near the entrance of the garage, who will then park their vehicle either in open parking  spaces or within the drive aisles throughout the garage. Parking attendant programs are utilized to ensure that the limited space within a garage is more efficiently used and to help make the commuter’s parking experience more enjoyable  SWARCO North America, Parking Solutions –Floors, Levels, and Rows  SWARCO North America, Parking Solutions – Space Availability        since they no longer need to spend their time searching for a parking space within the garage. Space on the ground floor will need to be provided for podiums, key lockers, and a loading/unloading zone for the vehicle owners to hand over  their vehicle to the attendant.  The primary costs associated with a parking attendant program are the parking attendants themselves. Attendant staffing levels would depend on the size of the garage and specific parking demand. A parking attendant program can be  applied to either existing or new garages with little to no difference in cost due to the relatively small amount of equipment the attendants need.  A separate report has been written (Downtown Valet Parking Feasibility Study prepared by SANDIS Civil Engineers) for the City of Palo Alto analyzing different existing parking garages throughout the downtown area of Palo Alto to determine  the feasibility of providing a parking attendant program. The intent behind providing a parking attendant program to an existing garage is to increase the parking capacity without incurring large costs associated with the construction of new  garages or expanding existing garages. A yearlong pilot program is currently under operation at Lot R testing the viability of a parking attendant program in an existing garage. It is understood at the time of this writing that the pilot program  has received pricing for a potential expansion beyond Lot R.  Parking Management Technology Cameras One method of detecting and keeping track of cars inside of a parking garage is through the use of cameras. Video cameras can be used in conjunction with recognition software to count and recognize parked cars. This is beneficial because it  requires minimal construction since one camera can provide information for a large area.  Sensors  Motion sensors are placed at the entrance and exits of parking garages or above each parking space to monitor when a car enters, exits, or is parked in a specific space. These sensors require minimal construction.    Either weight sensors or ground loop sensors are installed in the ground at the entrance and exits of parking garages, or in each parking space. They have the ability to accurately detect cars in individual parking spaces and entering  and exiting.  Display Signs There are many ways to notify and direct drivers to available parking. Variable message signs at the entrance of the parking garage communicate to drivers if there are spaces available in the garage by displaying either “FULL” or “AVAILABLE”.  Multi‐level variable message signs at the entrance of a parking garage could be used to show the number of spaces available on each level of the garage.  Way finding arrows on each level of the parking garage can illuminate to direct drivers to where there are available parking spaces. This helps cars navigate through large parking garages directly to available spaces. CalTrain Parking - Urban Lane Forest Avenue Hamilton Avenue University Avenue Lytton Avenue Al m a S t r e e t El C a m i n o R e a l Hig h S t r e e t Em e r s o n S t r e e t Ra m o n a S t r e e t Br y a n t S t r e e t Wa v e r l y S t r e e t Co w p e r S t r e e t We b s t e r S t r e e t Ta s s o S t r e e t Kip l i n g S t r e e t Flo r e n c e S t r e e t G i l m a n S t r e e t High/Alma North Garage Emerson/High Lot Emerson/Lytton Lot PERMIT PARKING High/Alma South Garage 3-HOUR & PERMIT PARKING 2-HOUR PARKING 2-HOUR PARKING 2-HOUR PARKING 2-HOUR PARKING 2-HOUR PARKING Ramona/ Lytton Lot Florence/ Lytton Lot Hamilton/Waverly Lot Cowper/Hamilton Lot Webster/Cowper GarageRamona/University Garage Emerson/ Ramona Lot Civic Center Garage Library Lot Bryant/Lytton Garage Lytton/ Waverly Lot Lytton/Waverly Lot Lytton/ Kipling Lot Gilman/ BryantLot Private Parking Garage2-HOUR & SENIOR PERMIT PARKING PERMIT PARKING 2-HOUR & PERMIT PARKING 3-HOUR & PERMIT PARKING 3-HOUR & PERMIT PARKING 3-HOUR PARKING 2-HOUR PARKING High/ Hamilton Lot 2-HOUR PARKING 3-HOUR & PERMIT PARKING 2-HOUR & PERMIT PARKING Gilman/ Waverly Lot PERMIT PARKING PUBLIC PARKING PERMIT PARKING Transit Center El PaloAlto Post Office Permit Parking Permit Parking N Emerson/Lytton Lot Ramona/University Garage Ramona/Lytton Lot Civic Center Garage Emerson/Ramona Lot Hamilton/Waverley Lot Gilman/Bryant Lot Florence/Lytton Lot Gilman/Waverley Lot Lytton/Waverley Lot Bryant/Lytton Garage Sheraton Hotel Lot Pay Toilet Public Restroom Parking Lot/Garage Entry High/Hamilton Lot High/Alma North Garage High/Alma South Garage Emerson/High Lot Cowper/Hamilton Lot Lytton/Kipling Lot Private Pay Garage Webster/Cowper Garage 30-Minute Parking Spaces Train Station Transit Stop City Shuttle Stop Marguerite Shuttle Stop Bicycle Boulevard/Bikestation® A Q S/LO R P X C F T H W/C $ KK D E G N M B CC Ca l T r a i n P a r k i n g - U r b a n L a n e UNDERPASS TO STANFORD UNIVERSITYTo Hwy 280 To Hwy 101 A B C CC N D E F G K S/L X P Q R O H T $ WC PT RR Purple Zone Coral Zone Lime Zone Blue Zone 800High Garage PERMIT PARKING Hig h S t r e e t Alm a S t r e e t Homer Avenue Channing Avenue Parking lot and garage restrictions and color zone requirements are in effect: Holidays excepted Yellow commercial loading zones 30-minute parking spaces White passenger loading zones Disability designated spaces ATTACHMENT B S e n io r C e n te r D o w n t o w n Li b r a r y C it yH a ll l o A lto ic al o n L ytto n P la z a CogswellPlaza S c o P J o h n s o n P ark W illia m s P a r k Lo t Q Lo t O Lo t P Lo t N Lo t A Lo t C Lo t K Lo t T Lo t F Lo t B Ci v i c Ce n t e r Lo t D Lo t G Lo t E Lo t H Lo t K Co w p e r We b s t e r Ga r a g e Br y a n t / L y t t o n Ga r a g e 80 0 H i g h G a r a g e Pe r m i t P a r k i n g Lo t R Hi g h Al m a Ga r a g e Lo t M EM E R S O N S T R E E T HOMERAVENUE TRE E T STREET TREET EVERETTAVENUEEVERETTAVENUE HIGHSTREET REE T ALMASTREET LYTTON AVENUE ALMA STREET EMERSONSTREET RA M O N A S T R E E T LYTTONAVENUE UNIVERSITYAVENUE RAMONASTREET BRYANTSTREET HI G H S T R E E T EMERSONSTREET ALMASTREET EM E R S O N S T R E E T HIG H S T R E E T HIG H S T R E E T HAMILTONAVENUE HAMILTONAVENUE EMERSONSTREET HAMILTON AVENUE GILMANSTREET WAVERLEYSTREET BR Y A N T S T R E E T FOREST AVENUEFOREST AVENUE BRYANTSTREET RAMONASTREET RA M O N A S T R E E T BRYANTSTREET FLORENCESTREET KIPLING STREET LYTTON AVENUE WA V E R L E Y S T R E E T WA V E R L E Y S T R E E T EVERETT AVENUEEVERETT AVENUE T ST R E E T RA M O N A S T R E E T BRYANTSTREET LYTTON AVENUE UNIVERSITY AVENUE CO W P E R S T R E E T KI P L I N G S T R E E T UNIVERSITY AVENUE UNIVERSITYAVENUE COWPERSTREET WAVERLEY STREET HAMILTON AVENUE RSTREET TREET EVERETT AVENUE COWPERSTREET TER STREET EV WEBSTER STREET WEBSTERSTREET LYTTONAVENUE TA S S O S T R E E T HAMILTON AVENUE CO W P E R S T R E E T FORESTAVENUE FOREST AVENUE WAVERLEY STREET BR Y A N T S T R E E T HOMER AVENUE WAVERLEYSTREET RAMONASTREET WEBSTERSTREET WEBSTERSTREET CO W P E R S T R E E T HOMERAVENUE HOMERAVENUE COWPERSTREET KIPLINGSTREET CHANNINGAVENUE LY WE B S T E R S T R E E T WE B S T E R S T R E E T U N I V E R S I T Y CIRCLE EVERETTCOURT LA N E 3 9 LA N E 7 E A S T LA N E 5 E A S T LA N E 6 E A S T LANE20EAST LANE30LANE20WEST LANE21 MI T C H E L L L A N E 5 E A S T BRYANT COURT PAULSENLANE LA N E 1 2 W E S T LA N E 1 1 W E S T CE N T E N N I A L W A L K DOWNINGLANE LANE 56 PE N I N S U L A C O R R I D O R J O I N T P O W E R S B O A R D EMERSONSTREET HIGHSTREET HIGHSTREET ALMA STREET ALMASTREET AL M A S T R E E T FORESTAVENUE HOMERAVENUE VENUE URBANLANE URBANLANE AL FOUND LA N E 7 W E S T LANE8WEST Th i s m a p i s a p r o d u c t o f t h e Ci t y o f P a l o A l t o G I S Th i s d o c u m e n t i s a g r a p h i c r e p r e s e n t a t i o n o n l y o f b e s t a v a i l a b l e s o u r c e s . Le g e n d Of f - S t r e e t P a r k i n g F a c i l i t i e s Do w n t o w n P a r k i n g A s s e s s m e n t D i s t r i c t Mu l t i - m o d a l S t a t i o n 0' 4 0 0 ' Do w n t o w n P a r k i n g As s e s s m e n t D i s t r i c t an d Of f - S t r e e t Pa r k i n g F a c i l i t i e s CITY O F PALOALTO I N C O R P O R ATED CALIFOR N I A P a l o A l t o T h e C i t y o f APRIL 16 1 894 Th e C i t y o f P a l o A l t o a s s u m e s n o r e s p o n s i b i l i t y f o r a n y e r r o r s © 1 9 8 9 t o 2 0 1 4 C i t y o f P a l o A l t o rri v e r a , 2 0 1 4 - 0 1 - 1 7 1 1 : 4 2 : 1 6 CD P a r k i n g A s s e s s m e n t P a r k i n g L o t s ( \ \ c c - m a p s \ g i s $ \ g i s \ a d m i n \ P e r s o n a l \ r r i v e r a . m d b ) been a relatively small amount of growth since 1988. Downtown commercial space has grown less than 10% over the past 25 years and most intensification of use has occurred in buildings that are decades older. Staff also believes that travel modes have shifted over the past 25 years, with the percentage of commuters taking Caltrain increasingly significantly. According to the 1988 Downtown Study, only 1% of Downtown workers took Caltrain in 1986. Staff is currently gathering data related to building occupancy intensities and travel mode share, which can put the calculated "deficit" in context and inform future decision making (see ongoing surveys and data collection below). Parking Occupancy Counts Since 2011, the City has measured parking occupancies for the Downtown Commercial surface parking lots and garages, as well as the surrounding residential areas. Data collection is done twice per year. In general, occupancy percentages in residential and commercial areas have increased as the economy has improved. However garage occupancies may fluctuate when companies leave the Downtown area, and permits are not yet issued to people on the wait list. Attached are the "heat maps" displaying occupancy levels of street segments in the downtown residential neighborhoods at various times of day and latest occupancy reports for the downtown parking facilities. Parking Garage Wait List City Revenue Collections administers the monthly parking pass program for the various Downtown Parking Facilities. The chart below details the current availability of parking permits for Downtown and California Avenue parking garages. In general, the City "oversells" permits and the total is adjusted on a regular basis. The City will be able to release additional permits in conjunction with the attendant program in Lot R. As of JAN UARY 27, 2014 Lot Current W/L Available Cal 249 W/L CC 112 W/L CW NOW/L 120 EG 34 W/L KT 12 W/L Q 47 W/L R 56 W/L 5 130 W/L X 11 W/L High 88 W/L Downtown Development Cap -Ongoing Surveys and Data Collection The Council initiated Phase 1 of the Downtown Development Cap study, which is the data collection and projection phase. In addition to verifying occupancy and traffic data, the study also includes two important surveys being conducted by an experienced survey firm. Travel Mode Survey: The consultants recently completed a street survey of Downtown Palo Alto visitors and employees. This survey will allow the City to have an accurate read on how people are getting into the Downtown area and for what purpose. Other questions drilled down on where people are currently parking. The results of this survey will allow the City to understand how people are getting downtown (car, train, walking, etc.) and how the availability of parking is influencing their decision. Building Intensity Survey: Current Downtown parking standards require 1 parking space for every 250 sq. ft. of new building floor area in the Downtown area. Many residents have pointed out that the intensity of use in many office buildings exceeds this standard, especially for start-up and technology companies. The survey will aim to determine the typical bUilding occupancy counts for downtown offices, in order to determine whether this current standard is accurate. The intensity of building use, used in combination with the travel mode data, can help the City establish parking policies. 8~fO~\ HILLARY E GIT~ . Director Planning and Community Environment Attachments: Residential Neighborhood Parking "Heat Maps" Downtown Parking Facility Occupancy Table City of Palo Alto Downtown Off-Street Parking Facilities Occupancy Analysis Fall 2013 Letter Name Hourly Permit Total Volume Occ Volume Occ Volume Occ Volume Occ Volume Occ Volume Occ Volume Occ Q Alma/High (North) 4 - 134 134 17 13% - - 45 34% - - 26 19% 80 60% 26 19% R Alma/High (South) 77 134 211 18 9% 15 19% 29 22% 76 99% 40 30% 196 93% 116 55% B Ramona/Hamilton 4 63 - 63 11 17% 28 44% - - 61 97% - - 59 94% 61 97% S/L Bryant St 294 394 688 29 4% 73 25% 190 48% 209 71% 130 33% 450 65% 339 49% CW Cowper/Webster 201 388 589 49 8% 55 27% 186 48% 66 33% 92 24% 327 56% 158 27% CC City Hall 187 519 706 106 15% 38 20% 279 54% 84 45% 193 37% 528 75% 277 39% 800 800 High St 4 105363-------------- Total 832 1622 2454 12AM (Open Parking) 1 Footnotes: 1 - Weekday Data Collection conducted on November 12, 2013 2 - Weekend Data Collection conducted on November 16, 2013 3 - 500 permits released in Jan 2014 due to businesses relocating out of Downtown Core during Fall 2013 4 - Private garage with public benefit parking use AM (Hourly) FALL 2013 Saturday 2GaragesAM (Permit) MID (Hourly)MID (Permit) 3 PM (Open Parking)Spaces Boatwright. Tabatha From: Sent: To: Cc: Attachments: . . LJ!)I CLEF~t;J /-\1) 0. C!\ Neilson Buchanan <cnsbuchanan@yahoo.com> j I S Or FlCE Thursday, January 30, 2014 8:23 AM IlJ JMJ 3 n .. c Chris Donlay; Paul Machado; Norman H. Beamer; Michael Hodos; Elaine MeY~lf~aiQ8 Naik; Summa, Doria Furman, Sheri; Gitelman, Hillary; Council, City; Planning Commission; Adina Levin Jan 27 City Council Action.docx I am writing to you as the primary leaders of 8 neighborhoods adjacent to the Calif and Univ Ave commercial cores. City Council is acting "fast" on a series on parking and traffic interventions and will be initiating other actions as part of a more comprehensive master plan.· This is THE ideal time to use NextDoor and your neighborhood email lists as tools to keep your neighbors informed about actions that will improve the quality of our neighborhoods. Below is the message I posted this morning on DTN Nextdoor. I also attached a longer message for neighbors who want more info. "On Monday night, Palo Alto took the first step of what Council Member Pat Burt described as a 3-legged stool to address parking and traffic woes * Step 1 was approving a framework for a residential parking permit program to reduce problems caused by large-scale use of neighborhood streets near downtown and Cal Ave for free parking. * Step 2, on February 10, City Council will be reviewing opportunities to use parking more effiCiently (valet parking, digital signs, and more parking structures) * Step 3, on February 24, will be reviewing opportunities to use less parking by improving incentives to drive less, including Caltrain GoPass, shuttles, carpool, bike improvements, and more" Attached is the longer message Neilson Buchanan 155 Bryant Street Palo Alto, CA 94301 650 329-0484 650 537-9611 cell cnsbuchanan@yahoo.com 1 On Monday night, Palo Alto took the first step of what Council Member Pat Burt described as a 3-legged stool to address parking and traffic woes * Step 1 was approving a framework for a residential parking permit program to reduce problems caused by large-scale use of neighborhood streets near downtown and Cal Ave for free parking. * Step 2, on February 10, City Council will be reviewing opportunities to use parking more efficiently (valet parking, digital signs, and more parking structures) * Step 3, on February 24, will be reviewing opportunities to use less parking by improving incentives to drive less, including Caltrain GoPass, shuttles, carpool, bike improvements, and more For Downtown and California Avenue, there are expected to be stakeholder groups including residents and business leaders working on the specifics of the programs to a) charge for parking, b) create alternatives for workers who have been using free neighborhood parking, and c) encourage alternatives to driving for workers and residents. To engage in more active dialogue on these issues, we have a special opportunity to hear from Kaid Benfield in Palo Alto next week, on February 4 at 6pm. Kaid co-authored the LEED-ND standard incorporating transportation into metrics for sustainable building. In his new book, People Habitat, Benfield writes about the attributes of character and comfort that create neighborhoods and cities that people love. "Habitat" that makes people happy is important to making places environmentally sustainable. As Palo Alto and neighboring communities wrestle with concerns that economic growth brings traffic and impacts that may damage beloved places, his perspective on these issues is timely and relevant. The venue is small and is likely to fill. Click here to RSVP. Palo Alto City Council is also looking at the bigger picture, asking residents for feedback on "core values" for the city. They will consider the input in the coming year in planning efforts for the City's Comprehensive Plan, as well as plans for downtown, California Avenue, and the transportation issues. Check out others' comments here, and add your own. Thanks, Adina Levin, for pulling this message together.