HomeMy WebLinkAbout2011-03-21 City Council Agenda PacketSpecial Meeting
Council Chambers
March 21, 2011
6:00 PM
Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is
available in the Council Chambers on the Friday preceding the meeting.
1 March 21, 2011
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.
Call to Order
Study Session
1.Development Center Blueprint Study Session
7:00 PM Special Orders of the Day
2.Community Partners Non-Profit Presentations by the Magical Bridge
Study Session
3.Update on Preliminary Analysis of a Potential Energy/Compost Facility at Palo Alto
Landfill/Byxbee Park and the Alternatives
City Manager Comments
Oral Communications
Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.
Consent Calendar
Items will be voted on in one motion unless removed from the calendar by two Council Members.
4.Peak Electricity Reduction Pilot Program for Commercial Customers
5.Resolution to Withdraw from the Financing Authority for Resource Efficiency of California
6.Approval of a Purchase Order with Western States Oil Company for a Three Year Period in
the Total Amount Not to Exceed $2,676,675 for the Provision of Automotive Fuel
7.Approval of a Conditional Use Permit and a Record of Land Use Action Amending an Existing
Conditional Use Permit to Allow the Addition of Two Wireless Fidelity (Wi-Fi) Antennas
2 March 21, 2011
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.
Mounted to the Front Façade of the Hotel President at 488 University Avenue͘
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8.Recommendation of the Utilities Advisory Committee to Approve the Bylaws of the Utilities
Advisory Commission of the City of Palo Alto
9.Adoption of a Resolution Summarily Vacating Public Service Easements within areas of
Underground Utility District No. 41
10.Adoption of a Resolution Approving Three Contracts with the Northern California Power
Agency (a) Amendment No. Two to Agreement for Construction, Operation and Financing of
Geothermal Project No. 3, (b) Amended and Restated Geothermal Project Operating
Agreement between NCPA and the Project Participants; and (c) Amendment No. 2 to NCPA
Facilities Agreement
11.2nd Reading Adoption of an Ordinance to Amend the Existing Palo Alto Commons Planned
Community (“PC”) to Add a 0.83 Acre Site and Rezone it to PC from CN and RM-15 for a new
3-story Building Providing 44 Senior Assisted Living Rental Units at 4041 El Camino Way
(First reading March 7, 2011 –Passed 9-0)
12.Approval of the City Council Priorities Report for Calendar Year 2011
13.Approval of Amendment Three to Contract S1013554 with Capitol Advocates, Inc. to Extend
the Term and Add $32,000 for a Total Not to Exceed Amount of $125,500 Legislative
Advocacy Services Related to High Speed Rail
14.2nd Reading: Adoption of Ordinance Amending Section 2.04.270 (Introducing ordinances
and resolutions for passage and approval) of Title 2 (Administrative Code) of the Palo Alto
Municipal Code to Remove Provisions Related to Reading of Ordinance and Resolution Titles
(First reading February 14, 2011--Passed 9-0)
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.
Council Member Questions, Comments and Announcements
Members of the public may not speak to the item(s)
Adjournment
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabiltities who require auxilliary aids or services in using City facilities, services
or programs or who would like information on the City’s compliance with the Americans with
3 March 21, 2011
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.
Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance.
PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council/Committee concerning
any item that is described in the notice of this meeting, before or during consideration of that
item. If you wish to address the Council/Committee 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/Committee, but it is very helpful.
4 March 21, 2011
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
Action Agenda
Action Agenda from the City Clerk
Schedule of Meetings
Schedule of Meetings from the City Clerk
Tentative Agenda
Tentative Agenda from the City Clerk
Informational Report
1.Police Auditor’s Final Report 2010
Report of City Manager Action Pursuant to the City’s Water Contract with San Francisco on
the Conduct and Final Settlement Agreement of the Bay Area Water Supply and
Conservation Agency’s Fiscal Year 2007-08 Audit of the Suburban Revenue Requirement
Storm Drain Oversight Committee Findings Memo Regarding FY2010 Storm Drainage Fund
Expenditures
Public Letters to Council
2.Public Letters to Council from the City Clerk
Supplemental Information
City of Palo Alto (ID # 1460)
City Council Staff Report
Report Type: Study SessionMeeting Date: 3/21/2011
March 21, 2011 Page 1 of 3
(ID # 1460)
Summary Title: Development Center Blueprint
Title: Development Center Blueprint Study Session
From:City Manager
Lead Department: City Manager
Recommendation
Staff recommends that Council provide comment to staff on the direction discussed in this
report on the Blueprint for Development Center (DC) Change.
Background
In July 2010, the City Manager launched a comprehensive project to streamline and modernize
the City of Palo Alto’s permit process focusing on improving the customer satisfaction and
regulatory efficiency. This study session provides a midpoint check in with Council before the
Blueprint project is completed in July this year.
The City Manager’s Office is overseeing the project, which is managed day to day by an in-
house manager, Yvonne Sheets-Saucedo, from the Development Center. In addition, staff is
using a consultant with extensive experience nationally with the development and permit
processes which provides the opportunity to implement ideas and projects already proven
successful in other communities. At the core of the project, however, are three focus groups
summarized below and discussed in greater detail in Attachment A to this report:
1. Development Center Customer Advisory Group (DCCAG)—This group is comprised of
Development Center users such as architects, homeowners, contractors and other frequent
customers. This group provides the feedback to ensure that the recommendations are
responsive to the real life experiences of the customer.
2. Staff Action Team (SAT)—This team is made up of key staff representatives from all the
departments with a role in the development process or customer interface. This group
brainstorms programs and process improvements to facilitate inter-department coordination
enhancing the customer’s experience to improve communications with the public and reduced
permit delays.
3. Staff Steering Committee (SSC)—This committee contains Executive Leadership members
from the departments involved with the development process. The SSC ensures that the
March 21, 2011 Page 2 of 3
(ID # 1460)
Blueprint Project and program ideas generated by the DCCAG and the SAT are implemented
and mechanisms are in place to ensure accountability and allocation of adequate resources.
Discussion
The Development Center Blueprint team is expected to complete its recommendations to the
Council by July 2011. Much of the feedback from the DC users to date has been focused on
process and system issues within the City Manager’s authority to modify, so few of the
recommended changes are expected to involve code amendments or legislative actions by
Council. Blueprint recommendations are, however, expected to involve organizational and
budget changes which will likely require Council action.
Once the process improvments and management structures are implemented beginning in July,
however, any code or legislative changes deemed necessary will be brought forward. The
committee work thus far has resulted in three findings listed below and work has already begun
on their implementation ahead of the final Blueprint recommendations.
Issue: Lack of accountability for Development Center day-to-day operations and customer service.
Staff Actions:
@ Create a single manager for Development Center to carry out the mission across departments.
Currently DC staff reports to their respective departments.
@ All staff interacting with customer should be physically located at the DC.
@ The DC operating unit will be responsible for collecting and reporting performance results.
Departmental managers and supervisors will be responsible to monitor staff performance
and correct issues.
Issue: Individual Project Management is a desirable service not currently provided. Project
Management would provide a central point of contact and in house advocate for qualifying
projects. Currently staffing levels do not provide the resources to implement this service.
Staff Actions:
@ Create adequate project management staffing to carry-out the Blueprint objective for all
levels of customer service.
@ Beginning in early April, staff will implement project management services as a pilot to
determine necessary program modifications prior to the Blueprint final report in July.
@ To insure equitable customer access to the service a tiered approach will be implemented.
Project management levels would include:
o Level 1: Customer routing, simple information requests and simple permits (e.g.
residents and homeowners)
o Level 2: Complex information requests and counter-based projects (e.g. -simple
residential)
o Level 3: Complex project management for submittal-based project (e.g. -complex
residential and commercial)
March 21, 2011 Page 3 of 3
(ID # 1460)
Issue: Customer volume and workloads dominate staff resources. Continuing budgetary constraints
on staff and other resources limit resources needed to match workload volumes and consistently
deliver reliable and predictable customer service. A funding mechanism is needed to address
volumes as well as to sustain the implementation of new services such as project management.
Staff Actions:
@ Transition Development Center funding to a Special Revenue Fund thereby separating
itself from the General Fund. Allow for the year end fund balances to carry-over from
year-to-year to create a “reserve” for seasonal workload variations.
@ Adopt a funding approach that strives to set fees at the actual cost of providing services,
including direct salary expense, departmental overhead and citywide overhead expenses.
@ Create an ongoing customer group to monitor the special revenue fund and system
performance and provide feedback to the City Manager’s Office and City Council.
The Blueprint Piloting Program is very comprehensive and will include testing new processes,
measuring staff capacity, evaluating technology and publications, identifying training needs and
conducting surveys for “real time” customer feedback. The Piloting Program will enable staff to
generate performance standards so metrics can be established when the program is
permanently implemented. Staff expects that the piloting activity, starting in April through July,
will provide the necessary data to refine criteria and resources needed to implement a fully
intergated system to ensure that all levels of customer interaction are addressed. Moreover,
the pilot program will provide staff valuable customer feedback that will be a significant factor
in how the permanent program is promoted and launched to the public later this year.
Prepared By:Steve Emslie, Deputy City Manager
Department Head:James Keene, City Manager
City Manager Approval: James Keene, City Manager
Friends of the Magical Bridge Playground*
Because everyone deserves a place to play!
Our Mission:To provide the first playground in this area where families of all abilities can experience the joy
of outdoor fun.
Why?Because none of Palo Alto’s 34 public parks are fully accessible to wheelchairs and those with various
physical and cognitive challenges.
Where?In an underused portion of Mitchell Park (behind Abilities United), generously donated by the City
of Palo Alto.
Magical Bridge Playground Features Include:
Fluid ramping systems will allow a wheelchair to travel to all parts of the park.
Smooth rubber ground surface, not all sand and bark, will accommodate wheelchairs and those with visual
impairments.
Fully accessible play stations and park features will ensure everyone can play together.
Raised sand table will bring sand play to those who use walkers and wheelchairs.
Accessible playhouse will foster pretend play among children of all abilities.
Community stage will provide a new gathering place and enhance imagination for all!
Who Benefits Most –Everyone!
1,255 of Palo Alto’s children between the ages of 5 and 17 with “special needs.”
8,014 community members between the age of 21 and 75 with an identified disability.
10,300 Palo Altans over the age of 65, some with limited mobility.
Funding:$1.6 Million needed
$110,000 raised or pledged, mostly private via donations
Plus, $2,500 Palo Alto Community Grant recipient in 2010.
Let’s build this park and stretch Palo Alto’s innovative spirit beyond technology!
* Part of Friends of the Palo Alto Parks, a 501c3 since 2003
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City of Palo Alto (ID # 1295)
City Council Staff Report
Report Type: Study SessionMeeting Date: 3/21/2011
March 21, 2011 Page 1 of 7
(ID # 1295)
Summary Title: Analysis of Energy/Compost Facility at Landfill
Title: Update on Preliminary Analysis of a Potential Energy/Compost Facility at
Palo Alto Landfill/Byxbee Park and the Alternatives
From:City Manager
Lead Department: Public Works
Executive Summary
The City hired Alternative Resources, Inc. (ARI) to conduct a Feasibility Study for
locating an Anaerobic Digestion facility on a 9-acre portion of the Palo Alto Landfill
(Byxbee Park) and to study prescribed alternatives. Given the complexity of this
analysis and the strong interest by multiple stakeholders, Council also requested staff to
present its Preliminary Analysis to the Council before completing the final Feasibility
Study. Staff has conducted several community meetings on the preliminary analysis
and received substantial Public comments. Both proponents and opponents of a Palo
Alto facility are requesting changes and/or further work on the Preliminary Analysis.
ARI plans to address public comments received to date as well as any Council
comments received at this Study Session in the Feasibility Study. It is expected the final
Feasibility Study will be presented in early fall.
This staff report discusses the feasibility study process and summarizes the alternatives
studied, the key findings in the Preliminary Analysis and the public comments received
to date. The staff report also contains information on other alternatives and
technologies as directed by Council.
Background
Palo Alto’s Process to Date:
Palo Alto’s Blue Ribbon Compost Task Force recommended to Council that an Anaerobic
Digestion Facility be pursued in the vicinity of the Palo Alto Regional Water Quality
Control Plant (Plant) to manage the City’s yard trimmings, food scraps and wastewater
solids (“biosolids”). The exact location of such a facility has been problematic because
of Palo Alto’s urbanized nature, the fact that no land has been specified for such a
facility, and the fact that the Landfill has been dedicated as Parkland (Byxbee Park).
Following receipt of the Compost Task Force Report, on April 5, 2010 (CMR:165:10,
Attachment A), Council directed staff to:
March 21, 2011 Page 2 of 7
(ID # 1295)
1.Hire a consultant to evaluate Dry Anaerobic Digestion
2.Prepare an applicable level Environmental Impact Report (EIR) focused on 8-9
acres of Byxbee Park;
3.Study energy conversion-technologies including Anaerobic Diegestion at Palo
Alto’s Wastewater Treatment Plant as part of its Facility Planning process; and
4.Pursue partnering opportunities for organics processing within 20 miles of Palo
Alto.
Palo Alto hired ARI to conduct the Anaerobic Digestion Study, and staff has been
pursuing Nos. 3 and 4 above. An appopriately scoped EIR (No. 2 above) will be
produced at the appropriate time should Palo Alto continue to pursue a Palo Alto
Facility. ARI is conducting an Initial Study (CEQA “Checklist”) which is the first step in
an EIR. Council members requested that a Preliminary Analysis be completed ahead of
the full Feasibility Study. The Preliminary Analysis was done by ARI and placed on the
Palo Alto Website on January 26, 2011. Public meetings were held on February 23 and
March 9 and public comments have been received in writing and at the meetings.
Terminology and Technology: Garbage, or Municipal Solid Waste (MSW), is now being
separated at the source by most communities, including Palo Alto, to facilitate recycling
and reuse. Recyclables (principally paper products, metal, glass and plastics) were the
first to be separated. Recently, organic material (principally yard trimmings and food
scraps, which are made up mostly of carbon containing molecules) have been the
target of separation efforts (Source Separated Organics, or SSO). Paper products have
traditionally been handled as recyclables, but can also be managed as SSO because
they are principally made of organic molecules and are amenable to most of the
management methods available for yard trimmings and food scraps. Currently, Palo
Alto has a program for source separation of commercial (principally food service
facilities) food scraps, but not yet residential food scraps.
Landfilling MSW or any of its components is undersirable because it takes up space,
causes envrionmental damage and wastes valuable resources. The search for a good
alternative for Palo Alto’s SSO led to the Energy/Compost Feasibility Study. Aerobic
(traditional) composting allows bacteria to use oxygen, begin the decomposition
process, and produce compost. Palo Alto has used this process for its yard trimmings
(not food scraps) for many years, but its compost facility will close in late 2011 or early
2012. Additionally, aerobic composting does not take advantage of the energy content
of SSO.
Therefore, many communities are considering a broad range of technologies called
Conversion Technologies (CT), ones that convert the energy locked into the organic
molecules into energy. Traditional incineration is generally not considered a Conversion
Technology because its principal goal is to reduce the volume of MSW and not recover
energy. Traditional incineration uses large volumes of air and fully oxidizes the organic
molecules, producing principally CO2, but other air contaminants as well.
March 21, 2011 Page 3 of 7
(ID # 1295)
Anaerobic Digestion is a Conversion Technology because anaerobic bacteria produce
methane as they break the organics down, and that methane is an energy source.
Anaerobic Digestion can either be “wet” (in liquids in tanks) or “dry” (piles in vaults)
depending on the nature of the material. Another class of Conversion Technologies are
higher temperature processes that depend on tempertuare and pressure, not bacteria,
to break down the MSW or SSO. Gassification and Pyrolysis are the two terms used
most for the high temperature Conversion Technologies. The principal difference from
incineration is that they allow little (gassification) or no (pyrolyssi) air into the system.
Therefore, traditional combustion of organics does not occur, but rather conversion of
those organics to fuels. Many proprietary gassificaion processes are now marketed, but
most processes being called gassification are producing sysnthesis gas (“syn gas”)
which is a combination of Carbon Monoxide (CO) and Hydrogen (H2) which can be used
as a fuel and combusted in a subsequent step. Depending on the temperature and
pressure, other fuels can be produced. Gassification generally also produces a residual
slag, and pyrolysis can produce a residual substance with carbon in it. If the high
temperature for the process is achieved with an electric arc, it is generally called
“plasma” or “plasma-arc” technology.
Further information on technologies is contained in Attachment C.
Discussion
Dry Anaerobic Digestion Preliminary Analysis
The City’s consultant (ARI) has prepared a Preliminary Analysis of Dry Anaerobic
Digestion (Alternative 1) and compared the cost and Greenhouse Gas (GHG) emissions
to two alternatives: Dry Anaerobic Digestion on Zanker Road in North San Jose
(Alternative 2), and conventional Aerobic Composting near Gilroy (Alternative 3). Dry
Anaerobic digestion (DAD) in Pal Alto had four sub-alternatives:
1(a):DAD of all 3 residuals (yard, food and biosolids) at the 9-acre
Landfill/Byxbee Park site.
1(b):DAD for yard and food on the 9-acre site and Wet Anaerobic
Digestion (WAD) at 9-acre site.
1(c):DAD for yard and food on the 9-acre site and WAD at the Regional
Water Quality Control Plant (Plant)
1(d):DAD for yard and food on the 9-acre site and continued
incineration of biosolids at the Plant.
The Alternatives and sub-alternatives are shown in Attachment B.
Economic Analysis Comparison
March 21, 2011 Page 4 of 7
(ID # 1295)
The Preliminary Economic Analysis (Attachment D) shows the lowest cost to be
Alternative 3, Aerobic Composting near Gilroy. Dry Anaerobic Digestion in North San
Jose (Alternative 2) is shown to be slightly more costly, and Anaerobic Digestion in Palo
Alto (Alternative 1) is shown to be the most expensive. Alternative 1 has a “High” and
“Low” estimate because there was a wide range of responses from vendors concerning
their costs. Alternatives 2 and 3 do not contain a range because the estimates came
from a singe vendor. The difference between the High and Low estimates appears to
be due to the level of complexity inherent in the designs of the vendor’s proposed
systems. The Sensitivity Analysis (Attachment E) done to date shows that if very
substantial grants were obtained for DAD, the “Low” estimate costs to Palo Alto could
be comparable to the costs of Alternatives 2 and 3.
Greenhouse Gas Analysis Comparison
The life-cycle Greenhouse Gas (GHG) emissions have been estimated for each
alternative. The units are Metric Tonnes of Carbon Dioxide Equivalents per Year (MT
CO2-e/Year). Greenhouse gasses are made up of different gasses; the principal ones for
this analysis being carbon dioxide and methane. Methane is a much more potent
Greenhouse Gas than Carbon Dioxide. Therefore, when GHGs are added together, they
must be converted to “Carbon Dioxide (CO2) Equivalents” and then added together.
Attachment F is a summary of the GHG Preliminary Analysis.
The Preliminary Analysis shows that all of the Alternative 1 sub options produce
substantially less GHGs than the “export” options; Alternatives 2 and 3. It also shows
that the (current) incineration of biosolids is a major contributor of GHGs making
Alternative 1 (d) the highest emitting GHG alternative of the four No. 1 sub-alternatives.
Public Comments
Public Comments received to date on the Preliminary Analysis fall into four categories:
1.Suggested changes to the economic and greenhouse gas models (the
methodology for deriving the estimates);
2.Suggested new runs of the model with different inputs (expanding the sensitivity
analysis);
3.Suggested new alternatives beyond the 6 studied to date, and;
4.General comments.
An example in the first category is a suggestion to include the cost of rebuilding the
RWQCP incinerator in options involving continued use of the incinerator. Staff agrees
that this cost needs to be included to follow standard economic engineering
methodologies; and to insure that alternatives being compared have similar design
lives.
An example in the second category is the suggestion to run the model with a higher
land rent value. The model was run with a land rent value comparable to “Parkland” as
March 21, 2011 Page 5 of 7
(ID # 1295)
the “highest and best use”. The suggestion is to prepare a model run using land rent
comparable to “Industrial/Commercial” as the “highest and best use”. Staff will do so.
Ultimately, the land rent value would be established by Council, should a project move
forward.
An example in the third category is a new suggested alternative where biosolids and
food scraps are mixed together in an anaerobic digester and yard trimmings are
composted separately. Use of RWQCP land would be maximized, with use of the 9-acre
site as needed. Staff has done some work in this direction and will formulate one or
more related alternatives immediately following Council feedback on March 21, 2011.
A full list of the public comments received is contained in Attachment G.
Regional (“Partnering”) Solutions
Staff continues to explore the possibility of Palo Alto partnering with other agencies
within a 20-mile radius, as directed by Council. Alternative 2 is the one (and only) near
term option that has been identified. Palo Alto’s hauler (GreenWaste of Palo Alto) is
associated with another corporation (ZWED) which is planning to construct a Dry
Anaerobic Digestion Facility for at least food scraps on Zanker Road in North San Jose –
within 20 miles. Therefore, staff is in frequent communications with Greenwaste, has
obtained cost estimates for food scraps and included them in the economic analysis.
Staff believes that Palo Alto’s current contract with Greenwaste could be modified such
that its food scraps could go to the Zanker Road facility. While it is not clear when this
facility would be available, it appears quite likely it could occur before the planning date
for this study: 2015.
Discussions with Palo Alto’s SMaRT Station partners have not resulted in any
alternatives within the 20-mile radius (or anything closer than Gilroy ZBest facility).
Sunnyvale has not identified any land for an Energy/Compost Facility near or at the
current SMaRT Station. Neither Mountain View nor Sunnyvale staff has received
direction from their Council to pursue development of such a facility within their
jurisdiction.
Pursuing Conversion Technologies
While Council directed staff to specifically study Dry Anaerobic Digestion on the 9-acre
site, it also gave staff broader direction to look at other Conversion Technologies in
connection with the Regional Water Quality Control Plant (RWQCP) Long Range
Facilities Planning Process. Staff is doing so.
One recent development is that the City of San Jose has received a grant to assist in
conducting a Gasification Feasibility Study at the San Jose Water Quality Control Plant.
Such a facility would produce energy from biosolids and wood waste, and possibly other
organics. Staff is in communication with San Jose, and will be involved in the Feasibility
Study. San Jose is also considering refurbishing four aging wet anaerobic digesters at
March 21, 2011 Page 6 of 7
(ID # 1295)
the San Jose Plant, and discussions are underway with San Jose about the potential for
Palo Alto bringing biosolids there. The San Jose Plant is within 20 miles.
Options for biosolids, restaurant grease, and some food scraps on the RWQCP site are
being studied through the RWQCP Long Range Facilities Planning Process. Three
conversion technologies: wet anaerobic digestion, gasification and pyrolysis are being
reviewed at the screening level. Wet anaerobic digestion is an established process and
used frequently at sewage treatment plants. Gasification pilot projects are emerging
with increasing frequency. Pyrolysis has still not been used on biosolids, as far as staff
is aware. As stated above, staff has received a number of public comments urging that
one or more new alternatives for the Energy/Compost Feasibility Study be identified
involving shared use of the RWQCP site and the 9-acre site. Staff will be addressing
these comments following feedback from Council on March 21, 2011.
State Lands Commission Involvement
Historically, the State Lands Commission has exercised sovereign control over much of
the public land in the Baylands. The City has disputed the State’s claim, but as a
workaround has obtained permits to use the land. These permits have taken the form
of lease agreements with both sides reserving their right to assert ownership. Recently,
several Palo Alto residents have filed a complaint with the State Lands Commission
which raises two issues:
1.Palo Alto’s alleged tardiness in opening closed portions of the Palo Alto Landfill to
the public as parkland (Byxbee Park).
2.Whether the State Lands Commission would “permit” (or enter into a lease) the
use of “sovereign” lands for an Energy/Compost Facility on the 9-acre site.
Palo Alto is discussing both these issues with State Lands Commission representatives.
With respect to the first issue, Council has directed staff to complete the work as rapidly
as possible to underground utilities, level the surface, seed the closed portions of the
Landfill, and remove existing fences. This work is expected to be completed by July 1,
2011. Given the necessity to run plans through CalRecycle and the City’s own
competitive bidding process, Staff does not believe this work can be completed much
sooner than projected With respect to the portion of the Landfill still open, staff
expects to cease acceptance of waste mid-to-late 2011, with the area being open to the
public by the end of 2012. Again; staff believes this is a realistic estimate.
With respect to the Energy/Compost facility study, staff has renewed discussions with
the State Lands Commission. Early indications were that such a facility was
permittable, in the same way that the current landfill and RWQCP have been permitted.
Staff will report back to Council further as discussions continue.
Utilities Advisory Commission Discussion on March 2, 2011
March 21, 2011 Page 7 of 7
(ID # 1295)
The Utilities Department would be the buyer for any energy (gas or electricity)
generated by the project and so on March 2, 2011 the Utilities Advisory Commission
reviewed the price Utilities would pay for the energy.Although no vote was taken, the
sense of the UAC was that a price based on avoided cost, including the value of
renewable energy, was appropriate.The price recommended by Utilities Department
staff for use in the study matches that methodology.The draft minutes from the UAC
meeting are included as Attachment I.
Attachments:
·Attachment A CMR165-10 (PDF)
·Attachment B Alternatives and Sub-Alternatives (PDF)
·Attachment C Information on Technologies (PDF)
·Attachment D Preliminary Economic Analysis (PDF)
·Attachment E Economic Sensitivity Analysis (PDF)
·Attachment F Greenhouse Gas Analysis (PDF)
·Attachment G Public Comments (DOC)
·Attachment H March 21, 2011 Study Session Presentation (PPT)
·Attachment I Excerpted Minutes from 3-2-11 Utilities Advisory Commission Meeting (DOC)
·Attachment J Public Written Comments (PDF)
·Attachment K Additional Public Written Comments (PDF)
Prepared By:Philip L. Bobel, Manager, Environmental Compliance
Department Head:J. Michael Sartor, Interim Director
City Manager Approval: James Keene, City Manager
•
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City of Palo Alto 11
City Manager's Report
TO: ' HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE: APRIL 5,2010 CMR:165:10
REPORT TYPE: ACTION ITEM
SUBJECT: Recommendation to Direct Staff: 1) To Defer Further Action on an
Anaerobic Digestion (AD) Facility or Aerated Static Pile (ASP)
Composting Facility Within Palo Alto, Until and Unless a Usable Site
is Identified; 2) To Examine the Feasibility of Energy Conversion
Technologies (Including AD Technologies) During the Upcoming
Regional Water Quality Control Plant Master Planning Process;
3) To Pursue Local Partuering Opportunities with SMaRT® Station
Partners and/or Local Organic Waste Processing Companies that are
Developing Private or Energy Conversion Facilities Within a 20-Mile
Radius of Palo Alto; and 4) To Resume Acceptance of Commercial
Garbage at the Landfill
RECOMMENDATION
Staff recommends that Council direct staff to:
1. . Defer further action on an anaerobic digestion (AD) facility or aerated static pile (ASP)
composting facility within Palo Alto, until and unless a usable site is identified;
2. Examine the feasibility of energy conversion technologies (including AD technologies)
during the upcoming Regional Water Quality Control Plant (RWQCP) Master PI arming
Process;
3. Jnvestigate and pursue local pannering opportunities with SMaRT® partners andlor local
organic waste processing companies who are developing private AD or energy
eonversion facilities within a 20-mile radius of Palo Alto; and
4. Resume acceptance of commercial garbage at the landfill.
BACKGROUND
Thc City currently maintains a 7.5 acre conventional windrow composting facility for yard
trimmings on an active section of the Palo Alto Landfill (located within Byxbee Park) which is
expected to close within 12 months after the landfill reaches the permitted grading levels. The
landfiIl is expected t(j reach permitted capacity near the end of 20 II. The
green material managed at the facility includes source ,separated yard trimmings such as lawn
clippings, lcaves, tree and shrub clippings, brush, and other vegetative materials generated
through landscape maintenance activities. Additionally, leaves accumulated through the City's
street sweeping operations "selected screened loads" and clean tree trunk/limb wood grindings
(I to 2-inch chips) are also managed at the facility.
CMR:165:10 Page 1 of6
On August 6, 2007, Council directed staff to develop a work plan to explore options to keep
compo sting in Palo Alto. A work plan for a composting feasibility study was presented and
approved by Council on January 22, 2008 (CMR: 116:08). Staff prepared the feasibility study
and presented the results of the study on April 28, 2008 (CMR:219:08). At that point Council
directed staff to table the issue until the Baylands Master Plan update was approved and to get
the input of the Parks and Recreation Commission (PRC) and the Planning and Transportation
Commission (PTC). On December IS, 2008 (CMR:470:08) and January 12, 2009
(CMR: 116:09), Council further discussed the composting issue and made a decision to convene a
citizen-based Blue Ribbon Task Force (BRTF) to further examine the composting question. At
that time, Council specifically directed the BRTF to avoid parkland location options.
On October 19, 2009, the BRTF presented its results and recommendations to Council
(CMR:402:09). The lead site recommended by the BRTF would have had resulted in potential
impacts on the Palo Alto Airport operations, as expressed to Council. Therefore, Council
directed staff to further examine the other alternatives and return to Council. The motion from
October 19, 2009 consisted ofthe following directives:
1) Accept the September 9, 2009 Palo Alto Compost Task Force Final Report (Report)
submitted by the Compost Blue Ribbon Task Force (BRTF);
2) Direct Staff to implement the short term recommendations for CUl'l'ent compost
operations contained in the BRTF Report as modified by the Staff response;
3) Request Staff to retum with analysis and recommendation of whether to incorporate
an interim solution of aerobic static pile composting or consider off site composting
on an interim basis;
4) Staff to evaluate the two options (Embarcadero Road/Airport site and 5-6 acres in the
northwest corner of the current landfill site) on the locations;
5) Staff to consider an option of partnering with another city or cities;
6) Staff to consider whether there are other locations on Embarcadero Way that could
work, this would take no more than 90 days;
7) Location of any facility would not have any negative impact on the Palo Alto Airport,
its operations, finances, and relationship with the FAA or Santa Clara County;
8) Staff to work closely with the airport community in the development of any
proposals, and
9) Staff to take into consideration the Airport Business Plan being developed.
In a separate action, Council adopted a statement of intent to proceed toward an anaerobic
compo sting system, at an unspecified location.
Since the last Council action on composting, staff held a public meeting with airport stakeholders
at West Valley Flying Club Meeting Room on November 4,2009. Minutes from that meeting
are included as Attachment A and further documented the negative impacts of a site on Airport
property. Staff also held a public meeting to discuss the expected recommendations of this staff
report at Cubberley Community Center, Room A-6 on December 9, 2009. Notes from that
public meeting are included as Attachment B. In addition, staff presented information (and
answered questions) to the Council in a study session on March 8,2010.
CMR:165:10 Page 2 of6
DISCUSSION
Short-term Recommendations
Staff has implemented all of the short-tenn recommendations for current compost operations
contained in the BRTF Report as modified by the staff response (Directive No.2, above). The
analysis of aerated static pile (ASP) composting within Palo Alto or off site composting as
interim solutions (Directive No.3, above) is contained in Attachment D. Staff concludes that an
ASP facility is too expensive and that there is no site that could be ready in time to serve as an
interim facility. Therefore the current interim plan of taking yard trimmings to the Z-Best Gilroy
facility should continue to be the shortcterm approach, JlPon closure of the Palo Alto Compost
Facility.
Loeal Siting Options
Evaluation of three pennanent siting options (the Embarcadero Road/Airport site, the northwest
comer of the eurrent landfill Byxbee Park site, and private properties along Embarcadero Way),
is also summarized in Attachment C, consistent with Directives No. 4 and 6, above. After
furthereonsultation with the Airport community, staff concludes that the Embareadero
Roadl Airport site would negatively impact that community and proposes no further work on that
site in confonnance with Directive No.7, ahove. With respect to the possible sites along
Embarcadero Way referenced in Directive No.6, staff concludes that procurement of sufficient
property would be too expensive and potentially disruptive for the existing land .owners and
tenants .. The site closest to the RWQCP entrance is a self-storage facility with numerous
individual tenants. In addition there would be neighborhood compatibility hurdles with utilizing
the properties on the west side of Embarcadero Way.
With respect to the construction of an Anaerobic Digestion facility in the northwest comer of the
current landftlllByxbee Park site, staff concludes that a detailed Feasibility Study would have to
be conducted by an engineering consultant to detennine costs and fully evaluate impacts.
Projected cost data obtained by Staff from venders has not been verified and is not sufficient for
final decision making. An Anaerobic Digestion facility is consistent with the October 19, 2009
Council direction and with the recommendations of the Compost Blue Ribbon Task Force.
However, given the key constraint (site is on dedicated parkland) of the landfilllByxbee Park
site, staff does not recommend moving forward with the Feasibility Study until and unless the
constraintis removed (Recommendation No.1, above). A Feasibility Study of this magnitude is
best completed in conjunction with an Enviromnental Impact Report so that appropriate
mitigations are identified and incorporated into the project design. The total estimated cost of
this detailed analysis would exceed two hundred fifty thousand dollars. This is a staff estimate
based on experience with the formerly proposed Enviromnental Services Center (ESC) at nearly
the same location on Byxbee Park.
Regional O)2portunities
Additionally, staff is actively exploring conversion technology options with the otherSMaRT®
Station partner cities, as well as opportunities to send organic materials to potential new privately
developed anaerobic digestion facilities.
Regiollal opportunities for anaerobic or other advanced processing are preliminary, but emerging
quickly. Several jurisdictions in the area are begiuning to express interest and explore their
CMR16S:10 Page 3 of6
abilities to build and operate regional facilities to provide organics processing in the future.
Currently no firm commitments exist, but opportunities for collaboration eould be pursued by the
City as they are identified. For example, the City's SMaRT® Station partners, Mountain View
and Sunnyvale, both have adopted zero waste goals. In addition, the City has an established
relationship with them in owning and operating a transfer and processing facility through 2021.
Both of these cities have an immediate interest in developing or using conversion technology to
meet their waste reduction goals and would likely be potential partners to build and operate an
anaerobic digestion or other conversion facility.
The primary private sector processing OPP011unity available in the near term is a facility being
developed by GreenWaste Recovery, Inc (Green Waste). GreenWaste, along with their business
partner from Germany, KOMPOFERM, have formed a subsidiary company called Zero Waste
Energy Development Company, Inc. (Zero Waste Energy). They are in the fmal planning stages
of designing a IS0,000-ton per year anaerobic digester in San Jose located approximately 12
miles from Palo Alto.
In September 2009, the City of San Jose and Zero Waste Energy executed a Memorandum of
Understanding (MOU) regarding their intent to develop lease terms for use of approximately 40
acres of a closed landfill site loeated beside the San Jose/Santa Clara Water Pollution Control
Plant· for a biogas facility. The first phase of the processing site, 50,000 tons per year, is
anticipated to be ready for operation as soon as late 2011. Initially, the processing plant
anticipates taking a blend of food scraps and yard trimmings from jurisdictions to produce
biofuel and compost.
GreenWaste is the collection and processing provider for the City of Palo Alto's solid waste,
recyclables, yard trimmings, and food scraps. Staff has had preliminary discussions with
GreertWaste about utilizing this facility for the City'S food scrap tonnage, and some or all of our
yard trimmings. Finally, staffhas also met with another company, Harvest Power, that is also
pursuing development of a regional AD facility for the south bay area. Harvest Power has not
identified any specific faeility location yet.
Regional Water Quality Control Plant Master Plan
Under the existing adopted Capital Improvement Project (CIP) WQ-IOOOl, staffwill soon be
procuring consultant services to prepare a Master Plan for the Regional Water Quality Control
Plant. The draft scope of work requests an analysis of energy conversion technologies (including
anaerobic digestion) that might be suitable replacements for biosolids incineration in the future.
The Master Plan Work is scheduled to begin later this year.
Feedstocks and End Products
Regardless of whether the City pursues partnership with a private firm or a regional conversion
technology facility, it is important to nnderstand our various feedstocks and what end products
are to be produced and marketed. A feedstock is the raw waste material that would be proeessed
and includes food waste, sewage biosolids, yard trimmings, and soiled paper. A single
technology may not be best for the various organic material feedstocks that exist in Palo Alto.
For example, certain feedstocks require greater vector and odor control than others. Certain
feedstocks may also affect the marketability of any end product compost material due to
concentrations of metals, fecal coliform bacteria, and other contaminants. These issues will
CMR165:10 Page 4 of6
continue to guide the City into a solution that will best serve Palo Alto's needs for the long term.
Because of the upcoming Master Plan and the various prospects for new regional facilities, it is
not yet clear whether a joint venture with other communities, a processing contract with a private
facility, an anaerobic digestion facility at the RWQCP, or some combination of the
aforementioned are in the City's best interests. Therefore, staff is recommending continuing to
explore advanced tecImoiogies at the Regional Water Quality Control Plant and at Regional
locations in the South Bay area, as expressed in Recommendations 2 and 3 above.
Commercial Garbage Disposal Moratorimn
On January 12, 2009 Couucil passed a motion containing the following provision:
"The City shall suspend accepting commercial garbage at the Palo Alto dump while awaiting
City Council action on the recommendations ofthe BRTF."
Staff interprets this provision to mean that it is to recommence acceptance of commercial
garbage upon further action by Council on the compo sting issue. Staff is seeking Council
confirmation of this interpretation through Recommendation No.4, above.
Follow-up to Study Session on March 8, 20 I 0
Attachment D contains further staff responses to questions and comments raised at the Study
Session on March 8,2010, including the potential early conversion oflandfill Phases IIA and lIB
to park use.
As a follow-up to the community· response at the Council Study Session on March 8, 2010,
Council may wish to provide specific direction to staff about conducting a scientific random
voter survey regarding the Byxbee Park site option. This survey would gage resident sentiment
about the possible undedication of a portion of Byxbee Park for an organic material processing
and energy generation facility. Similar voter surveys have been performed about other issues for
less than $25,000. Staff could therefore procure these polling services using unspent Refuse
Fund operating budget for program and project consultants. Survey questions and language
could be referred to the Policy and Services Committee if the Council moves to proceed with this
type of community outreach.
Attachment E is an aerial map from the Study Session presentation that shows two City-owned
areas of the Baylands that are not currently dedicated as parkland. These areas could potentially
be swapped for land within the current Byxbee Park. A potential survey could also gage voter
sentiment towards such a land swap idea.
RESOURCE IMPACT
There. is no additional resource impacts associated with the recommendations in this report
beyond what has already been anticipated in the Council adopted Zero Waste Operations Plan
(CMR:123:07).
ENVIRONMENTAL REVIEW
The staff recommendations in this report do not constitute a "project" as defined by the
California Environmental Quality Act (CEQA).
CMR165:1O PageS of6
POLICY IMPLICATIONS
The recommendation does not represent changes to existing City policies. The recommendation
is consistent with the Council adopted Zero Waste Plan and Council priorities to reduce
greenhouse gas emissions.
ATTACHMENTS
Attachment A: Notes from Public Meeting on November 4, 2009
Attachment B: Notes from Public Meeting on December 9, 2009
Attachment C: Staff Memo on Further Compost Facility Evaluation
Attachment D: Staff Memo Addressing Council Questions from Study Session on March 8, 20 10
Attachment E: Map of Potentially Offsetting Areas from Study Session Presentation
PREPARED BY: ~<t·a~~
APPROVED BY: 1l:1~----'
CITY MANAGER APPROVAL: . J
/ City Manager
Page 6 Qf6
A) Plllllose:
Meeting Summary
1114/09 CompostlAirport Public Meeting
(4:00-5:30 pm -Palo Alto Airport)
ATTACHMENT A
To explore potential sites for organics material management which would have "no
imp!j.ct" on the Palo Alto Airport (per I 0/19109 direction from the Palo Alto Council.)
B) Attendees:
Airport
Community Members
Chuck Byer
Harry Hirschman
Ralph Britton
Pat Roy
Larry Shapiro
Michael Baum
C) Summary:
Former Compost
Task Force Members
Bob Wenzlau
Emily Renzel
Palo Alto City Staff
Cara Silver
Steve Emslie
Phil Bobel
The group brainstormed and identified impacts to the Palo Alto Airport associated
with seven (7) different location configurations of Organics Material Management
(OMM) facilities. (See D. below for details). There appear to be three configurations
which are likely to have no impact on the Airport (with several qualifiers noted in
Part D).
1. Locating. the OMM on Embarcadero Way (currently privately owned
buildings) ..
2. Locating the OMM on the Los Altos Treatment Plant (LA TP) site and
locating the municipal operations planned for the LATP site on Embarcadero
Way (currently privately owned buildings).
D) Identification ofImpacts on the Airport:
1. Locating OMM on the current Landfill site. and swawing aWfoximately 10
acres of the North Runway site (22 acres total) as dedicated parkland. Thus, a
I b acre strip of the North Runway site, the eastern half, would become
parkland. The group assumed that the dedication itself would involve no
physical changes; that any physical changes would be a separate action
involving separate analysis.
IMPACTS:
No impacts tq the Airport were identified as long as the following points were
reCognized and addressed:
Page I
u; lPWDIADMINIKAREN\CMRI040510i 165-10 C ompC31lng Resp.nselAlltlChmenC A.doc
ATTACHMENT A'
a. The FAA must be consulted for any rules they may have. Their approval
may be needed,
b. Sufficient "buffer" must be allowed adjacent to the runway for aircraft
wingspan.
c, The new Parkland (North Runway site) would have to have restricted
access to prevent people and animals from entering.
d. The existing levee must be maintained. In fact, it may need to be
augmented in light of sea level rise.
e, There may be a habitat mitigation area at the north end of the North
Runway site which must be maintained.
2. Locating OMM on Embarcadero Road/Airport site and relocating Ailll0rt
facilities per the 9/09/09 memo from Barney, et all to PA Council. This
option would move the Heliport and Terminal to avoid impacts from the
OMM in the southeastern corner of the Airport.
IMPACTS:
The following impacts on the Airport were identified:
a. The changes to the layout of Airport operations are major and funding
would be needed. Both the amount and source of funds would be issues.
b. Cost of moving Embarcadero Road and resurfacing (at a minimum) of the
Airport access road would be impacts.
c. New location of the Heliport is not safe due to incoming fixed wing traffic
and proximity to fuel storage.
d, Negative visual impacts to the Airport would occur.
e .. ' All of the negative impacts identified in the Task Force Report associated
with the Embarcadero Road/Airport site would apply.
3. Locating OMM at the LATP site and move the activities plarmed for the
LATP site to the Embarcadero Road/Airport site and relocate Airport facilities
per the 9/09/09 memo from Barney, et all to the P A Council.
IMPACTS:
The negative impacts listed as 2.a -2.d above would also apply to this
concept.
4. Locating OMM on land riow occupied by privately owned buildings on one or
both sides of Embarcadero Way.
IMPACTS:
The following issues would have to be addressed and mayor may not turn out
to be actual impacts on the Airport:
a. The potential for a bird attraction hazard would have to be investigated.
Page 2
U:IPWDIADMfNlKAREMCMRI0405fOIf65·fO Com posting ResponselAltachmenCA.doc
ATTACHMENT A
b. A· 1,200 foot distance would have to be achieved with respect to yard
waste.
c. A 1 mile distance would have to be achieved for food waste.
5. Locating the OMM at the LATP site and locate the activities planned for the
LATP site where the privately owned buildings on one or both sides of
Embarcadero Way are now.
IMPACTS:
No impacts on the Airport were identified, assuming that there were no bird
attraction issues from the operations that would be located on Embarcadero
Way.
6. Locating the OMM at the LA TP site and locate the activities planned for the
LATP site on the North Runway site.
IMPACTS:
The following impacts on the Airport were identified:
a. FAA approval would be needed
b. Access would have to be provided which does not exist, creating safety
Issues.
c. Oversight of contractors and City staff would have to be addressed.
d. Bird attraction would have to be addressed.
7. Separate the OMM activities, locating only the curing piles (possible aerated
static piles) on the North Runway site.
IMPACTS:
The following impacts on the Airport were identified:
a. Access which does not now exi1;t would have to be provided, creating
safety issues.
b. The bird attraction issue would have to be addressed.
c. FAA approval would be needed.
8. Locating the OMM on the Landfill site and creating offsetting parkland
(approximately 10 acres) at the North Runway site.
IMPACTS:
There is no guarantee that the FAA will accept dedicating 20 acres as
"Parkland" and thereby reducing the available Palo Alto airpark land by 20%.
Until further clarification is gained on this item, it should not be included in
the "no airport impact" category.
Page 3
U:\PWD\ADMINlKAREMCMR\0405JO\J65~1O Compos{ing RespanseiAUachmen(A doc
ATTACHMENTB
On 12/9/09 City Staff presented its preliminary thinking in response to Council's
10/19/09 directives. The responses will undergo more work, and likely be
presented to Council on 2/1/10. Staff sought, and received, feedback on the
following concepts:
1. Interim Aerated Static Piles:
Staff is unlikely to recommend this due to cost, length of time to bring on
line, and lack of an authorized site. (The interim (post 2012) "fallback" is
the Z-Best (Gilroy) compost facility).
2. Long Term Sites in Palo Alto:
a. Airport Site
Staff is unlikely to recommend this due to impacts on the Airport
and the Council directive to have "no Impact" on the Airport.
b. Embarcadero Way Site
Staff is unlikely to recommend this due to high cost of purchasing
landlbuildings.
c. Landfill CByxbee) Site
. Sfaff is unlikely to recommend conducting a
feasibility/environmental study at this time due to uncertain
availability of the site and the high cost of a
. feasibility/environmental study.
3. Areas to Pursue:
a. Nearby Sites » Staff will pursue taking organics to a new anaerobic
digestion facility likely to open as soon as 2010 in San Jose
(Greenwaste, Zanker Road). approx. 12.5 miles from the
Embarcadero/101 interchange ( Note: Much closer than Z-
Best which is 53 miles ). » Staff will purs.ue the possibility of an energy recovery facility
at the SMaRT Station in Sunnyvale, although it is just an
idea at this point.
b. Palo Alto Regional Water Quality Control Plant (RWQCP) Master
Planning » Staff will consider anaerobic digestion and other energy
recovery possibilities at the RWQCP as the Master Planning
gets underway in 2010. (Not able to handle yard trimmings,
or all food waste within the RWQCP, however.)
The following feedback was received at the meeting;
Comments from Public
On Palo Alto Staff Presentation
at 12/09/09 Public Meeting
ATTACHMENTB'
Individual members of the public suggested that the following thoughts (or ansVjers to
questions) be included in the report back to City Council on (or about) 211/10:
I. Indicate that there is citizen support (as well as citizen opposition) to an organics
management. facility on the landfill (Byxbee) site.
2. The City's Solid Waste Management Plan filed with the County would have to be
revised if a new Palo Alto Compost Facility were to be developed.
3. The regional situation with respect to organics management should be discussed.
4. For Aerated Static Piles (ASP) and Anaerobic Digestion (AD), the extent to which
operating facilities exist should be discussed.
S. The emerging responses to the Santa Barbara RFP should be summarized to show
what technologies are actually being proposed by bidders there.
6. The quality of the food scraps processed at Z-Best (Gilroy) should be mentioned as it
is apparently contaminated with plastics and other non-food material.
7. The quality of biosolids should be discussed with the "hazardous waste" issue and the
"long term build-up" issues described.
8. The schedule for developing Greenwaste's Zanker Road facility should be explored
to determine why it is happening so much faster than Staffs estimation of a Palo Alto
facility schedule. . .
9. A resident "Initiative" would shorten the schedule by eliminating one of the two ErRs
shown on the Palo Alto Staff schedule.
10. The Waste Management Board management staff were much more optimistic about a
.Palo Alto schedule and should be consulted.
11. Wh~n will Greenwaste's .Zanker Road facility be able to take yard trimmings and
biosolids?
12. What has the experience to date been of taking commercial food waste in Palo Alto in
Palo Alto?
13. The process outputs (e.g., energy, compost) of an organics processing facility should
be fully considered as a decision is made on the type of process.
14. The sensitivity of the facility location to noise, light,. traffic, dust and pollutants
should be described.
15. Drawings showing what the various site locations would look like should be
presented.
16. Make it clear that the "Landfill site" is on "Byxbee Park".
3/111 0 ATTACHMENTC
Staff Evaluation
Follow-up to Blue Ribbon Task Force (BRTF) Recommendations
For Developing an Organics Processing Facility Within The
City of Palo Alto
n Staff analysis and recommendation for developing an interim Aerated Static Pile (ASP)
composting operation within Palo Alto versus adopting the Zero Waste Operations Plan of
sending yard trimmings to SMaRT/ZBest. .
The advantages of the City developing an ASP composting facility in Palo Alto after the existing
composting facility closes are mainly: reduced greenhouse gas vehicle emissions through a
closer destination facility; and that the City could control the facility and add other organic
wastes to the process (biosolids, food scraps, etc). Control of the facility and organic wastes that
could be processed could allow the City to implement residential curbside collection of food
scraps in their green waste carts.
Disadvantages of the City developing its own facility in the interim are the high cost of
developing an ASP operation ($3 million initial capital investment); and the fact that there is no
land readily available for the placement of an ASP facility in the intermediate term.
Staff does not believe that the $3 million investment for an ASP Facility developed on any
existing City-oWned property is warranted because of the interim nature of the ASP (Council has
prioritized Anaerobic Digestion) and because there is no readily available site for the facility.
2) Evaluation of Three Potential Anaerobic Digestion (AD) Facility Sites.
Site #1 Other Unspecified Locations Along Embarcadero Road
Staff focused primarily on the existing commercial properties along Embarcadero Way for this
portion ofthe evaluation. Five properties ranging in size from I to almost 4 acres were evaluated
by the Real Estate Division of the Administrative Services Department. Table 1 below
summarizes the potential acquisition costs for these properties. The properties' layout in relation
to the Airport and the Regional Water Quality Control Plant (RWQCP) is shown in Figure 1.
If only the three properties along the east side of Embarcadero Way are considered, acquisition
costs could range between $8.2 to $13.7 million for these 3.15 acres ofland. It is very unlikely
that even just these three properties would be easy to acquire. Eminent Domain would likely be
necessary. One of these three properties houses California Self Storage and another is currently
leased by Victor Aviation Services. Only the property at the comer of Embarcadero Road
appears to be vacant at the time of this report. It contains a two-story structure for research and
development and offices. Staff does not recommend pursuing the acquisition of these properties
for an organics processing facility.
Page I of 8
3/1/1 0 AITACHMENTC
Table 1: ROUGH ACOUISITION ESTIMATES FOR EMBARCADERO WAY PROPERTIES
High Mid Low
Street Number APN Acres $100/sf $80/sf $60/sf Facts
Sold 7/06 lor approx.
WEST 1880 008-03-027 1.19 $5,183,640 $4,146,912 $3,110,184 $4,250,000 recently
refurbIshed ~ avail
SIDE for lease
2440 008-03-072 3.95 $17,206,200 $13,764,960 $10,323,720 Newer R&D Sites -
several vacancies
! 1900 008-03-071 1.14 $4,965,840 $3,972,672 $2,979,504 Olo.r building -
available for lease EAST Older building -• SIDE 2415 008-03-030 1 $4,356,000 $3,484,800 $2,613,600 currently leased
i 2425 008-03-068 1,01 $4,399,560 $3,519,648 $2,639,736 Self storage facmty
Totals 5,14 $22,389,840 $17,911,872 $13,433,904
COMPARABLE DATA:
2525 E, Bayshore Road -1,44 acres, same age bldg -Comp Value per Real Quest $6,250,000 -Sold 4/2006
$4,200,000
1010 Corporation Way -Currently for sale -21 ,500 sl, Bldg, Office/R&D, Vacant, 1,10 ac lot size -for sale price
$5,300,000'" $246,51/51
CONDEMNATION COSTS CONSIDERATIONS (assume +30% to above mid range flgure):
Courts must find that: 1) public Interest and necessity require the project; 2) the project is compatible with the
greatest public good and least private Injury; and 3) the property is necessary for the project
Costs to consider: Fair market value, plus attorney fee$, appraisal fees, relocation expenses, payment for
business fixtures, equipment and good will, and if leased possibly relocation andlor tenants leasehold interest to
be compensated, .
NOTES and ABBREVIATIONS:
East Side parcels represent the lots next to RWQCP
APN: Assessor's Parcel Number
sf: Square Feet
Page 2 of8
3/1/10 AITACHMENTC
Figure 1: EMBARCADERO WAY PROPERTY LOCATIONS
Airport
I
\
Baylands
. \
" \
Site #2 Embarcadero Road/Airport Site
Based on meetings held with Airport stakeholders, there are no options within the airport
property that have no negative impacts on its operations, finances, or relationships with the FAA
or Santa Clara County,
Page 3 of8
3/1!1 0 ATTACHMENTC
Site #3 Northwest Corner of Current Landfill Site (Byxbee Park)
Staff has conceptually developed a 4.7 acre grading plan (Figure 2) at the Northwest comer of
the landfill adjacent to the PAR WQCP that might be large enough for a large AD facility that
could accommodate the City's entire organic waste throughput. The grading plan incorporates
dedicated park acreage from the area adjacent to the PARWQCP fenceline (facing the landfill)
and overlying approximately 2 acres of the existing landfill.
Implementing this conceptual grading plan would mean raising the grades of the existing land
adjacent to the landfill approximately 5 feet to approximately 15 feet above mean sea level
(MSL). This conceptual site would partially overlie the landfill final contours approved by the
landfill architect (Hargreaves Associates, April 2008). If an AD building were developed on this
site then the top of a building could be as high as 40 feet above MSL -lower than the highest
elevations ofthe landfill that are 60 feet above MSL.
Permits and Approvals
Permitting an AD facility at the Northwest corner of the landfill would involve CEQA, State
permits and local approvals and voter approval to undedicate a portion of Byxbee Park. This
entire development process would be expected to take 7 or 8 years to complete (See timeline
Figure 3). Because this site overlies the landfill and because this site would probably require two
EIRs and a vote to undedicated parkland, the schedule for development of a large AD facility
would be expected to take three to four years longer than a site that did not have these land use
issues.
• An Environmental Impact Report (ElR) would be required. It is likely that two EIRs may
be required - a programmatic EIR to support the vote to undedicate the parkland and
later, a design level EIR that would support the permits and approvals;
• A new or revised solid waste facility permit would be necessary;
• A new Bay Area Air Quality Management District (BAAQMD) Facility Pennit would
likely be required. A new high technology organics facility with emissions control would
meet the BACT standards (Best Achievable Control Technology).
• New or revised Waste Discharge Requirements (WDRs) will probably be required from
the Regional Water Quality Control Board since the proposed operation would be sited
partiallyi'on the landfill. Flatter grades overlying the landfill can be permitted as long as
an 'effective system for diverting surface drainage and preventing ponding is designed in
accordanee'with California Code of Regulations Title 27 Section 21090 (b)(1 )(B).
• Local permits and approvals would inelude revising the Baylands Master Plan,
Planning/Site & Design Review approvals, voter approval to undedicate parkland etc.
Page 40f8
31111 0 ATTACHMENTC
• The City would need to modifY the landfill's post-closure plan to reflect this continued
operation on the closed landfill. Also, a facility operations layer and drainage features
would need to be designed and constructed to protect the landfill's cap.
• An amendment to the landfill lease with the State Lands Commission would be necessary
for the improvements.
Other Impacts
Sino;:e the proposed facility can be incorporated into the PARWQCP, the existing landscape
screen trees would need to be removed and new landscaping improvements would need to be
installed at the perimeter of the new facility.
Access to Byxbee park could still be available via the existing parking lot. Some trails planned
at the north end of the landfill would need to be rerouted to avoid the new facility. Maintenance
of the park/landfill could still be undertaken.
Development Costs
Hilary Gans from the Blue Ribbon Task Force completed and presented to Council a preliminary
cost estimate of $ 13.75 million for an Anaerobic Digestion (AD) w/ Energy Recovery system
that is large enough to handle the City's yard trimmings and some food waste. This capital cost
estimate includes the cost of a specialized building, gas collection system and electricity
genenitjng equipment but did not include the cost of an asphalt operating surface or materials
handling equipment cost since the City (\lready owns all the necessary heavy equipment required
to run a c~mposting system.
The cost' per ton calculation to process the City'S organics would depend on what type of facility
is developed, what type of organic wastes would be managed at the facility and what throughput
of tonnage would be possible. A consultant feasibility study would need to be performed before
these costs could be accurately developed.
3) Evaluation of Other Options
Figure 4 presents timelines for two recommended courses of action: 1) study the feasibility of
developing energy recovery facilities for biosolids and limited foodwaste during the upcoming
RWQCI' Master Planning project, and 2) pursue partnering opportunities with SMaRT and/or
private ventures building nearby anaerobic digestion facilities.
Page 5 of 8
Figure 2" C " onceptual Grad" Facility on B b mg Plan for AD yx ee Park
ATIACHMENT"C
2010
IMMEDIATE
"J!
'" ..
" a
'"
BY COUNCIL
Projected Schedule
RFP • Request for Proposal
AD • Anaerobic Digestion
EIR • Environmental Impact Report
Figure 3: ANAEROBIC DIGESTION FACILITY DEVELOPMENT TIMELINE
CITY OF PALO ALTO
2011 • 2012
Council Decision
2010)
(Apr 2010)
Landfill
TIMELINE IN YEARS
2013 2014
Compost Facility Closes
(Dec 2011)
2012)
" (Nov 2012)
2015 2016
Selection of
Design-Build
AD Vendor
(JuI2012)
Begin Design,
Focused EIR,
.......... Permits and
Approvals
(JuI2012)
MATERIAL TO SmaRT
2017 2018 2019
Complete and Certify EIR,
rReceive All Pennits and Approvals.
(JuI2016)
. ,
I I , I
I I
Construction
and Startup
(Dec 2017)
P E KIVIAI'II t:: I'll
FACILITY
D . I I AD eSlgn, I Constr I I J • 1 Feasibility I Lag I Vendor CEQA, ! & Startup---1
• • Study/EIR • !TimeL RFP Permit (17 Mos)
(24 Mos) (8 MOS)(9 Mos) (48 Mos)
o
l '" co
!2. co
NO IMMEDIATE
COUNCIL ACTION
REQUIRED
Staff Driven
(Limited AD at WQCP)
Staff Driven
(Track Partnering Opportunities)
AD • Anaerobic Digestion
Figure 4: ANAEROBIC DIGESTION FACILITY DEVELOPMENT TIME LINES
CITY OF PALO ALTO
Begin Feasibility
rMaster Plan
TIMELINE IN YEARS
(June 2010) Landfill Closes
Compost Facility Closes
2011)
Landfill Closes
Complete Feasibility
,..........Master Plan
(May 2012)
Compost Facility Closes
(Dec 2011)
TRACKIN<iPA~ERING OPPORTUNITIES WITH NEW REGIONAL AD FACILITIES
g
I
~ -i
()
3/30/10 ATIACHMENTD
Staff Memo
Follow-up to Council Questions from Study Session on March 8, 2010
Council Email Ouestion: The Composting [Blue Ribbon Task Force] Report was originally
paired with a Colleagues memo on Early Opening of Portions of Byxbee Park. This
complementary item was amended and passed on Nov 2, 2009. It was stated at that meeting that
this item on the Early Opening would return 'quickly'. Will it be on the Agenda on AprilS along
with the Composting Report?
The COUNCIL MOTION from November 2,2009 stated:
1) Direct Staff to work with the Parks and Recreation Cormnission and Hargreaves and
Associates to develop fmal park design goals for Phase II of Byxbee Park including
provision to access and views and return j.o Council with a proposed impl()lUentation
budget, and 2) Direct Staff to take the necessary steps to open the completed and
approved landfill area (Phase II AlB in the Baylands Master Plan) to the public as
interim open space by the end of 2011 or sooner; 3) Amended to direct Staff to
report back to Council with an estimated budget for the work in both parts of
the Motion in a timely manner.
Staff Response: The attached Table 1 outlines the steps necessary to prepare closed Landfill
Phase IIA and Phase lIB for early public access. Staff will begin adding clean soil to low areas
in the previously closed sections within the next few months (weather permitting) in order to
fulfill the post-closure responsibility of addressing settlement. Most ofthe top-deck areas have
settled one to two feet. (or more) within the last several years. The current goal is to accept and
spread enough clean soil to bring the closed sections up to the original designed grades of these
already capped landfill areas.
The proposed FY 2011 budget for the Landfill Closure (CIP RF-llOO 1) has been adjusted to
provide $600,000 for the work required to prepare Phase IIA and Phase IIB for public access.
This will include: changes to the environmental control systems (leachate and landfill gas
collection piping) to place piping and well heads underground, minor grading and improvements
to site access roads, and removal of perimeter fencing. The Refuse Fund budget does not include
money to prepare final park design goals in conjunction with Hargreaves and the Parks &
Recreation Commission, final park design (which should include Phase lIC), nor final park
construction.
Staff believes it would be more efficient and cost effective to bury the piping system
underground when the Phase lIC closure is completed because there will be the efficiency of
earth moving equipment and a single contractor to mobilize rather than administering two
discrete projects successively. If Council decides to initiate the early opening of Phase IlA and
Phase lIB and to bear the extra expense, it would prohably only speed up the potential to open
these areas by about one year earlier than if the work was combined with the closure construction
on Phase lIC. It is also not clear yet how the park-related improvements will be funded.
Page 1 of5
TABLE 1
BYXBEE PARK -PHASE IIA & PHASE liB CLOSED LANDFILL PREPARATION WORK
I
ESTIMATED
TAS.q DESCRIPTION STATUS COST SOURCE OF FUNDS TIME LINE
1 IAdjust the setUed surface with new topsoil to raise the IN $50,000 PWD -Refuse: Landfill Complete by October 201 0 finished grade back to the permitted elevations PROGRESS Operations
IRevegetate surface following settlement remediation IN PWD -Refuse: Landfill 2 IPROGRESS $25,000 Operations Complete by December 2010
I Seek Local Enforcement Agency (LEA) approval for I PLANNED I PWD -Refuse: staff-level Complete by December 2010
3 (assuming no permitting "early" public access to Phase IIA & Phase liB task hurdles)
4 I Design, plan and permit changes to environmental control PLANNED $50,000 PWD -RefuSe: Closure Pending FY 2011 Budget systems (leachate and landfiU gas collection piping) reserve (CIP RF-11 001)
5 I Modify environmental control systems to place piping and PLANNED $500,000 PWD -Refuse: Closure I Pending FY 2011 Budget well heads underground reserve (CIP RF-11001)
6 IMinor greding and improvementof site access roads I PLANNED $25,000 IPWD -Refuse: Closure
reserve (CIP RF-11001) IPending FY 2011 Budget
7 I Remove perimeter' fencing IPLANNED $25,000 PWD -Refuse: Closure
I reserve (CIP RF-11001) Pending FY 2011 Budget
I Prepare Final Park Design Goals in conjunction with I PLANNED ICSD: ???
»-
8 $25,{)00 Pending Council action ~ Hargreaves and the Parks & Recreation Commission
('J ::c
9 I Final Park Design (including Phase IIC) IPLANNED $470,000 ICSD: ??1 IPending Council action a;::
~
10 I Final Park Construction (including Phase IIC) IPLANNED I $4,700,000 leSD: 1?? IPending Council action
..,
"
3/30/10 ATTACHMENTD
Study Session Question: Refuse fund has right to parkland until June 30, 2011 future use
would require $3.7 million annual payment? Is that built into the numbers?
Staff Response: CMR 104:07 established the following rent schedule for both the active and
closed portions of the landfill:
City of Palo Alto I
Landfill Rent
Schedule
Rent
Payment
(Smoothing
Rent Charged Schedule)
2004-05 7420925 4,288,747
2005-06 7420925 4288747
2006-07 7420,925 4,288,747
.2007-08 7420,925 4,288,747
2008-09 7,420,925 4,288,747
2009-10 7420925 4,288,747
2010-11 7420,925 4,288747
2011-12 0 4,288,747
2012-13 0 2,094,332
. 2013-14 0 2,094,331
2014-15 0 2,094331
2015-16 0 2,094,331
2016-17 0 2,094,331
2017-18 0 2,094,331
2018-19 0 2,094331
2019-20 0 2,094,331
2020-21 0 881,851
This rent schedule encompasses the entire landfill area (approximately 100 acres of both active
and closed). The amount of rent attributable to the piece of land being considered for
composting would be proportionally less. The current annual rent payment for the entire landfill
is approximately $4.3 Million. If the Refuse Fund occupies any portion of Byxbee Park for a
longer period than contemplated in the rent schedule, the schedul~ would have to be re-adjusted.
The schedule was based on the information available at the time that assumed a projected landfill
closure on June 30, 2011. The schedule adopted by the Council in 2007 contained a number of
Council-directed policies, including: (1) the Refuse Fund should be paying the General Fund for
use of the inactive portion until it is formally converted to park use; (2) the rent attributable to
Page 3 of5
3/30/10 ATTACHMENT D
the inactive portion should be less than fair market rent since the Refuse Fund is not actively
using the property and (3) the rent payments should be amortized over time so that Refuse rates
are not substantially impacted. The current economy which has led to less commercial dumping
at the landfill together with the temporary City Council imposed commercial dumping
moratorium may result in a slightly later landfill closure date. The City is in the process of
determining whether there is a need for further refining this rental schedule al).d whether there is
a need for an updated appraisal.
Study Session Question: If there is a de-aunexation of the parkland, the parkland will take on the
value of commercial properties around it. Refuse Fund would have a liability for approximately
that amount?
Staff Response: If the parkland is de-alUlexed and the Refuse Fund continues to utilize the
property for Refuse purposes (including composting), the Refuse Fund would be responsible for
the payment of rent. The rent would be based on the highest and best use which is most likely
research and development/industrial use.
Study Session Question: Concerned about buffer betWeen industrial activities and parkland -
will there be an EIR to estimate the impact on Parkland?
Staff Response: Yes, an ErR for a compost project would address land use compatibility and
related aesthetic issues. The zoning ordinance governing the new use could also prescribe
appropriate setbacksl buffer zones.
Study Session Question: 90% solution email by Bryan Long -can his solution be part of the
April 5 discussion?
For reference, the recommendations in Bryan Long's 90% solution email are:
I. Improve collection rates of our new commerciaVmultifamily food waste collection
program, and implement a residential food scrap collection program. Utilize Z-Best
or other regional facility to compost or digest these food wastes for the time being.
2. After landfill closure, divert yard trimmings to Z-Best or other regional composting
facility, and
3.. Direct RWQCP staff to incorporate alternatives for anaerobic digestion ofbiosolids
and Palo Alto's food scrap collections into their comprehensive [Master 1 plan.
Direct staff to consider yard trimmings as well, but as a secondary priority and only
if it does not significantly increase the cost or lengthen the timeframe required.
Page 4 of5
3i30/10 ATTACHMENTD
Staff Response: Staffs recommendation is largely in line with what is referred to as the 90%
solution. The upcoming RWQCP Master Plan will include an analysis of options for managing
the biosolids that are currently incinerated. The analysis ofbiosolids options won't constitute a
full "Feasibility Study". However it will include site specific cost and revenue estimates, general
environment impact analysis and life cycle estimates of greenhouse gas (GHG) emissions.
Taking some food waste ",ill be analyzed, but it is very unlikely that anything close to all the P A
food waste could be handled within the RWQCP footprint.
It is important to note that the RWQCP is funded 35% by Palo Alto and 65% by its other
Partners. Therefore, expenditures (including planning) for waste streams generated by only Palo
Alto would have to be funded by 100% Palo Alto funds .. Major Capital Improvement Projects at
the RWQCP also require approval by the Partner City Councils in addition to the Palo Alto City
Council.
Study Session Concerns: Numerous questions posed by Council at the study session related to
the size, cost, operations, buffer zones, and environmental impacts of an anaerobic digestion
facility.
Staff Response: These types of questions are best answered through a detailed feasibility study
combined with a full Environmental Impact Report (EIR) so that all mitigation measures can be
identified and properly estimated for cost. The cost of such a detailed study would exceed
$250,000. Previously a similar effort for the project known as the Environmental Services
Center (ESC) would have cost over $400,000 (CMR 125:05). The largest portion of the
proposed ESC was the composting area. Because no readily available site has been identified,
staff does not recommend moving forward with a full scale feasibility study for anaerobic
digestion at this time.
Page 5 of5
I I >. 0 C)
c: CO c: en --0 --I , CO I , I ,
--c: Cl) Cl) I ,
CO Cl) ~ s.... « u I ,
0 0 0 c... .....I
April 5, 2010 CMR 165:10
Study Alternatives
•Alternative 1: In‐City Options at
Landfill Site
Food Yard Biosolids
Case 1a Dry AD Dry AD Dry AD
(Separate Cell)
Case 1b Dry AD Dry AD Wet AD at
Landfill
Case 1c Dry AD Dry AD Wet AD at
RWQCP
Case 1d Dry AD Dry AD Continue
Incineration at
RWQCP
Case 1d
No Biosolids
Dry AD Dry AD
4
Study Alternatives
(continued)
•Alternative 2: Export
•Alternative 3: Export
Food Yard Biosolids
With Biosolids San Jose AD
(Zanker)
Gilroy
Compost
(ZBEST)
Continue
Incineration
at RWQCP
No Biosolids San Jose AD
(Zanker)
Gilroy
Compost
(ZBEST)
Food Yard Biosolids
With Biosolids Gilroy
Compost
(ZBEST)
Gilroy
Compost
(ZBEST)
Continue
Incineration
at RWQCP
No Biosolids Gilroy
Compost
(ZBEST)
Gilroy
Compost
(ZBEST)
5
Technologies for Green Waste Management
Prepared for City of Palo Alto ‐ Revised draft, 3/3/09
Technology Category Variations Process Summary Products Other Inputs Identified Vendors CIWMB Diversion?
Composting Open, Covered,
In‐Vessel
Decomposition of organic
materials in the in the
presence of oxygen
Solids that may be usable
as a soil amendment
Biosolids,
Food waste
Many common systems, >5
vendors for covered, >10 for
in‐vessel systems
Yes
Open Biosolids,
Food waste
Common system, not
associated with a specific
vendor
Covered Biosolids,
Food waste
Engineered Compost
Systems, Ag‐Bag, CV‐
Compost, GORE, Managed
Organic Recycling, Inc.
In‐Vessel Most are small systems
normally used only for
food waste at food waste
generator sites.
Food Waste Advanced Biotechnology,
Augspurger Engineering,
Biosystem Solutions, BW
Organics, CIWA ECorrect,
Engineered Compost
Systems, EPM Inc.,
Environmental Products &
Technologies Corporation,
Green Mountain
Technologies; Hot Rot
Composting Systems;
Nature's Soil; NaturTech, Tri
Form Poly, Inc., Vermigold
EcoTech Pvt. Ltd., Vermitech
Systems, Ltd., Willcam, Inc.,
Wright Environmental
Management, Wright Tech
Systems, Inc., X‐Act Systems
Page 1 of 4
Technologies for Green Waste Management
Prepared for City of Palo Alto ‐ Revised draft, 3/3/09
Technology Category Variations Process Summary Products Other Inputs Identified Vendors CIWMB Diversion?
Anaerobic Digestion Wet, Dry, Two‐
Stage, Batch
Bacterial breakdown of
organic materials in the
absence of oxygen
Gas suitable for use as
fuel, solids that may be
usable as soil amendment
Biosolids,
Food waste
>10 Yes for green waste
Wet Waasa, BIMA
Dry EcoCorp, Organic Waste
Systems (Dranco Process),
Waste Recovery System
Inc./Urbaser (Steinmuller
Valorga process), Kompogas
AG
Two‐Stage CCI US Corporation (US
Vendor for Canada
Composting/Biotechniche
Abfallverwertung GmbH &
Co. KG [BTA]), California
Renewable Technologies (US
Vendor for Arrow
Ecology/Arrow Bio), Linde‐
KCA‐Dresden GmbH, Super
Blue Box Recycling
(SUBBOR), WEHRLE Umwelt
GmbH (Biopercolat)
Batch Bekon, Biocel, Bokashicycle,
Sequential Batch Anaerobic
Composting, Onsite Power
Systems (Anaerobic Phased
Solids [APS] Digester),
BioConverter
Vendors without sufficient
information to categorize:
Environmental Developers
VRAD, Orgaworld
Page 2 of 4
Technologies for Green Waste Management
Prepared for City of Palo Alto ‐ Revised draft, 3/3/09
Technology Category Variations Process Summary Products Other Inputs Identified Vendors CIWMB Diversion?
Thermochemical
Technologies
Gasification,
Pyrolysis, Plasma
Arc
Processes that uses heat,
pressure, and steam
under low or no‐oxygen
conditions to decompose
materials
Gas (can be a fuel or
chemical feedstock),
hydrocarbon liquids, tars,
solids (these can be called
ash or char; may have
reuse potential)
Many >10 Not for municipal
green waste.
Gasification‐‐but not
others‐‐may be able
to receive credit for
municipal waste
residuals.
Gasification Gasification is a process
that uses air or oxygen
and high heat—typically
above 1300°F—to convert
feedstock into a synthetic
gas or fuel gas.
Gasification uses less air
or oxygen than
incineration processes. By
definition, gasification is a
partial combustion
process.
? AdaptiveNRG, Chiptec,
Changing World
Technologies (?),
Community Power
Corporation, Ebara,
Envirepel, EPI, Genahol,
Improved Converters, Inc.,
GEM America (Waste‐to‐
Energy, Inc.), Interstate
Waste Technologies
(Thermoselect), Ntech
Environmental, Precision
Energy Services, PRM Energy
Systems, Inc., Primenergy,
Tajiguas Partners,
Thermogenics, Inc., World
Waste Technologies
Pyrolysis Pyrolysis is a process that
can be defined as the
thermal decomposition of
feedstock at high
temperatures (greater
than 400°F) in the
absence of air.
GEM Operations Ltd.,
Venearth, International
Environmental Solutions
(IES)
Plasma Arc Heating method for
pyrolysis or gasification
Rigel Resource Recovery,
Plasco Energy Group
Page 3 of 4
Technologies for Green Waste Management
Prepared for City of Palo Alto ‐ Revised draft, 3/3/09
Technology Category Variations Process Summary Products Other Inputs Identified Vendors CIWMB Diversion?
Refuse‐Derived Fuel Waste
pelletization
Waste is dried, shredded,
and pelletized
Solids for combustion fuel Many <5 No
Waste Recovery
Technologies, Herhof
California
Other Technologies (Probably Not Suitable for Green Waste)
Prepared for City of Palo Alto ‐ Revised draft, 3/3/09
Technology Category Variations Process Summary Products Other Inputs Identified Vendors CIWMB Diversion?
Biofuel Production Ethanol
production
Acid and/or enzymatic
hydrolysis followed by
fermentation
Ethanol, solids Sugar and
starch‐based
feedstocks
like corn and
sugar cane
are proven.
Cellulostic
ethanol
production
(the kind that
could use
yard
trimmings) is
still in the
research
stage. Pilot
cellulostic
plants are
starting to be
constructed.
Celunol, BC International (?),
Arkenol, Masada OxyNol,
Biometics (Biofine)
?
Biodiesel
production
Fermentation (anaerobic
digestion) after hydrolysis
Biodiesel, (solids?) Brown grease
only
BioFuelBox, Black Gold
Biofuels, Ecoplus, North
American Biofuels
?
Page 4 of 4
Simplified Summary Economic Analysis
11
Base Case (Electricity)
1st Year (2015) Tip Fee ($/Ton)
Alternative 1 (In‐City) Low $High $
1a (All Dry AD –Food, Yard,
Biosolids)112* 353
1b (Dry AD – Food & Yard; Wet
AD Biosolids at Landfill)201 304
1c (Dry AD – Food & Yard; Wet
AD Biosolids at RWQCP)199 302
1d (Dry AD – Food & Yard;
Continue Incinerate Biosolids)119 234
1d (Dry AD – Food & Yard, No
Biosolids)141 346
Alternative 2Low $High $
Export Food to San Jose, Yard to
Gilroy; Continue Incinerate
Biosolids
72 72
Same as above, but no Biosolids 58 58
Alternative 3Low $High $
Export Food & Yard to Gilroy;
Continue Incinerate Biosolids 68 68
Same as above, but no Biosolids 52 52
* Cost uncertainty with dry AD biosolids
Simplified Economic Summary
Sensitivity Cases (Electricity)
1st Year Tip Fee (2015, $/Ton)
(Low $ Range)
Landfill
Gas
Grants (%)Public
Own,
Finance50 40 30
Alternative 1 (In‐City)
1a (All Dry AD –Food, Yard,
Biosolids)110* 48* 55* 62* 81*
1b (Dry AD –Food & Yard; Wet
AD Biosolids at landfill)199 93 105 117 150
1c (Dry AD –Food & Yard; Wet
AD Biosolids at RWQCP)196 92 104 115 148
1d (Dry AD –Food & Yard;
Continue Incinerate
Biosolids)
115 76 80 85 98
Alternative 2 (Export Food to
San Jose, Yard to Gilroy;
Continue Incinerate Biosolids)
72 72 72 72 72
Alternative 3 (Export Food &
Yard to Gilroy; Continue
Incinerate Biosolids)
68 68 68 68 68
12* Cost uncertainty with Dry AD Biosolids
GHG Model Results
(MT CO2‐e/Year)
10
Alternative 1: In‐City Options at Landfill Site
Electricity Pipeline Gas
Case 1a (All Dry AD ‐Food, Yard,
Biosolids)11,533 11,280
Case 1b (Dry AD Food, Yard; Wet AD
Biosolids‐at Landfill)14,227 19,188
Case 1c (Dry AD Food, Yard; West AD
Biosolids at RWQCP)14,200 19,161
Case 1d (Dry AD, Food, Yard; Continue
Incinerate Biosolids)21,106 23,929
Case 1d No Biosolids 5,855 6,072
Alternative 2: Export Electricity Pipeline Gas
Export Food to San Jose, Yard to Gilroy;
Continue Incinerate Biosolids 23,329 26,194
Food, Yard, same as above; No Biosolids 8,078 8,165
Alternative 3: Export Electricity Pipeline Gas
Export Food and Yard to Gilroy; Continue
Incinerate Biosolids 22,716 22,716
Food, Yard, same as above; No Biosolids 7,465 7,465
Public Comments Summary
February 23 & March 9,2011 Public Meetings
Energy/Compost Preliminary Analysis
A. Suggested Changes to the Financial Model
1.Conduct model runs using contingencies of 15 % and 30% for Alternatives 2 and 3.
2.For any incinerator option, assume that a state of the art incinerator must be built at the end of the
design life of the current incinerator (for both Cost & GHG analysis).
3.For Alternative 1A, only apply the contingency to biosolids.
B. New Suggested “runs” of the Financial Model (New Inputs)
1.Include a CO2 adder at $20 per ton and also conduct model runs using $30 and $60 per ton.
2.The rent value used ($103,000/yr)is incorrect –conduct runs at zero,$784,000/yr and
$908,000/yr, (to mach the current rent).
C. New Suggested Sub-Alternatives
1.For Alternatives No. 2 and 3, consider Wet (or Dry)Anaerobic Digestion (WAD) at RWQCP,
instead of incineration
2.Digest biosolids and food waste together (either using Wet or Dry Anaerobic Digestion).Then
aerobically compost the digestate with yard trimmings.
3.Use a combination of the 9-acre site and the RWQCP.
D. Renewable Energy/Greenhouse Gasses
1.Differentiate between the price of carbon and renewable credit energy.
2.Determine whether there should be two components to the CO2 credit.
3.Show how the facility contributes to meeting the City’s Climate Action Goals.
4.Include both a CO2 cost adder and include the carbon credit revenue.
E. Source Control for Organic Materials
1.A Zero Waste approach should be used. That is, the energy/compost facility effort should be
combined with an effort to reduce the organics generated at the source.
2.Reduce yard trimmings by decreasing the amount of plant growth through plant and tree selection.
3.Food waste should be composted rather than dumped down garbage disposals.
4.Don’t assume reduction in H20 use for irrigation; this is not a realistic way to reduce the amount of
yard trimmings.
F. Miscellaneous
1.Determine what San Mateo County is doing with its source separated organic wastes.
2.Integrate the 2 studies: the sewage long range plan and the energy compost study.
3.Don’t charge all costs to the Refuse Fund (charge some to the Regional Water Quality Control
Plant).
4.Need a 1,000 foot buffer zone between the energy compost facility and other uses.
5.State the justification for the choice of the selected grant percentages and put this in the March
Report to Council.
6.The City does not own the land for the 9 acre site, the State does.
7.What is cost of redesigning Byxbee Park to accommodate the energy/compost facility? Is it
included in the cost analysis?
8.Don’t spend money to use landfill gas because it will decrease over time.
9.The 9-acre study site and the 10-acre site in the circulated petition are different, resulted in a
disconnect.
10.Is there an assumption of public borrowing in the financial analysis?
11.What is the cost of excavation of the landfill material now on the 9-acre site? Is it included in the
Financial Analysis?
12.Show the results differently. Examples: 1) Don’t highlight “Grants” without stating likelihood of
obtaining them, 2) Show the aggregate cost over 20 years, not the “year 1” costs, as the key
measure of cost
13.Estimate and include the life-cycle greenhouse gas emissions from the exploration, extraction,
processing and transportation of all fossil fuels used during construction and operation of each
alternative.
G. Additional comments on COSTS at 3/9/2011 Mtg:
1.Present Public and private financing side by side.
2.Use total cost over life of project instead of one year, to compare alternatives
3.Determine whether a contingency exists in the San Jose ( Alt 2) numbers
4.Determine cost of Green Roof.
5.Use current rent value on landfill
6.Don’t show grant values unless there is a basis for it.
7.Translate costs to rate increases.
8.Determine rent associated with “highest & best use”.
9.Include Palo Alto facilities in the land appraisal.
10.Buffer should be consistent with RWQCP buffer zone.
11.Sensitivity analysis on gas
12.Analyze CNG as the product, as opposed to regular natural gas
13.See 4/10 CMR for buffer zone recommendations
H. 3/9/2011 Comments on GREENHOUSE GAS emissions:
1.Determine the amount of Carbon Black Particulate emissions in each alternative.
2.Adjust CO2 amortization for WET anaerobic digestion for more than 20 years.
3.Assume carbon from new incinerator construction.
4.Capture full life cycle of natural gas including development and transportation.
5.Were greenhouse gases from San Jose anaerobic digestion construction included in Alternative 2?
6.Don’t do too much analysis -don’t do any more –enough has been done.
7.Eliminate “electricity” and “pipeline” headings gas in Alternative 3 summaries.
8.What methane production was assumed in food only at San Jose?
9.Translate “MT CO2” to a more understandable reference.
10.Look at full life cycle of natural gas estimating CO2 emissions.
11.Include natural gas pipeline loss.
12.Meet carbon goals in Climate Protection Plan. Rank per $ per ton.
13.Use gallons of gasoline as CO2 translator.
14.Create a more useful product from compost.
15.Ask Lyngso type companies what is an acceptable compost-type product.
1
COUNCIL STUDY SESSION
Energy/Compost Facility
Preliminary Analysis
March 21, 2011
2
COUNCIL DIRECTION
•Hire Consultant/Evaluate Dry
Anaerobic Digestion
•Prepare applicable level EIR
focused on 8-9 acres of Byxbee
Park
•Study energy-conversion
technologies at Palo Alto
Wastewater Plant as part of
Facilities Planning
•Pursue partnering opportunities
for organics within 20 miles of
Palo Alto
3
CURRENT ORGANICS
MANAGEMENT AND PLANS
•Food Scraps
–Commercial: Aerobic Composting near
Gilroy (Greenwaste Facility)
–Residential: Not yet Source Separated
•Yard Trimmings
–Current: Palo Alto Aerobic Composting
Facility
–In 2012: Aerobic Composting near Gilroy
(Greenwaste Facility)
•Wastewater Solids (“Biosolids”)
–Incinerated at Palo Alto Wastewater Plant
–Alternatives being studied via Long Range
Facilities Planning Process and
Energy/Compost Feasibility Study
4
5
Palo Alto Facility
6
7
8
9
10
MANAGING PALO ALTO’S
SOURCE SEPARATED ORGANICS
(FOOD, YARD AND WASTEWATER SOLIDS)
11
ENERGY CONVERSION
TECHNOLOGIES
•Anaerobic Digestion
•Gassification
•Pyrolysis
Incineration (Fluidized Bed
replacing Multiple Hearth)
12
REGIONAL PARTNERING
(within 20 miles)
•Greenwaste (ZWED)
–Dry Anaerobic Digestion/North San
Jose Food Scraps
•City of San Jose/Harvest Power
–Gassification/North San Jose
–Wastewater Solids/Wood
•Sunnyvale-Palo Alto-MV/SMaRT
Station
[No Plans for Conversion
Technologies at this time.]
13
RESULTS OF DRY ANAEROBIC
PRELIMINARY ANALYSIS
1.Cost & Greenhouse Gas Models Developed
2.Dry Anaerobic In Palo Alto Compared To
Export Out Of Palo Alto
3.Analysis Placed On Website, Showing
Certain Sub-alternatives And Sensitivity
Analysis
4.Staff Doesn’t Recommend Drawing
Conclusions Based On Preliminary Analysis
5.Many Good Comments Received
6.More Good Comments Likely To Be
Received On 3/21/11
7.Staff Plans On Addressing Comments
And Finalizing Study In Early Fall
14
KEY EXAMPLES OF PUBLIC
COMMENTS
1/26/11 –3/21/11
NEW MODEL RUNS:
1.Higher and Lower Land Rent Values
2.Use $20, $30, and $60 per ton CO2 “adders”
CHANGES TO MODEL:
3.Include Incineration Replacement Cost
4.Include Contingency on Regional Alternatives (2 and 3)
5.Include Greenhouse Gas Emissions from generation of fossil fuel
NEW SUB-ALTERNATIVES:
6.Combine Food and Biosolids in Anaerobic Digesters, finish aerobically with yard and use both sites
7.Replace Incineration with Digestion as part of Regional Alternatives (2 and 3)
DIFFERENT PRESENTATION:
8.Present likelihood of obtaining Grants
9.Present 20-year aggregate costs (rather than single-year)
15
NEXT STEPS
1.Analyze all comments and;
a.Modify model
b.Create new model runs
c.Consider one or several new sub-
alternatives
2.Complete CEQA initial checklist
3.Prepare final Report in early fall,
per existing schedule.
16
Presentation
of
DRAFT
Economic and GHG Analyses
for Energy Compost
Feasibility Study
City Council
Palo Alto, CA
March 21, 2011
1784
17
Project Team
•Alternative Resources, Inc.
•Ascent Environmental
•Douglas Environmental
•Facility Builders & Erectors
17
18
Projections Waste
Quantities
(Tons/Year)
Food Yard Biosolids Total
First Year: 2015 14,000 21,000 27,000 62,000
Last Year: 2034 19,000 21,000 34,000 74,000
18
19
Study Alternatives
•Alternative 1: In-City Options at
Landfill Site
Food Yard Biosolids
Case 1a Dry AD Dry AD Dry AD
(Separate Cell)
Case 1b Dry AD Dry AD Wet AD at
Landfill
Case 1c Dry AD Dry AD Wet AD at
RWQCP
Case 1d Dry AD Dry AD Continue
Incineration at
RWQCP
Case 1d
No Biosolids
Dry AD Dry AD
19
20
Study Alternatives
(continued)
•Alternative 2: Export
•Alternative 3: Export
Food Yard Biosolids
With Biosolids San Jose AD
(Zanker)
Gilroy
Compost
(ZBEST)
Continue
Incineration
at RWQCP
No Biosolids San Jose AD
(Zanker)
Gilroy
Compost
(ZBEST)
Food Yard Biosolids
With Biosolids Gilroy
Compost
(ZBEST)
Gilroy
Compost
(ZBEST)
Continue
Incineration
at RWQCP
No Biosolids Gilroy
Compost
(ZBEST)
Gilroy
Compost
(ZBEST)
20
21
AD Energy Options
•Electricity
•Pipeline Gas
21
22
Models
•GHG
–Compares CO2-e Emissions on
Metric Tons/Year Basis
•Economic
–Compares costs on $/ton basis and
NPV basis
–Includes Sensitivity Analyses
•Landfill gas for electricity production
•Grants
•Public financing
22
23
RFI Approach
•Market-based approach for input
information
–Provided representative cost and
GHG information
–Provided comments regarding
technical approach
•Supplemented as necessary
23
24
RFI Respondents
Technology Respondent
Axpo-Kompogas ST Engineering Group
BEKON Energy
Technologies
Mustang Renewable
Power Ventures
Bioferm Energy Systems McGill Compost
DRANCO Organic Waste Systems
GICON Bioenergie GmbH Harvest Power
Strabag-Linde KCA Ecocorp
Valorga Urbaser
24
25
GHG Model Results
(MT CO2-e/Year)
25
Alternative 1: In-City Options at Landfill Site
Electricity Pipeline Gas
Case 1a (All Dry AD -Food, Yard,
Biosolids)11,533 11,280
Case 1b (Dry AD Food, Yard; Wet AD
Biosolids-at Landfill)14,227 19,188
Case 1c (Dry AD Food, Yard; West AD
Biosolids at RWQCP)14,200 19,161
Case 1d (Dry AD, Food, Yard; Continue
Incinerate Biosolids)21,106 23,929
Case 1d No Biosolids 5,855 6,072
Alternative 2: Export Electricity Pipeline Gas
Export Food to San Jose, Yard to Gilroy;
Continue Incinerate Biosolids 23,329 26,194
Food, Yard, same as above; No Biosolids 8,078 8,165
Alternative 3: Export Electricity Pipeline Gas
Export Food and Yard to Gilroy; Continue
Incinerate Biosolids 22,716 22,716
Food, Yard, same as above; No Biosolids 7,465 7,465
26
Simplified Summary Economic Analysis
26
Base Case (Electricity)
1st Year (2015) Tip Fee ($/Ton)
Alternative 1 (In-City)Low $High $
1a (All Dry AD –Food, Yard,
Biosolids)112*353
1b (Dry AD –Food & Yard; Wet
AD Biosolids at Landfill)201 304
1c (Dry AD –Food & Yard; Wet
AD Biosolids at RWQCP)199 302
1d (Dry AD –Food & Yard;
Continue Incinerate Biosolids)119 234
1d (Dry AD –Food & Yard, No
Biosolids)141 346
Alternative 2 Low $High $
Export Food to San Jose, Yard to
Gilroy; Continue Incinerate
Biosolids
72 72
Same as above, but no Biosolids 58 58
Alternative 3 Low $High $
Export Food & Yard to Gilroy;
Continue Incinerate Biosolids 68 68
Same as above, but no Biosolids 52 52
* Cost uncertainty with dry AD biosolids
27
Simplified Economic Summary
Sensitivity Cases (Electricity)
1st Year Tip Fee (2015, $/Ton)
(Low $ Range)*
Landfill
Gas
Grants (%)Public
Own,
Finance504030
Alternative 1 (In-City)
1a (All Dry AD –Food, Yard,
Biosolids)110**48**55**62**81**
1b (Dry AD –Food & Yard; Wet
AD Biosolids at landfill)199 93 105 117 150
1c (Dry AD –Food & Yard; Wet
AD Biosolids at RWQCP)196 92 104 115 148
1d (Dry AD –Food & Yard;
Continue Incinerate Biosolids)115 76 80 85 98
Alternative 2 (Export Food to San
Jose, Yard to Gilroy; Continue
Incinerate Biosolids)
72 72 72 72 72
Alternative 3 (Export Food &
Yard to Gilroy; Continue
Incinerate Biosolids)
68 68 68 68 68
27* Also Important to examine life-cycle net present value
** Cost uncertainty with Dry AD Biosolids
28
Example AD
Reference Facilities
28
29
Axpo-Kompogas Plant,
Zwolle (NL)
45,000 Tons/Year Biowaste; Natural Gas Use; 2010
29
30
Axpo-Kompogas Plant
30
(Size, waste type, location?)
31
BEKON Plant
Hille, Switzerland
44,000 TPY Biowaste; 1,000 kW Electricity;
December 2009
31
32
BIOFermTM
Moosdorf, Germany
32
13,000 TPY; Municipal Organic Waste;
Electricity
January 2008
33
DRANCO Plant
Terrassa, Spain
25,000 TPY Biowaste; Electricity
December 2006
33
34
DRANCO Facility
Vitoria, Spain
34
330 TPD
Mixed MSW
2006
35
DRANCO Plant
Brecht, Belgium
20,000 TPY Biowaste (Brecht I);
50,000 TPY Biowaste (Brecht II);
Electricity
July 1992 –Brecht I
January 2000 –Brecht II
35
36
Harvest Power
Valorsul Facility, Lisbon
60,000 MT/Yr
Source Separated Organic Waste; Electricity
2004
36
37
Harvest Power
Palo Alto Facility Concept
37
1.Organic Waste Receiving Hall
2.Hydrolysis Percolator
Loading Hall
3.Hydrolysis Percolators
4.Hydrolysate Buffer Tank
5.Methane Digesters
6.Digester Effluent Buffer Tank
7.HSAD Mechanical Room
8.Combined Heat and
Power Units
9.uCASP Feedstock Mixing
10.Covered Aerated Static
Pile (uCASP)
11.Ventilation System
12.HSAD and uCASP
Biofilter
13.Screening, Curing,
Finished Product
38
Strabag-Linde
Lemgo, Germany
50,000 TPY Screened Organics from MSW,
Yard Waste and Biosolids
2000
38
39
Strabag-Linde
Valladolid, Spain
39
600-TPD
Mixed MSW
2002
40
Urbaser –Valorga
Palo Alto Concept
40
41
Urbaser –Valorga
Ecoparc II
Barcelona, Spain
244,000 Mt/Yr MSW
Electricity
2004
41
42
WTE and Gasification
Facilities
42
43
Copenhagen, Denmark
43
Artist Rendering of proposed WTE power
plant planned for Copenhagen in 2016.
44
Sanford, Florida
80-DTPD Sewage Sludge Gasifier
(Operational September 2009)
44
45
WWTP
Sanford, Florida
46
Dry Sludge Feed to Gasifier
Sanford, Florida
47
Gasifier
Sanford, Florida
48
Slag Discharge from Gasifier
Sanford, Florida
49
Thermal Oxidizer, Oil Heater
Sanford, Florida
50
50
IWT –Chiba, Japan
330 TPD
Operating since 1999
51
51
Waste in Pit
JFE/Thermoselect Plant
Kurashiki, Japan
610 TPD
Operating since 2005
52
52
Cut Away Model -Ebara Plant
Kawaguchi, Japan
380 TPD
Operating Since 2002
53
53
Control Room –Ebara Plant
Kawaguchi, Japan
54
Westinghouse Plasma Gasification System
Utashinai, Japan
165 TPD for Auto Shredder Residue (ASR)
or 300 TPD for MSW
Date of Commercial Operation: 2003
54
5555
IES –Romoland, CA
50 TPD
Operating since March 2005
5656
Gasifier and Thermal Oxidizer
Entech Facility, Bydgoszcz, Poland
25 TPD –Hospital Waste
Operating since February 2003
57
Plasco Energy Demonstration Facility
Ottawa, Canada
100 TPD (Permitted for 85 TPD,
Generates 4 MW electricity)
Date of Initial Waste Processing: 2007
57
58
Plasco Energy Group –Plasma Gasification Facility
Artist Rendering for Facility Proposed for
City of Los Angeles
200 TPD
58
UTILITIES ADVISORY COMMISSION -MEETING
EXCERPTED DRAFT MINUTES OF MARCH 2, 2011
ITEM 3: DISCUSSION: Preliminary Results of the Energy/Compost Feasibility Study
Resource Planner Jon Abendschein gave a presentation on the preliminary results of the Energy/Compost
Feasibility Study. He described the history of the project, which was one of two studies being done on
handling green waste in Palo Alto. He gave an overview of three primary alternatives being considered and
four sub-alternatives. The project could generate 1.5-2.5 MW of biogas, which could be used to generate
power or cleaned up and injected into the gas distribution system. He showed the electric utility’s progress
toward the Renewable Portfolio Standard if power from this project was included. He showed the value of
renewable power and gas used in the study and described some of the preliminary results of the study.
The objective of the meeting was to answer Commissioner’s questions and take feedback on how this
resource would fit into the renewable portfolio and the prices used in the study.
Chair Waldfogel asked for Public Comment:
1.John Kelley commented on the costs of the various alternatives, the opportunity to obtain renewable
gas, the incineration of sewage sludge, and the value of avoided carbon emissions.
2.David Coale commented on the time period used in the study and the value of avoided carbon
emissions
3.Peter Drekmeier commented on the costs of the various alternatives, the value of avoided carbon
emissions, the costs associated with incineration of sewage sludge, and the cost effectiveness of wet
anaerobic digestion, and listed other specific concerns with the study alternatives.
4.Emily Renzel commented on the use of parkland, the marketability of sewage sludge compost, and
commented on some of the assumptions in the study.
Commissioner Eglash asked about project implementation, project ownership, and what was expected of
the Commission.Abendschein responded that staff was looking for comments on the assumptions used in
the energy portion of the study before the initial results of the study went to the City Council. Many of the
outstanding questions would be resolved by the Public Works department. In the scenario analyzed in the
study the project would be privately owned and operated.
Commissioner Melton said he was glad to hear that the City was not proposing to build and operate a
generator. He asked whether the project had been analyzed in enough depth to determine whether it was
economic or not. Abendschein responded that he was unsure whether the project was economic from a
waste management point of view. He said the energy component of the project was relatively small. The
question was whether this was an appropriate resource for the utility if it was economic from a waste
management point of view. Commissioner Melton asked whether the costs shown in the presentation
represented the price at which the utility was indifferent between buying from the project and buying outside
renewables. Abendschein said they were. Commissioner Melton said there was some additional value
associated with having a generator in the city under the City’s control.
Vice Chair Foster said the energy generation component of the project was valuable to the utility because it
was local, renewable, and baseload. He thought the City should look at wet anaerobic digestion of yard
and food waste. He said the City should move in a direction resulting in closure of the incinerator at the
Water Quality Control Plant. He said a carbon adder should be included in the study, and that the full
project lifetime should be considered.
Commissioner Keller agreed with most of what had been said. She asked about the reliability of digesters
as a fuel source. Abendschein said he was unsure about reliability.She asked about whether an
alternative would be considered involving digestion of food and yard waste. Abendschein responded that
he was unsure whether the Public Works department would proceed with an evaluation of that alternative.
She commented on the rent and asked whether there were air emissions that should be included. Utility
Director Valerie Fong replied that staff was focused primarily on its role as an energy purchaser rather than
as a generator owner who would be focused on emissions. Commissioner Keller supported the idea of
local generation.
Chair Waldfogel asked whether a carbon adder was included in the renewable power price. Abendschein
responded that it was. Chair Waldfogel asked whether an item related to local generation had been
included in the Long-Term Electric Acquisition Plan (LEAP). Assistant Director for Resource Management
Jane Ratchye replied that the LEAP Implementation Plan contained a work task related to local generation.
Commissioner Waldfogel asked whether it was possible to incorporate this project into a larger local
generation project, creating a multi-fuel plant. Abendschein responded that the project could supply a
portion of the fuel for the plant. Director Fong said the value of that option could be captured by providing a
value for renewable gas from the digester project.
Commissioner Eglash recommended providing more focused, specific, and actionable information in the
presentation to the City Council. He opposed paying higher than avoided cost for the energy from the
project.
Vice Chair Foster asked whether there were two studies in progress on anaerobic digestion. Abendschein
said there were. Vice Chair Foster recommended combining the studies.
Commissioner Melton said that the City’s utilities should not subsidize the project and should only pay
avoided cost for the energy from the project.
Commissioner Eglash said there was not enough information in the staff report to make a proactive
proposal if that was what the Commission was being requested to do. Chair Waldfogel said the question
being asked of the Commission was narrow: whether the Commission supported roughly 2 MW of local
baseload generation, and he said the answer was yes. In addition, on the question of how much CPAU
should pay for the renewable energy, staff is proposing to base these payments on the value of the
generation, including renewable attributes such as the value of carbon emissions. Commissioner Eglash
responded that the commission supports this approach, which is similar to what’s been done on other
similar staff analyses.
Director Fong stated that staff should have done a better job framing this issue and on what staff wished to
receive the UAC’s feedback. She clarified that the report and presentation were meant to provide the UAC
an update on the project and to inform the UAC of CPAU’s role. In this case, CPAU’s role is as buyer of
energy (renewable gas or electricity) and the key point for UAC discussion should have been narrowed to
whether it agreed with staff’s use of a value-based model for determining how much to pay for the
renewable energy from the project.
The sense of the commission was that it did agree with staff’s use of a value-based approach, including the
value of renewable supplies with a carbon adder.
Vice Chair Foster said he wanted the minutes to show his strong support for the following items: a) ending
incineration of our biosolids; b) producing locally-generated baseload green energy; c) including a carbon
adder in any analysis; d) considering the wet anaerobic digestion option, including both food waste and
biosolids; and e) examining lifetime value when preparing financial analysis.
From: Bigbillcutler@aol.com [mailto:Bigbillcutler@aol.com]
Sent: Thursday, February 17, 2011 12:23 PM
To: Bobel, Phil
Subject: Re: February 9th Public Meeting Follow-up/Wastewater Planning
Phil,
I object extremely strongly to the process of allowing the public to express opinions on the
biosolids options they prefer. This is entirely a technical choice based on analysis of the
properties of the various options, for which the public are completely unqualified.
The proper process would be to allow the public to prioritize various outcomes they feel are
important, such as reducing greenhouse gas emission, producing fuel and energy from waste,
controlling toxics, the appearance noise and odors from the facility, financial return from
operations, etc. Then make a technical selection on the basis of which option best realizes the
prioritized goals.
Allowing the public to vote in this manner creates expectations that will most likely not be fulfilled,
resulting in public resentment (as with putting the choice on the fountain for California Ave. before
the public, only to be overruled by the Arts Commission).
You did it right with the goals study for the waste treatment plant several years ago. Follow your
own example.
Bill Cutler
In a message dated 2/16/2011 12:47:43 P.M. Pacific Standard Time,
Phil.Bobel@CityofPaloAlto.org writes:
Wastewater Planning Interested Parties:
Thank you to those who attended the Feb. 9th public meeting on Biosolids Options for
the Palo Alto Wastewater Facilities Plan.
The information we presented during the meeting was a preview of some of the options
we will be evaluating before we come
back to you at a future meeting to explain our biosolids evaluations. Your comments and
your options preferences are
additional information we can use during evaluation of options and development of the
presentation for the future meeting.
The comments received and the PowerPoint presentation on Biosolids Options that was
given by the City and Carollo Engineers
are now on the project website. We’ve also placed the results of the “dots” exercise on
the website; attendees at the end of the
meeting placed “dots” next to their first and second choice of biosolids process and end
use options shown on display boards.
The third public meeting will be on May 4, 2011 at 3:00 pm, at the Cubberley
Community Center, Room H-1.
Details for that meeting will be sent out next month.
Visit the Long Range Facilities Planning web page to view all documents.
Thank you!
Water Quality Control Plant Staff
Long Range Facilities Planning Project
City of Palo Alto
(650) 329-2598
From: Bigbillcutler@aol.com [mailto:Bigbillcutler@aol.com]
Sent: Friday, February 18, 2011 6:32 PM
To: Bobel, Phil
Subject: Re: Energy/Compost Preliminary Analysis (1/24/11)
I'll take a look at what Council has directed and perhaps offer some suggestions. Why should I
trust City Council to set up an effective selection process? What are their qualifications?
As to not knowing how the decision will be made, there is ALWAYS a process in place for making
the decision, whether that process is explicitly described or not. "We'll know it when we see it" is
just one example, and a very poor one. Not declaring in advance what the process is, if only at a
very simple top level, is a recipe for disaster. It builds mistrust and sets up the situation for
rancorous argument when the decision is actually made. There are plenty of examples of good
decision processes to follow and there's no excuse for not choosing one in advance. I know this
is not your fault, so don't take my rant as having anything to do with you.
Here's a brief cut at a framework that I'd recommend.
1. List all the Qualites of Outcome, both benefits and drawbacks, that might occur as a result of
implementing a waste processing system. There's already been enough discussion to know what
these are. Examples would be:
- Reduces greenhouse gas emissions (a benefit)
- Interferes with people who want to enjoy the proposed site as parkland (a drawback)
2. Establish a minimum level of performance for each quality based on community input plus
expert analysis. Any proposed alternative must meet all the minimum performance requirements
or it will be dropped. Continuing the examples:
- Must reduce greenhouse gas emissions at least as well as the best non-waste-processing
alternative
- No more than X people per year are disappointed because they are denied the pleasure of
accessing the parkland taken by the facility.
3. Establish bonus point to be awarded for exceeding minimum requirements. Again, the relative
weighting of each Quality of Outcome, and the scale by which points are awarded for each
Quality, are determined by a combination of community input and expert analysis.
- An alternative that barely meets the minimum requirement on greenhouse gas emission gets
zero bonus points while an alternative that reduces greenhouse gas emission to zero gets
maximum bonus points for that Quality.
- Bonus points are awarded in proportion to how many of the X people (above) don't notice or
don't mind that the parkland has been taken.
4. Evaluate each alternative and award the bonus points. Provisionally, the alternative with
highest score wins. If this result doesn't feel right, go back and check how the bonus points are
determined ad adjust the process.
All of this is done in an open and transparent manner.
Bill Cutler
In a message dated 2/18/2011 7:33:44 A.M. Pacific Standard Time,
Phil.Bobel@CityofPaloAlto.org writes:
I’m afraid I can’t actually say exactly how the decision will be made here ( your 7th
paragraph ). So it would be disingenuous of me to set up a process other than the one
directed Council. The schedule & steps are on the website.
From: Cedric "Compost" de La Beaujardiere [mailto:cedric.compost@gmail.com]
Sent: Friday, February 18, 2011 5:24 PM
To: Bobel, Phil; Peter Drekmeier; Hays, Walter; Bob Wenzlau
Subject: AD Financial feasibility feedback
Phil informed us that sewage treatment plants have discovered that adding food waste to
their biosolids digesters produces more energy than digesting each of these inputs
separately and summing the energy produced. On the down side, the compost made from
the mixed inputs is less marketable than compost from food alone. I presume that the
financial comparisons look like the following (where "+" means "mixed with", and
knowing that all digestates would be composted with yard):
lesser financial value <
greater financial value
value of compost:
biosolids < food+biosolids < food
value of energy: food & biosolids
separated < food+biosolids
capital/ops savings: food & biosolids
separated < food+biosolids
GHG savings/offsets: food & biosolids
separated < food+biosolids
The first line begs the question whether the sum of selling two compost products,
the lower-value-biosolids and the higher-value-food, is worth more or less than
selling mid-value-food+biosolids.
I think this should be one for the sensitivity analysis, to consider the financial and
GHG implications of mixing biosolids with the food for digestion, versus keeping
them separated.
All in all, from a pure financial perspective, I suspect that mixing the streams together
will be the most economical, in terms of capital & operational costs and increased energy
sales, and that this would likely more than offset the decrease in the compost value. The
current draft study gives the following information
COMPOST
Input price amount value
$/ton tons $
food+yard $30 10,493 $314,790
biosolids $ 0 8,910 $0
All three TBD 19,403 ?
Compared to Electricity generation of $10-12M/year.
NOTES FOR PHIL & ARI:
Looking deeper at the study's spreadsheet for Low Range Electricity, Inputs tab, I
note a few things:
1) Rows 174 & 175 has a levelized price for electricity of $0.1205/kWh, but I don't see
the calculations to estimate price fluctuations over time and annualize it. Is this accurate
or something that still needs work?
2) Row 173 has the Annual Gross Power Output (kWh/year) listed as:
~10 GigaWh for Dry AD for all inputs, and
~12 GigaWh for Dry AD for yard+food and Wet AD for biosolids.
Why is the Dry AD estimated to produce ~2 GWh less electricity from biosolids as
Wet AD?
3) Rows 98 & 120 Energy purchased to operate Wet AD = $29,594 vs Dry AD =
$243,642
This matches my expectations, given that Wet AD has the energy loss of pumping all
that heavy water around, where as the Dry AD had the benefit of only having to move
around lighter dewatered materials.
However, I should expect the Dry AD energy purchase cost to decrease from option 1a
to the other options 1b, 1c, & 1d, given that the DAD would not be handling biosolids.
4) Rows 143-151: why does it cost 5 times more to deliver dewatered sludge cake than
liquid sludge from RWQCP to PALF? Presumably the liquid would be piped, so that is
cheap. What is the envisioned conveyance for the sludge cake? Trucks & bulldozers
would be expensive; conveyer belt would be cheaper. If this price differential is accurate,
it may be cheapest to pipe wet sludge to the landfill, dewater it there, and pump the water
back to RWQCP.
5) Rows 124-136: Operations and Maintenance Costs for AD Facilities. How does the
Dry AD facility get to be $2,000K/year versus Wet AD's $400K/year? Dry AD has hight
costs not listed for Wet AD:
$346K Maintenance & Repair
$296K Capital Repair & Replacement
$773K Other (Equip. Leasing, Compost Treatment, Mgt. Fee, Admin., Ins.)
15% Contingency for biosolids treated by Dry AD vs 10% for biosolids treated by
Wet AD.
Are these higher costs of $1.4M real, or do they reflect uncertainty which is already
captured by contingency, or are these costs missing from the Wet AD estimates?
Thank you,
Cedric
--
Cedric Pitot de La Beaujardiere
Former Co-Chair, Palo Alto Compost Task Force
Questions Re: AD spreadsheets from Enid Pearson 2/23/11
1. Low-Cost Range Options (electricity) Page 2 of 7
Lines 46, 47 and 48 all across; Site Preparation, excavation, pilings and Additional
up-front landfill closure:
It would be helpful to know what amounts of garbage are being moved around, or
excavated and what/how many pilings and to what depth they are being contemplated.
Whose plan is being used - the 9+ acres of the City or the AD advocates? And should
these two sites not be compared?
2. There does not seem to be any charge for hauling away excavated garbage from
these sites. Shouldn’t we be given a choice of whether we want the excavated garbage
spread around on the park or transported elsewhere? Would the current open Byxbee
Park be used as a site for spreading this excavated garbage?
3. Comparable numbers showing these costs would be helpful in making choices
4. There are no numbers detailing the number of trucks that might be involved in
the AD project and the anticipated times of hauling – day and night. A comparison of
the number of trucks servicing the AD vs the number of trucks going to regional facilities
is necessary to be able to judge the vehicle impact.
5. What is the impact on the current part of Byxbee Park that is open to the public
of the possibility of spreading excavated garbage on either the open park or nearby sites?
6. It appears that the AD project is expected to take only two years to construct. Can
we have a time line that also includes the permitting processes? For instance, who are
the agencies that need to pass on this project? Please give us a list of these
organizations.
7. The land appraisal that shows not one site in Palo Alto raises a lot of questions.
a) What happened to the recent appraisal of the land adjacent to the RWQCP on
Embarcadero Way?
b) Why would not the park land (Byxbee), if undedicated, immediately become
commercial/industrial land?
c) Consider the appraisals for wetlands such as the Don Edwards Conservation Lands? .
d) Palo Alto houses on 6,000 sq.ft lots are being bought for over one million dollars and
torn down. This makes an acre of land in Palo Alto worth $7,000,000.
e) Is there a CMR relating to the rent now charged for parkland adjacent to the landfill?
Page 2
8. Noise and Odor: I don’t see any dollars attached to reduce the impact of noise and
odor.. What would be the costs of ensuring that anything constructed would be
soundproofed for the benefit of the public still trying to use the remaining park?
What is the cost of odor control? What research has been done in this direction? The
AD project will be extremely noisy and create odors and together with the RWQCP will
generate extremely repellent odors.
(Should odor control also be a component of the future RWQCP?)
February 23, 2011
Jim Binder
Alternative Resources, Inc.
732 Main St # 101
Concord, MA 01742-2861
Dear Mr. Binder:
Thank you for the effort you have put into the feasibility study for processing
organic waste in Palo Alto.
Following are some of our concerns about, and recommendations for, the study as
it proceeds.
1) We are concerned that the study does not compare apples to apples. For
example:
• The study does an in-depth analysis of the costs of building an anaerobic
digester in Palo Alto, but relies on a tipping fee estimate from a San Jose
vendor for use of that facility (this same vendor also owns the Z-Best
facility in Gilroy, so it would have a monopoly on organic waste processing
and could charge whatever the market will bear). More importantly, the
study applies a 30% contingency cost to the Palo Alto options, but not to the
San Jose project.
• Alternatives 2 and 3 assume the City would continue to incinerate
biosolids. However, the Long-Range Plan for the RWQCP is considering
wet anaerobic digestion. Variations of Alternatives 2 and 3 should be
created to reflect the possibility of wet anaerobic digestion of biosolids in
Palo Alto.
• The figures in the study for operating the incinerator do not include capital
costs/retrofits, which will be needed by 2020. They also do not include the
costs of bringing the facility into compliance with new air quality
regulations aimed at addressing mercury emissions. This makes the cost of
continuing to incinerate biosolids artificially low.
2) The feasibility study does not include one of the most promising options – a wet
anaerobic digester that could handle both biosolids and food waste. By including
food waste, we would likely increase the scale of such a digester and bring down
the cost per ton. By using the 10 acres provided by the Palo Alto Green Energy
and Compost Initiative, we could accept food waste from the City’s wastewater
treatment plant partners, and mix yard waste with the digestate in an aerobic
process to turn all three waste streams into compost.
3) The feasibility study should address the possibility of a CO2 “adder.” The
following information is from a City of Palo Alto staff report titled CMR: 308:08 –
"Review of Results of Cost-Benefit Analysis of Climate Protection Plan and
Direction to Staff on Recommended Follow-Up Actions" (July 21, 2008):
"As part of the 2008-09 EPP [Environmentally-Preferred Purchasing Policy] work
plan, staff is developing a purchase evaluation methodology incorporating
environmental costs and benefits into the financial formulas. For example, a GHG
"adder" [see cliff note below] of $20 per metric ton is being proposed, and costs
and benefits for other environmental impacts, such as pollution and hazardous
waste disposal, are also being considered. In addition, life cycle analysis, already
a policy of the City, has yet to be fully integrated into City purchasing practices.
Training workshops are being scheduled for this fiscal year to educate staff
responsible for CIP projects in how to use life cycle analysis to identify the best
economic and environmental values for the City as they make purchases for their
projects."
Cliff note on adders: "Climate Change: Action by States to Address Greenhouse
Gas Emissions," CRS Report to Congress, January 18, 2007, page CRS-17:
Greenhouse Gas "Adders": ...In general, adders require utilities to weigh the future
costs of greenhouse gas emissions when considering different energy investment
options (e.g. fossil fuels, renewable energy supplies). For example, California's
Public Utilities Commission requires investor-owned-utilities to include an
[adder] on carbon dioxide emissions when conducting long-term planning or
procurement activities...[to] "serve to internalize the significant and under-
recognized cost of [greenhouse gas] emissions, [and] help protect customers from
the financial risk of future climate regulation..."
4) The feasibility study includes low and high estimates for the cost of a DAD
facility in Palo Alto. As explained to us on February 4, 2011, you received five low
estimates and two high estimates, based on the level of technology used. Staff
believes the more simple technologies (the low bids) would be suitable for Palo
Alto. Therefore, the higher estimates are unnecessary.
5) Assuming the figures from Zanker (San Jose) and Z-Best (Gilroy) are accurate
(which we question), the feasibility study projects that an on-site anaerobic
digestion facility would be more expensive than the alternatives in year one, but
cheaper in year 20 (the span of the study). Given that we expect to be processing
organic waste well beyond 2035, the City should look at a 30-year time horizon or
longer.
Thank you for considering these comments.
Sincerely,
Peter Drekmeier
Steering Committee Member
(650) 248-8025
From: Brian <bjdpc@yahoo.com>
Date: February 24, 2011 4:12:43 PM PST
To: Phil.Bobel@CityofPaloAlto.org, jbinder@alt-res.com
Subject: Why should the proposed AD facility be assumed to last 20
years?
February 24, 2011
Dear Mr. Bobel and Mr. Binder,
I am the person at the meeting last night who asked how many years the "fixed costs" for
the proposed AD facility were being "spread over". Mr. Binder replied that they were
being spread over 20 years, since that's the typical term for the loan that would need to be
obtained for the project.
When I got home last night I realized that that answer doesn't really make sense to me.
My parents bought their Palo Alto home in 1958, paid off the loan around 1988, and the
home is still in fine shape in 2011, around 23 years after the loan on it was paid off.
Analogously, I don't see any reason to assume that the proposed AD facility would last
just as long as the loan on it lasts. As I recall, Mr. Binder even acknowledged that the
cement used in the facility would probably last longer than 20 years.
To rectify this potentially significant problem with the number of years the proposed AD
facility's fixed costs are currently being spread over (and thus with the associated
estimated costs per ton), I would strongly recommend asking the seven companies who
submitted facility estimates how long each of them expect their facility would last. It
would be especially interesting to hear such estimates from companies who built such
facilities in the mid-90s, or from other companies currently operating such "old" facilities
(since they should know how well such a facility is still performing after about 15 years
of use). If such facilities are still performing well with no significant signs of
degradation, then a lifetime estimate of much more than 20 years would probably be
much more accurate than just using the figure of 20 years (based on the expected length
of a loan). Any such estimates that you obtained could be partially "discounted" to
account for the possibility that the company might state an excessively large value (e.g.,
you could assume 80% or 90% of their estimate). In addition, actual statistics for other
types of processing plants could be considered (for example, how long has the current
water treatment plant been in operation?).
Please let me know if you will be able to make some estimate of the expected lifetime of
the proposed AD facility other than just the expected length of the loan that would be
taken out for it. At a minimum, I think that it would be good to present a "sensitivity
analysis" with respect to this variable (e.g., what if the plant lasts 15 years, 25 years, 30
years, 40 years, 50 years, etc.).
Thank-you for your consideration of my ideas.
Sincerely,
Brian Davis
443 Tennessee Lane
Palo Alto, CA 94306
-----Original Message-----
From: Walt & Kay Hays [mailto:wkhays@igc.org]
Sent: Friday, February 25, 2011 5:22 PM
To: Peter Drekmeier; Bobel, Phil
Subject: Re: Fluidized bed incineration
- as well as its fuel consumption and GHG emissions.
At 12:05 PM -0800 2/25/11, Peter Drekmeier wrote:
>Hi Phil,
>
>On Wednesday you mentioned that if PA stuck with incineration, we
>would probably go with a fluidized bed incinerator. Are there any
>estimates as to how much such a facility would cost?
>
>Thanks.
>
>-Peter
>
>-----------------------------------
>Peter Drekmeier
>pdrekmeier@earthlink.net
>(650) 223-3333
--
Walt Hays
Mediator
650-424-9633
Adkins, Margaret
From: Bobel, Phil
Sent: Monday, February 28, 2011 6:38 PM
To: Silver, Cara; Miller, Martha; Thomas Jordan
Cc: Hartman, Donna; Adkins, Margaret
Subject: Response/ Appraisal of the nine acres at the location of the proposed AD Plant in the Baylands
Page 1 of 2
3/11/2011
Tom - I'm happy to meet with you on the questions you've raised, although I won't
be able to answer some (and Martha can't either). I'm also including them with the
"Comments" we are receiving on the ARI Preliminary Analysis.
When we ask for an appraisal we don't dictate the methodology/properties to be
used. It's a theoretical exercise and the appraiser uses their best professional
judgment. We will, in all likelihood, use the higher rent value from the Hurlberg
memo as another data point ( we're calling this the "sensitivity analysis" )
following 3/21 when we will get Council feedback on any modifications they'd like
to see. As you know, the rent value is a policy decision Council would ultimately
make. We will give them model runs for values they request. We already have several
public comments suggesting that the higher number be used and, unless Council tells
us not to ( which I doubt), we'll prepare a model run with the higher number.
If you'd like to meet, give me a couple early morning or late afternoon times that
would work next week. Thanks !
MA - “Comment”
Phil
-----Original Message-----
From: Thomas Jordan [mailto:tsj474@gmail.com]
Sent: Monday, February 28, 2011 2:24 PM
To: Miller, Martha
Subject: Re: Appraisal of the nine acres at the location of the proposed AD Plant
in the Baylands
Thank you for the prompt response. My questions are:
1) Why was Hulberg told to appraise "Undeveloped Parkland" when the purpose of the
appraisal was to establish the proper rent for the proposed AD Plant to pay to the
City and the Plant could be built only if the nine acres is removed by public vote
from Park status?
2) The ARI Cost Study for the proposed AD Plant uses $102,900 annual rent, which is
the amount the Hulberg Appraisal puts on "Undeveloped Parkland, as if
environmentally clean", but the proposed AD Plant cannot be built on "Parkland", so
the Hulberg applicable annual rent should be $784,000, the amount set for
"R&D/Industrial Use". How did this mistake occur in the ARI Cost Study? Did you
give ARI the incorrect amount? Did you look at ARI's work to be certain that they
used the correct annual rent? If the answer to the two prior questions is No, do
you now agree that the higher annual rent should have been used?
3) It is my understanding that for that exact same nine acres that you engaged
Hulberg to appraise the City is currently receiving over $1,000,000 a year in
annual rent from the Refuse Fund. If I am wrong, please advise me of the exact
amount that the City is collecting on those nine acres and direct me to the source
where you get your figures. Did you tell Hulberg that the City is currently
collecting this amount in rent, even with the nine acres being a dedicated Park?
Did you give Hulberg the latest appraisal in the City files supporting the receipt
of this much larger amount in current rent being received from the same nine acres?
4) Does the Hulberg Appraisal supersede the latest appraisal that the City has on
the Landfill, thus drastically decreasing, from and after the 10/20/10 date of the
Appraisal, the annual rent that the City can charge the Refuse Fund for dumping
there? If so, the drastically lower rent would seem to apply to all of the
Landfill acres on which the City is receiving annual rent, which I compute to be
95+ acres and would decrease the rent to less than 1/10th the current amount.
5) Current City Policy for charging rent to the Refuse Fund for use of City owned
land is stated in CMR 441:05 (and I am certain in other places as well). Is that a
correct statement of the City policy as of today? If not, please direct me to the
proper statement of the City Policy.
6) Did you advise Hurlberg of this policy and particularly of the City's current
annual rate of return, which I understand to be 10%, on the fair market value of
the property concerned? Hurlberg used 7% for Parkland and 8% for R&D/ Industrial.
Does the City's rate now have to be reduced to what Hurlberg used, thus further
decreasing the annual rent paid to the City by the Refuse Fund?
7) In CMR 165:10, Attachment C five properties along Embarcadero Way within a
stone's throw of the nine acres you had Hurlberg appraise were reported to the
Council as having a total value of from $22,389,840 to $13,433,904 for only 5.14
acres. These parcels all had structures on them, but there are accepted
conventional methods for adjusting the values of improved parcels to their
unimproved value. Did you give Hurlbert this information? If not, may I inquire why
not?
I am available to come to your office for your response if that is more convenient.
DPW and ARI have scheduled another public meeting on the proposed AD Study for
March 9 at 7pm. It is important that I understand these matters at least two days
prior to that meeting so that I may prepare my presentation. I appreciate your help
with this. Tom Jordan
On Feb 28, 2011, at 12:33 PM, Miller, Martha wrote:
> Tom,
>
> I am not available much this week, and since we are down to 2 people
> from 5 in our department I don't have much time in general. I have not
> looked at that appraisal in a long time so if you would like to send me
> your questions via email I can take some time to review them and get
> back to you. I have meetings this afternoon from 2pm on and then
> tomorrow off and on starting at 9am, but more importantly I am working
> on 3 big projects with short deadlines that I cannot take time away from
> just now.
>
> -----Original Message-----
> From: Thomas Jordan [mailto:tsj474@gmail.com]
> Sent: Monday, February 28, 2011 11:42 AM
> To: Miller, Martha
> Subject: Appraisal of the nine acres at the location of the proposed AD
> Plant in the Baylands
>
> I would like very much to come talk to you with several questions that I
> have about the Hulberg & Associates appraisal dated 10/20/10 and the use
> by ARI of a annual rental to the City of $102,000 on the nine acres. I
> have both the full appraisal and the cost figures from the ARI study.
> This is something that I could put in a formal letter to you with copies
> to many many people, but it strikes me that a half hour of questions and
> answers in a personal conference may be a more efficient way to get
> started. I am free this afternoon and all day tomorrow. Please let me
> know if I can come talk to you. Tom Jordan
Page 2 of 2
3/11/2011
-----Original Message-----
From: Thomas Jordan [mailto:tsj474@gmail.com]
Sent: Friday, March 04, 2011 4:00 PM
To: Bobel, Phil
Cc: Pearson, Enid; Renzel, Emily
Subject: Jordan's 3/4/11 Comments
My attempt at determining what rent the City is currently collecting on
Parcels IIA (22.5 acres), IIB (23.2 acres) and IIC (51.2 acres), with all
acreage taken from the map on page 83 of the Baylands Master Plan, is that
the City is charging approximately $59,523 an acre a year on Parcels IIA and
IIB, and that the rent the City charges on Parcel IIC is approximately
$91,812 a year per acre. Note that "collections" are less than the rent
"charged" because of the "smoothing" policy adopted by the CouncilI defers
collection of some of the charges until the 2011 to 2021 period to avoid a
sharp increase on the customers. I arrive at this by looking at the Landfill
Rent Schedule (See Exhibit D, page 5 of our Complaint to SLC), noting that
the rent charged on 51.2 acres of Parcel IIC was $4,700,821 and the rent
that was in the "proposed" column for Parcels IIA and IIB was $2,720,104
greater. This was a City generated table before the Council at the January
2007 meeting where the Council imposed the additional charge on the two
closed parcels. See all papers under Exhibit D to our Complaint to the SLC.
Surely someone at the City has the exact amounts for this, but I am giving
you what we poor citizens can compute. It does mean that the Hurlberg
appraisal of $784,000 for the annual rent on the nine acres is closer than I
thought to the $826,317 rent the City is actually getting. Still the $52,317
difference is worth putting before the Council clearly, simply because there
is no reason in the world that the Council should not have before it the
current rent on the same nine acres. The difference may well be that
Hurlberg is charging 8% annual rent on appraised value and I understand that
the City has been charging 10%. If that is the case the Hurlberg appraisal
of the FMV of the nine acres is more than the City's appraisal, but the 8%
rent applied makes the annual rent less.
In summary, the best and clearest statement of the situation is to (a) get
rid of the $102,99 annual rent as erroneous, (b) show a line at Zero annual
rent, recognizing that the City Council has the power to waive all rent, (c)
show the current rent received on the nine acres as $826,317 a year then (d)
show the Hurlbert appraisal at $784,000 a year rent, with a footnote on both
(c) and (d) that the difference is in the annual rent rate, with 10% being
the current rate and 8% being the Hurlbert rate.
One very important additional point that I neglected to mention in our
meeting is that the rent charged should carry an annual cost of living
increase as all commercial leases do, with ARI or Hurlbert telling the City
what amount to factor in over 20 years to cover this. The AD Plant group is
calling for you to put cost of living increases in many other places
advantageous to them, so you must be consistent and put them everywhere they
would occur in a commercial setting. Of course, if the Council in a noticed
public meeting chooses to waive the rent, the COL will be moot. Thank you
for your time today. If this is not clear, please let me know. Tom
Jordan
From: Cedric "Compost" de La Beaujardiere [mailto:cedric.compost@gmail.com]
Sent: Wednesday, March 09, 2011 11:18 PM
To: Walt & Kay Hays
Cc: Bobel, Phil
Subject: Hays/Cedric 3/9 Comment
Well, it could be that all the yard waste would be used to aerobically compost the
digestate. I would think that it would be all used for that, given that the annual mass of
organics is almost evenly split 3-ways between yard, food and biosolids. so that at least
all the yard could be used to compost the digestate from the other 2/3's. If anything, it
begs the question of how much yard would be needed to compost the digestate, and
would we possibly need more yard wastes, whether we were AD'ing our biosolids and
just our food, or other communities food as well.
Thanks, Phil, to you and your team for all the work and effort you've put into this project,
and your diplomatic yet effective balancing of conflicting input and pressures you're
getting from all sides. One could be buried under it all, or get agravated, but you show
neither and keep moving the process along.
Cedric
On Wed, Mar 9, 2011 at 9:13 PM, Walt & Kay Hays <wkhays@igc.org> wrote:
Hi,
Having expressed impatience with rehashing comments on cost, I'm embarrassed to
admit that I should have made one that I thought of on the way home; namely:
On C-2, what I ( and I think we) want is consideration of wet AD of biosolids and food in
one facility. That leaves yard waste. My understanding is that some of it can be utilized
as a bulking agent in aerating the digestate. However, the remainder would have to be
hauled to Gilroy.
My point is that all that should be considered under C-2.
Thanks.
Walt
--
Walt Hays
Mediator
650-424-9633
--
Cedric Pitot de La Beaujardiere
Former Co-Chair, Palo Alto Compost Task Force
-----Original Message-----
From: thomas jordan [mailto:thomasjordan474@comcast.net]
Sent: Thursday, March 10, 2011 10:17 AM
To: Bobel, Phil
Cc: Pearson, Enid; Renzel, Emily
Subject: Additional Citizen's comments on Preliminary Feasibility Report
Please add this as a supplement to the three page Memo addressed to ARI and
you that I handed to you at the beginning of last night's public meeting. I
do not have the email address for ARI, so will you please forward this to
them.
11. A member of the public at last night's meeting, speaking from the floor,
requested that the Hurlbert & Associates appraisal be re-opened with
instructions from the City to include Palo Alto properties, none of which
were included in the original appraisal. The request was noted on your list
of public comments. This comment is to put an even sharper point on that
request. The City Staff dealing with the appraiser should instruct them to
look at and consider parcels in Palo Alto including the five parcels listed
in CMR 165:10 at Attachment C, page 2 in reaching their conclusion. Those
five parcels were reported by DPW to the City Council less than a year ago
and are clearly relevant parcels to be considered in appraising the 9 acres
at R&D land value.They are all within a stone's throw of the 9 acre and are
all R&D. It is true that all are improved, but appraiser's have conventions
for arriving at the land value of improved lots. It is not improper to
require an appraiser to look at and comment on certain parcels. Their
professional opinion will deal with whether they are comparable. It is error
on the part of the City to direct the appraisers to consider parkland values
when a) the 9 acres will not be parkland if the citizens remove them from
that status, which is the only situation under which the AD Plant can be
built and b) the term "highest and best use" is not a subjective judgement
allowing DPW to decide what it thinks is "highest and best" but is clearly
defined by appraisers as yielding the highest economic return. Therefore, it
was a substantial mistake for DPW to decide that parkland was the "highest
and best use" then direct the appraiser to finding parkland type comparable
parcels. Either disregard the confusing mis-instructed appraisal or do it
right.
12. This leads me to an additional comment. The current appraisal is of bare
land only, but the ARI study is also considering public financing to build
the AD Plant. If the AD Plant is built with, say, $50M of City money, the
rent charged the Refuse Fund will not be a bare land rent but will be for a
$50M plant sitting on that land, which will have a even higher FMV than the
five nearby parcels referenced in #11 above, all of which are merely
warehouse type buildings. In short, the comment is: In your public financing
model, the annual rent charged the Refuse Fund should be based on the FMV of
the 9 acres PLUS the $50M AD Plant.
Thank you for considering this and adding it to the public comments going to
ARI and to the City Council. Tom Jordan
•
-CITY OF PALO ALTO. CA ClTY CLERIS-'S OFFICE To: The Mayor of Palo Alto and to all Members of the CIty Louncil
cc: James Keene, Palo Alto City Manager
Philip Bobel, Department of Public Works
II MAR 16 AM 10= 28
From: Tom Jordan, 474 Churchill Ave, Palo Alto CA 94301 650-327-6034
tsj4 74@gmail.com
Date: 15 March 2011
Re: State of California Existing Lease with Palo Alto for the Landfill and the relation
of that to the ongoing Feasibility Study for an AD Plant in the Baylands
SUMMARY OF THIS MEMO Our formal Complaint to the State Lands Commission
("SLC") on this matter has been sent to each of you and to all City employees
concerned with this matter. There are two purpose of this Memo. One is to bring
your focus sharply to the immediate significance of this issue as it relates to the
Feasibility Study. The second is to respond to the public comments of which we are
aware from City employees and from the advocates for the AD Plant in the Baylands
which seem to deny or defer or generally belittle this important matter.
1. THE IMMEDIATE SIGNIFICANCE OF THIS ISSUE The Feasibility Study assumes
that a large AD Plant will be built on the nine acres costing from $33M+ to $84M+,
all of which will be financed either privately or publicly. If the Council decides to
proceed with such an AD Plant the very first question at the very first meeting with
the prospective private company, if privately financed, or with Bond Counsel, if Palo
Alto finances it, will be: "Show us the legal description of the Plant Site and evidence
of the City's clear title to the land, or the City's clear authority to build on the land."
The City Manager will turn to the City Attorney expectantly, and what will the City
Attorney say?
That first meeting will proceed no further than that first question from the outside
attorney and will adjourn right there if the City has no more than it presently has.
The second section below deals with the various responses of City employees and of
AD Plant advocates to date on this issue and explains why they are all completely
and totally inadequate to answer the above question, which will be asked and
cannot be avoided.
Why continue an expensive Feasibility Study which consumes both significant City
money and Staff time, when the most basic first question of building an AD Plant in
the Baylands has not been covered? The City was fully advised of this issue over two
years ago and has done nothing. absolutely nothing. from then to the present to
satisfy this gaping hole. If the issue is easily resolved, as some of the City employees'
comments imply, or, if it is of no consequence, as the AD Plant advocates say, why
has not the matter been settled and resolved by a binding document from the State?
Until the City has that binding State document in hand, it is a waste of money and
time to pursue the Feasibility Study any further. The Council should put the
Feasibility Study on hold and the City Attorney should be instructed to obtain such a
document from the State. Once that State document is obtained, if it can be obtained,
the Study can be resumed.
2. OUR RESPONSE TO THE PUBLIC COMMENTS OF CITY EMPLOYEES AND OF AD
PLANT ADVOCATES In one article on this matter appearing 2/11/11 in The
Palo Alto Daily News we see:
"The city maintains that it has been complying with its State Lands Commission
lease, but Silver said it would contact the agency to confirm. She said the city
periodically checks in with the commission, which in exploratory conversations has
indicated it may allow composting on the land."
OUR RESPONSE: It is now more than a month since the "city ... will contact the
agency to confirm" compliance statement was made. Has the City done so? If so, why
not? If yes, what did the SLC say? This should give the Council great concern. If there
is truly no problem, why NOT establish that clearly NOW?
The "exploratory conversations "turn out to be only an exchange of emails in
January 2009 initiated by the City and going only to the SLC's clerk who handles
contacts from the public. She was the same nice cooperative person who sent to me
the SLC leases with the City that are now attached to our Complaint against the City.
The City's inquiry said nothing about an AD Plant on nine acres of current Landfill
which the State claims ownership of; it did not say that the proposed AD Plant
. would cost at least $50M and would be built and operated by a private for profit
company that would expect a 25% annual return on its capital cost of the AD Plant
plus additional profit from operating the plant; it did not state that the City had been
receiving over $lM a year into its General Fund as land rent for the 45 acres in
Parcel IIA and liB that the City promised the SLC in 1992 and in 2000 respectively
that it would open as public parks; it spoke only of the City may "want to continue
compo sting operations on top of the closed landfill".
Of course, the SLC public contact clerk could not respond to what the City never
asked her, so the City should not and really cannot assume anything from her
response about the current proposal under study. But note that the SLC public
contact clerk DID say: "composting is a permissible trust use so long as it is
regional". The proposal of the AD Plant advocates is not now and never has been
regional. The food scraps and yard waste tonnage figures in the Feasibility Study are ,
for Palo Alto only. The SLC clerk went on to say: "should composting become a
revenue generating source for the City, then the SLC may consider charging rent"
Here is trouble!!! The City has been receiving over $lM a year into its General Fund
for the 45 acres of Parcels IIA and liB that it promised the SLC in 1992 and 2000
respectively that it would open as public parks, but the City did not do so. In
addition, the City will receive about $lM a year into its General Fund as land rent for
the nine acres on which the proposed AD Plant is to located. The SLC may want that
•• <
2...
past and future rent to go to the SLC instead. And these are the "exploratory
conversations" which have" indicated it (the SLC) will allow composting on the
land." I don't think so. But no need to speculate. Let the City come clean with the SLC
now re its past and ask the SLC about approval of the proposed AD Plant on nine
acres. Why not?
On 2/10/11 Enid Pearson, Emily Renzel and I met with the SLC Chief Counsel, her
Deputy Attorney assigned to Santa Clara County and his assistant for a full hour at
the SLC office in Sacramento. The SLC attendees were advised three days prior to
that meeting of the specific leases involved and of why we were coming to see them.
At the meeting it was clear that the SLC attendees knew nothing of Palo Alto's failure
to comply with its lease obligations or of a proposed AD Plant in the Baylands. These
were the top SLC staff members who will have to approve any request by the City
for a lease for an AD Plant. Of course, they will not even consider any such request
until after they first decide what to do about the City's complete failure to perform
under the Lease since 1992 and 2000 and to make substantial money for the City in
doing so.
Another article appearing 2/11/11 in The Daily Post states the City's position as
follows:
"Palo Alto disputes that the State owns the land, said Senior Assistant City Attorney
Cara Silver. However, in 1989 City officials Signed a 49 year lease with the state for
the land that reserves certain rights for both the city and the state. Silver said that
the lease was intended to avoid lengthy litigation and is amended periodically to
reflect changed operations at the landfill. She said the latest lease agreement was
entered into in 2009 .... Silver said that if the city were to decide to put an anaerobic
digestion plant on the property, a new lease would have to be obtained from the
commission. ·But she said that the City has not pursued that because the feasibility of
the plant was still being studied by the city. However, she said that the city had done
'preliminary outreach' with the commission, which had indicated it would be open
to the idea."
OUR RESPONSE: As to the 2009 amendment referred to above, it was probably for
the renovation of the old Sea Scout building and had nothing to do with the Landfill,
nothing at all. The SLC leases for the Landfill are all attached to the Complaint that
we gave you and we obtained those directly from the SLC in 2009.
As to the 'preliminary outreach' comment, I repeat that we talked for an hour on
2/10/11 with the three ranking SLC people who would have to approve any request
from the City and none were aware of any such request But there is no need to
speculate. The City should apply to the SLC now and get its binding permission for
an AD Plant in the Baylands now, without further delay. Until the City has that SLC
binding permission in hand, the Feasibility Study should be put on hold.
At the 2/23/11 public meeting on the Preliminary Findings of the Feasibility Study
senior DPW staff described the City's Lease with SLC (I paraphrase from memory)
3
as containing a provision that requires the Lease to be amended before either party
can implement a change in the lease terms.
OUR RESPONSE That statement's literal words are true, but they leave the wrong
impression in the public mind. EVERY lease that exists can be amended if both
parties agree, but there is nothing in this lease that indicates that the SLC WILL
agree if the City requests a change, particularly when the City has been in complete
default of its promises under the Lease since 1992 as to one parcel and since 2000
as to another. The DPW Staffs statement leaves the impression that Palo Alto can
obtain an amendment if it needs to. The statement is not untrue, but it certainly
leaves the wrong impression that all the City has to do is ask. If that is really the
case, the City should ask, and put an end to this issue. I predict that the SLC will say
No.
At the same meeting an AD plant advocate tried to describe the situation as "old
news that has been known for a long time" and emphasized that the City disputes
the State's claim and that the State claim is a weak one. This speaker tried to leave
the impression that it is a matter that can easily be handled by the City and not
worth much attention.
OUR RESPONSE: Again, if the City can handle this quickly, it should do so and
remove this issue from the disc~ssion. We say that the State's claim is strong and
that the City cannot defeat it in court and will not even try. The City's failure to move
on this issue during the past two years is because the City knows that it has a
problem, particularly with being in default under the existing lease, and will, if it
can, try to slide the matter through the SLC beneath the radar, hoping that the SLC
would not be paying attention. The City is counting too much on the SLC not paying
close attention because the SLC has not paid attention in the 19 years of clear and
open default by the City under the existing lease. In addition, the City hopes to
argue that it should be allowed to continue its project because it is so far along in the
planning. Not a very dignified or upright strategy for the City of Palo Alto -it is, in
fact, shameless -but it is the only path the City has if it hopes to succeed.
That plan will not work. The Chief Counsel of the SLC told us on 2/10/11 in
Sacramento that the SLC has to depend on "complaint based enforcement" because
of its huge task of overseeing all State owned lands. That is why the City has gotten
away with nineteen years of default without being called by the SLC. Not because
the SLC cannot or is unable to carry out its mission. The SLC staff has been busy and
has trusted Palo Alto to do what it promised in the lease. But now the SLC does have ,
a Complaint to act on-ours -and it will investigate. There is no reason to expect
that the SLC will not enforce the Lease according to its terms.
The City can continue to deny and delay and avoid facing up to this situation, or the
City can face the situation fully and deal with the SLC re its nineteen years of default.
After that is taken care of the City can ask the SLC for permission to put an AD Plant
on the land that the City has been telling the State since 1989 will be a passive
pastoral park (to use the exact words in the Lease). The City will then add to its
request that it would like to have that new lease of the nine acres rent free from the
State, even though a for-profit private company will be operating a plant there and,
according to the Feasibility Study making a significant annual profit on its capital
investment (25% annually is the assumption that ARI states is necessary to induce a
private company to risk its capital) . Can the City succeed in making that request to
the SLC? That is the question, and it is time to find out before further time and
money is spent on the Feasibility Study. This issue should have been dealt with
before the $250,000 Feasibility Study began, but it was not. There is no logical
reason that it should not be dealt with now. We have supplied to the City the names
and contact information for the proper SLC Staff to approach, and that same SLC
Staff has been briefed on the situation. It is probably better for the City to call them
before the City is called by the SLC.
ADDENDUM
Additional comments regarding the 3/8/11 letter from Walter Hays to the State
Lands Commission in opposition to our Complaint filed 2/10/11
This letter completely misses the points raised in our Complaint. Our principal
points for current action requested of the SLC are to require the City promptly to
open Parcels IIA and lIB as public parks in the same manner and paid for in the
same way that the Parcel I park was opened. To be specific: require the City to
follow its existing plans for completing the parks, which plans are in its files and are
referenced in the Baylands Master Plan. Not just taking down the fencing and
throwing some grass seed on the ground as presently contemplated, and all paid for
from the General Fund, where over $lM a year has been going in land rents from
those same parcels. In addition, Parcels IIA and lIB are to be established as the areas
stated in the SLC leases, not the false configurations used by the City, which are
about 22 acres smaller in size than the real parcels in the SLC leases. This may also
require the immediate removal of the City's existing compost operations which are
illegally being conducted on the true Parcel lIB in clear violation of the terms of that
the 2000 Second Amendment. The 3/8/11 letter to the SLC from Walter Hays says
nothing about any of these points, except a vague reference to " a pattern of greater
flexibility and informality than would appear from the formal language of these .
documents". He omits to show any evidence of this pattern, other than the exchange
of emails, which we have already dealt with above.
As to the current proposal re the AD Plant in the Baylands, we did not ask the SLC to
take any part. We asked only that the SLC state clearly that the City could not do this
without the written approval of the SLC and to point out that the pattern of the
leases establishes a reasonable expectation on the part ofthe SLC that ParcellIC will
all be park. Nothing in the 3/8/11 letter to the SLC disputes that.
Minor, Beth
From: Wayne Davis [WDavis@harvestpower.com]
Sent: Tuesday, March 15, 2011 9:21 AM
To: Council, City
Cc: Paul Sellew; Linda Novick
Subject: Study session on organic waste processing
Attachments: Harvest Itr to Palo Alto 2011-03-15.pdf
To the Mayor and City Councilmembers:
Page 1 of1
CITy 01: PALO ALTO CA
uC1:f¥?lERK'5 OfFICE
" MAR '5 PH 12: "
On behalf of Harvest Power, I respectfully submit the attached letter for consideration at your study session on
organics wastes, scheduled for March 21, 2011.
Wayne H. Davis
Harvest Power, Inc.
221 Crescent Street I Suite 402 I Waltham, MA 02453
781-314-9504 (p) 978-505-2710 (m) 206-666-1870 (f)
Web I Blog I Facebook I Twitter
'HARVEST
3115/2011
,HARVEST'
. Superpowered.
Mayor Sid Espinosa and Councllmembers
City of Palo Alto
250 Hamilton Ave.
Palo Alto, CA 94301
Dear Mayor Espinosa and Councllmembers:
CITY Of PALO ALTO, CA
C'lTY CLERK'S OF'F'lCE
~ J MARI5~H 9:21
March lS, 2011
I am writing to urge the City of Palo Alto to continue to pursue a biological solution for processing its
organic wastes and to explore solutions in the Feasibility Study that can best meet the CIty's ambitious
environmental and economic objectives.
My company, Harvest Power, Inc., is committed to ushering In a new era of organic waste
management. In partnership with communities and organic waste generators we finance, build, own and
operate state-of-the-art facilities that produce renewable energy and soli enhancement products from
discarded organic materials. By harvesting these valuable resources, we enable communities and businesses
to increase their energy independence, reduce their environmental impact and reliably manage their organiC
waste in a cost effective manner.
The City of Palo Alto recognizes the potential inherent in organic 'waste' and should be commended
for its ambition to address all three forms of organic resources-food scraps, yard trimmings, and blosolids-
in the most environmentally beneficial and economically efficient manner. The 2010 RFI Issued by the City
was an Important first step towards initiating a more sustainable waste management policy.
There are, however, a broader range of possible solutions than those contemplated in the RFI.
Recent developments in organics processing technology make possible alternative approaches th~ would be
both cost effective and occupy a smaller footprint. These alternatives would still enable the City to achieve
greenhouse gas reduction (through both landfill diversion and avoidance of excess trucking), produce
renewable energy, and return carbon and nutrients to the soil via either compost or organic fertilizer.
As Palo Alto enters the next stage of its exploration, we would urge the City to allow sufficient
flexibility In the process to facilitate the emergence of the best technologies, rather than prematurely
excluding potential solutions. It is our recommendation that the feasibility study explore a variety of
technologies and processes to address the recycling of organics and accompanying production of power (e.g.,
wet and dry anaerobic digestion and compostlng) in order to find what is best for the City.
At Harvest, we recognize that each local situation demands a localized solution, and that no single
technology is best in all situations. In Vancouver, British Columbia, for example, we are building what will be
North America's first commercial scale "dry" anaerobic digestion system, while In london, Ontario we are
constructing a "wet" anaerobic digestion system that will be the largest in North America to produce
renewable energy and organic fertilizer from multiple feedstocks. We encourage Palo Alto to be similarly
open-minded In the search for Its solution.
As the feasibility study advances, we also encourage the City to evaluate a broad set of economic
and environmental factors that will accurately compare both the true costs and benefits of various solutions,
relative to the City's priority objectives. For example, the full costs of exporting organic wastes to other
communities would include not only basic trucking costs, but increased greenhouse gas emiSSions, lack of
221 Crescent Street I Suite 402 I Waltham MA 02453 I T: 781.314.9500 I F: 781.622.3771
www.harvestpower.com
'HARVEST
Superpqwered.
Mayor Sid Espinosa and Councilmembers
City of Palo Alto
March 15, 2011
Page 2
local control, and risk that the promised infrastructure will not be built. The costs of continuing to incinerate
biosolids include not only the obvious environmental factors, but also the potential replacement costs If the
aging equipment fails. We note that the analysis performed to date does not include replacement costs for
the fluidized bed at the incinerator which, we understand, would need to be replaced.
We also note that the cost analysis has been Inconsistent In application of contingency factors to the
various solutions considered. For example, no contingency factor was placed on the export of food waste to
San Jose, despite the fact that the proposed destination Is not yet fully permitted. This will provide fewer
options for Palo Alto since they will only accept food waste and Palo Alto will not have longer term control
over costs and flow. Contingency factors do of course have an appropriate place In any analysiS, but should
be considered for each option.
We believe that If Palo Alto considers both the full solution set and accurately accounts for the costs
associated with each potential solution, it will find that a local solution in which Palo Alto processes its
organics in Palo Alto is both economically and enVironmentally superior to exporting.
Finally, we would like to address one technical question that we understand has been raised since
the analysis of the RFI responses was released: whether dry anaerobic digestion can work for biosolids as well
as for food and yard waste. Based on current technology and experience, we anticipate that a dry system
could handle a portion of the biosollds but not all. Given the relative volumes of the various waste streams,
this would not be adequate to handle all of Palo Alto's biosollds, so an alternative solution would stili be
required. This Is one reason we urge a more complete consideration of wet systems, since a wet system
would be capable of handling both the food waste and blosolids together.
Harvest is pleased to have been able to provide information and perspective to Palo Alto in past
months, and we look forward to continuing to be of assistance as the City pursues its organics diversion and
sustalnabllity goals.
Sincerely,
~p~~
Paul Sellew ,-c16
Chief Executive Officer
Minor, Beth
From: Bill Leikam [bill@ovenclaw.com]
Sent: Tuesday, March 15, 2011 6:48 PM
To: Council, City
Subject: Byxbee Park & Anaerobic Digesters
Dear City Council Members:
CITY OF PALO ALTO. CA CITY CLERK'SOFFICE
II MAR 16 AM 6: "
Page 1 of1
I have been following the developments regarding the Anaerobic Digesters on Byxbee Parkland. I am clearly
opposed to this installation goihg into the landfill/parkland area because if it is built it will destroy a lot of
wildlife habitat and most especially a concentrated habitat for the Gray Fox that live in the area. I could be much
more precise in the location where the fox live, have their young and roam from to keep the rodent numbers
down but just trust that this area will be destroyed and thus the animals -more than just the fox -will suffer.
They are a significant part of the ecological balance of the Palo Alto Baylands.
Byxbee is a gem and it is a part of a continuous chain of parks along the San Francisco Bay. People from far and
wide -not only just Palo Alto citizens -come to take part in this natural environment because it is so rich in
bird-life. People, especially birders as far away as the east coast and even Europe, refer other birders to Byxbee
Park. I could tell stories about such people who have come to the special place.
My second reason for opposing this development is that Byxbee Park will be decertified thus opening the whole
of the parkland for developers to come in and build. We all know what happens when open land is up for grabs.
Greed takes over and the land becomes a cash-cow for developers. We cannot allow that to happen.
I urge the City Council to take the money that can be raised to build this Anaerobic Digester instead be used in
far more eco-friendly ways for the people of Palo Alto and in the process leave Byxbee Park intact.
Sincerely,
Bill Leikam
530 Kendall Ave
Palo Alto Ca 94306
650 -856 -3041
3/16/2011
Minor, Beth
From:
Sent:
Elizabeth Robinson [eliZrObin@comcast.lQ)ttlYOfPALOAlTFO·CCr:.A
Tuesday, March 15, 2011 8:26 PM CITY CLERK'S OF I Ii.
To:
Subject:
Council, City
Anerobic Digester and Byxbee Park "MAR '6 AM 8t I'
Council members,
In the last two months I have spent considerable time trying to understand the complex
issue before the council of using dedicated park land for an Anerobic Digester (AD).
From all the meetings that I have attended, I have three issues with the AD.
One is the cost! Two, the AD's are unsightly. To have a huge physical plant hidden away
in the country is one thing, but the AD plant will be a blight on the beauty and pastoral
scenery that now exist in the park. Three, once land is gone, it cannot be acquired again.
It takes great foresight to preserve land and even more to continue that commitment.
It seems more cost effective to go with the regional approach.
Thank you.
Respectfully,
Elizabeth Weingarten
1
March 16,2011
Mayor Espinosa and Members of the City Council
AD Feasibility Study
Dear Mayor and Members of the Council:
CITY OF PALO ALTO. CA CITY CLERK'S OFFICE
IIMAR 16 Atilt: 31
I urge this council to step back and stop spending any more money on the feasibility
study of this AD facility. If the definition of feasible means affordable and attainable
goals, then this project is not feasible. The promoters of this project have continued to
tout the AD facility as costing ONLY $13,000,000 and reducing C02 by 20,000 MT. In
fact, we now know it will cost from $50 to $100 million depending on which
inexperienced vendor is chosen. C02 is reduced to 12,000 MT. NOT 20,000 MT -quite
a difference.
How much more money and staff time must be spent trying to make this unworthy
facility feasible?
The City has a projected cumulative budget deficit of $98,600,000 (next 9 years). Are we
now, in good conscience, gomg to add another debt of$50 to $100 million payable by the
25,000 Palo Alto households with ever increasing refuse rates far into the future? What
other services will the 25,000 households give up for this unfeasible project? Are those
service losses calculated into the cost of this AD facility?
It is deceptive that this AD facility has been promoted to the public (without verification
of their claims) as the answer to global warming. It is the antithesis of a global warming
solution. Global warming studies by experts and all national conservation organizations
now state that unabated construction that invades parks, open space, conservation, lands
and natural habitat is a major cause of global warming. Our goal should be to restrict this
unabated construction at all levels especially in our own little town. .
Mayor and members of the Council, you have a chance to stop this hi-jacking of our 45
years of true environmental planning. Please don't continue this unfeasible project.
Stick to the principal of good planning that is truly environmentally sound.
Enid Pearson, Council Member, 1965-75
Minor, Beth
From: John Edwards [drjedwards@prodigy.net]
Sent: Wednesday, March 16, 2011 10:45 AM
To: Council, City
Subject: Baylands Anaerobic Digestion Plant
Council members,
CITY Of PALO ALTO: CA CIT'r'etERlfS OFFICE
11 MAR' 6 AtH\: SI
Page 1 of 1
I am a resident of Palo Alto for over 25 years. I utilize the Byxbee Park and the baylands near the
Interpretive Center near the airport at least 150 days per year for walking, picnicking and bike riding.
In today's Mercury News, March 16,2011, a headline article is "Forecast shows future deficits". The
first paragraph states "Palo Alto's $2.3 million budget deficit in the fiscal year 2012 will likely be
followed by more fiscal shortfalls". I believe both the study and the proposed Anaerobic Digestion Plant
are fiscally irresponsible during these and future times.
Since it appears necessary to take waste material from the region due to the covenant for the land usage,
the citizens of Palo Alto are most likely going to pay increased taxes for supporting the infrastructure
(roads, etc) and inconvenience if such a plant were put on Byxbee park. This is redistribution of Palo
Alto citizen tax dollars for outsiders.
I urge the council to take the following actions:
1. Immediately cease any and all expenditures for the study and implementation of the special
election measure to change the agreement for the Baylands and Byxbee Park usage.
2. Vote as a council to not recommend voting for the land usage change
3. Spend no money to put the measure onto the ballot. Instead have the vested interests of business,
Stanford, etc. pay for all costs so we taxpayers do not pay.
Thank you for your consideration.
John Edwards
Very concerned long time Palo Alto resident and taxpayer
3407 Greer Rd
Palo Alto, Ca 94303-4209
311612011
Minor, Beth
From:
Sent:
To:
Michael Goldeen [goldeen@goldeen.com]
Wednesday, March 16, 2011 11: 19 AM
Council, City
Cc: Renzel, Emily; Pria Graves
Subject: Anrerobic Digester @ 8yxbee Park
Honorable Concilmembers,
CIT Y OF PALO ALTO. CA CITY ClEQK'S Qj;;IHCE
II MAR I 6 AM 11: 3.
What is proposed is too much too fast. Its proponents seek political glory at our expense.
Page 1 of1
The technology is new. What is the experience ofthe facilities now using it? What size? (Scaling has
limits.) What cost? What mean time between failures? What surprises? Most of all for what primary
purpose?
So Palo Alto is the only city on the bay still incinerating sludge. So what. Maybe there is or was a
good reason to be the exception. Like reclaiming precious metals. Gold is not getting any cheaper.
What do other cities do instead of incinerating the sludge? It sounds like there are less radical, but still
attractive alternatives than an untried Anrerobic Dibestor made by a foreign firm.. It's not a matter of
xenophobia. It's a matter of getting service.
Better I think to go for two or three small installations localized at points of production. That way if
there's a problem. we'll only bum a toe.
Thank you for your consideration.
Michael Goldeen
2350 Tasso Street
Palo Alto, CA 94301
Phone 650-391-7247
E-mail michael@goldeen.com
3/16/2011
Page 2 of2
impedances of the Palo Alto load and the grid, I would expect the majority of it to run away from Palo
Alto.
A progressive AD facility would sequester the raw biogas C02, or chemically break it into carbon and
oxygen, and sequester the carbon. More forward-looking, it should break the methane into carbon (again
sequestered) and hydrogen, which would boost the coming hydrogen economy. That is expensive, but if
being progressive (as opposed to vaguely appearing progressive) is the motivation for the AD facility, it
is by far the preferred alternative to releasing C02 and making yet more C02 to generate power that
mainly scoots out of town.
Finally, the dream facility that the AD proponents showcase, with its "green roof' and invisibly tucked-
under digester rooms, has nothing to do with the practical facility that ARl is analyzing. In fact, the ARl
analysis will not tell us whether that alleged "green" design is even buildable or operable, let alone what
it would cost the city to build, operate, and maintain.
What ARI is analyzing will look very much like AD facilities everywhertr-a collection of utilitarian
factory structures attended by noisy heavy machinery and piles of raw and spent materials. I do not fault
them for that; they are analyzing with what is known to be workable in the industry, for the Palo Alto
context.
I urge you to take a hard look at the ARl results, particularly the costs. Without being cynical (I make
my living as a government contractor), I ask that you consider how many projects of this size actually
meet their cost goals. With all respect to ARl, this proposed facility will surely cost more than their best
well-intended estimates.
~
Above all, please consider this project in the context of Palo Alto's proven needs and financial
resources. Is it a reasonable and, 'especially, compelling investment for our limited resources?
I'll close with a positive suggestion: if reducing vehicular carbon emissions are truly a civic priority,
consider how to revamp Palo Alto's streets and traffic flow to expedite flow and minimize stop and go.
Every brake-and-accelerate cycle wastes energy extracted from burning the vehicle's gasoline or diesel
fuel, and unnecessary cycles add C02 needlessly to the air. Accomplishing this will take money, but it
will put Palo Alto firmly in the GHG reduction innovation leadership. The money required is almost
I certainly much less than the AD capital cost but, unlike the AD, it will not present a recurring cost
burden on the city, and it will yield continuing undeniable benefits.
David Bubenik
3116/2011
Minor,8eth
From: Emily Renzel [marshmama2@att.net]
Sent: Wednesday, March 16, 2011 9:55 AM
To: Council, City
Subject: Study Session on ARI preliminary results
Dear Mayor Espinosa and Members of the City Council: March 16, 2011
CITY OF PALO ALTO~ CA CITY CLERK'S OFFrCE
LtHAR r 6' AM If :31
Page 1 of3
I hope that all of you can now see from the ARI Feasibility Study cost figures that the proposed Anaerobic Digestion (AD) Plant is much
more costly than a combination of new Biosolids processing on the Regional Water Quality Control Plant (RWQCP) an9 exporting our
food scraps and yard trimmings to already existing Regional Facilities or perhaps a new regional facility in San Jose. And, the base case
for using Byxbee Park land charged a rent that is about 1I10th of rent currently being charged on the very same land. Using the current rent
would increase the per ton cost by about $13/ton. (See my attachment 1 on Rent.)
Almost half (27,000 tons) of the organic tonnage is the biosolids and about a third of that is paid for by Palo Altans. This also is the
tonnage which will produce the most biogas and also the tonnage that currently has the largest GHG effect because of the incinerator.
The City would do better to focus on the RWQCP processes than to get involved in a very costly new technology that uses parkland and
must be paid for by Palo Alto ratepayers. (See my attachment 2 on Wet AD) And, while the ARI comparisons lump together the per ton
fees for food scraps, yard trimmings, and biosolids, in the end, there will have to be rate increases in two enterprise funds.
This proposal to process organics on parkland in Palo Alto has already cost the Refuse ratepayers over $2 million due to the Commercial
ban, the Task Force staff support, and the ARI study costs. Those costs should also be included in the ARI asSessment.
The ARI cost analysis does not include costs for a Green Roof (estimated $4 -6 million), mitigation measures, cost of developing and
implementing a new Byxbee Park and/or landfill closure plan, so all of ARI's projected AD costs are clearly lower than actual costs to the
ratepayers.
The study is also interrupting a long held plan for completion of Byxbee Park, it is interfering with and complicating our RWQCP Master
Planning process and the RWQCP landscaping process, and it has helped put the Refuse Fund in a very bad financial state by using up the
Rate Stabilization Reserve.
GHG. The devil is always in the details, but there are many assumptions in the footnotes to the Greenhouse Gas (GHG) Analysis which
could significantly reduce the differential between the AD proposal and the export proposal. Even so, AD advocates have been
continuing to say 20,000 metric tons/year when the real differential is about 12,000 metric tons/year. Should refuse and sewage
ratepayers be asked to pay exhorbitant prices for that carbon savings when there are more cost effective ways to reduce GHG? (See my
attachment with questions re GHG.) -
This study, despite trying to shave every detail in favor of AD, already shows how costly AD will be. A number of you wanted to know
if this was ''feasible''. and thus voted for the study. It's pretty clear now that if ''feasible'' means financially realistic, it's not. Zillions of
dollars could fallout of the sky to improve the AD odds, but I wouldn't count on it if I were you. Sooner or later the ratepayers must
pay.
Emily M. Renzel, Coordinator
Bay1ands Conservation Committee
<marshmama2@att.net>
Attachment 1
Presented by Emily Renzel, Coordinator, Baylands Conservation Committee 9/23/11
Rent!
1. Why is it 1111 th of current rent at landfill?
2. Why is there no inflation adjustment as with other costs?
3. This facility cannot be built on parkland, so why was a ''park'' appraisal used?
4. Parks are owned by the General Fund and why should we be giving a private AD vendor such a gift of our precious parkland?
5. Why was 8% used as ROI when to date the landfill rent has been based on 10% ?
3/16/2011
Page 2 of3
The Appraisal had not one single Palo Alto comparable. Obvious choices are:
Embarcadero Way Properties. Appraised at $22 to $37 million (3/8/2010) for 8.3 acres = $2.65 million/acre to $5.3 million = for 9
acres $23.85 million to $47.7 million. At 8% ROI (2% lower than currently used on Byxbee Park) that would be rent of
$1,908,000/year to $3,816,000/year.
Los Altos Sewage Treatment Plant Site. Appraised at $6,530,000 for 6.4 developable acres. (10/18/2001).= $1,020,312/acre or
$9,182,812 for 9 acres. At 8% ROI = $734,525/year rent. .
Byxbee Park Landfill Rent. Highest & Best Use in 2005 was Industrial -Research & Development for the exact same land being
proposed for AD. Per email from Dale Wong to Ron Arp dated 3/812011 "Rent on active acreage (phase IIc): (51.24 acres) x ($100,888
per acre) = $5, 133,633. Rent on closed acreage: (phases IIA and lIB): (22.47 acres + 23.19 acres) x $50,094 per acres) = $2,287,292.
Total rent = $5,133,633 + 2,287,292 = $$7,420,925." In CMR 373:06, rent based on an ROI of 5% offair market value
(($50,094/acre/year) was used for the 46 acres of closed landfill Now suddenly a much lower rent of $11,333/acre/year is proposed for
the AD site based on land sales in San Jose, Oakland, and other lower-cost areas. Using current rent of$100,888/acre for 9 acres =
$907,992 minus the rent in the model of $102,900 = $805,092 divided by 62,000 tons = S12.99/ton/year The Appraiser used an 8% ROI
in the model whereas the City has used 10% in the past. Using the appraiser's 8% ROI on land value of $907,992 current landfill rent
would result in rent of $726,394/year.
Winter Lodge Exchange. In 1986, ·3.7 acres of seasonal wetlands at the Golf Course were valued at $2.6 million or $702,702/acre
which at an ROI of 8% (that used for the AD ssite appraisal) would have been $56,2 I 6/acre/yearin 1986! (PA Weekly 10/1/86) It's
doubtful that even with the real estate crash of 2008, the value would be less than that 15 year old appraisal.
Airport Cell Tower: The little 500 sf piece of land at the airport is being rented for $2.40/sf/mo. Comes out to $104,544/acre/mo or
$1,254,528/acre/year. That's a very current comparable.
Attachment 2
Wet AD on RWQCP and transport of food and yard by Emily Renzel 3/9/11
Wet AD on RWQCP $39,349,806 capital costs = $72.87/ton
Wet AD on Byxbee $40,452,501 capital costs = $74.911ton
Wet AD O&M $470,793/year= $17.437/ton
Total Wet AD costs/ton for 27,000 tons/year =
$90.31/ton (RWQCP) to $92.35/ton (Byxbee)
Alternative 2
Wet AD 27000 tons @ $90.3l1ton = $2,438,370/year
FoodIYard 35,000 tons @ $58.00/ton = $2,030,000/year
62,000 tons =$4,468,370/year = $72.07/ton
Wet AD 27000 tons @$92.35/ton =$2,493,450/year
FoodIYard 35,000 tons @ $58/ton = $2,030,000/year
62,000 tons = $4,523,450/year = $72.96/ton
Alternative 3
Wet AD 27,000 tons @$90.31/ton= $2,438,370/year
FoodIYard 35,000 tons @ $52.00/ton = $1,820,000/year
. 62,000 tons = $4,258,370/year = $68.68/ton
Wet AD 27,000 tons @$92.25/ton= $2,493,450/year
FoodIYard 35,000 tons @$52.00/ton= $1,820,000/year
62,000 tons = $4,3 I 3,450/year = $69.57/ton
Export + Wet AD on RWQCP = S 68.68 to S72.96/ton .
3/1612011
Page 3 of3
Attachment 3 -GHG questions
Greenhouse Gas Questions -Emily RenzeI3/9/11
Biogas Efficiency Rate: The Feasibility Matrix used 99% for the collection efficiency rate, but footnote #1 on the 11th page of the GHG
analysis says that 98% might also be used.
Does that mean that if the Feasibility Matrix says that. 1 04,566,531 cu.Ft/year are collected, then with 98% efficiency 1,045,665 cu Ft/year
less would be recovered? What is the GHG tonnage equivalent?
What are the implications for both the GHG and economic comparisons?
If gas revenue is shown as $796,640, then would there be $7,966 less revenue and therefore a commensurate increase in per ton cost of
12.8 cents?
Footnote 9 (my page 27) Is it reasonable to assume that the amount ofbiogas recovered from DAD in SJ for foodscraps is the same as a
combination of yard trimmings and foodscraps? Generally foodscraps are richer in gas than yard trimmings. So would this
underestimate gas recovery from food scraps in San Jose?
Footnote 9 (my page 41) points out that biogas from yard and food DAD is 57.5% but WAD is 65% methane and no adjustment was
made for those differences. What impact does that have on GHG and/or costs?
Note 4 (my page 49) Is electricity for grinding counted only at SMaRT or at both SMaRT and ZBest?
Note 6 (my page 53) What is the implication of making this assumption re C02 and CH4 being equal? A subnote to this note says
that "There is very little basis for this assumption."
Hauling Biosolids. Why is the residual from digesting biosolids 16% of the input, when
food/yard residuals are 29.9%? What are the GHG and cost impacts of this differential? See also note 4 (my page 57 saying that the
WAD & DAD biosolids digestate would be the same when converted to the same moisture content. What are the implications of that for
GHG & costs?
Hauling compost to end users. Is it a reasonable assumption that ag users will use yard/food compost? ZBest experience is that food
scrap compost is used only for non-ag landscaping uses. See Note 5. (my page 61) Is there any assurance that farms in Salinas or
Watsonville would buy food/yard compost from Palo ALto when Zbest has yard trimmings only compost available much closer? What
are the marketing implications if this is a faulty assumption and what would be the GHG/cost implications as well as operational
implications if we are unable to move our compost product?
3116/2011
City of Palo Alto (ID # 1450)
City Council Staff Report
Report Type:Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 5
(ID # 1450)
Council Priority: Environmental Sustainability
Summary Title: Peak Electricity Reduction Program
Title: Peak Electricity Reduction Pilot Program for Commercial Customers
From:City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the City Council approve a
two-year pilot electric Demand Response (DR) program.
Executive Summary
Reducing electricity usage during high-demand periods in the summer can help utilities across
the state and in the Bay Area limit production from inefficient and polluting electric generation
resources. A DR program provides an incentive for customers to reduce their electricity usage
when called on by the City of Palo Alto Utilities (CPAU). By reducing customers’ electricity
usage during these high-demand periods, CPAU’s annual peak usage and purchase cost for
electricity will also be reduced. The objective of the proposed two-year DR pilot program is to
evaluate the cost-effectiveness and customer-appeal of DR incentives in Palo Alto. The
program is expected to be launched in May 2011 and will run for two years, after which time
expanding the program will be evaluated. At its February 2, 2011 meeting, the UAC voted
unanimously to recommend that Council approve the DR pilot program.
Background
The Energy Policy Act of 2005 required utilities to offer customers time-based rate options such
as: a) time-of-use pricing, b) critical-peak pricing, c) real time pricing, and d) peak load reduction
credits. In June 2008, staff communicated to Council the requirements, but recommended
against implementing such options based on: 1) low level of community benefit, 2) constraints
on the City’s automated customer information (SAP) and billing system software, and 3)
insufficient metering capability (CMR: 215:08). While many of these limitations persist to date,
the DR pilot program is designed to work with current systems, and the information gained
from implementing a small-scale program will yield valuable insight at a relatively low cost. In
addition, the Council-approved 2010 Ten-Year Electric Energy Efficiency Plan (CMR: 218:10)
identified cost-effective demand reduction as a CPAU initiative.
March 21, 2011 Page 2 of 5
(ID # 1450)
Electric utilities are increasingly relying on DR and time-based retail rates to reduce supply costs
and pass on appropriate price signals to customers for efficient energy use. Large investor-
owned utilities (IOUs) in California have implemented DR programs that offer credits to
customers for energy use reduction during high-use periods. These programs appeal to large
commercial and industrial customers with flexible processes, cooling and lighting use capable of
being shifted away from peak periods when called for during an energy use reduction event. In
particular, these programs with combined incentives of lower monthly energy costs and credits
are attractive to Bay Area technology companies. Utility providers base the energy reduction
credits on their estimated avoided costs. Typically, large national service providers manage
these DR programs for the utility providers.
Customers participating in a DR program that reduces their electric usage below a baseline level
are compensated by utility providers according to the agreed upon terms and conditions. The
terms and conditions also specify the method of calculating the baseline usage, which is
generally based on a comparison of the customer’s prior usage patterns during similar periods
(e.g., afternoon usage during summer months).
Discussion
Pilot DR Program Design Parameters
The pilot program will be limited to two years (summers of 2011 and 2012) and two megawatts
(MW) of peak energy use reduction. For the first year of the program, up to four eligible
commercial customers with the appropriate metering equipment will be selected. To
encourage participation, staff recommends that CPAU compensate participating customers at
the rate of 50 cents for every kilowatt-hour (kWh) of energy reduced below a specified baseline
when called upon by CPAU to reduce electricity use during high summer demand periods. The
program is expected to be cost-neutral for CPAU as staff has proposed the 50 cent/kWh
compensation rate based on CPAU’s expected cost savings. The rate is expected to be
attractive to customers as it is nearly five times the electric retail rate. Baseline usage will be
calculated for each customer based on their prior usage patterns.
Total compensation per customer will vary depending on the energy reduction undertaken by
the participant and the number of times that CPAU calls for energy reductions. Staff estimates
participant compensation to be between $1,000 (at the minimum participation level of 50 kW)
and $20,000 (at a participation level of one MW) per year.
IOU DR Programs vs CPAU
Compared to the popularity of the IOU programs, staff anticipates that the appeal of a DR
program will be low in Palo Alto, at least in the near term. Most of CPAU’s commercial
customers have limited flexibility to curtail their electric usage. Potential avenues for usage
reduction include limiting non-critical lighting and pre-cooling buildings early in the day. In
addition, CPAU’s avoided electricity costs are relatively low resulting in lower incentives to
participating customers; the avoided costs for IOUs during the peak summer period is between
$1 to $2 per kilowatt-hour (kWh), compared to CPAU’s avoided cost of approximately 50 cents
per kWh. Staff will use the DR pilot program to test this hypothesis of low program appeal
March 21, 2011 Page 3 of 5
(ID # 1450)
from the level of participation interest at the proposed compensation rate and the level of
response to CPAU's energy use reduction requests. Staff is also investigating collaborative
opportunities with Stanford researchers and students to develop simple and low-cost ways to
expand the pilot program to a larger set of customers.
Environmental Benefits and Grid Reliability
In addition to reducing costs to CPAU and providing a small revenue stream for participating
customers, DR also has the effect of reducing air pollution by limiting production from
inefficient and polluting electric generation resources in California and the Bay Area.
Furthermore, demand reduction improves the electric transmission grid reliability during the
high use periods. The experience gained under this pilot program will assist CPAU in
determining if a CPAU DR program could be designed to effectively participate in these
emerging grid reliability market opportunities.
CPAU and Customer Load Profiles and Cost Reduction Potential
Customers’ ability to participate and compensation levels are not the only factors for a
successful DR program. From CPAU’s perspective, the program will be a success if it reduces
the City’s peak electricity usage with a minimum number of calls for energy use reduction
(energy reduction events). Most of the DR value to CPAU is from reducing local capacity costs,
which are driven by the City’s peak usage in the summer (local capacity costs are payments
CPAU makes to owners of electric generation resources located in transmission constrained
areas to keep their resource available to meet grid reliability needs).
Each time an energy reduction event is called CPAU has to compensate responding participants,
which increases the cost of the program. If the City is close to its peak load over many hours
and days in the summer then it is likely that many events would need to be called to achieve a
reduction in the summer peak. Staff has analyzed the City's summer peak energy use and
determined that a program designed to reduce the City’s annual peak by two MW (the
proposed limit for the pilot program) will need to target only a limited number of hours over
the summer months. Such a program is the most cost-effective and could result in $40,000 in
annual savings.
Terms and Conditions of the Proposed Pilot DR Program and an Example
Attachment A describes the terms and conditions of the proposed pilot DR program. Staff is
developing a detailed project description and participation application form. Attachment B
illustrates how such a program could work in a commercial building, using City Hall’s electrical
loads as an example.
Market Potential of DR in Palo Alto and Next Steps
Based on prior experience and an outside assessment, staff estimates a total potential demand
reduction of two to eight MW among large commercial customers in Palo Alto. While the cost
of local capacity is $20,000 per MW at present, staff expects this to increase to $40,000 per
MW within five years because of the anticipated need for new generation resources. At this
higher local capacity cost and full DR potential, Palo Alto could save an estimated $320,000 per
March 21, 2011 Page 4 of 5
(ID # 1450)
year from a DR program at the full potential (8MW ´$40,000/MW). Staff expects to gain
experience and better understand customer interests through the proposed two-year pilot
program and will report back to the UAC and Council in the Fall of 2012 on proposed next steps
for a DR program. Results from this pilot will also assist in better defining an Automated
Metering Infrastructure (AMI) or smart grid deployment plan throughout the City.
Board/Commission Review and Recommendations
The UAC considered staff’s recommendation for implementing a DR pilot program at its
February 2, 2011 meeting. During the discussion, commissioners described the proposal as the
type of innovative program they were looking for and were interested to hear about the plan to
collaborate with Stanford on the program evaluation. They also described the proposed pilot
program as a prudent way to start such a program.
The UAC voted unanimously five to zero to recommend that the City Council approve the
Demand Response Pilot Program. Minutes from the UAC’s February 2, 2011 meeting are
provided as Attachment C.
Resource Impact
The pilot program is expected to be launched in May 2011. The program administrative budget
is estimated to be $15,000 in 2011 and $10,000 in 2012. This amount will cover minimal
consulting costs for DR experts, help for staff to launch the program, and develop customer
contracts and promotional material. A part-time intern may also be employed to help manage
this program. The funds needed for program administration are available in the existing local
generation evaluation budget.
The total compensation to participants could be up to $40,000 per year if two MW of DR
volumes are achieved during the pilot phase. The compensation payments are available in the
existing supply procurement budget since CPAU’s electric supply cost is expected to be lowered
by a similar amount. Since the payments to participating customers will be processed outside
the automated customer billing system, no billing system upgrades or SAP software
modifications will be required.
Policy Implications
Demand Response programs were contemplated in the Council-approved 2010 Ten-Year
Electric Energy Efficiency Plan (CMR: 218:10)
Environmental Review
No CEQA review is required for this project.
Attachments:
·A -Summary of Terms and Conditions (DOC)
·B -Program Example (DOC)
March 21, 2011 Page 5 of 5
(ID # 1450)
·C -Excerpted Minutes of February 2, 2011 UAC Meeting (DOC)
Prepared By:Shiva Swaminathan,
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
ATTACHMENT A
Fact Sheet Outlining Proposed Terms and Conditions of the Demand Response Pilot
Program
1.Participant Eligibility Criteria:The pilot program will be open to large commercial
customers that have interval metering equipment that can be read remotely.
Participants would also need to have a minimum of 50 kW of flexible electrical
usage that can be curtailed under this program. The participant will specify the level
of flexible usage to which they will commit (Peak Load Reduction Quantity or PLR
Quantity).
2.Participation Period: The pilot program extends over two years, covering the
summers of 2011 and 2012.
3.Peak Load Reduction Events (PLR Events) and Duration of an Event: A PLR Event
is generally a high temperature day when it is likely that the City will reach its
annual peak electric consumption. During a PLR Event, CPAU will request that
participants reduce their electricity usage.The maximum duration of a PLR Event
is five hours,and will occur between the hours of 12 PM and 6 PM. No more than
15 PLR Events will be called in a year, and no more than 10 in any one month.
4.PLR Event Notification by CPAU: CPAU will notify the program participants one
day before the PLR Event specifying the hours that electricity usage reduction is
requested.
5.Establishing Customer Baseline Usage and Verification of Actual PLR Response:
PLR credits or payments to customers will be based on actual curtailment by
customers during a PLR Event. A defined algorithm will compute what the
participant’s electric usage would have been on the day if the customer had not
reduced usage. The difference between this computed load (baseline usage) and
actual usage will form the basis for computing customer credits and payments.
6.Definitions of full performance, non-performance, and partial performance by a
participant during a PLR Event:
a.Full performance in response to a PLR Event Notification occurs when
a participant responds to each PLR Event Notification during the
program year,and reduces their electricity usage by the entire PLR
Quantity for the full duration of the PLR Event. Such participant
would be compensated at the rate of 50 cents/kWh.
b.Non-performance in response to a PLR Event Notification occurs
when a participant does not respond to a PLR Event Notification by
10:00 a.m.PST on the day of the PLR Event,or participates at less
than half-the PLR Quantity committed. Such participant does not
receive any payment for that PLR Event.
ATTACHMENT A
c.Partial performance in response to a PLR Event Notification occurs
when a participant’s response does not meet the standards of full
performance described above, but meets 50% or more of the PLR
Quantity committed. The compensation rate for this level of
participation will be 35 cents/kWh for the event.A participant who
fully performs in response to all PLR Event Notifications in a given
year will be provided a one-time annual bonus payment of $100 per 50
kW of PLR Quantity.
7.Penalties for Non-Performance: There will not be any penalty for a participant who
does not perform in response to a PLR Event Notification.
8.Participants Exiting the Program: A participant can exit the program at anytime by
giving CPAU 10 days advance written notice.CPAU can also terminate a
customer’s participation at any time.
9.Research Component of the Pilot Program and Maintenance of Confidential
Customer Usage Data: Stanford University researchers have expressed interest in
working with CPAU staff in to implement the pilot program, and to expand the
program to cover a larger number of customers within three years. If CPAU
accepts this assistance from Stanford, CPAU will require any research participants
to protect the confidentiality of participating customer data via confidentiality and
non-disclosure agreements. Customer data within CPAU will be shared strictly on a
need to know basis under existing policies.
10.Public Recognition of Participants: Participants in this program will be recognized
for their participation and their leadership in environmental stewardship.
ATTACHMENT B
Example:The City of Palo Alto’s City Hall as a Prototype
Demand Reduction Customer
The figure below demonstrates City Hall’s electric load profile during the week of
August 22, 2010. On Thursday August 25, during hour ending 6pm,City Hall’s
electricity load peaked for the year at 595 kW. Had City Hall been participating in the
proposed DR program,it could have reduced electricity usage by 50 kW, through
notification to all city hall employees requesting reduction of lighting levels for the day.
The City could also pre-cool the building,allowing the building temperature to drift up
later in the afternoon,As a result of this action, the City would have been eligible for a
payment of $125 (50kW ´5hours ´50¢/kWh)from CPAU for participating in the DR
program for that day. If CPAU designated 10 of these Peak Load Reduction Events over
the summer and the City Hall load was reduced by a similar amount each time, then the
City would receive a payment of $1,250 from CPAU. In addition, the City could have
reduced its electric bill by $30 for each day and or $300 over the summer. Such
performance would result in a combined benefit of up to $1,550/yr for the City.
The corresponding supply purchase cost avoided by CPAU is estimated at approximately
$1,250, which is a combination of avoided capacity costs and electric energy costs.
(50 kW*$20,000/MW)+(50 kW ´50 hrs ´10 ¢/kWh)
(Capacity Value)(Energy Value)
ATTACHMENT B
Although savings are small at present, CPAU expects greater future returns as the cost of
meeting the City’s peak electric consumption increases and the California Independent
System Operator (the electric grid operator in California or CAISO)offers expanded
compensation for DR programs participating in the electricity markets.Customers with
ice storage cooling systems could also take advantage of such DR program to optimize
their systems. There is currently one commercial customer in Palo Alto with an ice
storage system.
ATTACHMENT C
EXCERPTED MINUTES OF UTILITIES ADVISORY COMMISSION
Meeting of February 2, 2011
ITEM 3: ACTION: Pilot Demand Response Program for Large Electric Commercial Customers
Commissioner Eglash recused himself from the discussion because of the proposed involvement in
the project of his Stanford colleague.
Commissioner Foster stated he would like to see more implementation of this program but
understood the need to start slowly on a new program. Commissioner Keller asked if there were
other plans to encourage commercial customers to manage their own peak usage. Senior
Resource Planner Shiva Swaminathan replied that the Plug-In Program would address that.
ACTION:
Commissioner Foster made a motion to recommend Council approval of the Demand Response
Pilot Program. Commissioner Melton seconded the motion. The motion carried unanimously (5-0)
with Commissioners Cook and Eglash absent.
City of Palo Alto (ID # 1445)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 3
(ID # 1445)
Summary Title: Withdrawal from FARECal, a Financing Authority
Title: Resolution to Withdraw from the Financing Authority for Resource
Efficiency of California
From:City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council adopt a resolution withdrawing the City of Palo Alto
(City) from the Financing Authority for Resource Efficiency of California (FARECal).
Executive Summary
In order to be able to finance various energy efficiency and water conservation projects and
programs, certain public agencies, including the City entered into a Joint Powers Agreement
(JPA) creating FARECal in 1993. The agencies comprised a subset of the membership of the
California Municipal Utilities Association. While some agencies have outstanding financings
through FARECal, the City has not sought to finance any of its projects or programs through
FARECal, and does not anticipate needing to seek any financings through FARECal. The City, as
a member of the JPA, is responsible for its share of the cost to maintain the JPA and further
bears some risk associated with the debts, liabilities and obligations of FARECal. Because the
City does not foresee a need to finance any projects or programs through FARECal, staff
recommends withdrawing from FARECal.
Background
In 1993, the Cities of Anaheim, Colton, Healdsburg, Palo Alto, Pasadena, Redding and Riverside,
the Northern California Power Agency, the Department of Water and Power of the City of Los
Angeles, the North Marin Water District, the Sacramento Municipal Utility District, and the
Turlock Irrigation District entered into the JPA to create a separate public entity and agency
with the power to exercise the planning, financing, purchase, lease, construction, operation and
maintenance of “Resource Efficiency Programs and Facilities.” A number of the members have
chosen to be “inactive” and other members later joined FARECal. Currently, the active
members of FARECal include the Cities of Anaheim, Azusa, Colton, Palo Alto, Pasadena, and
Riverside, and the Marin Water District and the Trinity Public Utility District (Trinity PUD).
The Cities of Azusa and Colton have outstanding financings stemming from original debt
issuances in 1997 and 2003. Colton’s original 1997 bond amount was for $16.19 million and
March 21, 2011 Page 2 of 3
(ID # 1445)
Azusa’s original 2003 bond amounts were for $31.18 million. The projects financed through
FARECal included electric system interconnection facilities, substations, and distribution system
upgrades. In order to remain in compliance with legal auditing requirements related to the
financings, in November, 2010, the FARECal Board of Directors (Board), which includes the City,
approved an arrangement between FARECal and Azusa, in which Azusa will maintain FARECal’s
accounts and records and related auditing activities. Azusa is to be reimbursed for its costs.
Currently, FARECal has $50,000 from member contributions. It is anticipated that Azusa will be
able to provide the first-year account and records maintenance within the $50,000 amount.
Discussion
Staff does not anticipate any need for the City to finance projects or programs through FARECal
in large part because the City can obtain project financing at favorable rates based on its own
positive credit standing. However, as a member of FARECal, the City incurs costs and liabilities.
To reduce unnecessary cost and liabilities, staff recommends terminating the City’s
membership in FARECal. Under Section 5.4.1 of the JPA, the City may withdraw from FARECal
upon (i) filing with the Board, a certified copy of a resolution of the City Council expressing its
desire to withdraw, and (ii) payment of, or making arrangement satisfactory to the Board to
pay,the pro rata portion of any incurred obligation arising under the JPA, which matures after
the date of filing the withdrawal resolution.
Approval of the accompanying resolution will enable withdrawal from FARECal.
Resource Impact
Although still preliminary a recommendation will be made to the FARECal Board at its meeting
on March 31, 2011,to make no additional assessment of costs for the City’s withdrawal,
beyond the contributions the City has already made to the $50,000 currently in the FARECal
treasury. At the March 31 Board meeting, the City will also inquire if any funds are due back to
the City. Over the long term, withdrawal from FARECal will result in savings of administrative
costs paid to FARECal. Further, withdrawal from FARECal will eliminate any liabilities arising
from member financings in the event of default or member bankruptcies.
The last audited financial report of FARECal was prepared for fiscal year 2005. In 2010, FARECal
entered into an agency agreement with the City of Azusa to have Azusa procure accounting and
auditing services to fulfill FARECal’s obligations with respect to financial reporting. Azusa
recently issued an RFP for these services, and the FARECal Board may approve a contract award
at its March 31, 2011 meeting. The administrative costs for Azusa’s agency role and any
contracted financial services are unknown at this time.
Policy Implications
This recommendation does not represent a change to current City policies.
Environmental Review
Approval of a resolution to withdraw from the Financing Authority for Resource Efficiency of
California does not meet the definition of a project pursuant to Section 21065 of the California
March 21, 2011 Page 3 of 3
(ID # 1445)
Environmental Quality Act (CEQA). Thus, no environmental review is required.
Attachments:
·Attachment A -Reso FARECal (DOC)
·Attachment B -Joint Powers Agreement Creating Financing Authority for Resource
Efficiency of California (PDF)
·Attachment C -Bylaws of Financing Authority for Resource Efficiency of California (PDF)
·Attachment D -Agency Agreement Between FARECal and the City of Azusa, Acting By and
Through the Light & Water Department, as Agent (DOC)
·This page was intentionally left blank (PDF)
Prepared By:Debra Lloyd, Manager
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
ATTACHMENT A
* NOT YET APPROVED *
1
110315 dm 6051548
Resolution No. ______
Resolution of the Council of the City of Palo Alto to
Withdraw from the Financing Authority for Resource
Efficiency of California
WHEREAS,the City of Palo Alto (City) entered into a Joint Powers Agreement
creating the Financing Authority for Resource Efficiency of California (FARECal) dated July 1,
1993;and
WHEREAS,the City is a Charter Member of FARECal; and
WHEREAS, currently active members of FARECal are the Cities of Anaheim,
Azusa, Colton, Pasadena, Palo Alto, Riverside,the Marin Water District and the Trinity Public
Utility District; and
WHEREAS,FARECal was formed to enable financing for activities, programs
and/or equipment designed to conserve, change usage patterns or reduce the demand for
electrical or other energy or capacity, natural gas or water, including water reuse or recycling,
and any other programs, equipment or facilities which meet resource efficiency or management
needs or requirements; and
WHEREAS, the Cities of Azusa and Colton have outstanding bonds financed
through FARECal totaling $47.37 million; and
WHEREAS,City, through the Joint Powers Agreement, incurs liability risk in the
event of default under a contract with FARECal; and
WHEREAS,City has agreed to fund FARECal operations under the Joint Powers
Agreement; and
WHEREAS,City has no current financing needs and anticipates no future financing
needs through FARECal; and
WHEREAS,City desires to mitigate its exposure and liability risk and reduce its
costs in funding FARECal; and
WHEREAS,City intends to withdraw from FARECal upon settlement of any
outstanding payment obligations.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
ATTACHMENT A
* NOT YET APPROVED *
2
110315 dm 6051548
SECTION 1.That the Council of the City of Palo Alto hereby authorizes the
City Manager, consistent with Section 5.4 of the Joint Powers Agreement to provide notice to
FARECal of such withdrawal.
SECTION 2.The Council finds that the Financing Authority for Resource
Efficiency of California does not meeting the definition of a project pursuant to Section 21065 of
the California Environmental Quality Act (CEQA) and, therefore, no environmental impact
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
______________________________________________________
City Clerk Mayor
APPROVED AS TO FORM:APPROVED:
______________________________________________________
Acting Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative
Services
ATTACHMENT D
AGENCY AGREEMENT
BETWEEN
FINANCING AUTHORITY FOR
RESOURCE EFFICIENCY OF CALIFORNIA
AND
THE CITY OF AZUSA, ACTING BY AND THROUGH
ITS LIGHT & WATER DEPARTMENT, AS AGENT
November 2010
Execution Copy
2
TABLE OF CONTENTS
1.PARTIES .............................................................................................................................................4
2.RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS................................................4
3.AGREEMENT.....................................................................................................................................5
4.DEFINITIONS ....................................................................................................................................5
4.1 Agency Costs..........................................................................................................................5
4.2 Agency Work..........................................................................................................................5
4.3 Agent ......................................................................................................................................6
4.4 Agreement ..............................................................................................................................6
4.5 Effective Date.........................................................................................................................6
4.6 Indebtedness ...........................................................................................................................6
5.APPOINTMENT OF AGENT ............................................................................................................6
5.1 Appointment of Agent ...........................................................................................................6
5.2 Agent’s Performance of Agency Work in Accordance with Applicable Laws, Rules
and Regulations .....................................................................................................................6
5.3 Other Agents...........................................................................................................................6
5.4 Procurement............................................................................................................................6
5.5 Compliance with the Federal Tax Law Requirements............................................................6
6.RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL........................................................6
6.1 FARECAL’s Role...................................................................................................................6
7.ACTIVITIES TO BE PERFORMED BY AGENT .............................................................................7
7.1 Inform FARECAL..................................................................................................................7
7.2 Expend Funds for Agency Costs ............................................................................................7
7.3 Arrange Services for Agency Work; Administer Contracts; Agent’s Employees..................7
7.4 Prepare and Submit Estimates of Agency Costs.....................................................................7
7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records...........................7
7.6 Furnish Additional Assistance and Information .....................................................................7
8.AGENCY COSTS ...............................................................................................................................8
8.1 Agency Costs..........................................................................................................................8
8.2 No Profit .................................................................................................................................8
9.PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS.............................................................8
9.1 Payment and Audit Procedures...............................................................................................8
9.2 Disputed Invoices ...................................................................................................................9
10.LIABILITY .........................................................................................................................................9
10.1 No Liability of FARECAL or Agent, Their Directors, Officers, Etc.; FARECAL
and Agent’s, Directors, Officers, Employees, Not Individually Liable..................................9
10.2 Extent of Exculpation; Enforcement of Rights in Equity.....................................................10
10.3 No Relief From Insurer’s Obligations..................................................................................10
3
10.4 No General Liability of FARECAL .....................................................................................10
10.5 No Warranty for Agent Services ..........................................................................................10
11.ALTERNATIVE DISPUTE RESOLUTION ....................................................................................10
11.1 NonBinding Dispute Resolution...........................................................................................10
11.2 Role of FARECAL Board of Directors; Nonbinding Mediation Procedure.........................10
12.RELATIONSHIP OF THE PARTIES...............................................................................................10
12.1 Separate and Several Interests ..............................................................................................10
13.UNCONTROLLABLE FORCES......................................................................................................11
13.1 Excuse of Performance by Reason of Uncontrollable Forces ..............................................11
14.BINDING OBLIGATIONS...............................................................................................................11
14.1 All Obligations Binding........................................................................................................11
15.GENERAL PROVISIONS GOVERNING AGREEEMENT ...........................................................11
15.1 Waiver Not to Effect Subsequent Events .............................................................................11
15.2 Headings Not Binding ..........................................................................................................11
16.INDEMNITY AND RELATED MATTERS ....................................................................................11
16.1 Indemnification of Agent......................................................................................................11
16.2 Separate Legal Capacities.....................................................................................................12
17.GOVERNING LAW .........................................................................................................................12
18.TERM AND EXPIRATION..............................................................................................................12
18.1 Effective Date.......................................................................................................................12
18.2 Termination ..........................................................................................................................12
19.SEVERABILITY...............................................................................................................................12
20.REPRESENTATION AND NOTICES.............................................................................................13
21.AMENDMENTS...............................................................................................................................13
50305946.1 4
AGENCY AGREEMENT
1.PARTIES.This Agency Agreement, effective as of this ___day of ____, 2010, by and
between the FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF
CALIFORNIA, a joint powers agency and a public entity organized under the laws of the
State of California, hereinafter referred to as “FARECal,” or “the Authority” created under
the provisions of the Act, and the CITY OF AZUSA acting by and through its LIGHT &
WATER DEPARTMENT a California municipal utility under California law hereinafter
referred to as the “City” or the “Agent.” The City and FARECal are also sometimes
referred to herein, with respect to this Agreement, individually as the “Party” and together
as the “Parties”.
2.RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS.The Recitals set
forth herein and the facts which follow are incorporated into this Agreement by reference
for all purposes. This Agreement has been reviewed by both Parties and shall not be
interpreted with reference to the rules of construction providing for construction against a
Party responsible for drafting or creating a particular provision or section, but should instead
be interpreted in a manner which broadly carries forth the goals and objectives of the Parties
as expressed herein. References to “Sections,” “Annexes,” “Appendices,” “Schedules” and
“Exhibits” shall be to Sections, Annexes, Appendices, Schedules and Exhibits, as the case
may be, of this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the singular or
the plural, depending on the reference. The use herein of the word “include” or “including”,
when following any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not non-limiting language (such as
“without limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. All terms
capitalized and not otherwise defined herein shall have the meaning set forth in the Joint
Powers Agreement or Bylaws of FARECal. This Agreement is made with reference to the
following facts among others:
2.1 FARECal was created pursuant to provisions contained in the Joint Exercise of
Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code
of California, as amended from time to time (the “Act”), by its members, which
are municipalities, water districts, joint action agencies, municipal utility districts,
public utility districts, irrigation districts and an irrigation district that supply,
among other things, electrical energy and water, in the State of California, for the
purpose of jointly and cooperatively undertaking the planning, ,development
financing, purchase, lease construction, operation and maintenance of Resource
Efficiency Programs and Facilities.
5
2.2 The City is a California municipal utility which provides electric energy and
water to its citizens through its municipally-owned electric and water system.
The City is one of the parties to the FARECal Joint Powers Agreement.
2.3 FARECal was established, designed and brought to fruition in order to create a
viable joint powers authority with the objective of representing and carrying forth
the common goals, the common aspirations and the common objectives of any
public agency eligible for membership in the California Municipal Utilities
Association (“CMUA”) and located in California.
2.4 Pursuant to the terms of the Act, and its Joint Power Agreement, FARECal has
any and all powers authorized by law to two or more of its Members relating to
the planning, development, undertaking, purchase, lease, acquisition,
construction, financing, disposition, use, operation, repair, replacement or
maintenance of facilities for the generation, production, transmission,
conservation, reuse, recycling, storage, treatment or distribution of electrical or
other energy or capacity, natural gas, water, waste water or recycled water, or
Resource Efficiency Programs and Facilities, or any combination thereof.
2.5 Over the course of the past several years members of FARECal, including the
City, have untaken projects through FARECal for which FARECal has issued
Indebtedness. Under California Government Code Section 6505 and Section 4.5
of the FARECal Joint Powers Agreement, FARECal is required to have its
accounts and records audited by independent certified public accountants.
Auditors have advised FARECal that the audit should include financial records
relating to outstanding FARECal Indebtedness.nce its inception, FARECal
administrative tasks, including the maintenance of FARECal’s books and records
and the administration and oversight of related audits, have been carried out
and/or administered by the staff of CMUA. CMUA staff has requested assistance
with respect to the maintenance of FARECal accounts and records and all related
auditing activities.
2.6 The City has offered to assist with respect to the maintenance of FARECal’s
accounts and records and related auditing activities provided it is made whole for
all of its related costs.
3.AGREEMENT.For and in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, and in order to carry forth certain objectives of FARECal
and to appoint as agent for FARECAL for the purposes set forth herein, the Parties agree as
follows.
4.DEFINITIONS. The terms set forth below, when initially capitalized, shall have the
respective meaning set forth below:
4.1 Agency Costs. The costs, as set forth in Section 8 hereof, of carrying out Agency
Work.
4.2 Agency Work. Agency shall be responsible for providing accounting and auditing
services for FARECal and such other activities denoted under Section 7 of this
6
Agreement. Such work may be performed in whole or in part, as determined by
Agent, by its own employees or by outside contractors.
4.3 Agent. The City of Azusa acting by and through its Light & Water Department,
which shall be responsible, in accordance with the terms of this Agreement, for
carrying out the Agency Work as Agent for and on behalf of FARECal.
4.4 Agreement. This Agreement, as it may be amended, modified or supplemented
from time to time.
4.5 Effective Date. The date first set forth above.
4.6 Indebtedness: Indebtedness shall have the meaning as ascribed thereto in the
Joint Powers Agreement for FARECal.
5.APPOINTMENT OF AGENT.
5.1 Appointment of Agent. In accordance with the terms and conditions of this
Agreement FARECal hereby appoints, designates, authorizes and directs the City
to carry out, as agent for and on behalf of FARECal, Agency Work in accordance
with the terms of this Agreement. The City hereby accepts such appointment,
designation, authorization and direction.
5.2 Agent’s Performance of Agency Work in Accordance with Applicable Laws,
Rules and Regulations. In carrying forth its Agency Work pursuant to the terms
of this Agreement Agent shall, in all material respects, observe all applicable
laws, rules and regulations.
5.3 Other Agents. The Authority shall at all times have the right to appoint another
agent or agents to perform, apart from and concurrent with this Agreement.
5.4 Procurement. In carrying out its duties under this Agreement, the City shall
utilize the procedures, protocols and restrictions of the City of Palo Alto or the
City of Riverside (as determined by FARECal’s Board of Directors) which either
Palo Alto or Riverside use when exercising similar powers, including but not
limited to procurement and contracting powers.
5.5 Compliance with the Federal Tax Law Requirements. Notwithstanding anything
to the contrary in this Agreement, each of the Parties shall take such actions in the
administration and the performance of this Agreement as may be necessary, if
applicable, to comply with the Federal tax law requirements on the Indebtedness,
and each shall refrain from taking any action that would adversely affect
compliance with the Federal tax law requirements.
6.RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL. FARECAL shall have
the following rights, duties and responsibilities under this Agreement:
6.1 FARECal’s Role. FARECal acting by and through its Board of Directors shall
have the following rights duties and responsibilities under this Agreement:
7
6.1.1 Review Agency Cost Estimates: Review, modify and approve the estimates
of Agency Costs submitted by the Agent pursuant to this Agreement.
6.1.2 Monitor Agency Work: Monitor the continuation and completion of
Agency Work.
6.1.3 Make Recommendations and/or Modifications Regarding Agency Work:
Make (i) recommendations to the Agent with respect to Agency Work
and/or (ii) modifications to Agency Work undertaken by Agent.
6.1.4 Provide Assistance: Provide such other assistance to the Agent in carrying
out Agency Work as the Board of Directors shall deem reasonable and
proper and as the Agent shall request.
6.1.5 Perform Other Functions and Duties: Perform such other functions and
duties as may be required of FARECal in connection with this Agreement.
7.ACTIVITIES TO BE PERFORMED BY AGENT.
7.1 Inform FARECal. Promptly inform FARECal regarding significant factors which
may affect or have affected Agency Work.
7.2 Expend Funds for Agency Costs. Expend moneys for Agency Costs in
accordance with this Agreement; provided, however, in no event shall Agent
expend money or incur costs for Agency Costs that exceed the estimate of
Agency Costs previously approved by FARECal.
7.3 Arrange Services for Agency Work; Administer Contracts; Agent’s Employees.
Negotiate, arrange for, administer, perform and enforce all contracts necessary for
the performance and completion of Agency Work and furnish conformed copies
of such contracts or other related documentation to FARECal. In performing
Agency Work, the Agent may use its own employees and equipment and facilities
owned or directly leased by the Agent without obtaining any consent or approval
of FARECal.
7.4 Prepare and Submit Estimates of Agency Costs. Prepare and submit to FARECal
for each fiscal year, the Agent’s estimate of Agency Costs.
7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records. Keep
and maintain records of moneys expended, obligations incurred, and credits
accrued; and maintain for auditing those accounting records prepared, or caused
to be prepared, by the Agent with respect to FARECal’s moneys and
Indebtedness; direct and oversee fiscal audits of FARECal.
7.6 Furnish Additional Assistance and Information. In addition to the services set
forth in Section 7.5, furnish, upon request, to FARECal any assistance requested
by FARECal’s Board of Directors and agreed to by the City.
8
8.AGENCY COSTS.
8.1 Agency Costs. Agency Costs shall include the following:
8.1.1 All costs approved by the Agent of labor and services, performed by the
Agent or by others, in connection with this Agreement.
8.1.2 Payroll and other expenses of employees of the Agent while performing
work in connection with this Agreement, including applicable overhead
costs and labor loading charges, including but not limited to time-off
allowances, assignment pay, payroll taxes, workers’ compensation
insurance, retirement and death benefits and other employee benefits.
8.1.3 Costs of the Agent, to the extent not provided for by insurance, of
discharging or paying any liability and loss, damage and expense, including
costs and expenses for attorneys' fees and other costs of defending, settling
or otherwise administering claims, liabilities or losses arising out of
workers' compensation or employer's liability claims or by reason of
property damage or injuries to or death of any person or persons or by
reason of claims of any and every character, or costs that should be paid or
provided to Agent to satisfy indemnification obligations under Section 16
of this Agreement or other costs that should be paid or provided to Agent to
satisfy indemnification obligations resulting from, arising out of or
connected with the performance of Agency Work, including negligent or
grossly negligent acts or omissions, but excluding willful misconduct of the
Agent, its City Council, or its respective officers or employees.
8.2 No Profit. The Agent shall not receive any profit under this Agreement, nor shall
the Agent be obligated to make any expenditure or incur any obligation regarding
Agency Work with respect to which it shall not be entitled to reimbursement
under this Agreement.
9.PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS.
9.1 Payment and Audit Procedures. From time to time, and at such times (not more
than twice annually) as the Agent shall determine, it shall submit to FARECal
requests and requisitions for payment of items of Agency Costs incurred or paid;
provided, however, such Agency Costs do not exceed the estimate of Agency
Costs previously approved by FARECal as provided in Section 6.1.1. FARECal
agrees to raise funds sufficient to pay all Agency Costs through whatever means
authorized under the FARECal Joint Powers Agreement, including Section 4.4 of
the Joint Powers Agreement which provides that Members shall make such
contributions, payments and advances to the Authority as are approved from time
to time by the Board of Directors of FARECal. FARECal shall pay or cause to be
paid the amount of each such request or requisition within 60 days after its receipt
thereof. At such reasonable times as shall be requested by FARECal, the books
and cost records of the Agent relevant to Agency Costs shall be subject to audit
by or on behalf of FARECal.
9
9.2 Disputed Invoices. In case any portion of any invoice received by FARECal from
Agent shall be in bona fide dispute, FARECal shall pay Agent the full amount of
such invoice and, upon determination of the correct amount, the difference
between such correct amount and such full amount, if any, including interest at
the rate received by Agent on any overpayment, will be credited to FARECal by
Agent after such determination; provided, however, that such interest shall not
accrue on any overpayment that is acknowledged by Agent and returned to
FARECal by the fifth calendar day following the receipt by Agent of the disputed
overpayment. In the event such invoice is in dispute, Agent will give
consideration to such dispute and will advise FARECal with regard to Agent’s
position relative thereto within 30 days following receipt of written notification
by FARECal of such dispute.
10.LIABILITY.
10.1 No Liability of FARECal or Agent, Their Directors, Officers, Etc.; FARECal and
Agent’s Directors, Officers, Employees, Not Individually Liable. Both Parties
agree that neither FARECal nor the Agent, nor any of their past, present or future
directors, officers, employees, board members, agents, attorneys or advisors
(collectively, the “Released Parties”) shall be liable to any other of the Released
Parties for any and all claims, demands, liabilities, obligations, losses, damages
(whether direct, indirect or consequential), penalties, actions, loss of profits,
judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses)
or disbursements of any kind or nature whatsoever in law, equity or otherwise
(including, without limitation, death, bodily injury or personal injury to any
person or damage or destruction to any property of the City, FARECal or third
persons) suffered by any Released Party as a result of the action or inaction or
performance or non-performance by any of the Released Parties under this
Agreement (including negligent or grossly negligent acts or omissions and
excluding willful misconduct which, unless otherwise agreed by the Parties, is to
be determined and established by a court of competent jurisdiction in a final,
nonappealable order). Each Party shall release each of the other Released Parties
from any claim or liability that such Party may have cause to assert as a result of
any action or inaction or performance or non-performance by the Released Parties
under this Agreement (including negligent or grossly negligent acts or omissions
and excluding willful misconduct which, unless otherwise agreed by the Parties,
is to be determined and established by a court of competent jurisdiction in a final,
nonappealable order). Notwithstanding the foregoing, no such action or inaction
or performance or non-performance by any of the Released Parties shall relieve
either Party from its respective obligations under this Agreement, including either
Party’s obligation to make payments required under this Agreement. The
provisions of this Section 10.1 shall not be construed so as to relieve the Agent
from any obligation under this Agreement or any agreement related to FARECal
Indebtedness. It is also hereby recognized and agreed that no member of the
FARECal Board of Directors, the Agent nor their officers, employees, board
members, agents, attorneys or advisors, or member of FARECal in its capacity as
a member of FARECal, shall be individually liable in respect of any undertakings
by any of the Released Parties under this Agreement or any agreement related to
FARECal Indebtedness.
10
10.2 Extent of Exculpation; Enforcement of Rights in Equity. The exculpation
provision set forth in Section 10.1 hereof shall apply to all types of claims or
actions including, but not limited to, claims or actions based on contract or tort.
Notwithstanding the foregoing, either Party may protect and enforce its rights
under this Agreement by a suit or suits in equity for specific performance of any
obligation or duty of the other Party and the Agent may enforce by any legal
means its right to payment for Agency Costs in accordance with the terms of this
Agreement.
10.3 No Relief From Insurer’s Obligations. The provisions of Section 10.1 shall not be
construed so as to relieve any insurer of its obligation to pay any insurance
claims.
10.4 No General Liability of FARECal. The undertakings by FARECal under this
Agreement shall never constitute a debt or indebtedness of FARECal within the
meaning of any provision or limitation of the constitution or statutes of the State
of California. Any provision of this Agreement to the contrary notwithstanding,
the obligation of FARECal under this Agreement to make or cause to be made
payments shall be limited to those payments permitted by and monies available
under a FARECAl indenture or any agreement related to FARECal Indebtedness
or as provided for in this Agreement.
10.5 No Warranty for Agent Services. All services provided by Agent are provided on
an “as is” basis. Agent disclaims all warranties, express or implied, statutory or
otherwise, including, without limitation, any implied warranties of
merchantability or fitness for a particular purpose.
11.ALTERNATIVE DISPUTE RESOLUTION.
11.1 Nonbinding Dispute Resolution. If any dispute arises out of or relates to this
Agreement, or the asserted breach thereof, the Parties agree that the Parties shall
first employ the non binding mediation process which is set forth in this Section
11 before initiating any other type of legal action.
11.2 Role of FARECal Board of Directors; Nonbinding Mediation Procedure.If a
dispute arises between the Parties under this Agreement, the Parties may submit
the dispute to the FARECal Board of Directors. If the Board of Directors is
unable to resolve the dispute, the Parties may then submit the dispute to non
binding mediation.
12.RELATIONSHIP OF THE PARTIES.
12.1 Separate and Several Interests. The covenants, obligations and liabilities of the
Parties are intended to be several and not joint or collective and nothing herein
contained shall ever be construed to create an association, joint venture, trust,
partnership or other legal entity, or to impose a trust or partnership covenant,
obligation or liability on or with regard to either or both of the Parties. Each Party
shall be individually responsible for its own covenants, obligations and liabilities
under this Agreement. Neither Party shall be under the control of or shall be
11
deemed to control any other Party. Neither Party shall be the agent of or have a
right or power to bind the other Party without its express written consent, except
as expressly provided in this Agreement.
13.UNCONTROLLABLE FORCES.
13.1 Excuse of Performance by Reason of Uncontrollable Forces. Other than with
respect to the obligation of a Party to make payments as provided in this
Agreement, neither Party shall be considered to be in default in the performance
of any of its obligations under this Agreement when a failure of performance shall
be due to an uncontrollable force. The term “uncontrollable force” shall be any
cause beyond the control of the Party affected, including but not limited to failure
of or threat of failure of facilities, flood, earthquake, tornado, storm, fire,
lightning, epidemic, war, terrorism, riot, civil disturbance or disobedience, labor
dispute, labor or material shortage, sabotage, restraint by court order or public
authority, and action or non-action by, or inability to obtain the necessary
authorizations or approvals from, any governmental agency or authority, which by
exercise of due diligence such Party could not reasonably have been expected to
avoid and which by exercise of due diligence it shall be unable to overcome.
Nothing contained herein shall be construed so as to require a Party to settle any
strike or labor dispute in which it may be involved. In the event a Party is
rendered unable to fulfill any of its obligations under this Agreement by reason of
an uncontrollable force, such Party shall give prompt written notice of such fact to
the other Party and shall exercise due diligence to remove such inability with all
reasonable dispatch. In such event, the Parties shall diligently and expeditiously
determine how they may equitably proceed to carry out the objectives of this
Agreement.
14.BINDING OBLIGATIONS.
14.1 All Obligations Binding. All of the obligations set forth in this Agreement shall
bind the Parties and their successors and assigns.
15.GENERAL PROVISIONS GOVERNING AGREEMENT.
15.1 Waiver Not to Effect Subsequent Events. Any waiver at any time by a Party of its
rights with respect to a default or any other matter arising in connection with this
Agreement shall not be deemed a waiver with respect to any subsequent default or
matter.
15.2 Headings Not Binding. The headings and captions in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement
16.INDEMNITY AND RELATED MATTERS.
16.1 Indemnification of Agent. In its capacity as Agent under this Agreement, Agent
shall be entitled to indemnification from FARECal as set forth herein. FARECal
shall, to the extent permitted by law, indemnify and hold harmless Agent, its City
Council members, officers, employees, agents, attorneys and advisors, past,
12
present or future when acting for Agent (collectively, “Agent Indemnitees”) from
and against any and all claims, demands, liabilities, obligations, losses, damages
(whether direct, indirect or consequential), penalties, actions, loss of profits,
judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses)
or disbursements of any kind or nature whatsoever in law, equity or otherwise
(including, without limitation, death, bodily injury or personal injury to any
person or damage or destruction to any property of the City, FARECal or third
persons) (collectively, “Losses”) arising by reason of any actions, inactions, errors
or omissions incident to the performance of this Agreement (including negligent
or grossly negligent acts or omissions and excluding willful misconduct which,
unless otherwise agreed by the Parties, is to be determined and established by a
court of competent jurisdiction in a final, nonappealable order) on the part of
Agent Indemnitees. At Agent’s option, FARECal shall defend Agent Indemnitees
from and against any and all Losses. If FARECal, with Agent’s consent, defends
any Agent Indemnitee, Agent shall approve the selection of counsel, and Agent
shall further approve any settlement or disposition, such approval not to be
unreasonably withheld
16.2 Separate Legal Capacities. The Parties acknowledge that the City, as Agent under
and a Party to this Agreement, acts in a legal capacity that is separate from its
capacity as a member of FARECal or a participant in any FARECal Indebtedness.
Accordingly, for purposes of this Agreement, the rights, entitlements, obligations
and liabilities of the City, as Agent and a Party to this Agreement, shall not apply
to or otherwise be affected by, and shall be legally separate from the rights,
entitlements, obligations, and liabilities of the City as a participant in any
FARECal Indebtedness.
17.GOVERNING LAW. This Agreement shall be governed by, interpreted and enforced in
accordance with the laws of the State of California, without regard to conflict of law
principles.
18.TERM AND EXPIRATION.
18.1 Effective Date. This Agreement shall become effective and in full force and
effect on the date first set forth above (the “Effective Date”).
18.2 Termination. This Agreement shall continue in force and effect from the
Effective Date until terminated by either Party, for any reason, upon not less than
sixty (60) days prior written notice to the other Party. Payment obligations of the
Parties hereunder shall survive any termination of the Agreement until satisfied.
Upon termination of this Agreement, Agent shall deliver FARECal's books and
accounts maintained by the Agent to CMUA or such other entity as directed by
FARECal.
19.SEVERABILITY.In case any one or more of the provisions of this Agreement shall for
any reason be held to be illegal or invalid by a court of competent jurisdiction, it is the
intention of each of the Parties hereto that such illegality or invalidity shall not affect any
other provision hereof, but this Agreement shall be construed and enforced as if such illegal
or invalid provision had not been contained herein unless a court holds that the provisions
13
are not separable from all other provisions of this Agreement.
20.REPRESENTATION AND NOTICES. Any notice, demand or request provided for in
this Agreement shall be deemed properly served, given or made if delivered in person or
sent by registered or certified mail, postage prepaid, to the persons specified below:
Financing Authority for Resource Efficiency of California
c/o Executive Director of CMUA
915 L Street, Suite 1460
Sacramento, California 95814
City of Azusa, Light and Water Department
Director of Utilities
729 North Azusa Avenue, P.O. Box 9500
Azusa, California 91702-9500
21.AMENDMENTS. The Parties acknowledge and agree that any amendment to this
agreement shall be in writing and duly executed by the Parties.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed on their respective behalves by their duly authorized representatives.
FINANCING AUTHORITY FOR RESOURCE
EFFICIENCY OF CALIFORNIA
Dated: ___________By: _____________________________
George F. Morrow
President
CITY OF AZUSA acting by and through its LIGHT
AND WATER DEPARTMENT
Dated: ___________By: _____________________________
Joseph R. Rocha
Mayor
City of Palo Alto (ID # 1444)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 2
(ID # 1444)
Summary Title: Award of Purchase Order for Fuel
Title: Approval of a Purchase Order with Western States Oil Company for a
Three Year Period in the Total Amount Not to Exceed $2,676,675 for the
Provision of Automotive Fuel
From:City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to
execute a purchase order with Western States Oil Company in the amount of $2,676,675 for
the provision of automotive fuel for a three year period from April 1, 2011 to March 31, 2014.
Discussion
City operations use approximately 350,000 of gasoline and diesel fuel annually. This purchase
order covers the provision and delivery of fuel to numerous locations throughout the City. The
purchase order provides for delivery of unleaded gasoline, diesel, and biodiesel fuel, in
accordance with City specifications, and at the Oil Price Information Service (OPIS) San Jose
“rack average” price in effect on the date of delivery. Fuel will be delivered into tanks located
at the Municipal Services Center, Landfill, Golf Course, Fire Stations One, Two, and Four, Water
Quality Control Plant, Foothills Park, Civic Center, and several standby generator sites.
As fuel pricing is determined by the Oil Price Information Service (OPIS) San Jose “Rack
Average,” and does not vary by vendor, lowest delivery pricing was used as the basis for bid
award (see Attachment “A”). A Request for Quotation (RFQ) was sent to six vendors on
January 27, 2011 with five vendors responding.
Bid Name/Number Automotive Fuel Services –RFQ #139841
Proposed Length of Purchase Order 12 months with option to renew
Number of Bids Mailed to
Contractors 6
Total Days to Respond to Bid 15
Pre-Bid Meeting?No
March 21, 2011 Page 2 of 2
(ID # 1444)
Number of Bids Received 5*
Bid Price Range $35,717 -$176,241*
*Bid summary provided in Attachment A.
Staff has reviewed all bids submitted and recommends that the bid submitted by Western
States Oil Company be accepted and that Western States Oil Company be declared the lowest
responsible bidder. The three year purchase order reflects an annual amount of $892,225 for
years one through three.
The purchase order amount is based on delivery pricing and an estimate of fuel costs taken
from the OPIS Index. Because the price of fuel changes daily, the actual cost may be higher or
lower than the estimate subject to fuel market trends. The annual purchase order value of
$892,225 was determined by multiplying the delivered cost of the fuel (based on the
February 7, 2011 OPIS index) by the estimated quantity required at each site and adding the
annual delivery charge.
Resource Impact
Funding has been budgeted for fuel costs in the FY 2010-11 Public Works Department
Equipment Management Fuel Operations Budget.
Policy Implications
Authorization of the contract does not represent any change to the existing policy.
Environmental Review
This contract is exempt from the California Environmental Quality Act under Section 15301 in
that the contract relates to ongoing operations. The Contractor is required to comply with all
federal, state and local environmental laws and regulations applicable to the transportation and
delivery of automotive fuels.
Attachments:
·RFQ139841 Bid Summary -Delivery Cost Only (PDF)
·This page intentionally left blank (PDF)
Prepared By:Keith LaHaie,
Department Head:J. Michael Sartor, Interim Director
City Manager Approval: James Keene, City Manager
Attachment A - Bid Summary - RFQ 139841
Western States Oil Co.
Item Del Yr1 Gal Total Yr1 Del Yr2 Total Yr2 Del Yr3 Total Yr3 Grand Total
1 0.00775 110,000 852.50 0.00775 852.50 0.00775 852.50 $2,557.50
2 0.00999 64,000 639.36 0.00999 639.36 0.00999 639.36 $1,918.08
3 0.05 60,000 3,000.00 0.05 3,000.00 0.05 3,000.00 $9,000.00
4 0.0875 3,000 262.50 0.0875 262.50 0.0875 262.50 $787.50
5 0.0875 4,000 350.00 0.0875 350.00 0.0875 350.00 $1,050.00
6 0.0875 1,000 87.50 0.0875 87.50 0.0875 87.50 $262.50
7 0.0875 1,000 87.50 0.0875 87.50 0.0875 87.50 $262.50
8 0.0875 33,000 2,887.50 0.0875 2,887.50 0.0875 2,887.50 $8,662.50
9 0.0875 11,000 962.50 0.0875 962.50 0.0875 962.50 $2,887.50
10 0.0875 6,500 568.75 0.0875 568.75 0.0875 568.75 $1,706.25
11 0.0875 16,500 1,443.75 0.0875 1,443.75 0.0875 1,443.75 $4,331.25
12 0.0875 1,500 131.25 0.0875 131.25 0.0875 131.25 $393.75
13 0.0875 3,000 262.50 0.0875 262.50 0.0875 262.50 $787.50
14 0.0875 500 43.75 0.0875 43.75 0.0875 43.75 $131.25
15 0.0875 1,600 140.00 0.0875 140.00 0.0875 140.00 $420.00
16 0.0875 500 43.75 0.0875 43.75 0.0875 43.75 $131.25
17 0.0475 3,000 142.50 0.0475 142.50 0.0475 142.50 $427.50
$11,905.61 $11,905.61 $11,905.61 $35,716.83
Attachment A - Bid Summary - RFQ 139841
Valley Oil Co.
Item Del Yr1 Gal Total Yr1 Del Yr2 Total Yr2 Del Yr3 Total Yr3 Grand Total
1 0.0049 110,000 539.00 0.004949 544.39 0.004998 549.83 $1,633.22
2 0.011 64,000 704.00 0.01111 711.04 0.011221 718.15 $2,133.19
3 0.08 60,000 4,800.00 0.0808 4,848.00 0.081608 4,896.48 $14,544.48
4 0.08 3,000 240.00 0.0808 242.40 0.081608 244.82 $727.22
5 0.08 4,000 320.00 0.0808 323.20 0.081608 326.43 $969.63
6 0.08 1,000 80.00 0.0808 80.80 0.081608 81.61 $242.41
7 0.08 1,000 80.00 0.0808 80.80 0.081608 81.61 $242.41
8 0.08 33,000 2,640.00 0.0808 2,666.40 0.081608 2,693.06 $7,999.46
9 0.08 11,000 880.00 0.0808 888.80 0.081608 897.69 $2,666.49
10 0.08 6,500 520.00 0.0808 525.20 0.081608 530.45 $1,575.65
11 0.08 16,500 1,320.00 0.0808 1,333.20 0.081608 1,346.53 $3,999.73
12 0.08 1,500 120.00 0.0808 121.20 0.081608 122.41 $363.61
13 0.08 3,000 240.00 0.0808 242.40 0.081608 244.82 $727.22
14 0.08 500 40.00 0.0808 40.40 0.081608 40.80 $121.20
15 0.08 1,600 128.00 0.0808 129.28 0.081608 130.57 $387.85
16 0.08 500 40.00 0.0808 40.40 0.081608 40.80 $121.20
17 0.08 3,000 240.00 0.0808 242.40 0.081608 244.82 $727.22
$12,931.00 $13,060.31 $13,190.91 $39,182.22
Attachment A - Bid Summary - RFQ 139841
Coast Oil Company
Item Del Yr1 Gal Total Yr1 Del Yr2 Total Yr2 Del Yr3 Total Yr3 Grand Total
1 0.0615 110,000 6,765.00 0.0615 6,765.00 0.0615 6,765.00 $20,295.00
2 0.0735 64,000 4,704.00 0.0735 4,704.00 0.0735 4,704.00 $14,112.00
3 -0.103 60,000 -6,180.00 -0.103 -6,180.00 -0.103 -6,180.00 -$18,540.00
4 0.1685 3,000 505.50 0.1685 505.50 0.1685 505.50 $1,516.50
5 0.1602 4,000 640.80 0.1602 640.80 0.1602 640.80 $1,922.40
6 0.1685 1,000 168.50 0.1685 168.50 0.1685 168.50 $505.50
7 0.1602 1,000 160.20 0.1602 160.20 0.1602 160.20 $480.60
8 0.1685 33,000 5,560.50 0.1685 5,560.50 0.1685 5,560.50 $16,681.50
9 0.1602 11,000 1,762.20 0.1602 1,762.20 0.1602 1,762.20 $5,286.60
10 0.1685 6,500 1,095.25 0.1685 1,095.25 0.1685 1,095.25 $3,285.75
11 0.1602 16,500 2,643.30 0.1602 2,643.30 0.1602 2,643.30 $7,929.90
12 0.1685 1,500 252.75 0.1685 252.75 0.1685 252.75 $758.25
13 0.1602 3,000 480.60 0.1602 480.60 0.1602 480.60 $1,441.80
14 0.1602 500 80.10 0.1602 80.10 0.1602 80.10 $240.30
15 0.1602 1,600 256.32 0.1602 256.32 0.1602 256.32 $768.96
16 0.1602 500 80.10 0.1602 80.10 0.1602 80.10 $240.30
17 0.1602 3,000 480.60 0.1602 480.60 0.1602 480.60 $1,441.80
$19,455.72 $19,455.72 $19,455.72 $58,367.16
Attachment A - Bid Summary - RFQ 139841
Nella Oil Co. LLC
Item Del Yr1 Gal Total Yr1 Del Yr2 Total Yr2 Del Yr3 Total Yr3 Grand Total
1 0.035 110,000 3,850.00 0.035 3,850.00 0.035 3,850.00 $11,550.00
2 0.035 64,000 2,240.00 0.035 2,240.00 0.035 2,240.00 $6,720.00
3 0.035 60,000 2,100.00 0.035 2,100.00 0.035 2,100.00 $6,300.00
4 0.2 3,000 600.00 0.2 600.00 0.2 600.00 $1,800.00
5 0.2 4,000 800.00 0.2 800.00 0.2 800.00 $2,400.00
6 0.2 1,000 200.00 0.2 200.00 0.2 200.00 $600.00
7 0.2 1,000 200.00 0.2 200.00 0.2 200.00 $600.00
8 0.2 33,000 6,600.00 0.2 6,600.00 0.2 6,600.00 $19,800.00
9 0.2 11,000 2,200.00 0.2 2,200.00 0.2 2,200.00 $6,600.00
10 0.2 6,500 1,300.00 0.2 1,300.00 0.2 1,300.00 $3,900.00
11 0.2 16,500 3,300.00 0.2 3,300.00 0.2 3,300.00 $9,900.00
12 0.2 1,500 300.00 0.2 300.00 0.2 300.00 $900.00
13 0.2 3,000 600.00 0.2 600.00 0.2 600.00 $1,800.00
14 0.2 500 100.00 0.2 100.00 0.2 100.00 $300.00
15 0.2 1,600 320.00 0.2 320.00 0.2 320.00 $960.00
16 0.2 500 100.00 0.2 100.00 0.2 100.00 $300.00
17 0.2 3,000 600.00 0.2 600.00 0.2 600.00 $1,800.00
$25,410.00 $25,410.00 $25,410.00 $76,230.00
Attachment A - Bid Summary - RFQ 139841
Falcon Fuels Inc
Item Del Yr1 Gal Total Yr1 Del Yr2 Total Yr2 Del Yr3 Total Yr3 Grand Total
1 0.04736 110,000 5,209.60 0.04736 5,209.60 0.04736 5,209.60 $15,628.80
2 0.05447 64,000 3,486.08 0.05447 3,486.08 0.05447 3,486.08 $10,458.24
3 0.49 60,000 29,400.00 0.49 29,400.00 0.49 29,400.00 $88,200.00
4 0.2376 3,000 712.80 0.2376 712.80 0.2376 712.80 $2,138.40
5 0.24117 4,000 964.68 0.24117 964.68 0.24117 964.68 $2,894.04
6 0.2376 1,000 237.60 0.2376 237.60 0.2376 237.60 $712.80
7 0.2417 1,000 241.70 0.2417 241.70 0.2417 241.70 $725.10
8 0.23726 33,000 7,829.58 0.23726 7,829.58 0.23726 7,829.58 $23,488.74
9 0.2417 11,000 2,658.70 0.2417 2,658.70 0.2417 2,658.70 $7,976.10
10 0.2376 6,500 1,544.40 0.2376 1,544.40 0.2376 1,544.40 $4,633.20
11 0.2417 16,500 3,988.05 0.2417 3,988.05 0.2417 3,988.05 $11,964.15
12 0.2376 1,500 356.40 0.2376 356.40 0.2376 356.40 $1,069.20
13 0.2462 3,000 738.60 0.2462 738.60 0.2462 738.60 $2,215.80
14 0.2462 500 123.10 0.2462 123.10 0.2462 123.10 $369.30
15 0.2462 1,600 393.92 0.2462 393.92 0.2462 393.92 $1,181.76
16 0.2462 500 123.10 0.2462 123.10 0.2462 123.10 $369.30
17 0.2462 3,000 738.60 0.2462 738.60 0.2462 738.60 $2,215.80
$58,746.91 $58,746.91 $58,746.91 $176,240.73
Attachment A - Bid Summary - RFQ 139841
City of Palo Alto (ID # 1429)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 6
(ID # 1429)
Council Priority: Land Use and Transportation Planning
Summary Title: CUP for wireless facility at 488 University
Title: Approval of a Conditional Use Permit and a Record of Land Use Action
Amending an Existing Conditional Use Permit to Allow the Addition of Two
Wireless Fidelity (Wi-Fi) Antennas Mounted to the Front Façade of the Hotel
President at 488 University Avenue, Staff Recommends Setting a Public Hearing
for April 4, 2011.
From: City Manager
Lead Department: Planning and Community Environment
RECOMMENDATION
Staff recommends that the item be scheduled for public hearing on April 4, 2011, given the
extent of concerns raised by the building’s residents and others. When the Council considers
the project, the Planning and Transportation Commission (PTC) and staff will recommend that
the City Council uphold the Director of Planning and Community Environment’s decision, with
the additional approval conditions suggested by the PTC, to approve Conditional Use Permit
10PLN-00285, amending the existing use permit based upon the Findings and Conditions of
Approval in the ROLUA (Attachment A).
EXECUTIVE SUMMARY
AT&T requests approval of an amendment to their existing Conditional Use Permit to allow the
expansion of the existing wireless antenna facility at the Hotel President. Currently there are
wireless antennas and equipment cabinets located on the rooftop of the building. This project
will add two Wi-Fi antennas to the interior side of the railing of the balcony facing University
Avenue. A tentative Director’s Decision to approve the project was issued, and residents of the
Hotel President requested a public hearing on the project by the Planning and Transportation
Commission (PTC). The residents’ objections focused on potential radiofrequency (RF)
emissions and access through the residents’ apartment units. Following this testimony and
considerable discussion, the PTC recommended that Council uphold the Director’s decision to
approve the project, adding two approval conditions requiring additional emissions testing and
restricting all maintenance-related access through the apartments.
BACKGROUND
March 21, 2011 Page 2 of 6
(ID # 1429)
Conditional Use Permit Process
Section 18.77.060 of the Zoning Ordinance outlines the process for conditional use permit
review. Upon tentative action by the Planning Director, any person may request a hearing
before the PTC not later than 14 days after the decision. The Commission’s action is then placed
on a Council Consent Calendar.
The Council has three options for reviewing this project. First, it may simply approve it as a
consent calendar item. Second, it may pull it from the consent calendar, discuss it and take
action based on the evidence presented at the PTC hearing. Or third, it may pull it from the
consent calendar and set another public hearing before the Council. Pulling the item for
options 2 or 3 requires the vote of at least 3 Councilmembers. Staff recommends the third
option, as there are many residents of the building and others who are likely to want to be
heard and a separate hearing would allow for a better discussion of the issues.
Process History
On January 20, 2011, the Director of Planning and Community Environment tentatively
approved the request for an amendment to the existing Conditional Use Permit (CUP) 99-CUP-
53 to allow the expansion of the existing AT&T wireless communications facility with the
addition of two Wi-Fi antennas placed within the balcony facing University Avenue (see
Attachment C for the approval letter). Within the prescribed 14 calendar day timeframe, three
requests for a public hearing were received for the Conditional Use Permit (CUP) application.
The requests are included as Attachment G to this report.
As prescribed in Palo Alto Municipal Code Section 18.42.110(b)(5), an existing wireless
communication facility that is modified from the original CUP approval (e.g. size, location,
capacity, landscaping, etc.), is subject to Architectural Review and requires an amendment to
the existing use permit. In addition to the CUP amendment and Architectural Review, the
proposed project requires Historic Review because the project site, Hotel President, is
designated as a Category II Historic Resource on the City’s Historic Inventory. The Architectural
and Historic Review was conducted at staff level and was not forwarded to the review boards
due to the minor scope of the project. The request for public hearing did not include a request
for hearing by the Architectural Review Board or Historic Resources Board.
Project Description
The Hotel President is a seven story building with retail on the ground floor and 75 residential
apartments above. AT&T currently has a wireless communications facility (antennas and
equipment cabinets) located on the rooftop of the Hotel President. The project is the addition
of two Wi-Fi antennas (12” x 7.25” x 6” deep) to the interior side of the existing balcony railing,
one positioned at each end. The antennas and related wiring would be painted to match the
existing paint colors of the building. The placement of the antennas behind the balcony railing,
approximately 60’ above grade, was determined by staff to be an acceptable location to
provide the needed screening from public views and to not impact the historic character of the
balcony. For additional information please refer to the applicant’s project description
(Attachment C) and the project plans.
March 21, 2011 Page 3 of 6
(ID # 1429)
DISCUSSION
Federal Communications Commission Regulations and Ruling
Personal wireless telecommunications facilities are regulated by the federal government
pursuant to the Telecommunications Act of 1996 (“Act”). (47 U.S.C. § 151 et seq.) Under the
Act, local governments retain control over decisions regarding the placement, construction and
modification of personal wireless service facilities so long as the decisions are in writing and
supported by substantial evidence; and: (a) do not unreasonably discriminate among providers
of functionally equivalent services; (b) do not prohibit or have the effect of prohibiting the
provision of personal wireless services; or (c) are not based on the environmental effects of
radio frequency emission to the extent that such facilities comply with the Federal
Communications Commission (FCC)’s regulations concerning such emissions. (47 U.S.C. §
332(c)(7)).
In addition, a recent FCC ruling recognized service carriers’ need to rapidly develop and site
wireless telecommunications infrastructure and established that “reasonable period of time”
under the Telecommunications act requires action within 150 days following agency
determination that an application for a new tower is complete, or 90 days for a collocation (the
addition of a facility on a structure already hosting one or more wireless facilities). These time
periods are commonly referred to as the “shot clock” and must be followed unless extended by
mutual consent.
Staff has determined that the timelines will be met if the council takes action at the March 21
meeting. However, if the Council were to decide to schedule a new public hearing on this item,
such hearing must be held on or prior to the April 11, 2011 council meeting (unless AT&T
consents to a later date).
Conditional Use Permit Approval
There are two required findings that must be met for a CUP approval. The first finding is that
the use shall not be detrimental or injurious to property or improvements in the vicinity, and
will not be detrimental to the public health, safety, general welfare, or convenience. The
second finding is that the use shall be located and conducted in a manner in accord with the
Palo Alto Comprehensive Plan and the purposes of Title 18 (Zoning). The findings for approval
of this project are described in detail in Attachment A, the Record of Land Use Action.
A common issue raised by concerned citizens regarding telecommunications projects, as is the
case for this project, is the unknown or potential health risks associated with the wireless
technology. However, the Telecommunications Act of 1996 prohibits the City from denying a
project based on potential environmental or health risks due to the radio frequency emissions,
as long as the facility complies with the FCC regulations regarding such emissions. This project
would meet these FCC regulations. Attachment D provides the project’s radio frequency (RF)
emissions analysis.
March 21, 2011 Page 4 of 6
(ID # 1429)
In an effort to keep the building’s residents informed, staff included a condition to the project
that requires AT&T to conduct annual RF emissions monitoring for three years following
installation (see Attachment A, Section 6, #4). AT&T is willing to provide this information for
the residents and the City may require it as part of the CUP approval.
Project Notification
Documentation of notifications provided for this project is attached to this report (Attachment
F). It is the City’s policy and practice to use the City’s GIST database to create mailing lists for all
public meetings. The information that is on the GIST system is based on Santa Clara County
records for the property owner information, which is updated a few times per year, and the
Utility’s customer database for the individual unit information. Notification for Council review
of the project on Consent was provided to property owners and tenants using the updated
contact list used for notification of the Planning and Transportation Commission hearing.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
Planning and Transportation Commission
On February 23, 2011 the PTC recommended approval (4-1) of the project in the location as
approved by the Director, with two additional approval conditions:
1.Prior to the installation of the project, applicant shall complete and provide to the
City an off-site live study for the proposed Wi-Fi antenna equipment to measure RF
emissions in all directions immediately adjacent to the device and up to two feet away, to
certify that the maximum power density does not exceed the FCC limits for exposure to the
public.
2.The applicant shall attempt, if feasible, to conduct the initial installation of the antennas
without requiring access to the residential units. For the on-going maintenance of the
equipment, the required access to that equipment shall not be accomplished through the
residential units.
Commissioner Keller cast the dissenting vote stating he believed the applicant failed to comply
with RF emission requirements and noting his concern regarding the location of the wireless
installation directly adjacent to and accessible from residential units as unique and
differentiated from previous installations within Palo Alto that do not share in these specific
circumstances. Commissioner Keller had crafted the first of the PTC’s two additional approval
conditions, which was then incorporated into the motion for approval.
There were 12 public speakers for this item at the meeting. The majority (10) of the speakers
were not in support of the project and cited concerns regarding the potential health issues the
project may cause to the residents. Residents requested that additional time be given before
any final decision is made on the project so the tenants can further research the specific
equipment that is proposed for installation. However, the applicant’s RF consultant reiterated
March 21, 2011 Page 5 of 6
(ID # 1429)
throughout the meeting that the equipment’s RF emissions fall well below the FCC limits and
residents offered no specific evidence controverting applicant’s emissions data.
Minutes from the PTC public hearing are provided as Attachment E to this report, and the PTC
staff report is available on the City’s website at:
(http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=26370).
RESOURCE IMPACT
The proposed project is not expected to have significant impacts on City revenue or expenses.
POLICY IMPLICATIONS
The proposed project is consistent with the Comprehensive Plan and staff believes there are no
other substantive policy implications. Comprehensive Plan Policy B-12 states that the City
supports the development of technologically advanced communications infrastructure and
other improvements that will facilitate the growth of emerging telecommunications industries.
ENVIRONMENTAL IMPACTS
This project is exempt from the provisions of the California Environmental Quality Act per
Section 15301 and 15331.
COURTESY COPIES
Randy Okamura, AT&T
Owner, 488 University Avenue
Attachments:
·Attachment A: Draft Record of Land Use Action(PDF)
·Attachment B: Location Map (PDF)
·Attachment C: Project Description and Supplemental Information (PDF)
·Attachment D: Radio Frequency (RF) Report (PDF)
·Attachment E: February 23, 2011 P&TC Staff Report and Minutes (PDF)
·Attachment F: Project Notification (PDF)
·Attachment G: Correspondence including Request for CUP Hearing (PDF)
·Attachment H: Responses to Questions from Commissioner Keller (PDF)
·Attachment I: Project Plan Sets (hardcopies to Councilmembers and Libraries only)(TXT)
Prepared By:Clare Campbell, Planner
March 21, 2011 Page 6 of 6
(ID # 1429)
Department Head:Curtis Williams, Director
City Manager Approval: James Keene, City Manager
1
DRAFT
ACTION NO. 2011-xx
RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION
FOR 488 UNIVERSITY AVENUE: CONDITIONAL USE PERMIT 10PLN-00285
(AT&T, APPLICANT)
On March 21, 2011, the Council upheld the Director of
Planning and Community Environment’s January 20, 2011 decision to
approve a Conditional Use Permit amendment to allow the addition of
two building-mounted wireless fidelity (Wi-Fi) antennas expanding
the existing wireless communications facility making the following
findings, determination and declarations:
SECTION 1. Background.The City Council of the City of
Palo Alto (“City Council”) finds, determines, and declares as
follows:
A.On August 12, 2010, AT&T, on behalf of University
President Associates LLC, applied for an amendment to an existing
Conditional Use Permit (99-CUP-53) and staff level Architectural
and Historic Review for the addition of two wireless fidelity (Wi-
Fi) antennas mounted to the front façade of the Hotel President
(“The Project”).Zone District: CD-C(GF)(P). Historic Designation:
Category II.
B.Following staff review, the Planning and
Transportation Commission reviewed the project on February 23, 2011
and voted [4-0]to recommend that Council uphold the Director of
Planning and Community Environment’s decision to approve the
project. The Commission’s action is contained in the CMR: xxx:11.
SECTION 2.Environmental Review. This project is
exempt from the provisions of the California Environmental Quality
Act per Section 15303 of the CEQA Guidelines.
SECTION 3.Conditional Use Permit Findings.
1.The proposed use, at the proposed location, will not
be detrimental or injurious to property or improvements in the
vicinity, and will not be detrimental to the public health, safety,
general welfare, or convenience, in that:
The proposed addition of two Wi-FI antennas to the existing
wireless communications facility at the Hotel President use will
not negatively impact the project site or the surrounding
properties. The project is designed and located to minimize visual
impacts from off-site views. The Federal Communications Commission
(FCC) regulations require transmitting facilities to comply with
2
Radio Frequency exposure guidelines; the limits established in the
guidelines are designed to protect the public health and safety.
The proposed use shall be conducted in accordance with all the
City’s regulations (Planning, Building, Fire, etc.) and FCC
regulations and, therefore, will not be detrimental to public
health, safety, and welfare.
2.The proposed use will be located and conducted in a
manner in accord with the Palo Alto Comprehensive Plan and the
purposes of Title 18 of the Palo Alto Municipal Code in that:
The proposed telecommunications use is consistent with the
Comprehensive Plan Policy B-13. This policy supports the
development of technologically advanced communications
infrastructure and other improvements that will facilitate the
growth of emerging telecommunications industries. The proposed use
does not conflict with the promotion and protection of public
health, safety, peace, morals, comfort, convenience, and general
welfare.
SECTION 4.Conditional Use Permit Granted. Conditional
Use Permit No. 10PLN-00285 is granted to allow the installation of
two Wi-Fi antennas (12” x 7.25” x 6” deep) on the interior side of
the existing balcony, one positioned at each end, and one
associated equipment cabinet located on the roof.
SECTION 5.Plan Approval.
The plans submitted for Building Permit shall be in
substantial conformance with those plans prepared by HMH Design
Group titled AT&T Site Number: CNU0770, consisting of seven pages,
revision date November 30, 2010 and received December 13, 2010,
except as modified to incorporate the conditions of approval in
Section 6. A copy of these plans is on file in the Department of
Planning and Community Development.
SECTION 6.Conditions of Approval.
Planning Division
1.A complete copy of this Record of Land Use Action shall be
printed on the second page of the plans submitted for building
permit.
2.The use shall be conducted in substantial conformance with the
project plans received on December 13, 2010 and related
documents on file with the City of Palo Alto Planning Division,
except as modified by these conditions of approval.
3
3.The Conditions of Approval from the original Conditional Use
Permit (99-UP-53) remain in effect for the life of this project.
4.Prior to the installation of the project, applicant shall
complete and provide to the City an off-site live study for the
proposed WiFi antenna equipment to measure RF emissions in all
directions immediately adjacent to the device and up to two feet
away, to certify that the maximum power density does not exceed
the FCC limits for exposure to the public.
5.The applicant shall attempt, if feasible, to do the initial
installation of the antennas without requiring access to the
residential units. For the on-going maintenance of the
equipment, the required access to that equipment shall not be
accomplished through the residential units.
6.AT&T shall provide to all the building residents and City annual
RF emissions monitoring, beginning when the installation goes
“live” and every year after that for three years. This report
shall clearly state what the RF emissions are for AT&T’s
facility on the building and its compliance with the FCC
regulations.
7.The installation of the project shall in no way disturb the
existing roof tiles on the building. No wires or equipment are
allowed to run on top of the tiles and the tiles are not to be
removed to accommodate the project installation.
8.The beams and railings on the balcony shall be minimally
impacted by the installation; great care shall be taken by the
workers and equipment to avoid any unnecessary contact with this
historic character defining element of the building.
9.All elements of the project that are exposed on the University
façade shall be painted to match the existing background color.
10.An amendment to this Conditional Use Permit is required if the
facility expands in size and/or capacity.
11.Revocation or Modification of Use Permit Approval: The
director may issue a notice of noncompliance for any failure to
comply with any condition of this permit approval, or when a use
conducted pursuant to a conditional use permit is being
conducted in a manner detrimental to the public health, safety
and welfare. After due process, the Director may revoke or
modify the original conditions of approval (PAMC 18.77.110).
SECTION 7.Indemnity.
4
To the extent permitted by law, the Applicant shall indemnify
and hold harmless the City, its City Council, its officers,
employees and agents (the “indemnified parties”)from and against
any claim, action, or proceeding brought by a third party against
the indemnified parties and the applicant to attack, set aside or
void, any permit or approval authorized hereby for the Project,
including (without limitation) reimbursing the City its actual
attorneys fees and costs incurred in defense of the litigation.
The City may, in its sole discretion, elect to defend any such
action with attorneys of its own choice.
SECTION 8.Term of Approval.If the Conditional Use
Permit granted is not used within one year of the date of council
approval, it shall become null and void, pursuant to by Palo Alto
Municipal Code Section 18.77.100.
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
_____________________________________________________
City Clerk Director of Planning and
Community Environment
APPROVED AS TO FORM:
___________________________
Senior Asst. City Attorney
PLANS AND DRAWINGS REFERENCED:
Those plans prepared by HMH Design Group titled AT&T Site Number:
CNU0770, consisting of seven pages, revision date November 30, 2010
and received December 13, 2010.
Page 1
Planning and Transportation Commission 1
Verbatim Minutes 2
February 23, 2011 3
4
Draft Excerpt 5
6
7
Chair Tuma: We will move onto 488 University Avenue, which is a request on behalf of 8
University President Associates, LLC and AT&T for an amendment to an existing Conditional 9
Use Permit. 10
11
Procedurally, how we will function on this item tonight is we will start with a presentation from 12
Staff. The applicant will then have up to 15 minutes to make a presentation. We will then go to 13
the public, and each member of the public will have up to three minutes to speak. Just as a 14
reminder for members of the public I will call the person who is to speak and then the person 15
who is to follow them. If the person following them could come up to the front and be prepared 16
to approach when their name is called that would be great. Also, in front of you as you are 17
standing at the podium you will have three minutes, when the yellow light goes on in front of 18
you that means that there is one minute left in your time. When the buzzer goes off if you are 19
not quite done I would ask that you wrap up the sentence that you are on so that everybody has 20
an opportunity to speak this evening. 21
22
NEW BUSINESS. 23
Public Hearing: 24
25
1. 488 University Avenue: Request by Christopher Fowler, on behalf of University 26
President Associates LLC and AT&T, for an amendment to an existing Conditional Use 27
Permit [99-CUP-53] and staff level Architectural and Historic Review for the addition of 28
two wireless fidelity (Wi-Fi) antennas mounted to the front façade of the Hotel President. 29
Zone District: CD-C(GF)(P). Historic Designation: Category II. Environmental 30
Assessment: Exempt from the provisions of the California Environmental Quality Act per 31
Section 15301 and 15331. 32
33
Chair Tuma: Before we go to Staff there have been questions raised by some Commissioners as 34
to whether by being a shareholder in AT&T or by being a subscriber to AT&T whether that 35
presents any conflict of interest for any of the Commissioners. I have been informed that being a 36
subscriber certainly does not. Being a shareholder, if you were such a shareholder and you hold 37
in excess of $25,000 worth of AT&T stock then you would be required to make that disclosure. 38
So with those parameters in mind are there any Commissioners who have any disclosures that 39
they would like to make? So none on those conflicts of interest. 40
41
Additionally, if there are any members of the Commission who had contact with either the 42
public, or the applicant prior to this evening’s proceedings and wish to make disclosures to that 43
effect now would be the time to do that. I see a light from Commissioner Keller. 44
45
Page 2
Commissioner Keller: I had a brief conversation with one of the appellants, Michelle Kraus. 1
Before this came to us I was curious what the sign was outside the building she lives in, and then 2
we had a brief conversation about that. I also had a brief conversation yesterday I believe it was 3
with Randy Nakamaura of AT&T where I mentioned to him some questions that I had that were 4
going to go through Staff. 5
6
Chair Tuma: Commissioner Garber. 7
8
Commissioner Garber: Yes, I had received a call on Wednesday, February 16 from Shiyama 9
Clunie with AT&T’s Division of External Affairs regarding a project at 488 University Avenue 10
to install the Wi-Fi antenna to deliver voice and data. She stated that two tenants in the building 11
had health concerns regarding the MF transmission, that they were leasing the space from the 12
Meridian Properties and that the antenna is going to be installed on the apartment’s balcony and 13
hidden, and they intend to produce an annual report to the City and the antenna’s EMF 14
transmission intensity. I had mentioned to her that I had not received the packet yet and I did not 15
have any other comments other than those that I have reported, or I did not make any other 16
comments other than those that I reported. 17
18
Chair Tuma: Commissioner Martinez. 19
20
Commissioner Martinez: Yes. I received a voicemail from one of the two people that were 21
mentioned. I am sorry that I didn’t pay attention to the name. I returned a voicemail basically 22
leaving the same message that Commissioner Garber said, that I had not looked at the packet, 23
and I would be happy to speak with them but that never happened. So I have really nothing to 24
disclose. 25
26
Chair Tuma: Commissioner Tanaka, go ahead and ask that question of the attorney. 27
28
Commissioner Tanaka: In terms of the $25,000 limit is that directly or is that like index funds 29
and mutual funds? What if you are not sure because you have a lot of index funds? 30
31
Ms. Melissa Tronquet, Senior Deputy City Attorney: If it is something within a mutual fund that 32
does not fall within the FPPC Guidelines. It is just if it is owned individually. 33
34
Commissioner Tanaka: Great, thank you. 35
36
Chair Tuma: Finally, I received a voicemail several days ago from a member of the AT&T staff. 37
I don’t recall who it was, but I was on travel and simply did not have an opportunity to return 38
that call. They had just left a message saying that they wanted to have a conversation regarding 39
this topic but that was it. 40
41
Okay, with that Staff I believe you have a presentation for us. Before we do that I have a light 42
from Commissioner Tanaka again. 43
44
Commissioner Tanaka: I think a reporter called me. I didn’t catch the name. He called me 45
when I was driving and asked me a few questions, more procedural and why did this come to the 46
Page 3
Commission. I just mentioned that it was because someone of the public requested the meeting. 1
That was the substance of my conversation. Thank you. 2
3
Chair Tuma: Okay. Staff. 4
5
Ms. Tronquet: You have seen these sorts of projects before but we thought it would be helpful to 6
start with a legal review because this area is regulated primarily by federal law and it limits our 7
ability to really regulate at either the state or local level. 8
9
The Telecommunications Act governs your review of this particular project. Really, it imposes 10
restrictions in sort of three main areas. We have reviewed them before. They are listed in your 11
Staff Report but just briefly the Commission cannot deny a wireless telecommunications facility 12
based on concerns about RF emissions as long as the project complies with the RF emission 13
standards set by the FCC. 14
15
The second item is that local agencies do have the ability to deny these types of applications 16
based on concerns about aesthetics but any decision to deny has be based on substantial 17
evidence. Really what that means is what a reasonable person would consider adequate to 18
support a conclusion to deny. This can’t be based on generalized concerns. It really has to be 19
specific to the facts of the case. 20
21
The third main issue is that local decisions that prevent closing a significant gap in coverage also 22
violate the Telecommunications Act. Really what that means is that the Commission must 23
approve if the applicant shows that there is a significant gap in coverage. Then finally, if they 24
are filling a significant gap the project must be the least intrusive means to fill that gap. 25
26
So those are kind of the three main areas that the Commission would consider tonight in 27
determining whether to make a recommendation to approve or deny this particular application. 28
Really, you are prohibited from considering issues outside of those three areas. So I think that 29
Staff as well as the applicant are going to cover it in a little bit more detail, but we thought it 30
would just be helpful to start with those three main things. 31
32
Ms. Clare Campbell, Planner: Good evening. The project before you tonight is for an 33
amendment to an existing Conditional Use Permit to allow the expansion of the existing AT&T 34
wireless facility at the Hotel President. The project proposes to add two Wi-Fi antennas to the 35
existing balcony facing University Avenue. These two antennas, which are 12 inches by seven 36
and one-quarter inches, and six inches deep would be mounted on the inside of the balcony 37
railing and painted to match the building. In addition to the Conditional Use Permit the project 38
was also subject to Staff level architectural review and historic review. Because the building is a 39
Category II resource the project was reviewed for compliance with the Secretary of the Interior’s 40
Standards for rehabilitation and was found to meet these standards. 41
42
After the issuance of the Tentative Approval for the project Staff received several 43
communications from the Hotel President tenants who requested a public hearing. The issue that 44
was raised was concern regarding the potential health hazards the installation may have on the 45
tenants. 46
Page 4
1
Staff received questions on this item from Commissioner Keller yesterday and the applicable 2
ones are forwarded to the applicant for responses. Staff has assembled AT&T’s responses and 3
put those at places for you tonight. 4
5
This concludes Staff’s presentation. Tonight we have AT&T representatives and their radio 6
frequency consultant here to provide a detailed presentation for you. Thank you. 7
8
Chair Tuma: Before we go to the applicant I think Commissioner Keller had a question on the 9
legal standard. 10
11
Commissioner Keller: So I have two questions. First of all, I think you mentioned one of the 12
things in terms of closing the gaps in coverage. When you were referring to a significant gap in 13
coverage are you referring to a significant gap in terms of the same radio frequency band, or if a 14
different service is provided is that considered filling a gap in coverage? 15
16
Ms. Tronquet: It is any gap in the providers own coverage. 17
18
Commissioner Keller: So for example, the question that is germane to this I believe is that the 19
typical coverage is of cellular telephone coverage is usually what we are talking about. In this 20
particular case I understand that what is being put in is Wi-Fi facility, which I am not sure if 21
there is a gap in Wi-Fi coverage that is being filled or Wi-Fi coverage is new, and what I am 22
trying to understand is the distinction between what the significant gap in coverage is of. 23
24
Ms. Tronquet: I think that the applicant will explain that more. There really is a relationship 25
here between the gap in cellular coverage in terms of talking on your telephone and kind of the 26
data Wi-Fi that would cover it. I think probably the applicant is really the best person to answer 27
that question, but they are related. 28
29
Commissioner Keller: They are related, thank you. Also I assume that gap in coverage not only 30
refers to signal strength but capacity, is that true? 31
32
Ms. Tronquet: Yes. 33
34
Commissioner Keller: Thank you. The second part of that is what is the definition of “least 35
intrusive?” You used that language. 36
37
Ms. Tronquet: Basically, that is really related to the alternative sites that they have examined 38
and whether there are less, intrusive is the only word that comes to mind, but whether alternative 39
sites are available really. 40
41
Commissioner Keller: Well, what I mean is intrusive to whom? Intrusive to the public? 42
Intrusive to…? In other words, if something is very intrusive to a small number of people and 43
less intrusive to lots of people who do you weigh that as being least intrusive? I am not sure. 44
45
Page 5
Ms. Tronquet: I think we are talking about intrusive to the public. So the impact if it is an 1
historic building for example, in this case whether it affects the building, how it affects the 2
public, how it affects the service. All of those are factors that would be considered. 3
4
Commissioner Keller: Thank you. 5
6
Chair Tuma: With that we will go to the applicant. I have what appear to be two cards from the 7
applicant. Between you you will have 15 minutes. Welcome. 8
9
Ms. Shiyama Clunie, AT&T: Good evening members of the Planning Commission. Thank you 10
for having me here tonight. You did a good job of pronouncing the name. 11
12
I want to start off by thanking Staff for communicating very professionally with us over the past 13
few days and weeks, and providing a lot of procedural information, responding to phone calls, 14
etc., etc. 15
16
I am here to talk to you tonight about what we call the wireless revolution. It is something that is 17
happening clearly here in Silicon Valley but really across the United States. AT&T in seeking to 18
erect sites like the one that is before you for your consideration tonight is simply responding to 19
an indisputable demand on the part of consumers for a better wireless experience. That means 20
one with fewer dropped calls, faster data speeds, and reliability. 21
22
So why do Palo Altoans, why do all of us need more wireless infrastructure. Wireless 23
subscribership has increased dramatically over the past decade from 97.0 million subscribers in 24
June 2000 to 293 million subscribers in June 2010. In fact, more consumers adopted wireless 25
broadband between 2005 and 2008 than DSL and cable combined, and we all know how popular 26
DSL and cable have been. By 2014 worldwide mobile downloads are expected to reach the 27
equivalent of ten downloads per day for every man, woman, and child on the face of the planet. 28
So essentially consumers want broadband to the person and to the home, they want it when they 29
want, wherever they want it. More and more people are telecommuting and using their smart 30
phones to do so. They are taking conference calls while on route in their cars, of course using 31
hands free devices. They are sharing files with their coworkers and their friends, whether they 32
be pictures or video or just word documents on the go, all day long, every day. 33
34
Palo Alto as you know, and as I am sure you are very proud of, is the epicenter of technology 35
and innovation. For full disclosure reasons I should tell you that I am a produce of Palo Alto 36
whether you want to claim me or not is up to you. I grew up here. I lived here from the age of 37
six to 18, went to Gunn High School, Juana Briones, and went to preschool at Escondido in 38
Escondido Village, and until I went off to college and then came back after grad school and lived 39
here in Palo Alto as well. So I hold the city near and dear to my heart. One of the things that I 40
am proudest of is that people who live in Palo Alto tend to be very intellectually curious. They 41
tend to conduct themselves in a very forward thinking, driven manner at work. They essentially 42
want access to data and to information all of the time. So that is one of the reasons that we are 43
here tonight is to try and meet that very clear demand. 44
45
Page 6
Seven thousand of the world’s leading technology companies are headquartered in Palo Alto, 1
employing more than 95,000 people. Stanford as you know is home to more than 16,000 2
students, and I can guarantee you that less and less or fewer and fewer of those students are 3
dependent on a landline phone. Many of them simply have a wireless phone and that is how they 4
communicate with one another. Palo Altoans demand the latest in mobile broadband service and 5
wireless technology essentially and we want to meet that demand by providing a state-of-the-art 6
wireless network. Palo Alto has historically and certainly up until this point been known as a 7
very innovative city. In order to continue to have that reputation and to earn that reputation you 8
really must have a state-of-the-art wireless network. 9
10
We have identified areas in Palo Alto that could benefit from capacity improvements. We don’t 11
do this on a willy-nilly basis. Each site is chosen scientifically and carefully by engineers. It is 12
an investment on our part, and consideration is given to issues like aesthetics, existing network 13
capacity, and resident and user demand. I want to keep emphasizing the fact that resident and 14
user demand is a key part of our analysis. 15
16
Our plan for improving service in Palo Alto includes macrocells, microcells, and Wi-Fi creating 17
hot zones, what we call them, in high traffic outdoor areas like University. I actually drove along 18
University, as I do a very regular basis, to get here tonight. You just can’t pass any stretch of 19
University without seeing people on their smart phones all day long coming in and out of 20
restaurants, etc. The hot zone that you are considering approving tonight will offload data traffic 21
from our regular 3G network. That will allow more reliable mobile broadband use and voice 22
access for AT&T’s wireless customers. So the customers who would be using their wireless 23
phones for data would normally be using our 3G network, this Wi-Fi site will help reduce the 24
demand on our 36 network and offload some of that traffic, giving people a better experience 25
both using voice and data services wirelessly. 26
27
Don’t take my word for it that Palo Altoans demand this technology. In just a few days of 28
talking with visitors to our Palo Alto store on El Camino we got over 160 people who expressed 29
their support for our efforts in the city. We look forward to collaborating with you and 30
improving resident’s quality of life, access to information, and public safety. Anyone who has 31
witnessed 9/11 or the San Bruno incident, or the earthquakes around the world, or their own day-32
to-day incidents know that people rely, depend on access to first responders through cell phones 33
when they are in the middle of a crisis. We would like to allow Palo Alto to continue to further 34
and improve its image as a technology leader. Here to talk to you more specifically about our 35
application at 488 University is Paul Albritton, outside counsel for AT&T. Thank you. 36
37
Mr. Paul Albritton, AT&T Outside Counsel: Thank you Shiyama. I have four major areas I 38
want to go over with you tonight, quickly. One, you asked questions about earlier, a gap and 39
how do you identify a gap. I want to go over the alternatives that AT&T looked at, 12 40
alternatives for this particular location and why it is the least intrusive means and what that 41
means under federal law. I want to go over the details of our particular proposal that is going on 42
this facility. Then I do want to cover federal law, but your City Attorney did a good job of that, 43
and I may fill in the blanks perhaps. I understand I have a few minutes after the public speaks 44
and I may save that for that time. So let’s jump right in. 45
46
Page 7
As Shiyama just said, we have had this explosive of wireless use across the United States. You 1
probably know this it is the marriage of the cell phone and the internet that have created this 2
tremendous growth of use and all of us having our iPhones and so forth. In talking about a gap I 3
have provided some additional information for you this evening. This is a different gap than you 4
are usually used to. This is a capacity gap. Capacity gaps have been recognized under federal 5
law as equivalent to a gap in coverage in terms of a carrier’s ability to provide service. I cited a 6
case in my letter, which I hope you received. It is Sprint versus Mt. Vernon, a 2005 case that 7
confirmed this capacity gap. Then I myself have had litigation against the City of Berkeley with 8
respect to capacity gaps. It is a known situation. Because what happens of course is each cell 9
site, the miracle of cellular technology is that we used to have mobile phones back in the early 10
1980s but there were only 85 of them in the Bay Area and you had to be a really important guy 11
to have one. The miracle was that we were able to separate the frequencies, reuse the same 12
frequencies, this expensive real estate that the federal government sells, over and over again by 13
creating these cells. Then a call transfers from cell to cell. 14
15
When the cell reaches capacity a couple of things start to happen. It looks to the phones that are 16
closest to it and so it begins to shrink, and the coverage area of the cell will actually shrink and 17
will lead to dropped calls between cells. You are familiar with dropped calls. It will also limit 18
accessibility that is the ability to actually get on the network. So you get a fast busy you don’t 19
get onto the network. In addition it leads to slow data speeds. So capacity gaps are a real 20
problem obviously. As people use their phones more and more the cell sites have gotten smaller 21
and smaller. The normal thing you would do in this situation with a capacity gap is you would 22
split the cell. You would put in a new cell. This is a unique situation in that the capacity gap 23
here is being experienced on the north sectors of the existing facility at 488 University. Our 24
engineers have determined that the real demand is coming right off of University Avenue right 25
there. It is not really affecting the northern sites in Menlo Park that are a mile away and looking 26
south, but really this particular facility. So they came up with a unique idea of how to offload 27
this capacity, and it is to use Wi-Fi, simple Wi-Fi antennas and actually simple Wi-Fi nodes. We 28
actually have the node that would go up on the hotel with us tonight. Chris can bring it up. The 29
node itself, this is it. That’s it. This is actually not an antenna. They are actually little four or 30
five inch antennas within the box itself. Otherwise it is the same kind of Wi-Fi access node that 31
you might see or might have in Starbuck’s or an Apple Computer Store. It is a three-watt unit. 32
If you are familiar with cellular technology you know that a major cell site, Americo cell site is 33
quite a bit more in terms of frequency. 34
35
So I provided to you a handout as I mentioned. This handout this evening shows the capacity of 36
or the minutes of use, or the usage of this particular cell site at 488 University over the last year 37
from January 2010 up to January 2011. You can see that the capacity, the minutes of use, are 38
increasing by about 300 percent a year. The AT&T engineers figure that somewhere in the 39
middle of 2012 this site will reach its capacity. For an engineer for a site to reach its capacity is 40
the death star. That means that the network is not working for all those reasons I just told you. 41
One way of offloading the capacity, as I mentioned, is to use a Wi-Fi. Any of these phones, if 42
you are using them, you can be using data or voice on the 3G network, on the regular cellular 43
network. If you go into a Wi-Fi area the phone switches over to Wi-Fi and it starts running the 44
data capacity on the Wi-Fi network. So by alleviating the data drain on University Avenue this 45
allows the 488 University site to continue to cover the square mile that it covers with voice and 46
Page 8
data in the capacity that it is supposed to. This is how the two technologies are related. This is 1
2.4, 5.8 Wi-Fi, the same sort of thing you have in your house, as I mentioned. 2
3
So the AT&T engineers decided this would be a very low impact way of solving the capacity 4
problem without building a new site. They looked, where can we put these antennas that would 5
make the most sense. If you have been to University Avenue and looked up at the expanse that 6
we are trying to cover, and there is a graphic in my letter, which shows you the area that we are 7
trying to cover along University Avenue. If you look up there is one place that has a beautiful 8
panoramic view of University Avenue and it is this balcony on 488 University Avenue. It is high 9
enough and it looks north and south, and provides the adequate coverage. It also happens to 10
have the AT&T cell site there and the high-speed fiber optic network going to that location. 11
AT&T did look around, provided you an alternatives analysis with 12 different locations. I will 12
summarize by saying most of them are too far off of University Avenue, or are not high enough, 13
or do not have the architectural feature that allows us to hide the antennas as we are doing in this 14
particular location so that they are absolutely invisible. I am happy to go through all 12 of the 15
alternatives with you if you wish, but that was the conclusion of the review that was done. 16
17
On the building itself they looked at putting the antennas on the roof where the antennas are 18
currently located. If you have been on the roof, which I have, you look down at University 19
Avenue and there is this beautiful Spanish tile awning, which will block the signal. This is line 20
of sight technology because these are very low wattage and it is like a flashlight, you have to 21
have direct line of sight technology in order to reach the cell phone. So it would block the 22
signal. So we couldn’t put the antennas on the roof. The original proposal was to put the 23
antennas underneath the balcony in order to reach the street. The Planning Department working 24
with us thought that that was too much of a visual effect on this historic structure, so 25
recommended that the antennas go right inside the railing. If you look at the plans there is a 26
small strut that is going from the inside corner of the railing, this will be mounted onto that, and 27
then this to give you an idea of how low the wattage is on this. It is fed by an Ethernet cable, a 28
CAT 5 cable. The CAT 5 cable goes up through the railing and up and underneath the roof, and 29
up to a radio on the – it is not really a radio it is an access point on the roof. It is just a small box 30
about the size of a footlocker that will run this equipment. So this is a very elegant, low 31
powered, small solution to the capacity problem that AT&T is suffering with this particular site. 32
Low impact to the community. We have covered the gap. We have covered the alternatives, and 33
I could go through those more individually if you wish. The details of the design I have 34
reviewed with you. 35
36
So I will quickly go onto the federal law with the few minutes remaining to me, and tell you as 37
you know that you cannot regulate based on the effects of radio frequency emissions. Is that the 38
end of my time or do I have 30 seconds? 39
40
Chair Tuma: You will have three minutes, as you indicated, at the end. If you have a thought or 41
two you want to wrap up now that is fine, but you will have three minutes after the public 42
speaks. 43
44
Mr. Albritton: I just want to quickly answer that question of what least intrusive means. Least 45
intrusive means based on the values expressed in your code and general plan. We found the least 46
Page 9
intrusive site based on the requirements, the preference for collocation, the preferences for 1
antennas located on existing structures, but it is based on the values expressed in your code. So 2
it doesn’t relate to some of the other generic concepts of least intrusive. I can touch on that in 3
my follow up. Thank you very much, be happy to answer any questions you have subsequently. 4
5
Chair Tuma: Thank you. Commissioner Keller has one question for our last speaker. 6
7
Commissioner Keller: I understood from your discussion that there is a cell site at 488 8
University Avenue that sort of covers an area around it as far away as Menlo Park. 9
10
Mr. Albritton: Yes. Each cell site covers about half a mile. The sites in Menlo Park would also 11
cover half a mile, and then you have a crossover in between. 12
13
Commissioner Keller: So what I am wondering is how define the coverage gap as being from 14
Waverley to Webster versus the coverage gap being from say High to Cowper. How do you 15
define where the coverage gap is? I would assume that there is not a disproportional amount of 16
people using Wi-Fi east of Waverley in comparison to the people who are using it at the 17
University Coffee Café across from Waverley or any of the other restaurants on the other side of 18
Waverley. So I am wondering why Webster, because I don’t know of too many restaurants in 19
that area. So perhaps you can elucidate this. 20
21
Mr. Albritton: Sure. Capacity gaps are different than coverage gaps. Capacity gaps we 22
generally show by the, as I mentioned, problems with accessibility and dropped calls, and we 23
have had customer complaints with respect to the service. We have 160 cards of people who say 24
they want better service. Then what we are trying to do is show a significant gap that we are 25
going to fill. 26
27
So the AT&T engineers looking at the north sector felt that offloading the phones that are closest 28
to this site in the north sector is going to have their biggest bang for their buck for the capacity 29
issue. Then we projected what we would be able to cover with the Wi-Fi and that essentially is 30
where we are getting the marriage of the gap that we want to fill with the gap that we identify as 31
our coverage gap. 32
33
The problem with showing it graphically is that coverage gaps just don’t show up graphically. 34
You have a cell site that has calls and data coming from all sorts of sources but they are not 35
identified – the switch can’t identify exactly where they are in terms of where your capacity gap 36
is. 37
38
Commissioner Keller: I understand. 39
40
Mr. Albritton: So this is the best thinking of the AT&T RF engineers in trying to resolve this 41
capacity problem. That is where we came up with the location, and that came from the 42
engineers, the actual location. So your point is well taken. The actually propagation from the 43
Wi-Fi is not going to end in those nice little lines. 44
45
Page 10
Commissioner Keller: So just quickly, if you picked the tall building at the corner of Ramona 1
and University for example. 2
3
Mr. Albritton: Is that 428 University? Is that right? 4
5
Commissioner Keller: No, I am talking about Ramona and University where there is a Spanish 6
style building further that is outside of this region, but it still covers a significant part of 7
University Avenue probably with more foot traffic than the part that is east of Waverley. To 8
what extent would that off load your network or not? I am sort of trying to understand what is 9
special about east of Waverley versus west of Waverley. 10
11
Mr. Albritton: Well, other than what I have described to you regarding the location of the north-12
facing sectors that AT&T based its information on, and the fact that they need to have adequate 13
height. Do you know the address of what we are talking about? I don’t know the exact height of 14
the building that you are talking about, but something that provides the appropriate height. The 15
other thing that we have noted in our alternatives analysis is there is high-speed fiber optic 16
coming, there is quite a bit of fiber optic coming into the location where the current AT&T 17
facility is located and that was a factor that also encouraged them to use this particular facility. I 18
apologize, I don’ know exactly the building you are talking about. 19
20
Commissioner Keller: Well, I appreciate that but perhaps some of the public may wish to weigh 21
in, but the building I am identifying is actually a few doors down from the Palo Alto Internet 22
Exchange, which at one point in time, 15 years ago, had a quarter of the world’s internet traffic 23
running through it. So I am sure there is plenty of fiber optic running to there. 24
25
Mr. Albritton: Fair enough. There is an AT&T site at the Westin across the train tracks. There 26
are the other two sites to the northeast and northwest in Menlo Park. So the proximity to the 27
Westin may be a reason. They did look at potentially putting – we have a reference to the 28
antennas in Westin here but those are too far away in order to provide the line of sight 29
technology of where we want to go. 30
31
Commissioner Keller: I appreciate that. I think I understand your description and maybe we 32
should go on. Thank you. 33
34
Mr. Albritton: Okay, appreciate your input. The last point on least intrusive means I have to say 35
is that the federal court says that you don’t have to show that this is the only site where 36
something can go, but that it is no less intrusive – less intrusive based on the values expressed in 37
the code than any other location that would be selected. Their example was that you don’t have 38
to go to every telephone pole and explain why each pole wouldn’t work if one pole is going to be 39
no less intrusive than any other. I hope that partly answers your question. 40
41
Commissioner Keller: Thank you. 42
43
Chair Tuma: I have a question for you before you leave, which is a procedural one. I was given 44
an additional card that was marked ‘applicant’ that has the name Bill Hammett on it. Is that 45
someone who is with your group, and is that person going to speak? 46
Page 11
1
Mr. Albritton: He is, and Bill Hammett is the Radio Frequency Engineer who prepared the RF 2
Emission Reports, and supplement report that you have in your packet. Bill has written the book 3
on this topic and is extremely well experienced in the area. As I mentioned, he is the one who 4
explains that the EMF on the balcony will be 200 times below the federal standard. He can tell 5
you all about how the standard was created and everything there is about the safety of the 6
facility. I don’t know if he is speaking. I think he put his card in there in case you have 7
questions for him. 8
9
Chair Tuma: Thanks. We will now go to the public. Just to remind members of the public you 10
have three minutes. When the yellow light comes on that means you are down to one. Our first 11
speaker will be TJ Loebbaka followed Farah Ansari. 12
13
Mr. TJ Loebbaka, Palo Alto: Just to address the committee, I actually came to speak about the 14
medical condition that my wife has. She has a medical neurostimulator implanted in her brain, 15
and she is going to potentially be getting about four more of those. So I have a keen interest in 16
finding out what type of electromagnetic interference is in my building. I actually live at 488 17
University. That is the original reason why I came to speak with you tonight. 18
19
But in lieu of their presentation it gave me a couple of additional talking points, which I think I 20
would like to address. In the documents included in the letters sent to the Planning Commission 21
one of the things the folks here at AT&T said that the new AT&T antenna would not be 22
accessible to the general public, and so no mitigation measures are necessary to comply with the 23
FCC Public Exposure Guidelines, which I think were the guidelines that were established in 24
1996. Correct me if I am wrong. So it says that they don’t have to comply with those guidelines 25
because it isn’t in the public spectrum, if I am not mistaken. So doesn’t that throw out the 1996 26
guidelines? So to me it doesn’t make sense that they could stand behind that and say well, we 27
have to comply with these guidelines and City of Palo Alto you have to allow us to do this 28
because of the 1996 guidelines. It says that they are far above and beyond, that they are in a 29
spectrum that isn’t monitored, isn’t controlled by the FCC. Interesting. 30
31
One of the other things that I also noted about this particular installation is they say it is supposed 32
to somehow solve all the future problems of the data connectivity here in Palo Alto. It is the end 33
all, be all. It is the savior of all data here in Palo Alto and beyond as they basically put it. It 34
seems that it would only really benefit their customers. I think this is to fix the iPhone 4 35
connectivity problems where you can use the camera to have a video conference with somebody 36
else on another iPhone 4. It seems to be that it doesn’t really solve any other gaps in 37
connectivity unless it is on their network. It seems to be an AT&T specific problem. 38
39
Additionally, I don’t think they care about the effects of the people living in that building like my 40
wife. If my wife comes in contact with any of that equipment she could actually have a seizure 41
or a brain hemorrhage based upon the stimulator that is implanted in her head. She can’t even 42
use a cell phone because it makes her have slurred speech. So I have a lot of concerns about the 43
health and well-being of my wife. I brought the guidelines and warnings from the Medtronic 44
website specifically about my wife’s condition and the thing that is implanted in her head if the 45
committee would like to take a look at it and see that there are true medical challenges with these 46
Page 12
types of installations and antennas, specifically at 488 University. We gravely have concerns 1
about this. 2
3
In addition to that, thank you. 4
5
Chair Tuma: You can go ahead and wrap up if you have one thought. 6
7
Mr. Loebbaka: I was going to say there are a lot of things I can say. There are a lot of roads we 8
can go down. It is interesting that they brought the RF technician or RF engineer when this 9
strictly a network issue. What does an RF guy who deals with antennas and installations and 10
stuff have to do with network? Why didn’t they bring us a network engineer to talk about the 11
capacity problems and how it would benefit their capacity? Why did they bring a guy 12
specifically dealing with RF technology and antennas? 13
14
Chair Tuma: Thank you. Farah Ansari followed by Michelle Kraus. 15
16
Ms. Farah Ansari, Palo Alto: Hi. Basically I am up here to speak about my health concerns as 17
well. I recently moved here from Los Angeles. I love the place. I love everything, the people, 18
everything. If I had known that there was a cell tower, and also if there were going to be 19
proposed Wi-Fi installations on my floor I probably would not have leased an apartment. 20
21
At the age of 13 I had a partially malignant tumor. At the age of 22 I also had cystic fluid in my 22
throat that had to be aspirated three times. So for me the health concern, whether or not anything 23
there is evidence, or anything that is a concern for me. That is basically it. Thanks. 24
25
Chair Tuma: Thank you. Michelle Kraus followed by Jeffrey Jones. 26
27
Ms. Michelle Kraus, Palo Alto: Hi. Thank you for taking the time. You know I came here for a 28
dream too that technology would make life better and not harm people. All of this is a bit 29
confusing because the future of Palo Alto is in-fill development. I look to the Council and the 30
Commission to be more of a leadership role going forward. We are going to have these 31
challenges but it is completely audacious that a commercial entity has been approved and 32
authorized. It is not the landlord’s problem. He is just in the business of making money. He is 33
operating under your guidelines. This may fall out of the purview of 1996 FCC Guidelines that 34
many of my buddies worked on. It is 15 years old. These technologies didn’t even exist. I have 35
a PhD from Carnegie Mellon. I am a long-term friend of Arthur Keller’s who is a PhD from 36
Stanford. It is completely audacious that when I go to Whole Foods I have to get into hand-to-37
hand combat to get a paper bag. Palo Alto has been a leader in clean technologies. Please come 38
forward be a leader for us here. 39
40
You know, least obtrusive is offensive. I will look out my window and I will see this unit. 41
Maybe the people from the street won’t see it, but I will. I live there. It is my sanctuary. I will 42
see this unit over and over and over again. 43
44
Now, one more time, we do not need to be a foil for the PR loss of AT&T’s lines and iPhone, 45
and smart phone arena. There is a little smelliness of the timing. One more time, it is not the 46
Page 13
building owner’s fault. His job is to make money. Frankly, if all the promises come true, 1
because there is more there that the others will talk about this could be a major notch in the 2
backbone of the new cellular intranet backbone for this area. He won’t have to deal with tenants, 3
they are pesky anyway. Please, stand up for rental residents. Do not make this class warfare. 4
This is the future of Palo Alto. I beg you to take a moment, step back, and think about how this 5
sounds and how this has been handled. It is not the Staff, but we need leadership. I ask you to 6
stand up and set standards and take a major role going forward. Otherwise, all is lost. Why am I 7
here? By the way, this is the second implementation. The first is in Times Square. Are we 8
Times Square? There are no residents that live in Times Square. Thank you. 9
10
Chair Tuma: Thank you. Jeffrey Jones followed by Mary Riordan. 11
12
Mr. Jeffrey Jones, Palo Alto: I want to thank the Planning Commission and Staff for their time 13
this evening. I currently live on the sixth floor. I currently live in Palo Alto. I currently live on 14
University Avenue. I am directly impacted by this project. I live right outside where it would 15
be. In order to install, upgrade, and more importantly maintain this project they are going to 16
have to use my apartment. So I am directly impacted by that. 17
18
I am stunned that this proposal seems to give permission to our friends at AT&T to enter our 19
homes three, five, eight, some unknown times per year to install, upgrade, maintain this device. 20
Additionally, I am further shocked that this entry into our apartments, and mine in particular, is 21
to support a commercial service that doesn’t benefit any of the residents in the building. 22
23
Other than their word that the equipment and service are reliable, AT&T has offered up no proof 24
of the reliability or maintenance, and this is after questioning Staff and looking at the project 25
requirements. As an iPhone user I have direct experience every day of AT&T’s lousy reliability. 26
So given this experience I would like to see a bit of proof. 27
28
Now, final words. Given the impact of this project on us, the residents of the President, and the 29
lack of consideration on the impact of us, I would like to ask the Commission for 90 days to at 30
our own cost have our experts look at, our own engineers review the plans and scope of this 31
project, especially around the capacity gap that was talked about, especially around the 32
reasonableness of entry and service and maintenance. I want to thank you all for your time this 33
evening. 34
35
Chair Tuma: Thank you. Mary Riordan followed by Haim Kedar. 36
37
Ms. Mary Riordan, Palo Alto: Hi, good evening. Commissioner Keller, I appreciate your 38
question regarding least intrusive means. I have lived in the President since 2004. It is my 39
home. I love it there. Where I live is on the end of that balcony. Like Michelle I am going to be 40
looking at this every day. To me least intrusive, it is hard when I hear from a lawyer that you 41
have federal guidelines and then there are more generic terms. Those generic terms are my life. 42
Those people are going to be outside my window installing this, maintaining this. We asked two 43
days ago what this would entail. We were told one to two days installation. Okay, do we know 44
about maintenance? We were told three days per year. The reality is there is only one device 45
that has been installed in the US in Times Square, and it was installed in November. So there is 46
Page 14
no meaningful history with this device to tell us yes, there is only going to be someone outside 1
your apartment three times a year to service this. 2
3
The other issue I have is I already have a wireless connection. Mr. Hammett, when I spoke with 4
him at the meeting the other night, informed me that it is quite possible that this antenna will 5
interrupt the wireless connection that I already use. So I am wondering how is it okay that a 6
corporation can come in, invade my privacy, and interrupt my own life and my own means that I 7
am using to get by at this point. I am just wondering how the means of a company are exceeding 8
those of regular individuals. I live in generic terms. Thank you. 9
10
Chair Tuma: Thank you. Haim Kedar followed by Iqbal Serang. 11
12
Mr. Haim Kedar, Palo Alto: Hi. I came to Palo Alto from Israel in 1995 and lived here ever 13
since. Before me, Mr. Rubenstein, an Israeli law professor, and later served as a Cabinet 14
Member for several Israeli Administrations visited here and extolled the virtues of Palo Alto, 15
crowning it the model city to the world. However today there are better cities in the union, cities 16
that serve and protect the residents by imposing common sense restrictions to the location of 17
controversial cell towers, and the associated harmful electromagnetic radiation, EMR. As of 18
today, this common sense is absent in the City of Palo Alto. To the tenants bewilderment this 19
tower turned into an encroaching project. Now we are asked to increase the injury by allowing 20
closer and more encompassing antennas radiating just outside of our windows. An added insult 21
to the greater injury is the fact that this antenna is to be mounted on our private and narrow 22
balcony, accessible only through our homes. Did I say homes? These studio units are mere 23
bedrooms, private to us. Now we are required to grant access to perfect strangers in no time or 24
right of refusal so that a corporation, which we have no part of, can make money selling its 25
services to the public at large. So what is next we ponder? What is the scope of this project? 26
We do not know. Why is it that Google provided free Wi-Fi to Mountain View and asked for 27
private host only, and only when public light posts were not available? All of Castro Avenue is 28
serviced by six lampposts. It is very similar to University Avenue. So before we even 29
contemplate moving forward we require more time to research this subject, especially alternative 30
and successful implementations. 31
32
I opened my piece on historical notes, so let me close this on an historical note from better times 33
when America had a can do attitude, not can do to you attitude. Houston, Tranquility Base here. 34
The Eagle has landed. So if we landed on the moon two scores ago then you must assuredly find 35
a better solution to this problem. Commission Members, make Palo Alto great again. Make us 36
proud. Thank you. 37
38
Chair Tuma: Thank you. Iqbal Serang followed by Christopher Fowler. 39
40
Mr. Iqbal Serang, Palo Alto: Good evening. I also live at 488 University. In fact, I conduct my 41
business, I am an architect, and I have an office on the roof of this building. Low and behold I 42
was not considered important enough to be notified by the applicant because I am not facing 43
University Avenue. I find that quite arbitrary and perhaps consequential as well. I live there 44
with my family and a seven-year-old girl on the fifth floor. I am concern. 45
46
Page 15
I am concerned with all sorts of bombardment of electronic waves and so on that we have. The 1
fact is that this is an amendment to an existing Conditional Permit, which we are not aware of 2
exactly what those conditions are. Being in that office at least twice a week there are 3
maintenance crews coming up there to fix things or to change things and replace things. Hardly 4
anybody knows what actually goes on in that respect, but easily twice a week there are people 5
coming up there to do things. Since this is an addendum to this existing Conditional Permit the 6
permit is a cell tower. The cell tower has a sign, which I borrowed from the roof that basically 7
says, notice: beyond this point you are entering an area where RF emissions may exceed the 8
FCC general population exposure limits. This is what we have to deal with every day because 9
the roof has a roof garden for our usage. Every individual living there has to think twice about 10
going up there and using this space. Again, this notification is only for half the building. I find 11
that as flaw. I find that a problem in how this has been approached. 12
13
I am looking to you the Commissioners again as mentioned earlier that we need leadership. I 14
don’t believe this type of product has been put on residential towers or residential homes ever 15
before. That is why the question comes up, how come the cell tower exists on a residential 16
building? There is a 15-story building kitty-corner from us. There are supposedly 12 different 17
locations they checked and this is supposedly the perfect place. If this is the perfect place 18
because of this height there are two other buildings across from us, which are commercial 19
buildings. We would appreciate if that would be followed through a little bit as well. We just 20
want more time to address this. Thank you very much. 21
22
Chair Tuma: Thank you. I noticed that Mr. Fowler is a member of the applicant’s team. So we 23
will continue and our next speaker is Stacey Lynne Harger followed by Sheldon Dean. 24
25
Ms. Stacey Lynne Harger, Palo Alto: Hi. Thank you for having this forum. I too live at 488 26
University Avenue. As far as the Wi-Fi you are speaking about two people. Three? I don’t 27
know the exact number, but still one individual is just as important as the group. Without an 28
individual you would not have a group. 29
30
These are areas of living that are relatively small compared to the average place that somebody 31
lives, hence, the feeling of invasion of privacy that will happen. Your bathroom is right next to 32
the front door. The square footage on one of those, and I know that others, is 325 square feet, as 33
large as 2,500 square feet. Again, our homes are a place of sanctuary and privacy intentionally 34
for us to be there so that we have refuge from the rest of the world to recoup, to rest, to 35
recuperate. To have something that symbolizes public access for one does affect you physically, 36
mentally, and if you don’t mind, spiritually. 37
38
We are not here to try and make AT&T fail. We want the best for their workers as well. 39
Everybody wants a job. We all have families to support. So this is not about trying to hurt other 40
people. So we wish that we would also be considered in that in our day-to-day living. We also 41
are not disputing that there is a huge use in cell phone use and technologies coming up. In the 42
first half we spent lots of time, or time on your speech. We don’t disagree with that. That is not 43
the point. We are also at a cutting edge, now that technology has become more mainstream, of 44
now seeing where does that fit with the human being, and where do we cross the line on crossing 45
the line of having technology along with the human being of living. That is where Palo Alto is 46
Page 16
now making a cutting edge stand to the world. We are one of the most popular cities in the 1
world. How our decisions are based on the human being factor will also be looked at by many 2
other people. So I do hope at the very least that there is more time for this to be discussed not 3
just for the current residents but those in the future we are establishing something important for 4
them as well. Thank you. 5
6
Chair Tuma: Thank you. Sheldon Dean followed by Leon Branchman. 7
8
Mr. Sheldon Dean, Palo Alto: Good evening. I too thank you for this opportunity to attempt to 9
do something about what I just recently learned about in the little time that I have had since this 10
has come to my attention. I have learned a lot. I am a personal trainer, health professional. I 11
know a lot about the human body. I am not as tech savvy as the AT&T representatives here, but 12
in the course of the last two days what I have learned is fairly alarming. As soon as I learned that 13
of course that it was going to literally and immediately impact me and several people who live 14
on the sixth floor. 15
16
There are no degrees of separation at the Hotel President. These are shoebox apartments that we 17
paid premium prices for because we all love it there. It is an historical landmark. It is a beautiful 18
view. I lived at the Hotel President I think over ten years. I am not here to point fingers at Chris. 19
If I owned that building, and if I was not privy to what I have learned within the last two days, I 20
would take a check from AT&T too, gladly. If I genuinely believed that there was no harm to 21
come of it, and it didn’t alter in any way adulterate the aesthetic of the President, which we again 22
we love. I decided some time ago, before ten years, before I moved there, I said I am never 23
taking another apartment. I can ill afford a house, but I saw that President with its characteristic 24
and Spanish inflection and I just immediately fell in love with it now ten years. I would hate to 25
leave it as a result of this. These things are going directly out my window where I sit for hours a 26
day. I have a home office. Jeffrey does, several people do. Literally they are spending all day in 27
that building with nothing separating them from this device, which we really honestly know very 28
little about, other than a pane of glass, which during the summer months we open. They talk 29
about maybe four feet that’s fine. Let’s talk about degrees of separation and what is really 30
acceptable. Palo Alto being the hub. The radio was invented not too far away from here. I 31
could throw a stone where this historic landmark is. This is Wi-Fi technology that honestly we 32
really don’t know enough about. Every cell phone provider is trying to upstage each other with 33
amplification and coverage. Ms. Clunie paints an idyllic picture about this utopian society where 34
everybody has access children are born with cell phones now. What I have learned, and 35
unfortunately I don’t have the time to go into all the research that I have learned, now I can 36
provide that if any of you are interested in it, and this is not tin hat conspiracy theory. It was just 37
in the Los Angeles Times this week evidence, sound evidence, inducing sincere concerns about 38
just cell phones themselves and what comparatively less microwave energy emit from them and 39
excitotoxicity within the brain. She is with child. I invite here to really think honestly and hard 40
as to whether or not she would want to live in one of these apartments. Right? 41
42
I talked with one of these techs. I was in Japan on a meditation retreat. I came back, a crane had 43
installed heavy equipment directly above my building. Iqbal informed me, hey you missed the 44
scene. They just put huge machines atop your apartment building. I investigated that. I talked 45
with a tech. One says it is nothing more than a hairdryer. Then they augment it with additional 46
Page 17
equipment, right? I felt fairly comfortable that it was safe. I talked to another tech and he 1
confesses off the record he said, I was on one of these sites and the thing cycled, I got second-2
degree burns. I am looking for another job. Okay? So I beg you please, this woman induced 3
what I perceived as a gentle threat in that federal law applies here. I imagine that may concern 4
you all, but if there is any way with which – I don’t even want more time to assess this. The fact 5
remains that it does not belong on a residential structure. Thank you. 6
7
Chair Tuma: Thank you. Leon Branchman followed by Angela Rickford. 8
9
Mr. Leon Branchman, Joint Ventures Silicon Valley: My name is Leon Beachman, and I am 10
with Joint Ventures Silicon Valley. I am here to speak in favor of your Staff’s approval of the 11
application. Joint Ventures Silicon Valley is working with cities and communities, community 12
organizations to try to improve the infrastructure for wireless here in the region. In fact, about 13
five years ago Joint Venture along with some other community organizations took a look at the 14
infrastructure here in Silicon Valley, and the conclusion was that we did not have a world-class 15
infrastructure to support our wireless calls and use of the internet. So we have been working 16
with cities like Palo Alto and San Jose to come up with solutions to best implement wireless 17
technology here. There are a lot of regulations within the cities that we believe inhibit the 18
deployment of the technology. So we would like to work with the cities to see what we can 19
come up with to facilitate the deployment of the technology. 20
21
In addition to that what we would like to do is work with communities to come up with ways to 22
make sure the community understands what is going on with the deployment of the technology. 23
We believe that in working with the community if we spend more time explaining what the 24
technology is, having them understand up front what the technology is about, maybe that would 25
facilitate a lot of the deployment and allay some of their concerns. 26
27
Another thing we would like to do is to hopefully create a more balanced conversation about the 28
technology itself. Often what happens in meetings like this is you have a group of people who 29
will come out who legitimately express their concerns, but there are a lot of people who are not 30
here who also would like to have better coverage as far as their communications are concerned. 31
What we would like to do is to have that balanced conversation so the decisions that you make 32
really take advantage of everyone’s input around this particular issue. 33
34
In addition to that what we are letting people know, some of you may know that the President 35
was here last week. A lot of people were wondering why the President was here. I have it from 36
the source that he was here to figure out why isn’t wireless coverage better in Palo Alto than it is. 37
What that is really pointing towards I believe is the fact that the President has come out and said 38
that our country having a first class wireless infrastructure is key to the strategic competitiveness 39
of this country. What he knows for a fact is for instance there are 2.1 billion phones in Israel 40
alone, 2.1 billion. As more of those folks embrace the technology it will become a competitive 41
advantage for them. So what we are doing is working to make sure that this region along with 42
the rest of the country really does the right thing in building this infrastructure so we can 43
compete moving forward with other people in the rest of the world, as this kind of infrastructure 44
will be the infrastructure for the 21st century. Thank you very much. 45
46
Page 18
Chair Tuma: Thank you. Angela Rickford followed by our last member of the public that I have 1
a card for, Herb Borock. 2
3
Ms. Angela E. Rickford, Palo Alto: Good evening. Thank you for allowing me to voice my 4
opinion here this evening. I would like to make four points, please. My husband and I are long-5
standing residents of Palo Alto. We have lived here for decades, and like Commissioner Keller I 6
also hold a PhD from Stanford. I have a vested interest therefore in upholding the highest 7
standards in our environment in terms of health, property values, service to residents, aesthetics, 8
and so on. A significant number of Palo Alto residents and Stanford residents, faculty, staff, 9
students would benefit directly from the AT&T installation. The incidents of dropped calls on 10
University Avenue and around is absolutely untenable. The prospect of improvement in this 11
regard would be more than welcome by us all. Thirdly, cell phone communication that is quick, 12
effective, reliable, and sustainable is essential for the safety and well being of our residents in 13
general, but especially in times of emergencies such as earthquakes and other natural and 14
national disasters. Witness for example the effectiveness of cell phone use in saving lives in the 15
current New Zealand earthquake as trapped individuals are able to indicate their location and 16
condition, and communicate on an ongoing basis with people above ground who could actually 17
give hope to those who are trapped under buildings and so on. 18
19
So I would like to urge the Commission to separate fact from fiction in approaching this issue, 20
and to approach it scientifically. I urge you, the entire Commission, to allow the innovation that 21
AT&T has proposed. Not to do so would be a retrograde step I think in an otherwise 22
technologically advanced community. Thank you. 23
24
Chair Tuma: Thank you. Our last speaker, Herb Borock. 25
26
Mr. Herb Borock, Palo Alto: Good evening Chair Tuma and Commissioners. Commissioner 27
Keller was referring to a building at Ramona and University. I believe the address was 250 28
University. Like other commercial properties they might want to charge a higher rent for this 29
facility than the residential property of 488 University. That may be the real reason why AT&T 30
wants to use this building. However, under the law it is not how much expense is going to be 31
charged or incurred by the applicant but rather what is least intrusive. It seems to me that 32
placing this facility on a commercial property or in the public right-of-way would be least 33
intrusive in terms of the Comprehensive Plan. 34
35
There is also the issue of the Civil Code Sections 1953 and 1954 regarding entry to dwelling 36
units. That is there are certain rights that tenants have in dwelling units in terms of access to 37
property and the amount of notice to receive. In Section 1953 of the Civil Code declares it as a 38
matter of public policy that you cannot void those rights by signing a lease that says just the 39
opposite. So those are very strong, but that is just referring to dwelling units. You don’t have 40
that same kind of restriction for the landlord or AT&T entering a commercial property. For that 41
reason, and also because of the substantial evidence you have about those concerns about entry 42
on the last page attached to your Staff Report from 13 residents I believe that that provides the 43
substantial evidence required to indicate that this project is not exempt from the California 44
Environment Quality Act until that concern of entry into these dwelling units is appropriately 45
mitigated, because of that significant effect. Thank you. 46
Page 19
1
Chair Tuma: Thank you. With that we will close the public hearing. Sorry, the applicant has up 2
to three minutes for any closing comments that they wanted to make. 3
4
Mr. Albritton: Thank you very much. Again, appreciate the opportunity to appear before you 5
tonight. I do want to emphasize again that you are looking at the least intrusive means as they 6
apply to your code. So you are looking at the typical land use issues that you look at of noise, of 7
odor, of visual impact. I wish all the sites I had to deal with were like this one. This is 8
extremely low impact with this very small antenna being hidden inside of a balcony on either 9
side. 10
11
The access issue that has come up is really a landlord-tenant issue. It is not a zoning issue that 12
you would make a decision on, and is not affecting the general public welfare in terms of your 13
findings. 14
15
I want to emphasize that you have to have substantial evidence to deny a wireless facility. This 16
is different than your normal situation in that it can’t just be general objections it has to be 17
specific evidence regarding those issues I talked about like view, and that sort of thing. 18
19
I do have Bill Hammett here. I want leave him a few minutes to answer some of your questions 20
about RF. There is also something called the shot clock that the FCC came out with a year ago 21
that requires you to make a decision with 150 days of the application, and that is because of the 22
delays that have occurred in these applications. The leadership was mentioned, President Obama 23
and his desire to have wireless infrastructure. If you want to exercise leadership it is really to put 24
in this kind of infrastructure. There are always adjacent neighbors that have concerns about 25
infrastructure just like a streetlight that is in somebody’s bedroom window but benefits the entire 26
sidewalk or community. We encourage you to make a decision benefiting the entire community. 27
Bill will speak regarding RF and I think I have covered the issues that I was going to cover, and 28
we obviously would answer any further questions you have particularly about the specific 29
alternatives. If you have any questions about any of those particular buildings, we have put 30
answers in our alternatives analysis but would like to answer your questions regarding those. 31
Bill, did you want to say something about RF emissions? 32
33
Mr. Bill Hammett, AT&T: Yes, please. Good evening. I am the author of the several reports 34
you have in your packet. I wish I had a full three minutes to address some of the issues that have 35
been raised. Let me just say a couple of quick points. I am happy to talk about the medical 36
devices or the standards or any of those other factors. 37
38
We took measurements when we were onsite on Tuesday or Monday night with a number of the 39
neighbors. Went up to the roof, took the measurements, the notice sign that the fellow held up 40
that is for workers who are all the way up on top who might be painting in front of the antennas. 41
They need to be notified. The levels on the roof are hundreds of times below the limit. 42
43
This facility is like putting a wireless router like you have in your home on the edge of the 44
balcony. There is no question that it will comply with the federal standards. That is a 45
guaranteed fact. I am happy to answer any other questions. Thank you. 46
Page 20
1
Chair Tuma: Okay, with that we will close the public hearing and come back to the Commission 2
for questions and comments. Commissioner Keller. 3
4
Commissioner Keller: Thank you. I understand that there are several people who mentioned 5
that they live on the top floor of the building and have apartments adjacent to the balcony. I am 6
wondering if one of those persons would like to answers the questions on behalf of the rest of 7
you, because I don’t think it is necessary to ask all of you. 8
9
Chair Tuma: If you could identify yourselves for the record. 10
11
Ms. Kraus: I am Michelle Kraus, Dr. Kraus. 12
13
Mr. Jones: Hi, Jeffrey Jones. 14
15
Chair Tuma: Thank you. 16
17
Commissioner Keller: Thank you. For the record my PhD is in Computer Science not Electrical 18
Engineering. That is alright, thank you. My question is is the balcony that the AT&T 19
communications facility is proposed for is that accessible to – can any of you in that group or 20
some of you in that group of the apartments that are adjacent to that balcony can you enter that 21
balcony from your apartment? 22
23
Mr. Jones: Several of us can the balcony. 24
25
Commissioner Keller: Thank you. I was trying to go through Staff to see if I could actually visit 26
that balcony and place that, but I don’t think that was arranged through Staff. 27
28
Mr. Jones: Happy to have you over. 29
30
Commissioner Keller: I think part of the problem is there is a time delay in this involved. 31
32
Ms. Kraus: I also believe you have been in that apartment that I had originally that Jeffrey lives 33
in, and you have seen the access through the French doors, in full disclosure. 34
35
Commissioner Keller: Yes. I did that prior to this thing being an issue. What I am wondering is 36
in terms of the placement of this communications device with respect to that balcony. What I am 37
wondering is is it in such a place based on that balcony where you could place your hand near 38
that device. Is that device accessible from your hand? Could you place your hand around it? 39
Could you place your hand around the railing? 40
41
Mr. Jones: Absolutely. 42
43
Commissioner Keller: So what I am wondering is to the extent that this is placed on some sort of 44
beam in the corner I presume or a post. 45
46
Page 21
Mr. Jones: Yes. 1
2
Commissioner Keller: What I am wondering is to what extent could a part of your body, you, or 3
maybe some kid or whatever have access to this so that that kid or adult was placing a part of 4
their body within the exterior beam of the wireless signal where it is directed. 5
6
Ms. Kraus: Correct. 7
8
Mr. Jones: Easily. 9
10
Ms. Kraus: Easily. 11
12
Mr. Jones: My balcony is two feet deep. 13
14
Ms. Kraus: I had chairs out there when I first moved in. 15
16
Commissioner Keller: Well, what I am wondering is on the corner beam, there is a corner post 17
there where I assume this is being proposed for. What I am wondering is can you put your hand 18
around that corner post? 19
20
Ms. Kraus: Yes, it is open. 21
22
Mr. Jones: Absolutely, yes. 23
24
Commissioner Keller: So the issue is, and may I ask a question of the City Attorney? Are the 25
residents of these apartments considered members of the public for the purposes of the FCC 26
guidelines for access in terms of the radio frequency emissions limits? Are the apartments of 27
these residents considered members of the public or are they considered occupational? Which 28
limit are they under? 29
30
Ms. Tronquet: I think that is a better question for the engineer. I am not familiar with what your 31
question is. 32
33
Commissioner Keller: I am asking a legal…. 34
35
Ms. Tronquet: The FCC guidelines are set for the public. 36
37
Commissioner Keller: Yes, so I presume that or my interpretation is that they are employees of 38
AT&T, and therefore they would be under the public emission exposure limitations as opposed 39
to the occupational exposure limitation. Is that correct? 40
41
Ms. Tronquet: Sure. 42
43
Commissioner Keller: Sure, okay great. So I am not sure how much more time I have. So I 44
may ask you some more questions later but that is enough for now. Thank you. 45
46
Page 22
Let me say a couple of things. Firstly, it is certainly useful and important to have appropriate 1
wireless communication within Palo Alto. At least from my having seen the particular balcony 2
in question in prior instances and based on the information from the residences I am concerned 3
about whether the residences actually have exposure to radio frequency emissions from these 4
devices that are in excess of the legal limit in terms of their access to the balcony, and in terms of 5
their access to particularly being able to place their hands around that balcony. The application 6
does not provide any restrictions on the use of that balcony. To me that calls into question the 7
issue of whether the particular implementation is actually within radio frequency exclusions. 8
Thank you. 9
10
Chair Tuma: Commissioners? Commissioner Garber. 11
12
Commissioner Garber: First let me just ask Staff when the public notifications went out for this 13
item, and if those all fell within the legal parameters. I ask the question only because we heard 14
from the public there were a number of members of the public that felt they didn’t have enough 15
time. So how much time are they required to have and did we get the notifications out within 16
that time? 17
18
Ms. Campbell: So we have the different notification periods for this Conditional Use Permit. 19
When the project was initially submitted the building was notified. The unfortunate situation 20
with this site is that the GIS information that we have that we pull our address information from 21
only provides one street address for 488 University Avenue. It does not provide individual unit 22
addresses so none of the individual units were initially notified of this application. In due 23
process, going through the review process when I came to learn of that the tenants were then 24
notified by the applicant about the project. The applicant only notified I think the front tenants 25
or the tenants that are only on the fifth, sixth, and fourth floor or something like that. Then for 26
the Final Tentative Approval when we got to that point we had the applicant provide to the City 27
Staff all of the tenant addresses with their unit numbers so we could notify everyone that this 28
project was moving forward with the Tentative Approval and they could come forward to take a 29
look at the plans, and so forth. So we utilized that same mailing list to do the notification too for 30
this public hearing. 31
32
Commissioner Garber: Just so I understand, do you have a date by which you then notified the 33
entire building, and what is the duration between the amount of time that they had having 34
received that notification and tonight’s date? 35
36
Ms. Campbell: Let me check the dates. 37
38
Commissioner Garber: Okay. I have a couple of moments here while you are looking for that. 39
Is the landlord present here? May I ask a question of you, please? 40
41
Mr. Chris Dressel, Landlord, 488 University Avenue: Just for the record, my name is Chris 42
Dressel and I am the landlord of the building. 43
44
Page 23
Commissioner Garber: Thank you. A number of your tenants have expressed concern about the 1
use of their apartments as access to the project site here, which is on the balcony. I am assuming 2
that you have leases in place with all of these various… 3
4
Mr. Dressel: Yes we do. 5
6
Commissioner Garber: Although it is not specifically the auspice of the Planning Commission, 7
because we are just here to talk about use, I assume that your tenants do have rights that control 8
access through their apartments. Have you reviewed those with them? 9
10
Mr. Dressel: Not specifically, not directly. We did have a meeting on Monday to sort of address 11
their concerns with regard to access for the balcony. The balcony the way it is constructed is 12
only accessible through – there are seven apartments that front the balcony, two of which have 13
metal French doors that actually open up. You could climb through the window on some of the 14
other apartments to get out there, but two of them do actually have doors that open out to the 15
balcony. As far as safety concerns the easiest way to get out there clearly would be to access one 16
of the two apartments with the French doors. You know, enter the apartment and walk through 17
and get to the outside to the balcony. I am sure that a seven-story ladder could be utilized to get 18
someone out there, but I think yes, the easiest way would be through an apartment. 19
20
Commissioner Garber: I am not actually asking about ease here I am asking legally. 21
22
Mr. Dressel: About the lease, yes. I don’t specifically have the lease with me to review it to see 23
exactly what it says. It typically will have language for maintenance of the apartment and that 24
sort of thing. 25
26
Commissioner Garber: There are of course laws that govern notification of entry, etc. by 27
landlords into apartments, etc. I would simply advise some of those that have expressed 28
concerns about that to continue to meet with you. Let me ask you one other question about your 29
meeting that you had on Monday and then I will complete my thoughts here. Was AT&T also a 30
part of that meeting so that people could express and ask questions about some of the concerns 31
that they have raised here this evening about EMF transmissions, etc.? 32
33
Mr. Dressel: Yes there were. There were I believe four representatives from AT&T that 34
specialized in different areas of the field of wireless connectivity and different parts of their 35
process. 36
37
Commissioner Garber: Thank you. 38
39
Mr. Dressel: If you don’t mind, I would add that we did specifically discuss about notification as 40
far as entry. In fact, what I had requested of the tenants was to present to us whatever their 41
recommendation would be for the amount of notice and hours of entry and that sort thing. I did 42
not get any specific response but I am sure that AT&T and the building ownership would be 43
more than willing to give as much access or notification regarding access. 44
45
Commissioner Garber: Thank you. Do we have an answer on the duration? 46
Page 24
1
Ms. Campbell: Yes. The tentative decision card was sent out on January 20, and there are 14 2
days for a request for a hearing to come in from that date. The meeting notice for tonight’s 3
meeting was sent out on February 8, and that was 15 days prior to this meeting. 4
5
Commissioner Garber: All of those times are within the City’s required timeframes? 6
7
Ms. Campbell: Yes, absolutely. 8
9
Commissioner Garber: Thank you. 10
11
Chair Tuma: Let me just follow up on that. You said that on January 20 the card was sent out 12
notifying people as to what the tentative decision had been as opposed to an opportunity to 13
participate in that process? 14
15
Ms. Campbell: That is correct. There was an initial card sent out when the application first 16
came in, and that card was sent out on August 18. When we send that out to the 600-foot radius 17
the system only created that one address for 488 University it didn’t create individual apartment 18
addresses. I do know that it was posted in the site because one of the tenants did come in to look 19
at the file, and he said he saw the card, or maybe he saw the white plastic notice board. So he 20
was aware that something was going on and he came in to inquire about the project. 21
22
Chair Tuma: Right, but our process requires us to notify each of the individuals? 23
24
Ms. Campbell: Our process requires that we notify the 600-foot radius and we rely on what the 25
GIS provides to us, and that is our due diligence. 26
27
Chair Tuma: Okay. Commissioner Tanaka. 28
29
Commissioner Tanaka: I have a few questions for the AT&T engineer if you could come to the 30
mike. One of the reasons for this upgrade is because of the maximum capacity that will run out 31
sometime in the mid 2012 timeframe. So I was wondering if you could speak a little bit about 32
how much extra capacity does this upgrade give you. 33
34
Mr. Hemmett: I am going to defer that to an employee of AT&T or an AT&T engineer. I am an 35
outside consultant that evaluates the safety aspects. 36
37
Mr. Albritton: I don’t have an immediate answer for you. I asked the RF engineers to actually 38
provide me with how many more years of growth would we get out of this and I did not get a 39
specific answer other than that they project three years out, and that this will provide adequate 40
capacity to meet those expectations three years out after the deployment. What the actual – we 41
have given you a slightly dumbed-down chart. You will see it is in percentages. It is actually in 42
kilobytes because for proprietary reasons we didn’t want to give the exact number of what we are 43
generating. That was the general three-year projection that I was given. The RF engineers 44
monitors the network and the usage of the network to make sure that they – and they project 45
three years out to make sure that the network will be able to meet its necessary requirements. 46
Page 25
This application was filed six months ago. They have to try and pre-plan in order to have that 1
available capacity. Does that answer your question? 2
3
Commissioner Tanaka: I think so, thank you. So about three years or something like that. 4
5
Mr. Albritton: Yes, in terms of capacity, yes and which obviously bets the question what 6
happens next. It is curious, if you will note the information that we gave you the line begins to 7
curve towards the end. There are a whole variety of factors that they include in those 8
calculations including adjacent sites, modifications of adjacent sites, and a number of other 9
factors that they include. I don’t know if they have calculated in the Verizon yet, I think they 10
did. 11
12
Commissioner Tanaka: So 2015 this…. 13
14
Mr. Albritton: Yes, but it is not necessarily an exacting science. As I said, I was somewhat 15
embarrassed to admit I have been doing this since 1984 when we started this network in the Bay 16
Area we though that the entire network would be built out with 28 sites. There has been this 17
phenomenal revolution and change. The iPhone was a change. The iPad is a change. The 18
internet is a change. So this technology continues to emerge. 19
20
Commissioner Tanaka: I understand the difficulty with forecasting. 21
22
Mr. Albritton: There may be other facilities that are added that begin to add to that demand or 23
could help offload that demand. 24
25
Commissioner Tanaka: Okay. I have another kind of technical question that maybe you or 26
someone else can answer. I saw the wattages and just to make this easier, you could go to Fry’s, 27
Costco, wherever and buy a Wi-Fi access point. Can you tell me relative to off the shelf retail 28
Wi-Fi how much more powerful is this system? 29
30
Mr. Albritton: I might defer that to Bill Hammett who is the expert on this. You probably know 31
you are bathed in Wi-Fi right now in this room, and that is usually one watt or less somewhere in 32
there. This is a three-watt facility. 33
34
I need to clarify one quick thing and that is you can hug this antenna and not exceed the FCC 35
MPE standards. So this issue of touching it is really irrelevant. I can let Bill speak to that 36
further. 37
38
Mr. Hammett: Yes, thank you. This unit would operate at a maximum of three watts. That is on 39
the front of the antenna. To really envision the situation, if that is the railing and the unit is on 40
the outside face of the railing. So Commissioner Keller, you were asking can somebody put their 41
hand in front of it. They certainly can. They can reach over and put their hand in front of it. 42
This is a directional…pardon me? Yes, you could reach over and put your hand in front of it. 43
The unit is focused out into the street not back toward the balcony. So the three watts is the 44
effective power going out to the front. The calculations that you have in your packet show that 45
behind the antenna you are hundreds of times below the standard. Even in front of the antenna 46
Page 26
you are complying with the standard. As he said, you could hug the antenna, just like you could 1
go to your wireless router in your house. 2
3
Commissioner Tanaka: So the standard wireless router in your house is one watt? 4
5
Mr. Hammett: It varies, but it is of a similar magnitude. The key isn’t necessarily the power of 6
the unit in watts. The key is the power density in milliwatts per square centimeter. That is how 7
much can someone experience, and that is where the standards are based. 8
9
Commissioner Tanaka: Okay. Can I just wrap up? So using that metric, using that area emitted, 10
the power density, how much different is the power density if you take what you are doing there 11
with what you could get at Costco or whatever retail store? How many times more is it? 12
13
Mr. Hammett: It is at most a couple of times more. 14
15
Commissioner Tanaka: So two times more? 16
17
Mr. Hammett: Sure. Say three watts in the focused area going out versus the one watt on an 18
omni-directional. 19
20
Commissioner Tanaka: Okay. Some of the residents mentioned that they have Wi-Fi units in 21
their apartments. So you are saying that this is about equivalent to standing next to two of them? 22
23
Mr. Hammett: If you were standing out in midair in front of the antenna where you cannot stand 24
without a tall ladder or repelling off of the roof, yes that might be equivalent to two of them. 25
26
27
Commissioner Tanaka: Okay. 28
29
Mr. Hammett: In fact most of the people are going to be inside their homes. The nearest 30
window I think is four feet away, so they are going to have less energy at that distance just as 31
you would from a wireless router in your home as you move away from it. 32
33
Commissioner Tanaka: Okay. How much less energy is that from the backside, relative to a 34
retail Wi-Fi, just to make it easier for everyone? 35
36
Mr. Hammett: It is not relevant. It is a 25-dB drop. So you are hundreds of times below behind 37
the antenna versus what it puts out in the front. 38
39
Commissioner Tanaka: so you are saying it is a hundred times less than a retail Wi-Fi? 40
41
Mr. Hammett: Yes. 42
43
Commissioner Tanaka: Okay, great. Thank you. 44
45
Page 27
Mr. Hammett: Yes, and I wanted to clarify. Commissioner Keller had asked the question that 1
maybe this does exceed the federal limit. I want to read half a sentence from my report that says 2
that this facility will comply with the prevailing standards for limiting public exposure to radio 3
frequency energy. That is the conclusion. That is the fact. Thank you. 4
5
Commissioner Tanaka: Thank you. 6
7
Chair Tuma: If you could remain at the mike for one second I think Commissioner Garber has a 8
follow up question. 9
10
Commissioner Garber: I have nowhere near the technical expertise of some of my fellow 11
Commissioners here, but I do have a question. Is the EMF that is produced by any machine, is it 12
cumulative? So if I have two of those, if I have three of those there is obviously EMF going that 13
is persistent, that exists within that space now be it inside, outside, etc. I am assuming the 14
equipment on the roof also generates stuff is this simply adding to that as well? 15
16
Mr. Hammett: Yes. There are two terms here. It is additive, no question. You get a little bit 17
from this one you get a little bit from that one. You have two little bit. It is not cumulative in 18
the sense that it adds over time. There is a very basic scientific reason for that, which if I had 19
about 30 seconds I could give you. I don’t know whether you are interested in that. But no, 20
there is no cumulative effect over time as opposed to x-rays or ultraviolet or those different types 21
of energy. Those are called ionizing electromagnetic energy. This is non-ionizing, the whole 22
radio band, light and below. 23
24
Commissioner Garber: Thank you. 25
26
Chair Tuma: I believe Commissioner Keller had a follow up as well on that same topic. 27
28
Commissioner Keller: Yes, thank you, sir. So in terms of Commissioner Tanaka’s interesting 29
comparison between a Wi-Fi and these, a Wi-Fi you said is one watt as opposed to three watts, is 30
that correct? 31
32
Mr. Hammett: They come in different power levels. We are using a typical – sure, one watt 33
might be a typical consumer one. This one because it is focused in a single direction rather than 34
sending it out in all directions might be three watts going out, but less behind. 35
36
Commissioner Keller: So let me see if I understand this correctly, and mind you bear with me 37
because I am a computer scientist and not an electrical engineer, but I know enough electrical 38
engineering to be dangerous, because I was required to take some of that. So my understanding 39
is this. In terms of a Wi-Fi bought off the shelf at Costco is the total power output one watt? 40
41
Mr. Hammett: That is my understanding. 42
43
Commissioner Keller: Okay. I am asking him at this time. 44
45
Page 28
Commissioner Garber: Commissioner, one moment. Let me just explain to the public that 1
unless you are recognized you may not speak. 2
3
Commissioner Keller: Okay, thank you Commissioner Garber for that comment. So let’s just 4
assume for the moment and there is maybe some dispute about this but with respect to a Wi-Fi 5
device that is the kind of thing I buy off the shelf at Fry’s if it is a one-watt total output power 6
that total output power is basically multi-directional. So in other words it is broadcast at one 7
watt, it is distributed over 360 degrees at least in one direction. Am I correct there? 8
9
Mr. Hammett: You are correct. Keep in mind that where we are headed is going to be a power 10
density not a power. 11
12
Commissioner Keller: I realize that. So the issue is that this one watt has a power density that is 13
disbursed around 360 degrees. 14
15
Mr. Hammett: Yes. 16
17
Commissioner Keller: And in contrast this three-watt antenna has a much greater than a factor of 18
three power density compared to the one watt Wi-Fi precisely because the radio frequency 19
emissions are distributed across a narrow angle. Therefore there is the factor of three simply in 20
power that we have identified in total output power, and there is a factor of much more than three 21
in the fact – can you tell me the angle of broadcast of this? Is it 30 degree, is it 20 degrees, is it 22
15 degrees? What is the angle at which this thing, the antenna, is directed? 23
24
Mr. Hammett: I would have to look that up to know what the angle is. We assume for the 25
calculations that it sends it energy out in all directions. So when we do the calculations we are 26
working with the maximum level. Whether it is tipped a little bit one way or the other to better 27
fill the street area we just assume it is three watts in all directions when we do that. 28
29
Commissioner Keller: So let me get this straight. If you are assuming that there are three watts 30
in all the directions, and considering – let me just do the math for the benefit of people here who 31
might be equally challenged. If it is three watts in all directions then that is three watts equally 32
distributed in 360 degrees. On the other hand, if the antenna is directional for 30 degrees for 33
discussion sake then that is one-twelfth and therefore you would actually have 12 times the 34
power density in that 30 degree angle. Isn’t that correct? 35
36
Mr. Hammett: No, that is not correct because the three watts is the peak power in the direction 37
of the orientation. You are not taking three watts input and one-watt input and in one case going 38
all directions, and in the other case starting with three times higher and focusing it as well. It is 39
three watts after focusing. 40
41
Commissioner Keller: So what you are saying, and let me see if I understand this. Earlier I 42
asked whether it was one-watt total power, and you agreed with me that it was one-watt total 43
power. Now you are saying that it is not one-watt total power it is one watt in any given 44
direction. I am totally confused. 45
46
Page 29
Mr. Hammett: That is why you need to be careful in the terminology. A lot of these units are 1
rated on their input power, how much power goes into it. A lot of them are rated in how much 2
focusing they do and what is the peak output power. For our calculations, and I would refer you 3
to Attachment E that has a wonderful diagram that shows the antenna, shows the calculations 4
behind the unit on the balcony, at the glass doors, at either of the two windows. This is an image 5
from the AT&T drawings and shows the results of these calculations. 6
7
Commissioner Keller: Which Attachment are you talking about? 8
9
Mr. Hammett: This is Attachment E. This was out on the table as part of the Staff Report. 10
11
Commissioner Keller: Let me take a look at that, hold on a second. I have this item one, which 12
has some things in it. It is a letter from Mackenzie & Albritton. 13
14
Mr. Hammett: I understand it is attached to that as well, but that has a copy. This should be 15
your packet that you received for this evening. 16
17
Commissioner Keller: Yes, I have the Attachment, sorry. I did read this thing. 18
19
Mr. Hammett: Good, so I don’t think it is useful to debate what the rating is of something off the 20
shelf at Fry’s. The issue is what are the exposure conditions that someone could be exposed to, 21
what are the power density levels? Those have been precisely calculated at all these different 22
locations. The point is that in no case does it ever exceed the federal limit. In most cases it is 23
hundreds of times below that. It is comparable to the energy coming off of a wireless router that 24
you might buy at Fry’s. 25
26
Commissioner Keller: So what I am trying to figure out is in terms of something that is 27
accessible from the balcony, okay? 28
29
Mr. Hammett: Yes. 30
31
Commissioner Keller: Within a few inches of the balcony. What I am trying to figure out is, 32
and I am looking at this document, the version of it that was sent in separately by your attorneys 33
that is dated October 26. That is the version of it that I am looking at. If that is incorrect let me 34
know. 35
36
Mr. Hammett: I don’t know. I am looking at the Attachment E in your Board packet. 37
38
Commissioner Keller: Yes, there is something here called RFR.calc methodology and things 39
like that. 40
41
Mr. Hammett: Okay. 42
43
Commissioner Keller: In this document. 44
45
Page 30
Chair Tuma: Commissioner Keller, I am going to have to ask you to wrap it up. This was going 1
to be a follow up question. We have other Commissioners who have not even had a chance to 2
ask questions yet. 3
4
Commissioner Keller: Okay. I will gather my questions together and ask this of the engineer in 5
a few minutes. Thank you. 6
7
Mr. Hammett: Thank you. 8
9
Chair Tuma: Commissioner Martinez. 10
11
Commissioner Martinez: I would like to bring our conversation back to earth. I would like to 12
ask the member of the public that had some comment whether they wanted to refute something 13
that was said, or not. 14
15
Mr. Loebbaka: It was me. I just wanted to talk about the intensity of the Wi-Fi and paint the 16
picture that it is not just something that you kind of buy off the shelf. It is something that is a lot 17
stronger. The guy who was talking is not an epidemiologist he can’t talk about dose and risk. 18
He can only say well, these are the FCC guidelines. I think the committee should look into 19
epidemiological studies. There are several out of Europe. I can tell you that several countries in 20
Europe don’t allow these types of installations in public buildings, in schools, because of the 21
output of these and electromagnetic fields and how it affects specifically children and their brain 22
development because they have a thinner skull. There are a lot of different things that I don’t 23
think they have told you as the committee as specifically in how it amounts to the risk of the 24
people that live in the building from the aspect of the electromagnetic fields, interference, and 25
also we have talked about access to these antennas will be a bit of an issue as well. 26
27
Commissioner Martinez: Okay, thank you. I also just want to say it seems like we only want to 28
hear from the applicant, and perhaps it is because the public was so eloquent in stating how they 29
feel about this application. So I am going to be guilty of asking the applicant a couple of 30
questions as well. 31
32
I read in our packet that there may be as many as two maintenance visits per month for these 33
antennas. Is that correct? 34
35
Mr. Albritton: No, that is not correct. 36
37
Commissioner Martinez: What is your judgment of what would be? 38
39
Mr. Albritton: Well there is the initial installation, which they presumably could do in one day 40
but we have said two days. Thereafter, there really is no serviceable part of this router. If it was 41
dislodged or something like that, vandalized, it might require some attention. After the first short 42
period of use it is possible but unlikely that they would need to adjust the angle of the antenna, 43
but because it is being very closely mounted within the slats of the railing there isn’t going to be 44
much play in that. The area that it is covering and the direction that it is facing it is frankly not 45
quite as refined as normal cell antenna in terms of how it is angled and so forth. So we have said 46
Page 31
I think three times a year, maybe, but frankly – I think we should probably stick with that 1
estimate. There is equipment on the roof and so there can be changes through the equipment on 2
the roof but not the antennas themselves. Again, I emphasize that the access is not – the 3
landlord/tenant issue is not a zoning issue to be addressed. 4
5
Commissioner Martinez: I understand your position. I also read there is an alarm on the system 6
in case there is a malfunction. Without being dramatic and saying three o’clock in the morning, 7
say nine-thirty in the evening, what happens. 8
9
Mr. Albritton: No, no the alarm doesn’t go off at the unit. 10
11
Commissioner Martinez: But what happens in….? 12
13
Mr. Albritton: The whole cell site is setup for a number of things power outage, fire, which 14
never happens, but that kind of thing. It is setup through the network operations center, which is 15
a 24/7. 16
17
Chair Tuma: Excuse me. If you could make an effort to speak a little bit more directly into the 18
microphone. Apparently the television is not picking it up and it is not getting recorded. Thank 19
you. 20
21
Mr. Albritton: Thank you. So that is the nature of the alarm. 22
23
Commissioner Martinez: My question was what do you need to do at that point? Do you need 24
to have access to these antennas? 25
26
Mr. Albritton: Well, the alarms are generally setup for the primary cellular network, and they 27
want to keep the cellular network up and running. This is obviously important for capacity. It 28
frankly is hard to imagine if the Wi-Fi aspect of the cell site went down that it would create the 29
level of emergency that you would have to go in the middle of the night and work on it. If the 30
entire cell site goes down, this is a very robust, high-capacity site they will be focused on that 31
site. The purpose of this, as we have mentioned, is to offload capacity and so I can’t readily 32
imagine a situation where we needed to go running through people’s bedrooms to get access to 33
these things in the middle of the night. What kind of circumstance would cause that? If there is 34
a power outage the overall cell site has a battery backup that kicks in that is obviously very 35
important in emergency circumstances. In that circumstance I would guess if the network is 36
suffering that there will be priority locations that are higher than these Wi-Fi nodes. So yes, the 37
network is alarmed but I guess I am trying to emphasize this is a very elegant way of addressing 38
a capacity situations with a very low impact, low wattage facility. The main actor in terms of the 39
network is the cell site. I hope that answers your question. 40
41
Commissioner Martinez: It does, thank you. You also mentioned that one of the alternatives 42
was to mount these antennas under the balcony. 43
44
Mr. Albritton: Yes. That was actually the initial preferred alternative. 45
46
Page 32
Commissioner Martinez: How would you have access to service these? 1
2
Mr. Albritton: That is a really good question. I believe they were below but towards the edge. I 3
frankly can’t tell you how they wash the windows in this building but I am sure that there is a 4
methodology that they could have used to access the antennas should they need servicing. But 5
you make a very good point, which is the intent is not to go out and access and service these 6
antennas very often. They are a standalone, no moving parts, solid piece of equipment that is not 7
intended to be accessed. It is plugged in and it runs. No more than you access the Wi-Fi 8
antennas that you have operating in this room. I am sorry, I am sure that they would have 9
figured out a way to get underneath the balcony because they proposed it, but I am not sure how 10
they would have done it whether it is something that pulled it up or something else. 11
12
Ms. Amy French, Current Planning Manager: Can Staff clarify? The original proposal was 13
affixed to the outside of the balcony railing not on the underside of the balcony. 14
15
Commissioner Martinez: He is saying on the underside? 16
17
Mr. Albritton: Underside of the railing, right? 18
19
Ms. Campbell: Just the original submittal that came in, the first version of this project the 20
antennas were placed on the exterior side of the railing, not under the balcony. Just on the 21
exterior side. 22
23
Commissioner Martinez: So is under the balcony acceptable or not? I am asking the applicant. 24
25
Mr. Albritton: In terms of a location? 26
27
Commissioner Martinez: Yes. 28
29
Mr. Albritton: Sure. I am not the construction person. We probably have a construction person, 30
but yes anywhere – obviously the only thing that is important is that this face is looking at the 31
street. 32
33
Commissioner Martinez: Okay. To Staff, is that an objectionable quality condition for an 34
historic building? 35
36
Ms. French: The balcony is a character defining feature of the building so that would have to be 37
evaluated as to – if it squeezes between those corbels I don’t know if it is narrow enough to do 38
that. This becomes an historic review question. 39
40
Ms. Campbell: My understanding when we did this evaluation initially with the first submittal 41
was that we encourage the applicant to remove the antenna from the outside because we didn’t 42
want to have any physical attachments placed on this feature because it was a very important 43
feature for this building. So that is why the direction went to place it on the inside so it is 44
screened from view. 45
46
Page 33
Mr. Albritton: I have to say there were photo simulations provided. Given the fact that it is six 1
stories in the air very hard to see, and AT&T would accommodate working with Staff to identify 2
a preferred location if that was something that was a condition of approval or something like 3
that. 4
5
Commissioner Martinez: If it prevented having to go through people’s apartments, to interrupt 6
their privacy, to have it mounted six stories above, boxes this size that could be painted, isn’t that 7
a reasonable alternative for Staff to consider? 8
9
Ms. Campbell: I think the access issue would still be the same if they need to access the 10
antennas, and if they are on the side or underneath I think the maintenance would be the same 11
issue. 12
13
Ms. French: We are not the experts on the maintenance, but a bucket truck could do both of 14
them equally the same I would think. However, I would say it is not Staff’s decision any longer. 15
This is the Council decision. By having this hearing you are now the recommending body to the 16
Council. We could certainly weigh in in a Staff Report. 17
18
Commissioner Martinez: I just want to understand the thinking behind this, Amy. There was 19
quite a bit of discussion about how this was going to be concealed and they did a good job of 20
doing that. But I heard nothing about the impact on the residents and it just seems that the report 21
is very incomplete. When there is another alternative that can be served by a bucket that doesn’t 22
require people going in through their apartments it seems like it is something we should have 23
heard about. That is all I am saying. 24
25
Ms. French: Yes, it is possible that the bucket could be used to go and maintain them where they 26
are proposed in front of you tonight too, is what I am trying to be clear about. 27
28
Mr. Albritton: I believe if it is mounted under the railing you are still going to have to have 29
some access to install it. It is six stories up so it is difficult to get to. It is limited access. I am 30
sorry I am repeating myself, but that is a landlord/tenant issue in terms of access. It is a lease 31
issue. If you granted our permit and in fact there is no legal access through these apartments 32
then we can’t build it. On the contrary if you deny the application but we have full access we 33
can’t build it. They are separate. One is a civil issue and the other is a zoning and permitting 34
issue that you are dealing with. The same thing with respect to the impacts. Individual impacts 35
are not what you look towards in terms of substantial evidence for approval or for general public 36
convenience, welfare, or detriment to public safety and health. 37
38
Commissioner Martinez: Thank you. 39
40
Mr. Albritton: We understand it and AT&T of course will be tremendously sensitive and will 41
agree to any rules that the landlord wishes to impose on access whether it is cotton booties to 42
walk through the apartments with or to have a chaperone paid for or something like that. This is 43
something that AT&T understands the tenants concerns but this is the way to get to this ideal 44
location in terms of least intrusive, providing the coverage that is necessary for the public 45
benefit. 46
Page 34
1
Chair Tuma: Thank you. I have a few questions. Staff, the applicant had mentioned something 2
about the 150-day shot clock. Where are we in that process? 3
4
Ms. French: Not sure. The applicant may know better than we do the shot clock concept. We 5
work with permit streamline clocks. That is our clock. They know more about this shot clock 6
than I can presume to know. 7
8
Chair Tuma: Then let me ask the question differently. Are we under a time constraint in terms 9
of this getting to Council and getting resolved? If so, when is that? 10
11
Ms. French: Typically, once the Planning Commission makes a recommendation we get it to the 12
Council within 30 days. Our job was to get it to you within 30 days of receiving the request for 13
hearing. 14
15
Chair Tuma: Okay. 16
17
Ms. Tronquet: Courts have ruled that these applications need to be ruled on within a reasonable 18
period of time. Cases have held that a reasonable period of time is anywhere between 90 and 19
150 days. So you are under time constraints and this needs to go to the Council. 20
21
Chair Tuma: Okay, so when does that 150 days run? 22
23
Ms. Tronquet: I don’t know the timeline for this project. You can find the approval where 24
already by the time it gets to the Council we are already 90 days into it. So I would say we are 25
very close. 26
27
Chair Tuma: I think we need to know before we make a decision, at least I do. 28
29
This is a question probably for the RF engineer. One of the members of the public had made a 30
comment or said that they were told specifically that this device would interfere with their Wi-Fi 31
in their unit. Is that accurate? 32
33
Mr. Hammett: I apologize if I have misspoken. No, the expectation is that it would not cause 34
interference. 35
36
Chair Tuma: It was not a comment that you had made. It was a comment that a member of the 37
public made that one of the AT&T employees had told them that that would happen. 38
39
Mr. Hammett: No, I think she mentioned my name because I was at the meeting on Monday. I 40
think she mentioned that I thought that it would cause interference. The expectation is that it 41
would not any more than a Wi-Fi at the AT&T Store versus one over at Borders books would 42
cause interference with each other. They use protocols so that they don’t interfere, and they are 43
located in such a way that they don’t create that type of interference. 44
45
Page 35
Chair Tuma: When you say they are located in such a way, these are right outside the window of 1
these residents. 2
3
Mr. Hammett: That is correct and they are located outside the widow aimed down the street. 4
5
Chair Tuma: Okay, okay. Thank you. Another question for the applicant, probably for the 6
attorney. How many occasions have you as an applicant met with the members of the public, 7
particularly the residents, to discuss this matter, and when did those meetings take place? 8
9
Mr. Albritton: On this application? 10
11
Chair Tuma: Yes. 12
13
Mr. Albritton: As the attorney I have not. They sometimes find me threatening. So the External 14
Affairs group of AT&T I know had a meeting last Monday and I don’t know, Chris, if there were 15
other meetings. One-on-one meetings? That is the one meeting that I know about. 16
17
Chair Tuma: Last Monday as in ten days ago, or two days ago? 18
19
Mr. Albritton: Two days ago. 20
21
Chair Tuma: So that was the first and only time AT&T has met with the residents on this? 22
23
Mr. Albritton: Yes. I don’t think that is for lack of trying. They were coordinating through the 24
building manager I believe. 25
26
Chair Tuma: That is fine, I just wanted to know how many and when the meetings had taken 27
place. 28
29
Mr. Albritton: They were certainly aware of the neighbor concerns through the manager, 30
through the landlord, and through the communications with the Staff. 31
32
Chair Tuma: Thank you. My other questions had already been addressed. Commissioners, 33
additional questions? Commissioner Keller. 34
35
Commissioner Keller: Thank you. The extra time allowed me to find my bearings through this 36
Attachment E to which I was referred earlier. So first let me mention a few things that are 37
identified here and then I will ask for some clarification from the consulting engineer. 38
39
So the first thing is on page one of the statement of Hammett and Edison Consulting Engineers. 40
That is the second page of Attachment E. It states that for Wi-Fi the public limit is 1 mW, which 41
I assume is milliwatt and that is a thousandth of a watt. Is that correct? 42
43
Mr. Hammett: That is correct. 44
45
Commissioner Keller: And it is per centimeter square which means per square centimeter. 46
Page 36
1
Mr. Hammett: Yes. 2
3
Commissioner Keller: Okay, great. A centimeter is one one-hundredth of a meter so would you 4
say it is about a quarter of an inch or half an inch, or something like that? 5
6
Mr. Hammett: Yes. 7
8
Commissioner Keller: Okay, great. So what I also note is that there is a sentence on page 3 of 3 9
of this document where it says No Recommended Mitigation Measures, it says due to their 10
mounting location, I am going to read the entire paragraph into the record. 11
12
“Due to their mounting location, the new AT&T antennas would not be accessible to the general 13
public and so no mitigation measures are necessary to comply with the FCC public exposure 14
guidelines. Power density levels exceeding the occupational guidelines,” which I understand are 15
parenthetically are five times the public exposure guidelines, “are calculated to extend no further 16
than 6 inches directly in front of the new AT&T antennas themselves, due to that short distance, 17
the new AT&T operation as proposed can be considered intrinsically compliant with FCC 18
guidelines, and so no additional mitigation measures are required.” Then it goes on to talk about 19
mitigation measures for existing cellular and others at 525 University Avenue have not been 20
determined as part of this study. I understand based on my knowledge of physics that essentially 21
the power density drops off with the square of the distance. Is that right? 22
23
Mr. Hammett: Yes, it is the inverse square law and the far field of an antenna that is correct. 24
25
Commissioner Keller: So if the power density for occupational guidelines is calculated no 26
further than six inches, and if the personal measure would be one milliwatt per square centimeter 27
as opposed to five milliwatt per square centimeter then I would presume that at four milliwatts 28
per square centimeter – excuse me, instead of five if you go down to one and quarter, which is 29
one-fourth of that that this would be a distance of a foot, no greater distance than a foot. Am I 30
doing the math wrong? 31
32
Mr. Hammett: I am not following the math, but why don’t you tell me where you are headed. 33
34
Commissioner Keller: So my understanding is this, correct me if I am wrong. If you have a 35
maximum of five milliwatts per square centimeter at six inches, at most six inches that at most 36
12 inches you would be a maximum power within that would be one and a quarter milliwatts per 37
square centimeter. Have I done the math right? 38
39
Mr. Hammett: I am not following your math but now I see where you are headed. Okay. 40
\ 41
Commissioner Keller: Okay. So since the exposure limit is one milliwatt per square centimeter 42
then the distance that you have defined here as being problematic is somewhere on the order of a 43
foot or so by your very words, or the words of your professional engineer. 44
45
Page 37
Mr. Hammett: They key word here is no further than. In fact, it is likely never to be reached, the 1
occupational limit, for this antenna. 2
3
Commissioner Keller: So have you actually calculated this amount and provided 4
demonstrations? I mean if you actually meant not further than then why do you say six inches? 5
I am wondering why you referred to occupational guidelines as if this was not accessible to 6
members of the public when in fact residents of these seven apartments actually have access to 7
this and can place their hand directly in front of it. 8
9
Mr. Hammett: Because the calculations that we were dealing with in the instance you are raising 10
was to answer the question of occupational exposure. The sentence before dealt with the 11
question of public exposure. It is our belief that nobody is going to stand in front of the antenna, 12
in midair, 60 feet up. That was the basis for that conclusion you have read. The subsequent 13
statement, the subsequent one that calculated very precisely at the request of the City Staff what 14
are the actual levels at all of these locations. These are the actual calculated levels based on the 15
antenna patter, based on all the information that we had reported in the earlier more generic 16
study. This is the specific one. This supports the conclusion, no question, this meets the federal 17
standard. For public there is no location where the public exposure will be exceeded for 18
anybody near this facility even if they were standing out in front of that antenna. 19
20
Commissioner Keller: So are you saying that the residents of these apartments are in fact not 21
members of the public? 22
23
Mr. Hammett: No I am not. 24
25
Commissioner Keller: Okay. Are you allowing for them to put their hand in front of the 26
antenna, not having to stand there, but certainly part of their hand in front of the antenna is 27
accessible from the balcony. Are you accepting that or denying that? 28
29
Mr. Hammett: I am accepting that as we had demonstrated earlier. 30
31
Commissioner Keller: Okay, great. So what I am trying to understand is have you made actual 32
calculations of this – what you are saying is it is a maximum of three watts, right, which is 3,000 33
times the maximum per centimeter squared. I am trying figure out at the point right in front of 34
the antenna what is the maximum power density. 35
36
Mr. Hammett: Okay, your statement is not correct. You are comparing watts to milliwatts per 37
square centimeter. So the watts are the power at the point source if you could consider the 38
antenna to be a point source, and it is spreading immediately. The standard is not based on 39
power from the antenna. It is based on power passing through a unit area. It is power density. It 40
is a common misconception of you see watts and you think it is the same in both cases. The key 41
is how much power there is passing through a unit area. That is what the standards are based on, 42
milliwatts per square centimeter. 43
44
Commissioner Keller: Have you actually calculated the maximum power density at the surface 45
of that device? 46
Page 38
1
Mr. Hammett: Yes, and it was not done as part of this study, because this study draws the exact 2
conclusion that is necessary, which is it complies with the standard. 3
4
Commissioner Keller: But you have not provided to us that calculation, have you? 5
6
Mr. Hammett: No I have not. 7
8
Commissioner Keller: So based on the evidence before me I don’t have that evidence submitted 9
before us. What I do have evidence is that you used the calculation of six inches, and 10
presumably you would have said something less than six inches if you meant it. So from my 11
point of view in some sense you have not met the burden, and I am not sure whose burden it is, 12
but you have not demonstrated that there is no problem here with an excess amount of power 13
from somebody sitting and putting their hand immediately adjacent to the device. That is what I 14
am failing to understand. 15
16
Mr. Hammett: I would be happy to explain why it is that I can make that statement so 17
conclusively that it will comply with the prevailing standards for public exposure. 18
19
Commissioner Keller: Is that a conclusory statement in the eyes of the law? I am not a lawyer, 20
but I serve as expert witness and I know what a conclusory statement is when I see it. 21
22
Mr. Hammett: That is one. 23
24
Commissioner Keller: That conclusory statement is not backed up by any evidence that you 25
have provided here. 26
27
Mr. Hammett: It is backed up by the information contained here including the very specific 28
findings for the different areas at which Staff had requested. If you go through the data and I am 29
happy to perform that calculation if you stipulate that as a condition. The data here on Figure 2 30
that you referred to, the methodology, when you get close to an antenna the inverse square law 31
doesn’t apply because you are no longer in the far field of antenna. Tell me, Chair, if you want 32
me to go through that explanation. In a near field of antenna the pattern is not yet fully formed. 33
The power is distributed over the elements of the antenna. Inside this box are small antenna 34
elements and it is only when you are some distance away that the pattern is formed and you 35
actually get the gain of the antenna. When you are very close to the antenna you do not get the 36
gain that gives you the three watts out. 37
38
Commissioner Keller: So let me understand this correctly because I am not an electrical 39
engineer, as I pointed out. In order to get three watts over here you have to have three watts 40
coming from here. The power doesn’t teleport itself except by going through that distance, 41
right? 42
43
Mr. Hammett: That is correct. 44
45
Page 39
Commissioner Keller: So therefore if you are getting three watts over here the three watts have 1
to come from somewhere in the antenna. If the power is not fully formed in a reasonable 2
framework then I would expect that there might be some hot spots located immediately adjacent 3
to the box. 4
5
Mr. Hammett: And that would not be correct. It is small amounts of power distributed over the 6
length of the antenna. 7
8
Commissioner Keller: So small amounts meaning 3,000 milliwatts? 9
10
Mr. Hammett: No. 11
12
Commissioner Keller: Total? 13
14
Mr. Hammett: No. The 3,000 milliwatts is due to the fact that the antenna has elements that are 15
organized in such a manner that if you feed them together they will create a patter with no energy 16
up, no energy down, no energy back, all the energy goes out toward the front. In order to get the 17
three watts you don’t put three watts in, you put a very small amount of power in, and the peak 18
will be three watts because of nature of the way you feed the antenna. 19
20
Chair Tuma: Excuse me Commissioner Keller. We need to move on. 21
22
Commissioner Keller: Then I will make a motion if I may. 23
24
Chair Tuma: You may. There are a few other Commissioners who wanted to speak but you may 25
make a motion. It is your prerogative. 26
27
MOTION 28
29
Commissioner Keller: I make a motion that this application be denied because it fails to conform 30
with the requirements of the lack of staying within radio frequency emission limits for members 31
of the public, in particular for those who live along the seven apartments adjacent to the balcony, 32
and can place their hand adjacent to this radio frequency device. That exposure point has not 33
been demonstrated to be within the limits and there is substantial evidence based on the 34
applicant’s statements in the document that it exceeds that limit. 35
36
Chair Tuma: Is there a second? Motion fails for lack of a second. Commissioner Garber. 37
38
Commissioner Garber: I am just curious, for the applicant, one of the members of the public 39
asked why – I don’t know if it was asked as a question, but I am posing it as a question. Why the 40
applicant didn’t consider a Castro Street solution for the placement of the antennas? As was 41
described on Castro Street there are many antennas that are placed on light poles up and down 42
the street as a way of distributing the signal. I am just curious as to why that was not entertained 43
as an alternative. 44
45
Mr. Albritton: Castro Street in Mountain View? 46
Page 40
1
Commissioner Garber: Yes. 2
3
Mr. Albritton: I hope you will indulge me for 15 seconds. What Bill is trying to describe is if 4
you have jets of water coming out in a stream, coming together it can then form into, we have all 5
seen this, form into a wave of water. 6
7
Commissioner Garber: Forgive me for interrupting. Are you answering the preceding question 8
or mine? 9
10
Mr. Albritton: I will. You were asking about the distributed antenna system. 11
12
Chair Tuma: Excuse me sir. The question before is coming from Commissioner Garber, and 13
that question was about whether there was a Castro Street-like. 14
15
Mr. Albritton: Yes, and I just mentioned a distributed antenna system. A distributed antenna 16
system or DAS network are usually a collection of antennas that are connected by fiber optic 17
cabling back to a cell site. They function to distribute cell site service through up to 24 different 18
nodes that are connected by fiber optic back to a local cellular location. The telephone 19
corporations are allowed access to the public right-of-way under California Public Utility Code 20
Section 7901, so are allowed into the com space of a telephone pole in order to provide telephone 21
service. That perhaps is what you are talking about in Mountain View. It is a replacement for a 22
full cell site. It is not what we are trying to achieve in this particular location, which is a 23
localized Wi-Fi service from a particular height. 24
25
I think the short answer is I don’t recall telephone poles tall enough or utility poles where this 26
solution might be considered, but you would have to get fiber optic to the pole, up the pole, and 27
into the nodes. It would have similar impacts but it was not explored to put those kinds of 28
antennas or facilities on University Avenue. 29
30
Commissioner Garber: So if I am understanding you correctly it sounds like there are two 31
reasons. One is it is a solution for a different problem, and then two there are issues of access or 32
ways of making that distribution. 33
34
Mr. Albritton: Yes, and you have to have the appropriate poles, and you have to have the 35
appropriate space on the poles. 36
37
Commissioner Garber: Thank you. 38
39
Chair Tuma: Commissioner Tanaka. 40
41
Commissioner Tanaka: So I have more questions for the RF engineer. Is that box you hold up 42
active? Is it basically power over Ethernet going into that so there is actually a router inside that 43
is broadcasting, or is it just a passive antenna that you feed the Wi-Fi signal through from the 44
roof equipment? 45
46
Page 41
Mr. Hammett: This is an active. This is fed with coaxial cables that are on the bottom of the 1
unit here. These are the coaxial cables that are fed. 2
3
Commissioner Tanaka: So I guess what I am wondering is there are some Wi-Fi points that are 4
power over Ethernet so they actually are routers as the attorney described, and then they sell a lot 5
of Wi-Fi antennas out there that are just passive. All they do is you feed power into them, you 6
feed the signal into them, and they broadcast it out. I was wondering is this truly an active? 7
Coaxial suggests to me that it is a passive antenna. 8
9
Mr. Hammett: Yes, it suggests that to me as well. We look at what the rating of the power into 10
and out of the unit is. 11
12
Commissioner Tanaka: Sure. 13
14
Mr. Hammett: Whether it is active and separately powered it does not appear to be so. It looks 15
like it is coaxial. 16
17
Commissioner Tanaka: It looks like a passive antenna. 18
19
Mr. Hammett: Correct. 20
21
Commissioner Tanaka: Okay, great. So since it is a passive antenna that means I guess right 22
now we are on 802.11N, 11G, A, B. So it looks like then if there is another standard perhaps you 23
could upgrade the antenna without having to upgrade the antenna without having to go through 24
people’s apartments because you could change the protocol on the roof. 25
26
Mr. Hammett: That is correct. The antenna doesn’t matter what is coming into it. It will 27
broadcast it out. 28
29
Commissioner Tanaka: So it is a little more future proof. 30
31
Mr. Hammett: Exactly. 32
33
Commissioner Tanaka: Okay, that sounds like a good plan. I am done? That’s it? 34
35
Commissioner Garber: I am sorry I did not have the full five minutes in there so you are not 36
done. 37
38
Commissioner Tanaka: So then perhaps this is more upgradeable than just five years. I am just 39
asking for your professional opinion. 40
41
Mr. Hammett: I don’t know that I have a professional opinion on the growth of the network. 42
My role is to establish the safety conditions. 43
44
Commissioner Tanaka: Do you think that having a passive antenna versus an active antenna 45
does that affect the amount of maintenance that might have to be done? So you don’t actually 46
Page 42
have to change routers that break or power that burns out or surges or stuff like that? Does that 1
affect the amount of maintenance you have to do? 2
3
Mr. Hammett: That is correct. They say three times a year. You see these facilities that I know 4
they don’t go to that often for the very reason you mention. I think they put that in as a 5
maximum. 6
7
Commissioner Tanaka: I realize that is a maximum. What do you think is realistic? 8
9
Mr. Hammett: I don’t have the background to speak to that. I don’t do maintenance. 10
11
Commissioner Tanaka: Do you have any idea if let’s say they didn’t do this Wi-Fi plan they 12
actually did it as a cell site, they just beefed up the cell site to 4G or LTE or whatever. What 13
kind of power boosting would have to happen on roof if they just took the existing cell site and 14
said okay, we are not going to do the Wi-Fi on the balcony, we are just going to boost the signal 15
up? What kind of power change would that be for the residents? 16
17
Mr. Hammett: Again, since I don’t do the network design I am not really in a position to know 18
the answer to that question. 19
20
Commissioner Tanaka: Okay. Does the applicant know? 21
22
Mr. Albritton: I truly apologize. I was consulting with one of the Wi-Fi people here and I didn’t 23
hear the question. 24
25
Commissioner Tanaka: Sorry. My question is let’s say you didn’t do the Wi-Fi plan. Let’s say 26
you just said we are going to go 4G, we are going to go LTE, or Wi-Max, or whatever the case 27
might be. So you simply would just boost the signal on the roof instead of doing the directional 28
Wi-Fi. 29
30
Mr. Albritton: An LTE upgrade or something like that would entail installing new radio 31
cabinets, new radio equipment that would then be fed into new additional antennas that are added 32
to the roof. So you would be adding to the output of overall facility by the wattage coming off of 33
those radios and going into the LTE antennas and out. 34
35
Commissioner Tanaka: I see, so you are saying that instead of having a very directional Wi-Fi 36
away from the residents you would have to actually, if you were to upgrade this to LTE or 37
whatever the standard might be, you would actually have to place another piece of equipment up 38
there that would actually in a sense double the amount of power being emitted to the residents. 39
40
Mr. Albritton: That is an accurate statement, although I think you are talking about hundred to 41
thousands times more wattage. 42
43
Commissioner Tanaka: I see, so there would be a thousand more times more radiation versus… 44
45
Mr. Albritton: It depends on what radios they put up and what capacity they have. 46
Page 43
1
Commissioner Tanaka: Okay. 2
3
Mr. Albritton: I am not speaking out of school I don’t think when I say that a macrocell site can 4
be anywhere between 1,200 to 2,500 watts. 5
6
Commissioner Tanaka: Okay, so the Wi-Fi is… 7
8
Mr. Albritton: It all depends on, and I shouldn’t make that statement broadly because a 9
macrocell can have 800 megahertz antennas, 1,900 megahertz antennas, 700 megahertz antennas, 10
or for T-Mobile 2,100 megahertz antennas. Each frequency will have different wattages going 11
through the antennas, which have different gains. So that statement is very broad but it is 12
substantially more power by factors of hundreds. 13
14
Commissioner Tanaka: Okay. So by doing the Wi-Fi solution the residents are in fact getting 15
several orders of magnitude less radiation as a result. 16
17
Mr. Albritton: Yes. I began my statement by saying I wish all of my hearings like I had like this 18
were this kind of solution. It is extremely low wattage. It is extremely low impact. You can 19
touch the antennas. With a building permit in San Francisco we placed five-foot antennas on top 20
of apartment buildings that are a thousand times more powerful than this, and they are sitting on 21
top of residentials but they are still well within the FCC standards. 22
23
Commissioner Tanaka: I note Chair I am out of time. Can I ask one last quick question and this 24
will be it for me? 25
26
Chair Tuma: Sure. 27
28
Commissioner Tanaka: My last question is several of the residents mentioned there is some 29
commercial property across the street, nearby that are just as high, 15 stories high. Can you 30
explain a little bit why those were not good alternatives? 31
32
Mr. Albritton: Yes I can. As I mentioned we have an alternatives analysis that goes through all 33
12 of the proposed locations. We went and looked at the locations that were actually suggested 34
by the Staff and by the residents. There is 499 University directly across the street. It is only 35
about a two-story building, it doesn’t provide the height that we are looking for for the coverage, 36
and it doesn’t have any architectural feature where we could hide these antennas. So we would 37
have to mount this on the side of the building, try to paint it to match, and then have the cabling 38
coming off it. It is not clear that it has the fiber optic input that we would need, which might 39
require trenching University Avenue to get the fiber optic into the building. It was considered to 40
be a more intrusive solution to put that kind of thing, also it doesn’t provide the coverage that we 41
need. 42
43
There are photographs and a description of this in our alternatives analysis. There is a building 44
at 428 University Avenue, which is again sort of a flat, modern stone façade. It has a four foot 45
parapet at the top, probably about this height, which means in order to get the signal up we 46
Page 44
would have to mount these on tripods looking down off of the roofline, or we would have to 1
flush mount them on the front at the side of the building. Again, they would be entirely visible 2
and we don’t know again if it has the adequate fiber to serve the data requirements that we have. 3
4
There were also suggestions of using the Garden Court Hotel directly behind the Hotel President. 5
It is about a four-story building, which is behind the Hotel President, which is a six-story 6
building, so signals would be blocked from the Garden Court into University Avenue. Similarly, 7
the parking garage, Cowper Parking Garage I think it is called, is setback about half a block from 8
University Avenue with buildings in between and would not be able to see around the Hotel 9
President in order to get the signal to University Avenue. 10
11
So we are looking for a location that provides line of sight, very short distance because of the 12
low power of these, but the five-story height is just right to look up and down the street that has 13
an architectural feature that allows us to hide the equipment. In this case it is collocated with our 14
facility so in terms of the least intrusive means under your code it qualifies as a collocation. It is 15
structure mounted as opposed to having its own pole. 16
17
We also looked at AT&T Switch at 322 Hamilton Street because it had the fiber location. Again, 18
we didn’t have the direct line of sight without mounting some kind of antenna mount or pole in 19
order to put these high enough in the air so that they would reach the five stories and hit 20
University Avenue. As I mentioned we looked at 525 University Avenue, which is the 15-story 21
building. That is too high for these antennas to reach. There is a potential of putting a macrocell 22
there but it is too close to our current site and would cause interference. Then the Westin Hotel 23
where we have a macro site was also too far from University Avenue. There are other 24
alternatives I can mention but those were the – the last one that was mentioned was using the 25
Borders & Books façade and the sign and putting Wi-Fi antennas in the sign. That is too low for 26
the type of coverage that we want. In addition, it was we though much more historically 27
problematic to try and put these facilities in that sign and in that façade. I think I have covered 28
most of the proposed locations. 29
30
Commissioner Tanaka: You have answered my question, thank you, appreciate it. That’s it. 31
32
Chair Tuma: Thank you. Commissioner Martinez. 33
34
Mr. Albritton: Thank you for all of your time. We really do appreciate that. 35
36
Commissioner Martinez: I am going to cede my spot to Commissioner Garber. 37
38
Chair Tuma: Commissioner Garber. 39
40
MOTION 41
42
Commissioner Garber: I am going to make a motion. The motion is that the Commission 43
supports the Staff’s recommendation that the City Council uphold the Director of Planning and 44
Community Environment’s decision to approve Conditional Use Permit 10PLN-00285 amending 45
the existing use permit based on the findings and conditions in the Record of Land Use Action, 46
Page 45
with two conditions. I am going to need the support of two of my fellow Commissioners to 1
create those conditions. Commissioner Keller, would you provide wording for the first 2
condition? 3
4
Commissioner Keller: I am happy to provide wording independent of whether I support the 5
motion, but Commissioner Garber asked me to. 6
7
Commissioner Garber: Okay. 8
9
Commissioner Keller: The wording for that is that prior to the installation of these wireless 10
devices that an offsite engineering study be done with actual measurements of the comparable 11
device with distances that are from immediately adjacent to two feet away, and determine 12
whether there are any areas within that range, in any radius that exceed the maximum power 13
density allowed by FCC rules for members of the public. 14
15
Commissioner Garber: And the second condition, Commissioner Martinez, can you help me 16
with some wording there? 17
18
Commissioner Martinez: Yes. We would propose that for the location of the two antennas that 19
the applicant work with Staff to explore their location on the building directly beneath the 20
balcony so that the need for access through tenant apartments is not necessary. 21
22
Commissioner Garber: If that is found that that is pursued but if it is not that the project would 23
then be approved as submitted? That is a question for you. If there is some reason that that can’t 24
happen presumably it would revert to the proposed location. 25
26
Commissioner Martinez: No, I would propose that it would come back to the Commission at 27
that point with another alternative. 28
29
Commissioner Garber: In that case let me – Chair? 30
31
Chair Tuma: Let me try some language that may get us there. That is that the Staff work with 32
the applicant to explore alternative locations that obviate the need to go through the private 33
dwellings, but that we recognize that it may not be achievable. That is how I would word it and 34
the only thing I would say to that is, well we have to have a second on it before we start 35
commenting on it. 36
37
Commissioner Garber: Well, let me do this Commissioner Martinez, let me accept the Chair’s 38
wording and see if we can get a second. Then if necessary we will look for alternative friendly 39
or otherwise or some other action. 40
41
Commissioner Martinez: Okay. 42
43
Chair Tuma: Is there a second to the motion? 44
45
Page 46
Commissioner Tanaka: I think I will second it but I am a little bit confused by the protocol here. 1
You have made a motion to accept the recommendation with two conditions. 2
3
Commissioner Garber: Yes. 4
5
Commissioner Tanaka: So you need a second for both conditions. 6
7
Commissioner Garber: No I am looking for one second for all of those things. 8
9
Chair Tuma: Procedurally, there is currently one motion on the floor that has two conditions to it 10
and Commissioner Garber is looking for a second to that single motion that has both of those 11
conditions to it. 12
13
Commissioner Tanaka: I would like to second it but I think for Arthur’s wording I would like to 14
just tweak that. I don’t know if I can second it and tweak it or if someone else has to second it. 15
16
SECOND 17
18
Chair Tuma: I will go ahead and second the motion. 19
20
Commissioner Tanaka: Okay. 21
22
Chair Tuma: Would you like to speak to the motion? 23
24
Commissioner Garber: Yes, but only briefly. First, I believe that with the testing that 25
Commissioner Keller has proposed although not necessarily supported at the moment in terms of 26
the motion that the finding therefore can be made that the use will not be detrimental or injurious 27
to the property or improvements in the vicinity and will not be detrimental to the public health, 28
safety, and general welfare, or convenience. I also believe the second finding can be made, 29
which is that use shall be located and conducted in a manner in accord with the Palo Alto 30
Comprehensive Plan and the purposes of Title 18, which is the zoning. That is with the 31
condition that ideally we can find another location such that there is less impact to the applicants 32
relative to the ongoing maintenance of this particular device. 33
34
Relative to the device itself it does appear that it is a far better solution than any number of the 35
alternatives that have been both discussed this evening and that have been reported to in the 36
alternatives study that was presented to us. Let me leave that at that and let’s see where we go 37
with any modifications or amendments. 38
39
Chair Tuma: Okay. I am going to speak to the second. I am in agreement with Commissioner 40
Garber with respect to the necessary findings. The main trouble that I have, and obviously I 41
have supported the motion, but there are two issues that I think are unfortunate, and could have 42
made this evening’s proceedings significantly better. 43
44
The first of those deals with the notification. I understand that we have a process we rely on, and 45
we rely on those GIS system to give us these addresses, but we must have known with a 46
Page 47
landmark as prominent as this one that there were lots of people living there. So I think we could 1
have done a better job of noticing that. The consequence of that would likely have been that 2
much of the discussion and the types of issues that were raised tonight perhaps could have been 3
raised earlier on in the process and addressed in the alternatives analysis and the other things that 4
the applicant was doing. 5
6
The other thing I would say directly to the applicant is I am sure you guys do this all the time 7
you do it all over the place. But coming to the public two days before the meeting is a mistake. 8
You don’t do yourself a service by doing that, you don’t do the public a service by doing that. 9
There may be communities in which that is okay, but in Palo Alto this is a much more engaged 10
community. I would say that in the future, and there are birdies whispering about the future 11
about what may happen here, we typically see our applicants come to the public sometimes 12
months in advance of the hearings and begin to work with them, and explain to them in a process 13
that allows people to understand what is being done. That process informs not only the public 14
but often times the project itself. Many of these types of issues and concerns and things that 15
have been brought up tonight can be dealt with – you are never going to make everybody happy 16
all the time, but if you take that extra time and do it in advance you are going to wind up in a 17
better position, and certainly with a happier public. That is much of what we, as this body, are 18
concerned about. So I understand there are a lot of legal issues here. I have the background, I 19
used to work for a wireless company so I understand, but there are also real people issues here. I 20
would just say that I think the applicant could have done a better job in dealing with those issues. 21
I would say that it would behoove you in the future to do that. 22
23
Commissioner Keller. Commissioner Tanaka. 24
25
Commissioner Tanaka: I guess I would like to propose maybe it is not an amendment, maybe it 26
is just a clarification to the second condition in terms of the offsite testing. It looks like the 27
antenna that they are using is a pretty standard antenna in terms of it is not something custom 28
made for this project. It has probably been deployed before in other situations. So I am pretty 29
sure the manufacturer of that has the specifications. So rather than having to do a field test 30
perhaps the applicant could just refer to a preexisting engineering specification and use that to 31
satisfy that condition. If that is the case, then I don’t need an amendment. I just wanted to see if 32
you were requiring a live field test or just a clarification of the specifications from existing 33
engineering. 34
35
Chair Tuma: Commissioner Keller. 36
37
Commissioner Keller: I am actually requesting a live field test because I presume that these 38
devices are not expected to be placed in such a manner that people in normal use will be 39
immediately adjacent to them. 40
41
Chair Tuma: Let me interject something here. Does the applicant have any problem in running 42
this type of test? 43
44
Mr. Hammett: No, there is no problem running that test. 45
46
Page 48
Chair Tuma: Thank you. 1
2
3
Commissioner Tanaka: Okay, then I withdraw my amendment. 4
5
Chair Tuma: Commissioner Keller. 6
7
Commissioner Keller: Yes, a couple of things. Firstly, I do appreciate Commissioner Garber’s 8
interest in trying to resolve the issue of the emissions by actually doing a test to ensure that this 9
is within the legal limit. It would be ideal if we had that data before and there is some question 10
as to what the data might come out. To the extent that that data could be made public and 11
available which I think also should be made a condition of that, is to publicly release the data, if 12
that is okay? Is it a problem for the applicant to publicly release the data? No. Thank you. So I 13
think that would be important as a step. 14
15
I spent a few minutes trying to go through the Comprehensive Plan to see if there is any 16
particular rule about not building public facilities that require access through people’s apartments 17
and being a homeowner in Palo Alto I understand that I have a utilities easement in my backyard 18
that allows the various utility providers to have access to the pole that is adjacent to my 19
backyard. Most people don’t expect that that’s the case in their apartments. So I think that this 20
is in some sense unusual ground. 21
22
It seems to me that there are a couple of different factors going on. First of all, there is a lot of 23
internet use in Palo Alto. I expect that that will be growing and there is something particularly 24
unusual about this particular site in that people have access to being immediately adjacent to the 25
antennas. I am not familiar with any other cell phone site or hot zone in which people can be 26
immediately adjacent to the antenna or even place themselves within the face of where the 27
antenna is broadcasting. So this is unusual. This is not going to basically mean that I am 28
opposed to all cell sites, or opposed to all Wi-Fi sites. There is something particular about this 29
one that is unusual. 30
31
I do recognize that it is certainly convenient for AT&T to have this site where they already have 32
a cell site on top of the building because of various concerns like cabling and power and access 33
that has already been provided. But it seems to me that at the beginning of the presentation I 34
heard something about macrocells, microcells, and hot zones if I remember correctly. I 35
understand from the discussion that there is a cell site at, I guess it is a macro site or a micro site 36
I could not hear which, on top of this building. There is one on top of the Westin if I remember 37
correctly. So if you think about equidistant between that somewhere maybe it makes sense to 38
split the site and put a micro site somewhere in between. 39
40
In terms of 250 University Avenue, somebody provided the address of the building that is about 41
four stories tall at the corner of Ramona and University. It is a very attractive building. I am not 42
sure how easy it would be to put something there but the issue of the distance from Waverley to 43
Webster seems to be rather contrived considering the nature of what is being proposed. Putting a 44
microcell site or putting a hot zone adjacent to that building which is within a very small stone’s 45
throw of Palo Alto Internet Exchange, which has more fiber going to that site than you can throw 46
Page 49
a stick at, I think that should be seriously considered as a potential. That will not only provide 1
Wi-Fi access but could also offload some of the 3G and 4G access. I believe it is not a 2
residential location. So I would seriously suggest consideration of that. 3
4
Now I understand more about it. I am questioning the issue about whether the constraints were 5
designed in such a way to facilitate the reuse of this site. I realize there is a premium on reusing 6
sites because that is one of the conditions is that since there is a site there you can reuse it, but 7
you are not actually reusing the same antenna masts, you are actually creating separate antenna 8
masts effectively on the side of the building. So it is because of these reasons that I am actually 9
going to vote against it. I realize there are probably enough votes to support it, but I do indicate 10
that I think there are alternative and better solutions for this particular installation, and because of 11
the particular uniqueness of the approach being applied here. Thank you. 12
13
Chair Tuma: Okay. Any other discussion? Commissioner Martinez. 14
15
Commissioner Martinez: This is a messy land use issue. Regardless of how we cut it we have a 16
commercial use that is intruding upon a residential use. I am reluctant to support the 17
recommendation if it has built in it the option of going back to what has been proposed before us 18
tonight. 19
20
The applicant has already expressed a willingness and an interest in installing these antennas 21
below the balconies where access through tenant apartments is not required. I think we should 22
make that our strong message to Staff and the applicant that that is a better solution than what 23
has been proposed today. The small boxes mounted six stories high in the shadow of a balcony, 24
painted to match the color of the stucco, in my work is not an issue with historic resources. I am 25
sure there is a modest way we can make that work. 26
27
I would like to take a minute to cite from the Comprehensive Plan. Since Commissioner 28
Fineberg is not here with the big book tonight I am going to try to do this in her place. The first 29
Comprehensive Plan policy cited in the Staff Report was B-13, which supports this. This has to 30
do with research and development. We are not talking about research and development we are 31
talking about the application of a product that is available on the market. This is not an emerging 32
industry. This is AT&T, American Telephone & Telegraph, which is as old as anybody can 33
remember. So that is not a good supporting Comprehensive Plan policy. 34
35
I would like to read a few that I pulled out of the Comprehensive Plan this afternoon. Also from 36
the Business Element, Policy B-1. Use a variety of planning and regulatory tools including 37
growth limits, which doesn’t apply, to ensure that business change is compatible with the needs 38
of Palo Alto’s neighborhoods. This is a business change. It is not compatible with existing 39
residential uses, not as it has been proposed. 40
41
Program H-20. As part of the Zoning Ordinance Update process change the zoning code to 42
disallow use other than residential unless the project can demonstrate overwhelming benefit to 43
the public. I am not certain that this project really makes a compelling case for that. 44
45
Page 50
Land Use Policy L-11. Promote increased compatibility, interdependence between commercial 1
and mixed use centers. There is a problem with compatibility with the residences and this 2
proposed use. 3
4
Goal L-2. Safe, attractive mixed use centers. That has been called into question tonight. 5
6
Policy L-12. Preserve the character of residential neighborhoods by encouraging new or 7
remodeled structures to be compatible with the neighborhood and adjacent structures. When we 8
talk about character in the Comprehensive Plan I know there is a direct connection to the 9
physical character, the physical environment. But in Palo Alto in our Comprehensive Plan it 10
means more than that. It means the human environment. The character of human environment 11
here is substantially disruptive if these antennas are installed in a manner where the rights and 12
privacies of tenants are compromised. 13
14
I would like to add a friendly amendment that asks the applicant and Staff to explore the 15
installation of these antennas below the balconies, attached to the building, in a manner that is 16
consistent with our historic resources policies and programs, without giving the option to go 17
back to what was earlier proposed tonight. I am proposing that as a friendly amendment. 18
19
Chair Tuma: If I may, I have a question for a member of the public that may inform that. The 20
landlord if you could come forward, please. Do you periodically wash the windows on the 21
outside? 22
23
Mr. Dressel: No we do not wash the windows other than when the apartments are vacant they 24
are cleaned. 25
26
Chair Tuma: They are only cleaned on the inside. They are not cleaned on the outside? 27
28
Mr. Dressel: No. 29
30
Chair Tuma: So no windows are ever cleaned on the outside. 31
32
Mr. Dressel: There are no rigging devices for the building to repel down and clean the windows 33
or whatever. 34
35
Chair Tuma: In the time you have been there has there ever been any need to do any work on the 36
exterior of the building? 37
38
Mr. Dressel: Only when we first purchased the property we did an exterior weatherproofing and 39
paint job that required scaffolding. That is the only time. 40
41
Chair Tuma: Okay, thank you. Applicants, would you be amenable to a condition that required 42
these antennas to be installed in a location that did not require access for maintenance through 43
the individual residences? 44
45
Page 51
Mr. Albritton: I have to say I am just not qualified to answer that question. It is a construction 1
question. 2
3
Chair Tuma: There is no one from the team that is qualified to answer that question? 4
5
Mr. Albritton: Is there? 6
7
Mr. JR Henderson, AT&T: Hi. Traditionally we try not to use bucket trucks for accessing Wi-Fi 8
devices. Putting the devices underneath the balcony that could be done. I think I would have a 9
concern with blocking off the street and having vehicles having to get around, but if push comes 10
to shove and that is the way we have to go I think it is an option we can look at. I am not the 11
maintenance person but most of our installations are accessible. We really try to concern 12
ourselves about blocking traffic on a street and what that can cause in maintaining our 13
equipment. 14
15
Chair Tuma: Okay, but using a bucket truck, physically you could do it. 16
17
Mr. Henderson: We have done it before with bucket trucks. Just don’t know what the impact is 18
on University Avenue. 19
20
Chair Tuma: Okay. As I understand it from the attorney earlier the frequency with which this 21
maintenance would happen would be very, very infrequent. Is that? 22
23
Mr. Henderson: Correct. 24
25
Chair Tuma: Okay, thank you. So perhaps…Planning Director. 26
27
Mr. Williams: Thank you. I was just going to throw this out. Is it an option to include the 28
possibility that either they do it from underneath or that it would have to have the consent of the 29
tenant, not the property owner, but the tenant? Just an idea. 30
31
Chair Tuma: I hear what you are saying. I think that puts the tenant in a very difficult situation, 32
in a potentially combative situation. So I would much rather see this move forward where 33
essentially we are conditioning this on the …. 34
35
Commissioner Garber: Access to the site from ….. 36
37
Chair Tuma: Hang on one second because I want to split it. Let me try this. The initial 38
installation could possibly be done by accessing through the apartment or individual units if that 39
was absolutely necessary, but that ongoing the maintenance would be done without having to 40
access through. So whatever location would work on the building in terms of meeting the 41
aesthetic requirements, but at the same time so that it could be maintained, going forward from 42
the exterior. So I would offer that as a substitute friendly amendment. 43
44
Commissioner Garber: Let’s do it this way. I will not accept the initial friendly amendment. I 45
will accept the friendly amendment from the seconder. 46
Page 52
1
Chair Tuma: Okay. I will accept that as well as the seconder. Any additional discussion, 2
comments, questions? Are we ready to vote? Sure. 3
4
Commissioner Keller: So I am understanding your friendly amendment is that other through 5
initial construction that any further access in order to maintain it that that not require any access 6
through any of the apartments. 7
8
Chair Tuma: Yes, essentially the only access they have is in the first instance to install it. If they 9
need to maintain it, change it out, do other things that needs to happen without accessing through 10
the – that is the intent of my friendly amendment. 11
12
Commissioner Keller: Right, okay. Thank you. 13
14
Chair Tuma: Commissioner Tanaka. 15
16
Commissioner Tanaka: I have a question for the applicant. So you just heard the friendly 17
amendment. Would that be acceptable? 18
19
Mr. Albritton: I think AT&T wants to do everything they can to avoid affecting the tenants. The 20
only reason I hesitate is that you are treading on the rights between the landlord and the tenant. 21
You are dictating what rights he may or may not have. The best way to answer that…. 22
23
Commissioner Garber: Could we interrupt your deliberation there? Actually, I would state, and 24
I will let the attorney to the left of me weigh in here in a moment. I believe that we are not, and 25
in fact what we are doing is we are getting ourselves outside of that. We are making it more 26
clear that the City is standing outside of that. I am very concerned that we have no auspice to get 27
between the landlord, their tenants, and their commercial agreement that they have with you. 28
Our focus is primarily on the use here but we are being very sensitive to some of the things that 29
we have heard here, and are proposing conditions which essentially get around what we are 30
hearing is one of the primary issues. So there is nothing between us and the landlord and/or the 31
tenants in this particular, in the conditions that we set forth. 32
33
Mr. Albritton: All I can give you is a tentative yes. I am an outside counsel to AT&T. You can 34
probably imagine there is an army of lawyers that work for AT&T. It certainly suggests a 35
potential reasonable solution. I don’t know the logistics and the facts. I don’t know if a bucket 36
truck can reach it. I don’t know what the cost of the bucket truck is. I don’t know if there are 37
other improvements to the building that…. 38
39
Commissioner Tanaka: Your employee wants to say something. Can he speak? 40
41
Mr. Albritton: So it is a tentative. 42
43
Mr. Henderson: My concern with a bucket truck is it is six stories high so you have to make sure 44
you have a bucket truck large enough to be able to reach, like a fire truck to be able to reach up 45
that high. When you talk about intrusion for access there may be intrusion on the street, which 46
Page 53
may cause just as much heartache as it would for accessing a device on a balcony. If I have to 1
remove that device I can be in within 30 minutes to an hour to take it out. If I have to bring a 2
truck in that means I have to block off the street. It is a two-lane street on University, correct? 3
Right? There is limited parking. I know you have merchants out there. So basically what you 4
are going to have to do is you are more than likely going to have to close portions of the street 5
off to get a bucket truck in there that is going to be able to reach up to six feet. There is more 6
intrusion here as well. So I think it is possible. I am not the maintenance guy, the field 7
maintenance guy, the field services guy, but from my history of working with these devices you 8
are going to need a large truck to reach that high, which is going to essentially cutoff traffic 9
flowing up and down that street. That is my concern. That is a big concern. 10
11
Chair Tuma: Okay. 12
13
Commissioner Garber: Through the Chair here for a moment. Just for you to understand what 14
you are trying to do or what you are proposing is to provide benefits to not only your customers 15
but the public at large, etc. You are saying that there would be a burden obviously on the public 16
thoroughfare in order to maintain those things. At that point the burden is shared and the 17
benefits are shared by the public and we are not including any of the private property owners in 18
that equation. So there is some parody there. 19
20
The other issue of course is that it puts burden on you. Inevitably there will end up being, there 21
is the likelihood of temporary permits, trying to coordinate that through doing it early mornings 22
or late at night or whatever. I recognize all of that, but importantly it takes out of the equation 23
having to go through what is essentially private property here. 24
25
Mr. Henderson: I understand it is not the best situation to have to utilize private and commercial. 26
27
Chair Tuma: So I think the takeaway here to the applicant is let’s get creative and find if there is 28
a solution. You are going to have another hearing. It is going to be in front of the City Council. 29
If the motion that is on the floor passes our recommendation would be that this is the way that 30
this installation gets done. Do your homework, and try to figure out a way to do it between now 31
and then. I think if you can do it and it is feasible and it is reasonable it will make for smoother 32
sailing at the next step. So with that unless there are any other comments, Commissioners? 33
Commissioner Tanaka. 34
35
Commissioner Tanaka: So is the amendment? I guess I just actually want to make sure that 36
there is a truck that actually can go up six stories. 37
38
Chair Tuma: It is not a condition that they have to use a truck. The condition is that they install 39
it in such a way that they don’t have to go through the private homes of the residents of the 40
building to do maintenance, change it out, or anything other than after the initial. So however 41
they accomplish that if they have guys with parachutes, they are going to use a helicopter, 42
whatever they are going to do, repel off the building, guys do it for the Super Bowl all the time. 43
I don’t think any of us are in a position to say to these folks how they need to implement it. I 44
think what we are saying is this is what we would like to see implemented. 45
46
Page 54
Commissioner Tanaka: Okay. 1
2
MOTION PASSED (4-1-2-0, Commissioner Keller opposed, Commissioners Fineberg and 3
Lippert absent) 4
5
Chair Tuma: Okay. So with that all those in favor of the motion say aye. (ayes) Opposed? 6
(nay) That passes four to one, with Commissioner Keller opposing. 7
8
Attachment F
Project Notification
It is the City’s practice and policy to use the City’s GIST (Geographic Information System
T…) database to create mailing lists to satisfy notification requirements for public
hearings. The information that is on the GIST system is based on Santa Clara County
records for the property owner contact information, which is updated a few times per
year, and Palo Alto Utilities Department customer database for the tenants of individual
units’ contact information.
Within three business days of receiving a Conditional Use Permit application, staff sends
notice cards to property owners and residents within 600 feet of the project site to
inform them that a project has been submitted and is under review; staff utilizes the
City’s GIST system to obtain the mailing list information. The first notices for the project
were sent out August 16, 2010. In addition to the mailed notice cards, the project site
was posted with an 11” x 17” sign that notified the readers that the project had been
submitted to the City for review.
Staff also required the applicant to provide more detailed notification to the tenants
that are adjacent to the balcony feature. The applicant provided staff with a copy of the
notice and the distribution list (October distribution list); all the units facing University
Avenue were provided notice in late October.
When the tentative decision for approval was prepared, notice cards were sent January
16, 2011 to property owners and residents within a 600 foot radius, and to the October
tenant distribution list provided by the applicant.
On January 24, 2011 the first request for a public hearing was submitted. In
communications with the tenants that followed this request, it came to staff’s attention
that the residents in the building were not all individually noticed of the project; only
the tenants that were listed on the October distribution list were individually notified.
The City’s GIST system only provides resident address information for those who are
paying utility bills in Palo Alto; the tenants in the Hotel President do not pay separate
utility bills to the City, so therefore the City does not have the individual unit address
information available in the GIST system. For the August 2010 City notification, “488
University Avenue” received one notice card for the whole building; for the January
2011 City notification, one card was sent to 488 University and additional cards were
sent to the October distribution list. The property owner was included in the distribution
of all City notices, but according to the tenants, he did not notify them of the proposed
project.
The notification for the February 23, 2011 Planning and Transportation Commission
public hearing went to residents and property owners within the 600 foot radius, and to
all the individual residents in the Hotel President. This updated distribution list was
used for notifications associated with City Council review of this project.
Council Members Burt, Espinoza, Holman, Klein, Price, Scharff, Schmid, Shepherd, and Yeh:
There are five outstanding factors regarding AT&T's proposed antennae deployment that are of
significant concern to the residents of the President Hotel at 488 University Ave.
1. Access to rental residential homes by a third‐party corporate entity for commercial gain: AT&T
has proposed a solution that is in violation of existing California law. Entry and Inspection are governed
by Civil Code which specifically pertains to building maintenance, safety, and emergency issues, not to
entrance by a private third party for commercial enterprise that does not pertain to the specific
residential rental unit(s).
2. Disregard for the conditions requested by the Planning Commission: It appears that only after
prompting by the President’s residents, has AT&T begun to evaluate the conditions requested by the
Planning Commission in February. These conditions were 1) a request for additional field research on
the output of the proposed antennae and 2) a request to consider other alternatives for antennae
placement that do not impact building residents.
Since the Planning Commission meeting, it appears that little has been done, as was frankly represented
by employees of and consultants for AT&T. Specifically, On March 7th, a meeting was held with
representatives from the building’s tenants, an AT&T employee, an AT&T consultant and the building
owner. The residents initiated the discussion on alternative placements—the AT&T representatives
treated these suggestions as new information despite having heard these potential alternatives in our
earlier meeting with AT&T on February 21st (prior even to the Planning Commission meeting). We are
surprised that this item has gone to the Council’s Consent Calendar without these conditions having
been taken seriously.
3. Private corporate collusion with commercial property owners for commercial gain overriding the
concerns of rental residents: It appears that the private applicant is unable or unwilling to conduct
meaningful community outreach. Certainly AT&T, with its vast resources, can provide better notification
and community outreach going forward by bringing representatives, whether employees or consultants,
that can effectively answer questions presented and/or respond in a timely fashion to questions that
remain on the table. To date, communications have been less than stellar and those representing AT&T
less than forthcoming with the community.
Specifically, in the case of the antennae project at the President, we would have expected in Palo Alto
that community outreach would have been conducted much earlier than two days before the Planning
Commission public hearing, especially given the overall poor advance notice of the project. The
haphazard way this project has been handled (before and after the Planning Commission meeting) has
building residents very troubled.
4. Addendum or New Use Permit: The question remains as to why AT&T has been able to consider
the deployment of these devices as an addendum. If the applicant has not fully disclosed the planned
full extent of this deployment, it is recommended that they be compelled to resubmit a full and new use
permit with the City’s Planning Department. It appears to many involved that AT&T plans to use the
existing cell tower as the centerpiece of a much larger telecommunications project, not merely as a
“band‐aid” for their claims of data overload or of poor coverage in the 400 block of University.
If as stated the goal is to provide a meaningful service of real benefit to the residents of Palo Alto, it
would seem much more logical to place these powerful antennae at busier places on University Ave
(such as 300 University Ave or 250 University Ave) where they will benefit more members of the
community.
5. City policy concerning private telecommunications vendors: Going forward, how will the City
treat proposals from private telecom vendors? Does the City have a telecommunications plan with
overall objectives? And if not, how can the City escape claims of preferential treatment or monopoly by
certain vendors while excluding others? Does this not present huge legal liabilities to the City overall?
That is, if AT&T, the applicant at hand, gains control of a certain radius of University Avenue does this
shut out other commercial vendors; and if so what are the ramifications to the City and other
commercial applicants?
Thank you all for your time and attention in reviewing our comments.
The 6th Floor residents of the President Hotel, 488 University Ave
AT&T Applicant has prepared responses to Conlffiissioner Keller's questions:
1. Are residents of the apartments adj acent to the proposed antennas considered as
members of the public for the exposure limitations?
Yes, we routinely evaluate against the tightest limit: public, meaning any member of the
general public, 24/7
2. Are the balconies where the proposed antennas are to be placed accessible to the
residents of those apartments just as they are accessible to service personnel through
those apartments?
Two 6th floor apartments have doors that open to the balcony, while the others have
windows that face the balcony.
3. The Hammett & Edison document dated August 5, 2010 provides a measurement
regarding occupational guidelines (page 3, first full paragraph). At what radius would the
power density level not exceed *public* exposure guidelines for the requisite frequency
range? Please provide the calculations of this radius.
It would be a matter of inches, ifi! exceeds the public limit at all. And that's in FRONT
of the antenna, a position that would be close to impossible to attain, requiring one to be
suspended in the air, off of the balcony. For someone on the balcony, BEHIND the
antenna, the public limit would not be reached even touching the antenna.
4. Is periodic access of wireless carrier personnel through private apartments detrimental
to public health, safety, general welfare, or convenience?
Landlord access through an apartment at the Hotel President is a landlord/tenant issue
and not a zoning issue subject to regulation by the Planning Commission. Landlord
access to a tenant apartment does not affect Conditional Use findings related to the
3public health, safety, general welfare, or convenience2•
7. Have other locations in proximity to the coverage gap at an appropriate height been
considered? In particular, the City's Cowper-Webster garage, the Garden Court hotel,
499 University Avenue, Borders Bookstore fa9ade, 432 University Avenue.
See attached documents for response
8. Please provide a map of the coverage gap by signal strength.
A slide is attached for this information.
1
Supplemental Alternatives Analysis
(Response to Staff Inquiry 2/22111)
This document should be read in conjunction with the Alternatives Analysis submitted
2117/20 II. In total twelve alternatives were considered for placement of the approved
WiFi nodes.
I . Staff proposed locations
In an email dated February 22, 20 II, planning staff requested that AT&T evaluate
additional possible locations for the approved WiFi nodes. In general, these potential
locations are either too far from the desired coverage location, lack architectural features
that would allow disguising the approved WiFi nodes or may require trenching of
University Avenue to provide Fiber Optic Data service. A briefreview of these
supplemental alternatives, as requested by staff, is set forth below.
499 University Ave.
This low-rise commercial building does not provide adequate height to provide effective
service to more than a small portion of the coverage objective area. Additionally there
are no architectural features that would allow the wireless access points to be installed
without having them clearly visible from the street. Lastly, there is likely not a fiber optic
connection that would be sufficient for connections into the AT&T data network.
Installation of this capacity may require trenching of University Avenue.
428 University Ave. (aka 432 University Ave.)
This is a fOUI-stOry square commercial building witb a modern stone favade. To be
located on this building, the approved WiFi nodes would have to either be mounted on
approximately 5-foot tall rooftop tripods rising above the parapet, or be mounted to the
exterior fayade of the building both of which would be fully visible from the street below.
Lastly, there is likely not a fiber optic connection tbat would be sufficient for connections
into the AT&T data network. Installation of this capacity may require trenching of
University Avenue
Set back half a block from University Avenue, any signals from WiFi nodes on this fOUI-
story building would be blocked from the coverage objective area by the six-story
President Hotel and the other buildings between the Garden Court Hotel and University
Avenue.
Parking Garage -The City's Webster/Cowper parking garage is setback from
University Avenue and the signal from any WiFi nodes placed on this building would be
obstructed from the coverage area by the buildings which surround the parking structure.
Borders Bookstore Fa~ade -(456 University Ave.)
The iconic Borders fa<;:ade and signage does not provide adequate height for the signal
coverage necessary to fill the capacity gap identified by AT&T. In addition, locating the
approved WiFi nodes at this location would pose significant challenges to avoid
impacting the historic nature ofthis fa<;:ade. Lastly, there is likely not a fiber optic
connection that would be sufficient for connections into the AT&T data network.
Installation of this capacity may require trenching of University Avenue
II. Additional preliminary sites rejected by AT&T
The following additional locations were initially examined by AT&T as part of the site
selection process. Due to their distance from the coverage gap area, it was determined
early on that they would not meet the technical requirements to provide coverage along
University Ave. and as such they were not included in the Alternatives Analysis.
Westin Palo Alto (675 EI Camino Real) -this location did not provide coverage along
University Ave.
AT &T Innovation Center (260 Homer Ave) -did not provide coverage to the desired
outdoor area.
Alternatives Analysis
I. Summary
AT &T Mobility has identified a significant capacity gap in its wireless network at the
northeast end of University Avenue. This busy section of roadway along with the
neighborhood serving commercial'uses (restaurants and retail) in this area create a high
and rapidly growing demand for wireless voice and data service. AT&T Mobility
explored several nleans to provide additional wireless capacity to this area. Rather than
exclusively considering traditional wireless communication Facilities ("WCF"), AT&T
Mobility also explored installing WiFi nodes similar to those used in residences and
businesses to provide ihe local area with additional wireless capacity.
II. Preferred Locations
When considering facility locations AT&T Mobility seeks to identify the least intrusive
means to provide coverage to the subject area based upon the values expressed in
applicable local regulations. According to the Wireless Communication Facilities section
of the City of Palo Alto Municipal Code, Section 18.42.110 (a) "building mounted WCF
and co-location facilities are preferred and encouraged."
Further, Section 18.42.11 0 (b) (1) states that wireless facilities consisting of "Building-
mounted projects that do not exceed the existing building/roof-top screening height"
require only architectural review and not a conditional use permit and are therefore
preferred over locations which would require a CUP.
III. Methodology
AT &T Mobility reviewed both alternative siting location as well as alternative
technologies to identify the least intrusive mean to fill the identified capacity gap.
Through this analysis it immediately became apparent that a limited modification to the
existing facility would be less intrusive than installing a new WCF, whether collocated or
stand-alone. A review of the alternatives evaluated by AT&T Mobility follows.
V. List of Alternatives Considered
-345 Hamilton Avenue
AT &T owns a landline telephone switch in a building at 345 Hamilton Avenue. While
this was identified as the initial location for the approved facility, AT&T RF engineers
determined that this site would not provide adequate coverage for the heavily traveled
University Avenue corridor due to signal blockage from existing buildings. InstaIling an
antenna structure taIl enough to overcome this signal blockage would not be aestheticaIly
viable at this location.
-Wireless Facility at 525 University Avenne
There is an existing cellular co-location facility at 525 University Avenue about 170
feet away from the approved facility. This facility houses equipment for Clearwire,
Sprint Nextel, and Verizon Wireless. Due to its IS-story height and distance from
University Avenue, this building would require the installation of a full WCF rather than
the proposed WiFi nodes. The installation of an additional wireless facility at this
location would be aesthetically inferior to the proposed facility.
1550
Title only
Page 1
City of Palo Alto (ID # 1447)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 3
(ID # 1447)
Summary Title: Adoption of UAC Bylaws
Title: Recommendation of the Utilities Advisory Committee to Approve the
Bylaws of the Utilities Advisory Commission of the City of Palo Alto
From:City Manager
Lead Department: Utilities
Recommendation
The Utilities Advisory Commission (UAC) recommends that the City Council approve the Bylaws
of the Utilities Advisory Commission of the City of Palo Alto, as attached.
Executive Summary
The UAC has reviewed, discussed and agreed upon a set of bylaws. The UAC desires to establish
these bylaws in order to facilitate and enhance public participation and UAC debate at the
UAC’s meetings in accordance with the requirements of Palo Alto Municipal Code and
applicable California law, including, without limitation, the Ralph M. Brown Act. As directed by
the City Council at its October 18, 2010 meeting, the UAC bylaws are being returned to the
Council for approval.
At its January 12, 2011 meeting, the UAC voted five to one to recommend the attached bylaws
for Council approval.
Background
On July 6, 2009, the Council moved “for the Mayor [then Mayor Drekmeier] to appoint a
Council subcommittee to review the role of the UAC and return with a report before the second
reading of the Ordinance.” The mayor appointed the then Chair of the Policies and Services
Committee (Vice Mayor Espinosa), the then Chair of the Finance Committee (Mayor Burt) and
the Council liaison to the UAC (Council Member Yeh) to the Ad Hoc Subcommittee.
One of the recommendations of the Ad Hoc Committee members was for the UAC to have the
ability to foster and facilitate engagement with the general public, including representatives of
commerce and industry, in regard to the Utilities Department’s matters. However, the
language was crafted so that this was an ability, not a mandate, and would be at the discretion
of the City Council. The Ad Hoc Committee members also stated their expectation that the UAC
would develop its own bylaws. At its October 18, 2010 meeting, in a seven to two vote, the City
Council adopted the recommendations of the Ad Hoc Committee and included that the UAC,
March 21, 2011 Page 2 of 3
(ID # 1447)
subject to the Council approved bylaws, address the circumstances that commerce and industry
groups with policy issues may come forward to address the Commission.
At its December 1, 2010 meeting, the UAC appointed Commissioners Foster, Berry and Melton
to an ad-hoc committee to review the UAC’s draft bylaws. This ad-hoc committee met with
Utilities staff on January 4, 2011 and returned to the full UAC at the January 12, 2011 meeting
with proposed amendments to the bylaws. The attached bylaws (Attachment A) incorporate
the final amendments made and approved by the UAC.
Board/Commission Review and Recommendations
The UAC reviewed the proposed bylaws at its January 12, 2011 meeting. The UAC discussed the
requirement that Council approve later amendments to the bylaws and noted that the UAC
would not have the discretion to appoint a standing budget committee at a later date without
going back to Council for approval. After discussion, it was proposed to remove the sentence in
Section 4.1 that stated “Standing committees may be appointed only with the approval of the
Council”. It was also proposed that Section 9.1 be amended to read “The Bylaws shall be
amended or repealed in accordance with the Code”, removing the reference to Council
approval, so that if the Code allowed for UAC approval then the UAC Bylaws would also. In a
five to one vote the UAC recommended Council approval of the bylaws. Excerpted minutes
from the UAC’s January 12, 2011 minutes are included as attachment B.
Resource Impact
Any resource impacts to implement the UAC bylaws would be any incremental increase in staff
time as might be needed to facilitate UAC formed subcommittees, any standing committes,
special meetings, and engagement with the general public.
Policy Implications
Adoption of these bylaws does not represent a change to current City policies.
Environmental Review
Adoption of this Ordinance does not meet the California Environmental Quality Act’s definition
of a project pursuant to Public Resources Code Section 21065, and therefore, no environmental
review is required.
Attachments:
·A -Bylaws of the Utilities Advisory Commission of the City of Palo Alto(DOC)
·B -Excerpted Minutes from January 12, 2011 UAC Meeting (DOCX)
Prepared By:Debra Lloyd, Manager
March 21, 2011 Page 3 of 3
(ID # 1447)
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
ATTACHMENT A
1
110106 jb 0073487
BYLAWS OF THE UTILITIES ADVISORY COMMISSION
OF THE CITY OF PALO ALTO
Section 1.Purpose.
1.1 The City of Palo Alto (the “City”) Utilities Advisory Commission (the
“Commission”) desires to establish these bylaws and any other rules and procedures (the
“Bylaws”) in order to facilitate and enhance public participation and Commission debate at the
Commission’s meetings in accordance with the requirements of Palo Alto Municipal Code (the
“Code”) section 2.23.060(c), other provisions of Chapter 2.23 of the Code, and applicable
California law, including, without limitation, the Ralph M. Brown Act, California Government
Code Section 54950 et seq. (the “Brown Act”).
Section 2.Creation; Duties of Commission.
2.1 The Commission is created pursuant to Chapter 2.23 of the Code. The
Commission shall perform the duties imposed upon it by applicable ordinances of the City and
applicable California and federal laws. In addition, the Commission shall, as may be requested
by the Council or the City Manager, provide advice on any matter pertaining to the purpose and
duties of the Commission, as set forth in section 2.23.050 of the Code, and as the same may be
amended from time to time by ordinance of the City.
Section 3.Officers.
3.1 The officers of the Commission shall consist of a Chair and a Vice Chair.
3.2 The offices of Chair and Vice Chair shall be filled by the election of
members of the Commission from among their members. Individuals so elected shall serve for a
term of one (1) year, July 1 through June 30, or until such date when their successors are elected.
The election shall be held at the first regular Commission meeting conducted on or after July of
each year. In the event that either office becomes vacant during the regular term, the
Commission shall elect a member to serve for the remainder of the term.
3.3 The Director of Utilities (the “Director”) or the Director’s designee shall
serve as the secretary of the Commission and, acting in such capacity, shall keep minutes of all
of the meetings of the Commission,shall maintain a twelve-month rolling calendar with tentative
future agenda topics,shall accept and file in the name of the Commission documents and
correspondence addressed to it, and shall present all such correspondence to the Commission.
3.4 The duties of the officers of the Commission shall be, as follows:
3.4.1 The duties of the Chair shall consist of presiding over all regular and
special meetings, including special study sessions,of the Commission, appointing ad hoc
committees, calling meetings of the Commission as provided by the Brown Act, designating the
ATTACHMENT A
2
110106 jb 0073487
date, time and place of such meetings, signing documents and correspondence in the name of the
Commission, and representing the Commission before the Council, its committees and
subcommittees, and such other groups and organizations as may be appropriate. The Chair may
designate another member to act in his or her stead. The Chair shall have the same voting rights
as other members of the Commission.
3.4.2 The duty of the Vice Chair is to assist the Chair and to preside over
meetings of the Commission during the Chair’s absence.
Section 4.Committees.
4.1 Standing and ad hoc committees may be appointed as required or desired
in accordance with the Brown Act. Such committees shall be comprised of no more than three
(3) Commission members. These committees shall be project-oriented. Standing committees may
be appointed only with the approval of the Council. Ad hoc committees shall be dissolved and
renewed every year, July 1 through June 30.
Section 5.Quorum.
5.1 Four (4) members of the Commission shall constitute a quorum for
conducting its business.
5.2 When there is not a quorum at the commencement of or at any time during
a meeting of the Commission, the Chair or the Vice Chair, or in such officers’ absences any
present Commission member with the longest tenure on the Commission, shall adjourn the
meeting, or if no Commission member is present, the Director shall adjourn the meeting, and all
such actions shall be taken in conformity with the Brown Act.
Section 6.Regular and Special Meetings; Study Sessions.
6.1 Regular meetings of the Commission shall be held at least once a month,
on the first Wednesday of each and every month; provided, however, a regular meeting may be
cancelled or held as a special meeting on another day of the month in accordance with the Brown
Act. Regular meetings shall be held at 7:00 p.m. in the Council Conference Room or the
Chambers of City Hall, 250 Hamilton Avenue, Palo Alto.
6.2 Special meetings, including special study sessions,may be called in
accordance with the Brown Act. Notices of special meetings shall be provided in the manner
required under the Brown Act. At the special meeting, the Commission shall consider only the
business set forth in the notice.Special meetings, including, without limitation, field trips, may
be held at locations other than City Hall, as may be specified in the meeting notices; provided,
however, no special meeting shall be held outside of the jurisdictional boundaries of the City,
unless it is allowed by the Brown Act.
ATTACHMENT A
3
110106 jb 0073487
6.3 Any regular or special meeting of the Commission may be adjourned to a
subsequent date for continuation or completion of the business on the Commission’s agenda at
the meeting.Notice of such adjournment shall be provided in accordance with the Brown Act.
6.4 All regular and special meetings of the Commission shall be open to the
public.
6.5 Special study sessions are meetings at which the Commission may receive
information about the Department of Utilities’ business in an informal setting.The Commission
may discuss the material freely and without following the formal rules of parliamentary
procedure. Any oral communications and public comments will be received during the study
session. The communications and comments of representatives of commerce,industry and not-
for-profit groups,as those communications and comments relate to the subject matter of the
study session,shall be encouraged.
6.6 Up to two joint study sessions a year will be held between the
Commission and the City Council.
Section 7.Agendas.
7.1 The agenda shall contain a brief general description of each item of
business to be transacted or discussed at the meeting of the Commission or as required by the
Brown Act. The agenda for all regular and special meetings, including special study sessions,of
the Commission shall be prepared, in writing, by the Director or the Director’s designee, shall be
based upon a twelve-month rolling calendar, and shall include any item of business that is carried
forward from a prior regular meeting at the request of the Commission or the Director. The
agenda shall be posted within the time and in the manner required by the Brown Act. The agenda
for a regular meeting will generally be closed and no additional items accepted after 12:00 p.m.
of the Wednesday preceding the meeting. Additional items may be added to the agenda
thereafter only in accordance with the Brown Act.
7.2 Whenever feasible, a complete copy of each regular meeting’s agenda and
all supporting materials will be delivered or mailed to each Commission member so as to reach
the recipients by no later than 7:00 p.m. on the Monday preceding the meeting.
7.3 The agenda for a regular meeting shall make provision for the
Commission to identify and briefly discuss any and all matters that the Commission desires to
consider at any future regular meeting of the Commission.
7.4 Nothing in the Bylaws shall be interpreted to prohibit consideration of any
item of business which fosters and facilitates engagement with the general public, which
consideration also shall not exclude any representative of commerce,industry or a not-for-profit
advocacy group in regard to any utility matter falling within the purpose and duties of the
Commission, as set forth in section 2.23.050(b)(1)(A) through (E) of the Code.
ATTACHMENT A
4
110106 jb 0073487
7.5 Public comments shall be generally limited to three minutes per person,
but this time limitation is subject to the discretion of the Chair,which shall be exercised in
accordance with agenda time management concerns.
7.6 Any two Commissioners may bring forward a commissioner memo on any
topic to be considered by the Commission, but no more than three Commission members may
sign a memo. Prior to the preparation of a commissioner memo, the Commission members who
author a memo shall share a draft of the proposed memo with the Director prior to the
finalization of such memo. Final commissioner memos shall be provided to the Director by noon
seven days prior to the Commission meeting that the memo is intended to be agendized in order
to afford the Director sufficient time to process the Commission’s agenda packet.The
Commission shall not take action on the day that a commissioner memo is introduced if it will
adversely impact staff resources or current work priorities which are not addressed in the memo,
but the Commission may take action on the day that the memo is introduced if there are no
impacts on staff resources or work priorities.
7.7 The agendas shall allow for Commission review of the twelve-month
rolling calendar. Items can be added to the rolling calendar at the request of at least two
Commissioners.
Section 8.Conduct of Meetings.
8.1 The Chair, the Vice Chair, the temporary presiding officer appointed by
the Chair, or, if necessary, whichever member of the Commission in attendance with the longest
tenure on the Commission, shall take the chair at the time designated for the start of the meeting,
and shall call the Commission to order.
8.2 The Chair, the Vice Chair, or in his or her absence the temporary presiding
officer shall preserve order and decorum at all meetings of the Commission, announce the
Commission’s decision on all subjects, and decide all questions of order subject to any appeal
procedure set forth in the Bylaws.
8.3 The Chair shall call the roll of the Commission members. The Director or
the Director’s designee shall record the names of those present and those absent.
8.4 The Commission may, by a majority vote of its members, adopt or amend
any other rules and procedures to be followed at regular and special meetings and study sessions
of the Commission to the extent such rules and procedures are not in conflict with the Bylaws, or
any applicable Palo Alto ordinance, or California or federal law, rule or regulation. The other
rules and procedures shall be deemed guidelines and failure to comply with any such rules and
procedures shall not be the basis for challenge to or invalidation of any action of the
Commission, nor shall they be construed to create an independent remedy or right of action of
any kind, except as may be authorized by applicable laws.
ATTACHMENT A
5
110106 jb 0073487
Section 9.Amendment.
9.1 The Commission may recommend that the Council amend or repeal the
Bylaws.Bylaws canshall be amended or repealed by the Council in accordance with section
2.23.050(c) of the Code.
Section 10.Bylaws Available to Public.
10.1 Upon the Council’s approval, the Bylaws and any other rules and
procedures adopted by the Commission pursuant to Section 8.4 hereof shall be transmitted to
each member of the Commission, to the Council, and to the City Clerk. Copies of the Bylaws
and any other rules and procedures shall be made available to the public, upon request, and at
each meeting of the Commission.
THE FOREGOING BYLAWS WERE APPROVED BY THE COUNCIL AT A
REGULAR MEETING HELD ON _________________, 2011. THEY SHALL BECOME
EFFECTIVE AS OF ___________________, 2011.
ATTACHMENT B
1
EXCERPTED MINUTES OF UTILITIES ADVISORY COMMISSION
Meeting of January 12, 2011
UNFINISHED BUSINESS ITEM 1: Utilities Advisory Commission Bylaws
The Commissioners reviewed the amendments to the UAC bylaws proposed by the UAC
ad-hoc committee (comprised of Commissioners Foster, Berry and Melton). Commissioners
Foster and Melton agreed that the amendments shown were in line with the discussion held
at the meeting of the ad-hoc committee on January 4, 2011. Commissioner Berry noted his
disagreement with the requirement that Council approve later amendments to the bylaws
and also noted that the UAC would not have the discretion to appoint a standing budget
committee at a later date without going back to Council for approval. After discussion, it was
proposed to remove the sentence in Section 4.1 that stated “Standing committees may be
appointed only with the approval of the Council”. It was also proposed that Section 9.1 be
amended to read “The Bylaws shall be amended or repealed in accordance with the Code”,
removing the reference to Council approval, so that if the Code allowed for UAC approval
then the UAC Bylaws would also.
ACTION: Commissioner Foster made a motion to recommend Council approval of the
bylaws with the proposed amendments. Commissioner Melton seconded the motion. The
motion carried (5-1) with Commissioner Berry voting no.
City of Palo Alto (ID # 1390)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 2
(ID # 1390)
Summary Title: Adoption of a Resolution Vacating Easements UG 41
Title: Adoption of a Resolution Summarily Vacating Public Service Easements
within areas of Underground Utility District No. 41
From:City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Council approve the attached Resolution Summarily Vacating public
service utility easements within areas of Underground Utility District 41 (Attachment A).
Background
On April 25, 2005, the Council passed Resolution of Intent No. 8515 to establish Underground
Utility District No. 41 (CMR:200:05). On July 11, 2005, the City Council adopted Ordinance No.
4882 to create Underground Utility District No. 41 (CMR:304:05), which provided for the
removal of poles, overhead lines and associated overhead structures in areas contiguous with
portions of Colorado Avenue, Middlefield Road, Oregon Expressway and Cowper Street. The
removal of the overhead utility facilities and construction of replacement underground facilities
has now been completed.
Discussion
The Utilities Department has completed the conversion of overhead electric service to the new
underground system and the poles and lines from the old rear service areas have now been
removed. The attached Resolution will vacate several of the rear pole line easements for public
service utilities within certain areas of Underground Utility District 41. The easements to be
vacated are shown with bold lines and X’s on the map, attached to the Resolution as Exhibit B.
The vacation is in accordance with the Streets and Highways Code which authorizes the City
Council to summarily vacate public service easements for utilities when the easements have
been superseded by relocation and there are no other public facilities located within the
easements. Staff has received confirmation from the City Utilities, Public Works and Planning
departments, as well as AT&T, formerly Pacific Bell, that there are no existing utilities within the
easements, and there is no plan or future need for the easements. As these easements are not
necessary for any present or future use they may be summarily vacated in accordance with
Section 8333 of the California Streets and Highways Code.
Resource Impact
March 21, 2011 Page 2 of 2
(ID # 1390)
The easement vacation processing fee of $1,675.00, as set forth in the Municipal Fee Schedule,
is not applicable to City-initiated easement vacations in Underground Utility Districts.
Policy Implications
The recommendation does not represent any change to City policies. The Planning Department
has determined that the vacation of these easements is in conformity with the Palo Alto
Comprehensive Plan.
Environmental Review
The proposed summary vacation is categorically exempt from the review under the California
Environmental Quality Act (CEQA) pursuant to Title 14 California Code of Regulations Section
15305 as a minor alteration in land use limitations.
Attachments:
·Attachment A: UD District 41 Resolution (PDF)
Prepared By:Martha Miller, Manager, Real Property
Department Head:Lalo Perez, Director
City Manager Approval: James Keene, City Manager
City of Palo Alto (ID # 1459)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 6
(ID # 1459)
Summary Title: Amendments to NCPA Geothermal Project Agreements
Title: Adoption of a Resolution Approving Three Contracts with the Northern
California Power Agency (a) Amendment No. Two to Agreement for
Construction, Operation and Financing of Geothermal Project No. 3, (b)
Amended and Restated Geothermal Project Operating Agreement between
NCPA and the Project Participants; and (c) Amendment No. 2 to NCPA Facilities
Agreement
From:City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council adopt a resolution authorizing the City Manager to execute
the following Northern California Power Agency (NCPA) Geothermal Project Agreements
and Facilities Agreement amendments:
·Amendment Number Two to Agreement For Construction, Operation And Financing
Of Geothermal Generating Project Number 3 (Third Phase Agreement);
·Amended And Restated Geothermal Project Operating Agreement Between
Northern California Power Agency And The Geothermal Project Participants
(Operating Agreement); and
·Amendment Number One To Northern California Power Agency Facilities
Agreement (Facilities Agreement)
Executive Summary
Council’s approval of these amendments will reduce Palo Alto’s risk of assuming future financial
obligations for a project that Palo Alto no longer has an ownership interest in. The Turlock
Irrigation District (TID) will be terminating its NCPA membership on April 1, 2011. TID has
been a participant in various NCPA projects and their termination of membership has
required NCPA to update or develop a number of agreements and policy documents. On
February 24, 2011, the NCPA Commission approved five agreements related to a project in
which TID has decided to retain their ownership interest, the Geothermal Generating
March 21, 2011 Page 2 of 6
(ID # 1459)
Project Number Three (Geothermal Project). Of the five related agreements approved by
the NCPA Commission in February, three also require approval of the participating
members’ governing boards: the amended Third Phase Agreement; the amended
Operating Agreement; and the amended Facilities Agreement. Council’s approval of these
three agreements is necessary for TID to complete its withdrawal from the NCPA Joint
Powers Agreement (JPA).
Amendments to the Geothermal Project Agreements are of interest to Palo Alto, because
TID’s ownership in the project originates from project entitlements that Palo Alto and two
other NCPA members (Gridley and Plumas-Sierra) permanently transferred to TID in 1984
and 1985. However, until this time, TID has not been a signatory to the Third Phase
Agreement. Additionally, under the 1984 transfer agreement the transferring members,
including Palo Alto, indemnified TID from any liability for property damage, which could
include decommissioning costs. The proposed amendments to the Third Phase Agreement
will incorporate the 1984 and 1985 transfers, formally recognizing TID as a project
participant and recognizing that Palo Alto, Gridley and Plumas are contingently liable for
bond payments only in the event of a TID default. The amended Operating Agreement
provides that TID will assume the obligations of Palo Alto, Gridley and Plumas relating to
the project’s operating, capital improvement, maintenance, financing and
decommissioning costs. The indemnity and insurance obligations assumed under the
1984 agreement will be extinguished as of April 1, 2011, because the 1984 agreement and
the 1985 agreement will be terminated as of that date.
Background
NCPA is an organization of publicly-owned electric utilities including Palo Alto. NCPA arranges
for delivery of the City's electric power and manages electric resources that Palo Alto jointly
owns with other NCPA members. In June 2009, TID provided formal notice to NCPA and all
NCPA members of its intent to terminate its membership in NCPA effective no later than April
1, 2011. Over the past 18 months, NCPA staff has inventoried all relevant agreements, policies,
and procedures and updated or developed new agreements and policy documents, as
necessary, to effectuate TID's withdrawal.
NCPA identified the following three categories of agreements, policies and procedures requiring
review and/or revision:
1) Natural gas related programs and projects;
2) Geothermal related programs and projects; and
3) Obligations under existing governance agreements to be settled prior to exit.
Natural Gas Related Programs and Projects
All work has been completed associated with the natural gas related programs and projects.
This included terminating the Natural Gas Purchase Program Third Phase agreement (approved
by Council on May 17, 2010, CMR: 224:10), removing TID from the natural gas procurement and
pipeline capacity management agreement, and modifying natural gas pipeline tariff agreements
to reflect a split of pipeline capacity between NCPA and TID. No further action by Palo Alto is
March 21, 2011 Page 3 of 6
(ID # 1459)
required at this time.
Geothermal Related Programs and Projects
TID will retain its interests in Geothermal Project No.3 even after its withdrawal from NCPA.
However, TID is not a signatory to the Third Phase Agreement and its rights and entitlements
flow instead from:
·1984 and 1985 letter agreements between TID Palo Alto, Gridley, and Plumas by which
project entitlement percentages are transferred. These letter agreements are also
referred to as the “Transfer Agreements”, and Palo Alto, Gridley and Plumas are often
referred to as the “permanently transferring participants”;
·Letter agreements between TID and NCPA by which NCPA agreed to treat TID as a
project participant; and
·NCPA governance documents such as the Facilities Agreement and the Geothermal
Project Operating Agreement.
The letter agreements permitted TID's commissioner to vote at Commission meetings and
through its appointed representative on the Facilities Committee. After April 1, 2011, TID will
no longer have a commissioner on the NCPA Commission. Further, because the Facilities
Agreement provides that representation on the Committee is contingent on being an NCPA
member, TID will not have a representative on the Facilities Committee to formally represent
its entitlements in the geothermal project. As a result, NCPA and TID have been negotiating
agreements that will ensure that TID’s rights and obligations as embodied in the letter
agreements are continued in successor agreements to be implemented upon TID’s withdrawal
and that continuing NCPA member interests are protected in an equal fashion.
In order to finalize TID’s withdrawal the Geothermal Project participants, including Palo Alto,
will need to approve amendments to the Third Phase Agreement, the Operating Agreement,
and the Facilities Agreement to reflect TID’s participation in the project as a non-NCPA
member. The NCPA Commission approved the amendments to these three agreements at their
February 24, 2011 Commission meeting and is requesting that Palo Alto approve them before
April 1, 2011.
Additional agreements approved by the NCPA Commission on February 24 were the Fourteenth
Supplemental Indenture of Trust, and the Facilities Agreement Schedule FA 10.00 –Federal Tax
Guidelines Relating to Private Business Use. Both of these only required approval by the NCPA
Commission and therefore no further action on them is required by Palo Alto at this time.
Obligations under Existing Governance Agreements to be Settled Prior to Exit
NCPA and TID have negotiated a settlement that identifies their claims against each other and
establishes a payment amount that will be used to settle both known and unknown claims that
were outstanding at the time of the settlement. This “Exit Agreement” will also be used to
terminate certain remaining agreements between the parties as required due to the
termination of membership and to establish dispute resolution scope limits and processes for
disputed payments. This particular agreement requires approval by only the NCPA Commission
March 21, 2011 Page 4 of 6
(ID # 1459)
and TID.
A detailed description of the above mentioned agreements, along with a summary of steps
taken by NCPA related to TID's withdrawal, is found in the NCPA Staff Report dated February
22, 2011 (Attachment B). The Membership Withdrawal and Exit Agreement between NCPA and
TID, the Fourteenth Supplemental Indenture of Trust, and the Facilities Agreement Schedule FA
10.00 are shown in Attachments G, H, and I.
Discussion
The following description of the proposed amendments is summarized from a letter to Council
from the City Attorney, which is provided in Attachment J. Amendment Number Two to the
Geothermal Third Phase Agreement (Attachment D) implements the following changes:
1)TID is formally recognized as a project participant in regard to its 12.661% ‘Transferred
Project Entitlement Percentage’ interest in the Geothermal Project, and the project
interests of Palo Alto, Gridley and Plumas will be correspondingly reduced. Specifically
Palo Alto’s interest will be formally reduced from 12.316% to 0%. Palo Alto, Gridley and
Plumas will remain contingently liable only in the event that TID defaults on a bond
payment.1 Given Palo Alto’s original 12.316% interest transferred to TID, Palo Alto
would be contingently responsible for 97.275% (about $225,000/year) of TID’s bond
payment obligations. Palo Alto, Gridley and Plumas’ contingent liability will cease by
2024, when the 2009 Bonds are no longer outstanding, or earlier if the 2009 Bonds are
refinanced or restructured.2 In the event of a TID default Palo Alto, Gridley and Plumas
may each recover from TID their respective shares of bond payments made on behalf of
TID, however, their respective interests in the project will not change.
2)The term “Project Entitlement Percentage” is redefined to include capacity, energy and
associated attributes of the project, including renewable energy certificates (RECs), so
TID will be able to claim the RECs on a retroactive and prospective basis as of April 1,
2011. Though Palo Alto has not claimed RECs from the project in the past, the
amendment to the Third Phase Agreement clarifies that Palo Alto cannot lay claim to
these RECs as of April 1, 2011.
3)If Palo Alto, Gridley or Plumas fails to pay its share of TID’s default in payment, then
each of the other non-defaulting NCPA member project participants will be entitled to
pay the amount(s) in default and receive a prorated portion of the interest(s) of the
defaulting parties. As Palo Alto has a 0% interest in the Project, it will not be required to
pay for any defaults by Gridley and Plumas and it will not be entitled to receive any
1 The only outstanding bonds related to the current Third Phase Agreement are the 2009 Series A Bonds issued
under the Indenture of Trust, dated as of November 1, 1983. 2 The NCPA Commission adopted a resolution (Attachment C)approving the amendment to the 3rd Phase
Agreement; the resolution contains a Palo Alto amendment, which provides that NCPA will use reasonable efforts
to eliminate the City’s contingent liability before 2024 if the 2009 Bonds can be refinanced in a manner that will
achieve costs savings to NCPA.
March 21, 2011 Page 5 of 6
(ID # 1459)
portion of the defaulting members’ interests.
The amended and restated Operating Agreement (Attachment E) makes the following changes:
1)TID, as a project participant, will assume the obligations of Palo Alto, Gridley and Plumas
relating to the project’s operating, capital improvement, maintenance, financing and
decommissioning costs, for the project interest transferred to TID. The indemnity and
insurance obligations under the 1984 agreement will be extinguished as of April 1, 2011,
because the 1984 agreement and the 1985 agreement will be terminated as of that
date.
2)After April 1, 2011, TID, as a non-member of NCPA, will not have the right to vote at an
NCPA Commission meeting on any issue relating to the project. However, TID can direct
Palo Alto, Gridley and Plumas’ NCPA Commissioners to vote at a NCPA Commission
meeting on behalf of and in accordance with TID’s instructions on any matter directly
related to its interest in the project.
Amendment Number One to the Facilities Agreement (Attachment F) permits TID to designate a
representative to the Facilities Committee which has purview over the project. There are no
issues implicated for Palo Alto in this amendment.
Resource Impact
The NCPA Commission has not yet decided how to allocate the costs of the NCPA and TID
negotiated settlement between the remaining NCPA members (this refers to TID’s remaining
share of the current fiscal year NCPA budget and other outstanding claims). However, the
impact to Palo Alto is not anticipated to exceed $25,000. Costs currently paid by TID for NCPA
JPA fees, judicial costs, and regulatory costs will be reallocated to the remaining NCPA members
in future budget years.
Palo Alto remains contingently liable for 97.275% (about $225,000/year) of TID’s bond payment
obligations only in the event of a TID default, and the amended agreements will terminate this
contingent liability when the 2009 Bonds are no longer outstanding.
Attachments:
·Attachment A: Resolution for NCPA Agreements for TID Withdrawal (DOC)
·Attachment B: NCPA Staff Report on TID Agreement Approvals Required for Withdrawal
from the NCPA JPA (PDF)
·Attachment C: NCPA Commission Resolution (PDF)
·Attachment D: Amendment No 2 to Geothermal 3rd Phase Agreement (PDF)
·Attachment E: Amended and Restated Geothermal Operating Agreement (PDF)
·Attachment F: Amendment No 1 to the NCPA Facilities Agreement (PDF)
March 21, 2011 Page 6 of 6
(ID # 1459)
·Attachment G: Membership Withdrawal and Exit Agreement Between NCPA and TID (PDF)
·Attachment H: Fourteenth Supplemental Indenture of Trust (PDF)
·Attachment I: Facilities Schedule FA 10 00 (Federal Tax Guidelines Tax Exempt Status)
(PDF)
·Attachment J: Letter to Council from the City Attorney, March 14, 2011 (PDF)
Prepared By:Debra Lloyd, Manager
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
ATTACHMENT A
* Not Yet Approved *
1
110302 sh 0073513
Resolution No ____
Resolution of the Council of the City of Palo Alto Approving
Amendments to Three Geothermal Generating Project
Agreements Pertaining to Turlock Irrigation District’s
Withdrawal from Membership in the Northern California
Power Agency
WHEREAS, the Turlock Irrigation District (“TID”) has provided the required two-
years’ notice of termination of membership in the Northern California Power Agency (“NCPA”)
in accordance with the Joint Powers Agreement, as amended (“JPA”), and the NCPA
Commission has determined that TID’s withdrawal shall be effective as of April 1, 2011; and
WHEREAS,TID’s termination of membership under the JPA will affect the rights
and obligations under various agreements of TID, NCPA members and NCPA, and thus will
require those agreements to be terminated or amended; and
WHEREAS,under the JPA, a member is obligated to pay its pro-rata share of all
debts, liabilities and obligations of NCPA as of the effective date of termination as a condition
precedent to such member’s withdrawal from membership; and
WHEREAS,TID and NCPA have identified the agreements to be terminated or
amended, and the parties have reached agreement on and settled their respective claims; and
WHEREAS,as of February 24, 2011, the NCPA Commission approved the
following agreements that NCPA members, including Palo Alto, are now required to approve by
action of their governing bodies:
1.Amendment Number Two to Agreement for Construction, Operation and Financing of Geothermal Generating Project Number 3;
2.Amended and Restated Geothermal Project Operating Agreement Between
Northern California Power Agency and the Geothermal Project Participants; and
3.Amendment Number One to Northern California Power Agency Facilities
Agreement.
NOW, THEREFORE,the Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby approves and authorizes the City Manager on
behalf of the City of Palo Alto to execute the following contracts: (1) Amendment Number Two
to Agreement For Construction, Operation And Financing Of Geothermal Generating Project
Number 3; (2) Amended And Restated Geothermal Project Operating Agreement Between
Northern California Power Agency And The Geothermal Project Participants; and (3)
Amendment Number One To Northern California Power Agency Facilities Agreement.
* Not Yet Approved *
2
110314 sh 0073513
SECTION 2. The Council finds that the adoption of this resolution does not meet
the definition of a project under Section 21065 of the California Environmental Quality Act and,
therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
____________________________________________________________
City Clerk Mayor
APPROVED AS TO FORM:______________________________
City Manager
______________________________
Sr. Asst. City Attorney ______________________________
Director of Utilities
______________________________
Director of Administrative Services
AMENDMENT NUMBER TWO TO
AGREEMENT FOR CONSTRUCTION, OPERATION AND FINANCING OF
GEOTHERMAL GENERATING PROJECT NUMBER 3
This Amendment Number Two to Agreement for Construction, Operation, and
Financing of Geothermal Generating Project Number 3 ("Amendment Number Two") is made
this 1st day of April, 2011 by and among the Northern California Power Agency ("NCPA"), a
California joint powers agency; the Cities of Alameda, Biggs, Gridley ("Gridley"), Healdsburg,
Lodi, Lompoc, Palo Alto ("Palo Alto"), Roseville, Santa Clara, and Ukiah; the Plumas Sierra
Rural Electric Cooperative ("Plumas"), a rural electrical cooperative; and the Turlock Irrigation
District ("TID"), a California irrigation district ( collectively the "Parties")
W I T N E S S E T H:
WHEREAS,
A. Each of the Parties other than TID is a party to that certain Agreement for
Construction, Operation and Financing of Geothermal Generating Project Number 3, dated as
of July 1, 1983; and
B. Each of the Parties other than TID is a party to that certain Amendment Number
One to Agreement for Construction, Operation and Financing of Geothermal Generating
Project Number 3, dated as of August 1, 1983 ( "Amendment Number One"); and
C. The Agreement for Construction, Operation and Financing of Geothermal
Generating Project Number 3 as amended by Amendment Number One is hereafter referred to
as the "Original Agreement" and as amended and supplemented from time to time is hereafter
referred to as the "Agreement"; and
D. Pursuant to the Original Agreement, NCPA agreed to construct, operate, and finance
a certain geothermal generating project located in Lake and Sonoma Counties constituting the
Project for the benefit of those parties other than NCPA executing it (the "Original Project
Participants"), each of whom is entitled to its Project Entitlement Percentage of Project
capacity and energy and is obligated to pay for the costs of said Project in accordance with
Section 5 of the Original Agreement; and
E. The Original Project Participants and TID entered into an Agreement for Transfer
of Rights to Capacity and Energy of Geothermal Generating Project Number 3, dated as of
October 1, 1984 (the "First Transfer Agreement") by which each Original Project Participant
transferred to TID specified and varying East Block Entitlement Percentages of Project capacity
and energy in each calendar year, to and including 2000, and, from calendar year 2001 until the
end of the life of the Project, Gridley permanently transferred 0.118% of its 0.456% of East
Block Entitlement Percentage of Project capacity and energy to TID, and Plumas permanently
transferred 0.227% of its 0.91% East Block Entitlement Percentage of Project capacity and
energy to TID; and
GEOTHERMAL THIRD PHASE AMENDMENT TWO 1
Execution Version
F. Palo Alto and TID entered into an agreement dated December 30, 1985 (the "Second
Transfer Agreement") and pursuant to the First Transfer Agreement and the Second Transfer
Agreement, Palo Alto permanently transferred all of its 12.316% East Block Entitlement
Percentage of Project capacity and energy to TID; and
G. The First Transfer Agreement and the Second Transfer Agreement are hereafter
collectively referred to as the "Transfer Agreements", and resulted in Gridley having rights to a
0.3360% Project Entitlement Percentage of Project capacity and energy, Palo Alto having rights
to a zero % Project Entitlement Percentage of Project capacity and energy, Plumas having rights
to a 0.7010% Project Entitlement Percentage of Project capacity and energy, and TID having
rights to a 6.3305% Project Entitlement Percentage of Project capacity and energy, together with
all additions thereto pursuant to section 7(d) of the Agreement, being referred to as the
"Transferred Project Entitlement Percentage" ; and
H. Gridley, Palo Alto and Plumas are hereafter collectively referred to as the
"Transferors"; and
I. The Transferors, while having permanently transferred all their respective rights to the
Transferred Project Entitlement Percentage to TID pursuant to the Transfer Agreements,
remain liable to NCPA with respect to all payments under the Agreement related to the
Transferred Project Entitlement Percentage to the extent TID does not make such payments;
and
J. As of the effective date of this Amendment Number Two, the only outstanding bonds
relating to the Project are NCPA's Geothermal Project 3 Revenue Bonds, 2009 Series A (the
"2009 Series A Bonds") issued under the Indenture of Trust, dated as of November 1, 1983,
between NCPA and U.S. Bank Trust National Association, as successor Trustee (as amended
and supplemented, the "Indenture") and the Indenture is the only existing Bond Resolution for
purposes of the Original Agreement; and
K. The Indenture provides that NCPA will not consent or agree to any amendment of
the Agreement which will reduce the payments required thereunder or which will in any manner
materially impair or materially adversely affect the rights of NCPA thereunder or the rights or
security of the holders of the bonds issued under the Indenture; provided that nothing in the
Indenture shall be construed so as to prohibit any other amendment of the Agreement; and
L. The Parties desire to amend the Original Agreement to, among other things, reflect
the terms of the Transfer Agreements by substituting TID for the Transferors as the Project
Participant under the Agreement with respect to the Transferred Project Entitlement Percentage
while, in order to avoid the appearance of the impairment of the security of the holder of any
2009 Series A Bond, so long as any 2009 Series A Bond remains outstanding under the
Indenture, each of the Transferors shall continue to remain liable for all payment obligations
accruing under the Agreement which are related to the Transferred Project Entitlement
Percentage such Transferor transferred to TID; and
GEOTHERMAL THIRD PHASE AMENDMENT TWO 2
Execution Version
M. The Parties also desire to amend the Original Agreement to clarify that
environmental attributes associated with the Project capacity and energy are included within the
rights held by the Project Participants, including TID;
NOW, THEREFORE, the Parties hereto agree as follows:
1. Terms used in this Amendment Number Two and not defined herein have the
meaning given to them in the Original Agreement.
2. To provide that TID, and not the respective Transferors, is the Project Participant
with respect to the Transferred Project Entitlement Percentage, Appendix "A" of the
Agreement ("SCHEDULE OF PROJECT PARTICIPANTS AND PROJECT
ENTITLEMENT PERCENTAGES") is hereby amended in its entirety to read as provided in
Exhibit 1 hereto to include a 12.661% TID East Block Entitlement Percentage and a 6.3305%
Project Entitlement Percentage and to correspondingly reduce the East Block Entitlement
Percentages and Project Entitlement Percentages of the Transferors.
3. To recognize that the 2009 Series A Bonds were issued when the Transferors were
the Project Participants with respect to the Transferred Project Entitlement Percentage, and to
increase the security for the 2009 Series A Bonds by adding TID as the Project Participant with
respect to the Transferred Project Entitlement Percentage while maintaining the respective
payment obligations of the Transferors under the Agreement with respect to the Transferred
Project Entitlement Percentage so long as any 2009 Series A Bonds remain outstanding under
the Indenture, Section 5(f) of the Original Agreement is hereby supplemented by adding at the
end thereof the following:
"Notwithstanding anything in this Section 5(f) or elsewhere in this Agreement to
the contrary, in the event the Turlock Irrigation District ("TID") should fail to timely pay
any amount payable by it under the Agreement, which payment obligation accrued while
any of NCPA's Geothermal Project 3 Revenue Bond, 2009 Series A ("the 2009 Series A
Bonds") remained outstanding under the Indenture of Trust, dated as of November 1,
1983, between NCPA and U.S. Bank Trust National Association, as successor Trustee, as
amended and supplemented (the "Indenture"), the City of Gridley ("Gridley"), the City
of Palo Alto ("Palo Alto") and the Plumas Sierra Rural Electric Cooperative ("Plumas"
and together with Gridley and Palo Alto the "Transferors") shall remain contingently
and secondarily obligated for each such payment in the following proportions, such that
the security of the holders of the 2009 Series A Bonds with respect to the Agreement is
not adversely affected by the addition of TID as a Project Participant and the reduction
of the Project Entitlement Percentages of the Transferors with respect to the
Transferred Project Entitlement Percentage:
Transferor Share of Amounts Not Paid by TID
Gridley 0.932%
Palo Alto 97.275%
Plumas 1.793%
GEOTHERMAL THIRD PHASE AMENDMENT TWO 3
Execution Version
In the event TID fails to make a payment when due under the Agreement, which
payment obligation became due while any of the 2009 Series A Bonds remain
outstanding under the Indenture, NCPA shall, not more than ten (10) days after the due
date for such payment, send the written demand contemplated by Section 7(a) of the
Agreement to TID and to the Transferors by electronic means or overnight delivery
service or by such other means as shall provide for delivery the next business day. Such
demand shall specify the amount due but not received by NCPA. If TID has not made
the missed payment by the twenty-fifth (25th) day following NCPA's sending the
demand for payment, each Transferor shall, not later than the thirtieth (30th) day from
the date of such demand, pay its respective share of the amount specified in the NCPA
notice of nonpayment from the sources specified in the Agreement for other payments
thereunder by the Project Participants. The Transferors' contingent and secondary
obligation for payments which TID fails to make when due under the Agreement shall
cease, and the Transferors shall be relieved of all obligations to make payments pursuant
to this Section 5(f), on the first date when no 2009 Series A Bonds remain outstanding
under the Indenture; provided, however, that nothing in this sentence shall relieve any
Transferor of its obligation to pay amounts which became due from TID under the
Agreement prior to such first date.
In addition to any other remedy available under the Agreement, each Transferor
may directly recover from TID any payments made pursuant to this section as well as
any costs or damages incurred by it as a consequence of the failure of TID to make
any payment under the Agreement, including the recovery of any attorneys fees."
4. The Original Agreement is hereby supplemented by adding a new Section 17 thereto
to read as follows:
"17. Attributes Associated with Project. A Project Entitlement Percentage of
Project capacity and energy includes not only the rights to electric capacity and energy,
but also the rights to a proportionate share of any associated attributes of the Project that
either exist or may exist in the future. This includes attributes such as environmental
credits, renewable energy credits, resource adequacy credits or other attributes associated
with the production of electricity from a renewable energy resource, along with ancillary
services. In all cases the right to a proportionate share of any associated attributes of the
Project is subject to the terms of this Agreement including the provisions hereof relating
to the loss by a Project Participant of the rights to Project capacity and energy including
the associated attributes
Upon the request of a Project Participant, evidence of the ownership of such associated
attributes will be provided by NCPA to the requesting Project Participant (and may
thereafter be sold by the Project Participant to third persons subject to the terms of
Section 18 of this Agreement and without being subject to a right of first refusal by
other Project Participants), in proportion to its respective Project Entitlement
Percentages of Project capacity and energy but subject to the provisions of Section 18 of
GEOTHERMAL THIRD PHASE AMENDMENT TWO 4
Execution Version
this Agreement and such commercially reasonable conditions as may be imposed or
adopted by the NCPA Commission from time to time.
5. The Original Agreement is hereby supplemented by adding a new Section 18 thereto
to read as follows:
"18. Federal Tax Matters. Each Project Participant recognizes that Bonds
issued with respect to the Project may bear interest that is excluded from gross income
for federal income tax purposes or may be issued under circumstances that entitle NCPA
or Bondholders to subsidy payments from the United States or federal tax credits with
respect to such Bonds (such exclusion from gross income or entitlement to a subsidy or
tax credit being referred to herein as a "Tax Benefit") and subject to the provisions of
federal tax law that limit, among other things, the arrangements permitted with respect to
the sale, assignment, delegation, or other disposition of Project Entitlement Percentages
of Project capacity and/or energy, or environmental and other associated attributes of
the Project. Each Project Participant shall comply with the covenants relating to Tax
Benefits contained in the Bond Resolutions, including the limitations on private use
permitted under such covenants as if the Project Participant had made such covenant
with respect to its Project Entitlement Percentage of Project capacity and energy. No
sale, assignment, delegation or other disposition of all or any portion of a Project
Participant's rights or obligation under this Agreement, including Project Entitlement
Percentages of Project capacity and/or energy, or environmental and other Project
attributes, that have been financed in whole or part with Bonds which have a Tax Benefit
shall be effective until: (i) such Project Participant shall have given prior written notice
thereof to NCPA; and (ii) NCPA's bond counsel shall have rendered an opinion to the
effect that (A) such sale, assignment, delegation or other disposition will not adversely
affect the Tax Benefits associated with such Bonds; and (B) such sale, assignment,
delegation or other disposition is within any private use restriction or other limitation
with respect to the Tax Benefits associated with such Bonds applying such restrictions
and other limitations solely to the Project Participant's Project Entitlement Percentage of
Project capacity and energy and not to the Project as a whole. Notwithstanding the
immediately preceding sentence, each Project Participant may, without obtaining such
bond counsel opinion, sell, assign, delegate or make such other disposition to which it is
entitled hereunder in a transaction which complies with tax-related guidelines established
by the NCPA Commission from time to time which guidelines have been approved by
NCPA's bond counsel."
6. The Original Agreement is hereby supplemented by adding a new Section 19 thereto
to read as follows:
"19. "In-lieu" JPA Cost Assessment for Non-Members. Project Participants
may not necessarily be members of NCPA. NCPA members pay a joint powers
agreement cost assessment for NCPA administrative costs, pursuant to the joint powers
agreement by which NCPA is formed, and non-NCPA member Project Participants
hereby likewise agree to pay for a portion of those costs, but only as applied to the non-
GEOTHERMAL THIRD PHASE AMENDMENT TWO 5
Execution Version
NCPA member Project Participant's Project Entitlement Percentage of energy produced
on behalf of the Project Participant. In addition to other payments required by this
Agreement, non-NCPA member Project Participants shall pay the annual "in-lieu" JPA
Cost Assessment, invoiced by NCPA in twelve (12) equal billings, which will be
separately identified for each non-NCPA member Project Participant. If a non-NCPA
member Project Participant later becomes an NCPA member, such Project Participant
shall no longer be required to pay the in-lieu JPA Cost Assessment. If an NCPA
member Project Participant later withdraws from NCPA, and is no longer an NCPA
member, such Project Participant will thereafter be subject to the in-lieu JPA Cost
Assessment as described in this section.
The In-lieu JPA Cost Assessment shall be:
In-lieu JPA Cost Assessment = (JPA Cost Assessment Rate) x (MWh of Project energy
produced on behalf of the Project Participant in the prior calendar year as metered at the
point of delivery)
The "JPA Cost Assessment Rate" shall be the amount per MWh charged to NCPA
members in any given year by the NCPA Commission as a JPA assessment pursuant to
Article IV section 3(a) of the Amended and Restated Northern California Power Agency
Joint Powers Agreement, and shall in no event exceed 15 cents per megawatt hour."
7. The proviso contained in Section 7(d) of the Agreement is hereby amended to read as
follows:
"provided, however, that the sum of such increases for any nondefaulting Project
Participant shall not exceed, without the written consent of such nondefaulting Project
Participant, an accumulated maximum of 25% of the nondefaulting Project Participant's
Project Entitlement Percentage set forth in Appendix A as in effect on April 1, 2011."
8. Section 11(e) of the Original Agreement is hereby amended in its entirety to read as
follows:
"Any Project Participant may veto a discretionary action of the Project
Participants relating to the Project that was not taken by a 65% or greater Project
Entitlement Percentage vote within 10 days following mailing of notice of such Project
Participants' action by giving written notice of the veto to NCPA and the other Project
Participants unless at a meeting of the NCPA Commission called for the purpose of
considering the veto and held within 30 days after such veto notice, the holders of 65%
or greater of Project Entitlement Percentages shall vote to override the veto."
9. Subsection (a), (b) and (c) of Section 12 of the Original Agreement are hereby deleted.
Subsection (d) of Section 12 of the Original Agreement is hereby amended by deleting the
subsection designation (d) and amending the language of former subsection (d) in its entirety to
read as follows:
GEOTHERMAL THIRD PHASE AMENDMENT TWO 6
Execution Version
"The term of this Agreement commenced on December 14, 1983. The Term of
this Agreement shall continue until the later of: (i) the expiration of the useful life of the
Project, or (ii) the date on which all Bonds issued have been retired, or full provision
made for their retirement, including interest until their retirement date. In the event of
the termination of the existence of NCPA prior to the termination of this Agreement, it
is the intent of the Project Participants that this Agreement continue as an agreement
among the Project Participants with the Project Participants performing the duties and
obligations of NCPA as a group."
10. Section 14 of the Original Agreement is hereby amended in its entirety to read as
follows:
"This Agreement is a service schedule and a third phase agreement attached to
and incorporated into the Facilities Agreement by and among the Project Participants
and NCPA. "
11. By execution of this Amendment Number Two, TID shall be deemed to have
executed the Agreement and be considered a Project Participant for all purposes of the
Agreement.
12. Except as provided in this Amendment Number Two, the Original Agreement shall
remain in full force and effect.
13. This Amendment Number Two may be executed in several counterparts, all or any
of which shall be regarded for all purposes as one original and shall constitute and be but one
and the same instrument.
IN WITNESS WHEREOF, each Project Participant has executed this Amendment
Number Two with the approval of its governing body and NCPA has executed this Amendment
Number Two in accordance with the authorization of its Commission.
NORTHERN CALIFORNIA POWER AGENCY
By: ______________________________
Approved as to form:
_________________________________
CITY OF ALAMEDA CITY OF BIGGS
By:__________________________ By:_______________________
Approved as to form: Approved as to form:
GEOTHERMAL THIRD PHASE AMENDMENT TWO 7
Execution Version
_____________________________ __________________________
CITY OF GRIDLEY CITY OF HEALDSBURG
By:___________________________ By:________________________
Approved as to form: Approved as to form:
______________________________ ___________________________
CITY OF LODI CITY OF LOMPOC
By:____________________________ By:_________________________
Approved as to form: Approved as to form:
_______________________________ ____________________________
CITY OF PALO ALTO CITY OF ROSEVILLE
By:____________________________ By:__________________________
Approved as to form: Approved as to form:
________________________________ ____________________________
CITY OF SANTA CLARA CITY OF UKIAH
By:_____________________________ By:__________________________
Approved as to form: Approved as to form:
________________________________ _____________________________
PLUMAS-SIERRA RURAL TURLOCK IRRIGATION DISTRICT
ELECTRIC COOPERATIVE
By:______________________________ By:__________________________
Approved as to form: Approved as to form:
_________________________________ _____________________________
GEOTHERMAL THIRD PHASE AMENDMENT TWO 8
Execution Version
GEOTHERMAL THIRD PHASE AMENDMENT TWO 9
Execution Version
Exhibit 1
APPENDIX A
In effect April 1, 2011
SCHEDULE OF PROJECT PARTICIPANTS AND PROJECT ENTITLEMENT
PERCENTAGES
PROJECT
PARTICIPANT
PROJECT NO. 2
ENTITLEMENT
PERCENTAGE
EAST BLOCK
ENTITLEMENT
PERCENTAGE
PROJECT
ENTITLEMENT
PERCENTAGE
City of Alameda 14.994% 18.771% 16.8825%
City of Biggs 0.000% 0.454% 0.227%
City of Gridley* 0.334% 0.338% 0.336%
City of Healdsburg 3.252% 4.096% 3.674%
City of Lodi 14.560% 6.000% 10.28%
City of Lompoc 3.266% 4.096% 3.681%
City of Palo Alto* 0.000% 0.000% 0.000%
City of Roseville 3.252% 12.514% 7.883%
City of Santa Clara 54.651% 34.13% 44.3905%
City of Ukiah 4.972% 6.257% 5.6145%
Plumas Sierra Rural
Electric Cooperative*
0.719% 0.683% 0.701%
Turlock Irrigation
District*
0.000% 12.661% 6.3305%
TOTALS 100.000% 100.000% 100.000%
* Pursuant to Section 5(f) of the Agreement, the City of Gridley, the City of Palo Alto and the
Plumas Sierra Rural Electric Cooperative remain contingently and secondarily responsible for
all payment obligations of Turlock Irrigation District while the 2009 Series A Bonds remain
outstanding.
1590958.2
1
AMENDED AND RESTATED
GEOTHERMAL PROJECT OPERATING AGREEMENT
BETWEEN
NORTHERN CALIFORNIA POWER AGENCY
AND
THE GEOTHERMAL PROJECT PARTICIPANTS
DATED AS OF April 1, 2011
2
TABLE OF CONTENTS
RECITALS ............................................................................................................ 4
AGREEMENT ....................................................................................................... 6
Definitions ......................................................................................................... 6
1.1 Agreement ............................................................................................... 6
1.2 Cost-Effective .......................................................................................... 6
1.3 Efficiency ................................................................................................. 7
1.4 Facilities Agreement ................................................................................ 7
1.5 Facilities Committee ................................................................................ 7
1.6 Legal Notice ............................................................................................. 7
1.7 Modified Operational Plan ........................................................................ 7
1.8 NCPA Management Services Costs ........................................................ 7
1.9 Operating Entity ....................................................................................... 7
1.10 Operational Plan .................................................................................... 8
1.11 Power Plant ........................................................................................... 8
1.12 Project.................................................................................................... 8
1.13 Project Costs ......................................................................................... 8
1.14 Project Entitlement Percentage ............................................................. 8
1.15 Project No. 2 Member Agreement ......................................................... 8
1.16 Project No. 3 Third Phase Agreement ................................................... 9
1.17 Project Participants ................................................................................ 9
1.18 Prudent Utility Practice ........................................................................... 9
1.19 Steamfield .............................................................................................. 9
1.20 Substantial Deviation ............................................................................. 9
Project as Single Shared Resource .................................................................... 10
Term; Amendment; Termination of Prior Agreement .......................................... 10
Continuing Monitoring ......................................................................................... 10
Plan Adoption ..................................................................................................... 10
Planning .............................................................................................................. 10
Steamfield and Power Plant Operations ............................................................. 11
Project Costs ...................................................................................................... 11
3
Surplus Capacity and Energy Sales .................................................................... 12
Project Annual Budget ........................................................................................ 12
Project Participant Direction and Review ............................................................ 13
Scheduling .......................................................................................................... 15
Reduced Steam Availability ................................................................................ 16
Reduced Transmission Capacity ........................................................................ 16
Power Plant Repair, Retirement, Replacement and Enhancement .................... 16
Power Plant Production Reduction, Suspension or Retirement .......................... 16
Notices ................................................................................................................ 17
Facilities Agreement ........................................................................................... 18
Project Agreements—Precedence, Interpretation and Severability .................... 18
Agreements Terminated by this Agreement ........................................................ 19
Counterparts ......................................................... Error! Bookmark not defined.
4
AMENDED AND RESTATED
GEOTHERMAL PROJECT OPERATING AGREEMENT
BETWEEN
NORTHERN CALIFORNIA POWER AGENCY
AND
THE GEOTHERMAL PROJECT PARTICIPANTS
This Agreement dated as of April 1, 2011 (“Effective Date”), by and among
the Northern California Power Agency (NCPA), a joint powers agency and public
entity of the State of California, and certain of its Members, the Cities of
Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Roseville, Santa
Clara, and Ukiah, the Turlock Irrigation District (TID), and the Plumas-Sierra
Rural Electric Cooperative (each of the foregoing being referred to individually as
a "Party" and all of the foregoing being referred to as the "Parties"), is made with
reference to these
RECITALS:
A. The Project No. 2 Member Agreement provided for the construction,
operation, and financing of NCPA Geothermal Generating Project No. 2,
consisting of two nameplate-rated 55-megawatt geothermal electric generating
units ("Project No. 2").
B. The Project No. 3 Third Phase Agreement provided for: (i) the
construction, operation, and financing of NCPA Geothermal Generating Project
No. 3, consisting of two nameplate-rated 55-megawatt geothermal electric
generating units on the East Block ("Project No. 3"); (ii) refinancing of Project No.
2; (iii) sharing of resources, facilities and costs between and among Project No. 2
and Project No. 3 ; and (iv) defining the term “Project” to include both Project No.
2 and Project No. 3.
C. Pursuant to section 4 of the Project No. 3 Third Phase Agreement, NCPA
agreed to provide to each Project Participant, and each Project Participant
agreed to take, or cause to be taken, such participant’s Project Entitlement
Percentage of the capacity and energy of the Project.
D. Section 16 of the Project No. 3 Third Phase Agreement provides that
NCPA may, in accordance with the provisions on Project Participant direction
and review in section 11, enter into agreements for the transfer or sharing of
resources, facilities, and costs between and among the Project No. 3 and other
entities and projects (including without limitation Project No. 2), which
agreements may provide, among other things, for the transfer or sharing of
steam, transmission facilities, generating equipment, spare parts, staff,
5
insurance, taxes and other payments, and for the integrated operation of the
Project No. 3 and Project No. 2 by NCPA.
E. Section 16(c) of the Project No. 3 Third Phase Agreement constitutes
approval by the participants in Project No. 2 of, among other things, equal
sharing between Project No. 2 and the East Block portion of the Project of steam
from the Project No. 2 area and the East Block area.
F. Section 16(d) of the Project No. 3 Third Phase Agreement provides in part
that, subject to the specific terms of contemplated agreements for transfer or
sharing of resources, facilities and costs in subsections (a) and (b) of section 16,
Project No. 2 and the East Block portion of Project No. 3 shall be conducted for
the mutual benefit of all participants therein.
G. On July 28, 1983, NCPA on behalf of the Project Participants in Project
No. 2 and Project No. 3, declared in a Memorandum of Understanding Re: NCPA
Geothermal Projects, approved by the Project Participants for Project No. 2 and
Project No. 3 (“1983 Memorandum of Understanding”), voting separately and in
accordance with the procedures required of them, that the Project Participants
would negotiate a further agreement as authorized by the Project No. 3 Third
Phase Agreement, which would include concepts with reference to the operation
of the two projects.
H. In the Agreement for Transfer of Rights to Capacity and Energy of
Geothermal Generating Project Number 3, dated as of October 1, 1984, ("the
First Transfer Agreement"), as supplemented by the “Agreement Between the
Turlock Irrigation District and the City of Palo Alto”, dated December 30, 1985
("the Second Transfer Agreement"), TID acquired a permanent transferred East
Block Entitlement Percentage of 12.661%, consisting of 12.316% from Palo Alto;
0.118% from Gridley; and 0.227% from Plumas-Sierra Rural Electric
Cooperative.
I. On August 30, 1985 NCPA purchased the two federal geothermal
resources leases which are the source of steam supply for all four units of the
Project.
J. Project Participants in Project No. 3 have acquired the interest of Project
Participants in Project No. 2 in the drill-rig funded by the Development Fund
pursuant to the Memorandum of Understanding Re: NCPA Geothermal Projects
dated July 28, 1983.
K. The NCPA Facilities Agreement, dated September 22, 1993, was entered
into by the Cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo
Alto, Redding, Roseville, Santa Clara, and Ukiah, and the Plumas-Sierra Rural
Electric Cooperative. TID approved the Facilities Agreement on August 29,
1995.
6
L. In accordance with the Project No. 3 Third Phase Agreement and the
1983 Memorandum of Understanding, NCPA and the Project Participants
consider the Project as a single shared resource, because of the finite nature of
the steam reservoir, and have previously entered into a Geothermal Operating
Agreement dated as of October 29 ,1990 to provide the means to manage
Steamfield usage, to optimize that usage, and make appropriate reflections
thereof in cost accounting and budgeting, to modify or clarify some of the
understandings among them, including certain understandings in the
Memorandum of Understanding Re: NCPA Geothermal Projects, in order to
achieve those objectives, and to supersede the Memorandum of Understanding.
M. The Parties by this Agreement now intend to amend, restate and
supersede the prior Geothermal Project Operating Agreement.
NOW THEREFORE, in consideration of the premises described in the
recitals, and of the promises, covenants, terms and conditions in this Agreement,
NCPA and the Project Participants do hereby enter into this
AGREEMENT:
1. Definitions. Unless the context requires otherwise, the definitions
contained in the Project No. 3 Third Phase Agreement shall be used in this
Agreement and the additional capitalized terms in this Agreement shall have the
following meanings:
1.1. “Agreement” means this Amended and Restated Geothermal Project
Operating Agreement by and among NCPA and the Project Participants.
1.2. "Bid" means an offer for the Supply or Demand of Energy or Ancillary
Services, including Self- Schedules, submitted by Scheduling Coordinators for
specific resources, conveyed through several components that apply differently
to the different types of service offered to or demanded from any of the CAISO
markets. All capitalized terms in this section 1.2 have the meaning as defined in
Appendix A – Master Definition Supplement of the CAISO Tariff, and are
implemented in accordance with Article 30 – Bid and Self Schedule Submission
for All CAISO Markets, as the referenced sections of CAISO Tariff may be
amended from time to time.
1.3. "CAISO" means the California Independent System Operator, a non-
profit public benefit corporation established by AB1890 which acts as a balancing
authority for the California electrical grid and wholesale electric markets, or a
successor agency or entity.
1.4. “Cost-Effective” means that the benefits to the Project outweigh the
costs taking into account the uncertainty of projected costs and benefits and the
7
time value of money.
1.5. “Efficiency” means the ratio of the net electric energy produced by a
generator to the energy of the steam supplied to that generator from the
steamfield.
1.6. "Facilities Agreement" means the agreement between NCPA and
certain of its Members and non-NCPA members, including the Project
Participants, dated as of September 22, 1993 and providing for the manner in
which NCPA operates projects on behalf of project participants, as such
agreement exists or may hereafter be amended.
1.7. "Facilities Committee" means the committee of project participants in
the various NCPA projects, including the Project, established by Article 4 of the
Facilities Agreement.
1.8. "Fiscal Year" means a one year period ending on June 30 of each
year.
1.9. “Legal Notice” means sufficient notice under the California open
meeting laws.
1.10. “Modified Operational Plan” means an Operational Plan amended
by the NCPA Commission upon the advice of the Facilities Committee from time
to time.
1.11. "NCPA Administrative Services Costs" means that portion of Project
Cost reflected in the NCPA Annual Budget including administrative, general and
occupancy costs and expenses, including those costs and expenses associated
with the operations, direction and supervision of the general affairs and activities
of NCPA, general management, treasury operations, accounting, budgeting,
payroll, human resources, information technology, facilities management,
salaries and wages (including retirement benefits) of employees, facility
operation and maintenance costs, taxes and payments in lieu of taxes (if any),
insurance premiums, fees for legal, engineering, financial and other services,
power management costs, scheduling and load dispatch costs, energy risk
management and settlements costs that are charged directly or apportioned to
the development, financing, construction, improvement, maintenance, operation
or decommissioning of the Project. The cost of NCPA legislative and regulatory
efforts, unless directly related to the Project, shall not be considered to be NCPA
Administrative Services Costs.
1.12. "Operating Entity" means an operating entity as defined in Facilities
Schedule FA 3.02 of the Facilities Agreement.
8
1.13. “Operational Plan” means the five or more-year plan for the operation
of the Steamfield and Power Plants adopted pursuant to this Agreement. An
Operational Plan shall set objectives and parameters for operation of the
Steamfield and the Power Plants. The Operational Plan (i) shall establish the
maximum, and otherwise describe the, annual and monthly capacity and energy
output of the Power Plant and the associated Project Participants’ annual
capacity and energy entitlement, based on Project Entitlement Percentages and
(ii) shall include operating guidelines for Power Plant operations and scheduling,
Steamfield operations and development, minimum operating levels, Project
maintenance schedules, Project enhancement schedules, and related cost
information. The Operational Plan shall provide for avoiding, correcting, and
addressing Substantial Deviations. The general goals of an Operational Plan
shall be the Cost-Effective optimization of Steamfield and Power Plant usage.
1.14. “Power Plant” means one or more of the electric generating units at
the Project originally nameplate-rated at 55 megawatts each.
1.15. “Project” means Project No. 2 and Project No. 3, including, but not
limited to, the Steamfield and the Power Plants, and all improvements, including
reclaimed water facilities, pipelines, appurtenances and pumping equipment
installed to arrest steamfield degradation, photovoltaic systems, and other
existing and future additions, betterments, equipment, materials, and
appurtenances necessary or convenient for the generation, transformation, and
transmission of electric power (including utilization of the NCPA Tap Lines and
the Castle Rock-Lakeville 230kV Transmission lines) from Project No. 2 and
Project No. 3 controlled or funded by NCPA.
1.16. “Project Costs” means all the costs described in Section 5a of the
Project No. 3 Third Phase Agreement and Section 8 of this Agreement.
1.17. “Project Entitlement Percentage” means, with respect to each
Project Participant, the percentage so identified and set forth opposite the name
of such Project Participant in Appendix A to the Project No. 3 Third Phase
Agreement, as amended, as such percentage shall be revised from time to time
in accordance with sections 7(d) and 13 thereof. “East Block Entitlement
Percentage” and “Project No. 2 Entitlement Percentage” mean, with respect to
each Project Participant the percentages so identified and set forth opposite the
name of such Project Participant in the same Appendix A, as such percentages
shall be revised from time to time in accordance with sections 7(d) and 13
thereof.
1.18. “Project No. 2 Member Agreement” means the "Amended and
Restated Agreement for Construction, Operation and Financing of NCPA
Geothermal Generating Unit # 2 Project," dated as of January 1, 1980,as
supplemented by the "Shell Member Supplement 1" dated as of May 1, 1980
and the "Shell Member Supplement 2" dated as of July 1, 1980, by and among
9
NCPA and certain of its Members, to wit: the Cities of Alameda, Biggs, Gridley,
Healdsburg, Lodi, Lompoc, Roseville, Santa Clara, and Ukiah, and the Plumas-
Sierra Rural Electric Cooperative, which provided for the construction, operation,
and financing of Project No. 2.
1.19. “Project No. 3 Third Phase Agreement” means the Agreement for
Construction, Operation and Financing of Geothermal Generating Project
Number 3, dated as of July 1, 1983, as amended and supplemented, by and
among NCPA and certain of its Members, to wit: the Cities of Alameda, Biggs,
Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Roseville, Santa Clara, and Ukiah,
and the Plumas-Sierra Rural Electric Cooperative, which provided for the
construction, operation, and financing of Project No. 3.
1.20. “Project Participants” means all of the signatories to this
Agreement, excluding NCPA, each of whom is also a signatory to the Project No.
3 Third Phase Agreement.
1.21. “Prudent Utility Practice” means any of the practices, methods and
acts engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, or any of the practices, methods and acts which,
in the exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result
at the lowest reasonable cost consistent with Northern American Electric
Reliability Corporation (“NERC”) and Western Electric Coordinating Council
(“WECC”) approved business practices, reliability, safety and expedition. Prudent
Utility Practice is not intended to be limited to the optimum practice, method, or
act to the exclusion of all others, but rather to be acceptable practices, methods,
or acts generally accepted in the WECC region.
1.22. "Self-Schedule" means the Bid component that indicates the
quantities in megawatt hours ("MWhs") with no specification of a price that the
Scheduling Coordinator is submitting to the CAISO, which indicates that the
Scheduling Coordinator is a Price Taker, Regulatory Must Run Generation or
Regulatory Must Take Generation, which includes existing transmission contracts
(" ETC") and transmission ownership rights ("TOR") Self- Schedules and Self-
Schedules for Converted Rights. All Capitalized terms in this section 1.21 have
the meaning as defined in Appendix A – Master Definition Supplement of the
CAISO Tariff as that Tariff may be amended from time to time.
1.23. “Steamfield” means the geothermal steam resource available to the
Project from federal Geothermal Resources Leases CA 949 and CA 950 held by
NCPA, and other arrangements which may make a geothermal steam resource
available to the Project.
1.24. “Substantial Deviation” means a variation from a major objective or
parameter in an Operational Plan or Modified Operational Plan of plus or minus
10
five (5%) percent or more, unless otherwise provided in a plan.
2. Project as Single Shared Resource. The Project shall be considered as a
single shared resource to be operated in accordance with the Project No. 3 Third
Phase Agreement and this Agreement. This Agreement implements Article 16 of
the Project No. 3 Third Phase Agreement and supersedes and replaces the 1983
Memorandum of Understanding and the 1990 Geothermal Project Operating
Agreement.
3. Term; Amendment; Termination of Prior Agreement.
a. This Agreement shall remain in force and effect from the Effective
Date until this Agreement is superseded by another agreement among the same
parties for the operation of the Project as a facility or until the Project Participants
terminate or cancel this Agreement with the same formality as its execution, as
provided in this section 3.
b. Any action to amend, supersede, terminate or cancel this Agreement
shall require the written consent and approval of all Project Participants.
c. The 1983 Memorandum of Understanding and the 1990 Geothermal
Project Operating Agreement are hereby terminated and superseded by this
Agreement.
4. Periodic Reporting. NCPA shall report to the Project Participants each
month in a form or forms approved by the Facilities Committee, on the
operational status of the Steamfield and the Power Plants and attainment of the
Operational Plan and any Modified Operational Plan, such report or reports at a
minimum shall contain a monthly and Fiscal Year-to-date summary of activities,
expenditures compared to the Annual Budget, and monthly and Fiscal Year-to-
date summary of plant availability, energy production, capacity levels, minimum
and maximum operating levels compared to forecast.
5. Operational Plan Adoption. In cooperation with the Project Participants,
NCPA staff shall each year prepare a draft Operational Plans for the Project for
review by the Facilities Committee and adoption by the NCPA Commission.
Adoption of the annual Operation Plan by the NCPA Commission shall occur not
later than September 30th of each year, unless otherwise agreed by the Facilities
Committee NCPA shall conduct Steamfield and Power Plant operations in
accordance with the adopted Operational Plan (or any adopted Modified
Operational Plan). Provided, however, that NCPA shall have the authority to
make or adjust to a Substantial Deviation as may be required by Prudent Utility
Practice.
6. Modified Operational Plan. In cooperation with the Project Participants,
NCPA staff shall prepare Modified Operational Plans as may be required and
11
shall present such Modified Operational Plan to the Facilities Committee. If the
Facilities Committee determines to recommend changes in the Operational Plan,
the Facilities Committee shall present a draft Modified Operational Plan to the
NCPA Commission as soon as practical which may adopt such Modified
Operational Plan.
7. Steamfield and Power Plant Operations. Pursuant to section 11 of the
Project No. 3 Third Phase Agreement, entitled Member Direction and Review,
the Project Participants do hereby direct NCPA to operate the Steamfield and
Power Plants in accordance with Operational Plans and Modified Operational
Plans adopted by the NCPA Commission, and as a single shared resource
between Project No. 2 and Project No. 3. The Project Participants may schedule
energy in compliance with such plans. The Project Participants may reduce, but
not increase, the amount of their scheduled monthly energy subject to limitations
specified in the Operation Plan. For example, for CY 2011, the limitation is 15
Megawatts total, allocated among all Project Participants in any scheduling hour.
If NCPA encounters a Substantial Deviation or determines there is a need to
make a Substantial Deviation from an Operational Plan or Modified Operational
Plan, NCPA staff shall take such action as may be required by Prudent Utility
Practice and promptly notify the Facilities Committee and the Project Participants
in writing. NCPA staff shall give such prompt notification of any Substantial
Deviation which NCPA: (i) determines needs to be taken or made at least seven
(7) days in advance, unless emergency conditions and Prudent Utility Practice
require action beforehand; or (ii) encounters, within seven (7) days of the
Substantial Deviation. Special meetings of the Facilities Committee may be
called to consider the Substantial Deviation and such changes of the Operational
Plan and the Modified Operational Plan as may be appropriate under the
circumstances.
8. Project Costs.
a. NCPA shall account for Project Costs under the Federal Energy
Regulatory Commission Uniform System of Accounts for Public Utilities Subject
to the Federal Power Act. Project Cost elements classified as fixed costs shall
be assigned to capacity and variable costs shall be assigned to energy. Fixed
and variable costs shall be determined in accordance with the schedules
attached to the Facilities Agreement. The variable price for steam and such
other costs which vary with energy output shall be allocated to the Project
Participants at the same price per unit of energy output without regard to which
Power Plant is the source of the energy. Project Participants shall pay for
capacity and energy from the Project and Project Costs associated with the
Project in accordance with this Agreement and the Project No. 3 Third Phase
Agreement.
b. The Parties acknowledge that section 5(a) of the Project No. 3 Third
Phase Agreement provides, in part, that:
12
"NCPA shall fix charges to the Project Participants to produce revenues
to NCPA from the Project to meet the costs described in (i) and (ii) above
based on East Block Entitlement Percentages applied to such costs
allocable to the East Block portion of the Project and Project No. 2
Entitlement Percentages applied to such costs allocable to the Project No.
2 portion of the Project; and to meet the costs described in (iii) above ,
based on the anticipated energy sales of the East Block portion of the
Project and, on the anticipated energy sales of the Project No. 2 portion of
the Project, respectively,"
and the Parties further acknowledge that such provision is not consistent with the
treatment of Project No. 2 and Project No. 3 as a single resource as provided in
this Agreement. Solely among themselves and NCPA, the Project Participants
waive as the price for steam and the costs of Steamfield operation, maintenance,
and development that sentence of section 5(a) of the Project No. 3 Third Phase
Agreement as recited above,
c. The annual budget shall reflect monthly estimates of fixed and
variable costs of the Project. Monthly billings by NCPA to the Project
Participants shall compare the actual fixed and variable costs with the annual
budget estimates.
9. Surplus Capacity and Energy Sales.
a. Section 9 of the Project No. 3 Third Phase Agreement, which relates
to sales of surplus capacity and energy by NCPA upon the request of a Project
Participant, does not apply to any transfers under Section 8 of the Project No. 3
Third Phase Agreement. The term “rights” under Section 8 shall be deemed to
include attributes as defined in Section 17 of the Project No. 3 Third Phase
Agreement.
b. When, pursuant to a Project Participant's request, NCPA sells surplus
energy or capacity on the day ahead of the delivery date or during the active day
for delivery, prices for capacity, energy, and ancillary services (all as defined in
the CAISO tariff) shall be established at the Geothermal Project generator
location in accordance with the Bid and Self-Schedule provisions contained in the
CAISO tariff for the market into which the capacity, energy and ancillary services
were sold. When NCPA sells surplus energy or capacity for Project Participants
on any other forward basis, the price will be as specified by the Project
Participant selling the surplus with such pricing communicated to NCPA in
advance of the transaction scheduling date and the Project Participant shall
assume responsibility for any additional CAISO costs, including those identified
in Section 12(b).
10. Project Annual Budget.
13
a. The Project No. 3 Third Phase Agreement requires, in section 6, that
prior to the beginning of each Fiscal Year, the NCPA Commission will adopt an
annual budget for the Fiscal Year covering all costs and expenses relating to the
Project.
The Project annual budget may be part of a multi-year budget. NCPA shall use
the same cost allocation formula or method for allocating each category of NCPA
Administrative Costs to the Project and other NCPA projects and programs.
Such cost allocation formulas and methodologies shall be based upon cost
causation principles and provide for fair and equitable allocation of such costs to
the Project and avoid placing an unfair burden of such costs on the Project.
The existing cost allocation methodology for allocating power management costs,
including risk management, settlements, and dispatching and scheduling costs to
the Project resulting from the NCPA Power Management Cost Allocation Study
(known as "the Nexant Study") shall continue in effect until changed by vote of
the NCPA Commission. Any change to that methodology shall be based on cost
causation principles and shall not discriminate against any Project Participant.
If a non-NCPA member Project Participant pays an In-lieu JPA Cost Assessment
(pursuant to section 19 of the Project No. 3 Third Phase Agreement), then
payment of such assessment shall be deemed to cover all costs incurred by
NCPA which are not included within the Project annual budget or NCPA
Administrative Services Costs or which in any way relates to the non-NCPA
member’s activities or characteristics not related to its participation in the Project
(including, but not limited to, the amount of the non-NCPA member’s native
electric loads or demands or revenues or any other similar characteristic). No
other non-Project Costs shall be assessed to a non-NCPA member without its
written consent. Nothing herein is intended in any way to limit or restrict the uses
to which the proceeds from the In-lieu JPA Cost Assessment may be applied by
NCPA.
b. The annual budget, as it relates to the Project and any amendment
affecting Project Costs, shall not go into effect until it has been reviewed by the
Facilities Committee and received the approval of the NCPA Commission.
11. Project Participant Direction and Review.
a. Project Participant Direction and Review in General.
i. All directions to NCPA with respect to the Project, and all meetings
of NCPA in connection therewith, shall be as provided in accordance
with section 11 of the Project No. 3 Third Phase Agreement and this
Agreement.
14
ii. NCPA shall comply with all lawful directions of the Project
Participants with respect to the Project, including relating to this
Agreement, to the fullest extent authorized by law. Actions,
authorizations and approvals of Project Participants, including giving
directions to NCPA, shall be taken only at meetings of authorized
representatives of Project Participants sitting as the NCPA
Commission or the Facilities Committee duly called and held pursuant
to applicable law.
b. Participation at NCPA Commission Meetings.
i. A non-NCPA Member Project Participant may not vote or
participate directly as if it had an NCPA Commission representative
in meetings of the NCPA Commission, other than as a member of
the public or as otherwise permitted by this section.
ii. Notwithstanding the provisions of subsection (c) of Section 11 of
the Project No. 3 Third Phase Agreement, Article 8(b) of the
Amended and Restated Northern California Power Agency Joint
Powers Agreement, or sub-subsection b (i) of this section, at any
meeting of the NCPA Commission upon the demand of any Project
Participant, including a non-NCPA Member Project Participant, the
vote on any issue relating to the Project shall be by Project
Entitlement Percentage. In any case where such a demand is
made, sixty-five (65%) percent or greater affirmative vote shall be
required to take action.
iii. Nothing herein is intended to prevent or prohibit TID from directing
the vote of the NCPA Commission representatives for the City of
Palo Alto, the City of Gridley, and the Plumas-Sierra Rural Electric
Cooperative to vote TID's Permanent Transferred East Block
Entitlement Percentages in Project No. 3 acquired from those
agencies in the manner directed by TID pursuant to section 21(b).
iv. Any Project Participant, including a non-NCPA member Project
Participant, may veto a discretionary action of the Project
Participants relating to the Project that was not taken by a sixty-five
(65%) percent or greater Project Entitlement Percentage vote
within 10 days following mailing of notice of such action, by giving
written notice of veto to NCPA and other Project Participants,
unless at a meeting of the NCPA Commissioners called for the
purpose of considering the veto and held within 30 days after such
veto notice, the holders of 65% or greater of the Project
Entitlement Percentage shall vote to override the veto, The sixty-
five (65%) percent of the Project Entitlement Percentage specified
in this subsection shall be reduced by the amount that the Project
15
Entitlement Percentage of any Project Participant shall exceed
thirty-five (35%) but such sixty-five (65%) shall not be reduced
below a majority in interest.
c. Representation of Project Participants on Facilities Committee. Each
Project Participant, whether or not an NCPA member, shall be entitled to
designate one member of the Facilities Committee, who shall have voting rights
only with respect to matters relating to the Project to provide it representation
with respect to the Project. The Facilities Committee shall advise NCPA on
matters relating to the Project in accordance with the terms of the Facilities
Agreement, and shall have such other authority as may be delegated to it by the
NCPA Commission or the Project Participants.
The Parties agree to cooperate in the amendment of the facilities
Agreement to the extent necessary to effectuate this subsection.
d. Rights of Non-NCPA Member Project Participants.
i. Meetings in General. Except for meetings of the NCPA
Commission covered in Subsection (b) and of the Facilities
Committee covered in Subsection (c), attendance and participation
at all other NCPA meetings by any Project Participant that is not a
NCPA member is limited to those meetings which are subject to the
Ralph M. Brown Act.
ii. NCPA shall ensure that all Project Participants, including Project
Participants that are not NCPA members, timely receive copies of
notices, agendas, staff reports (relating to the Project), and minutes
of any meeting of any committee, subcommittee, or working group
which is subject to the Ralph M. Brown Act and at which the Project
is an agenda item. In addition, all Project Participants, including
Project Participants that are not NCPA members, have the right to
inspect and to obtain copies of documents that are public records
pursuant to the California Public Records Act.
12. Scheduling
a. Each Operating Entity may direct NCPA to Bid, including Self-Schedule, its
Project Entitlement Percentage of the Project in any manner and for delivery to
any scheduling point on the CAISO controlled grid, provided that such Bid,
including Self-Schedule, shall be consistent with licensing and regulatory criteria,
including obligations of NCPA under interconnection agreements, the CAISO
tariff and the NCPA Second Amended and Restated Metered Subsystem
Aggregator Agreement (“MSSA Agreement”), as each of those documents may
be amended from time to time.
16
b. The Operating Entity directing NCPA to Bid, including Self-Schedule, its
Project Entitlement Percentage of the Project to any scheduling point on the
CAISO controlled grid, is financially responsible for all costs incurred by NCPA in
complying with such direction, including but not limited to the costs of losses,
congestion, scheduling fees and any other charges allocated to NCPA by the
CAISO related to NCPA’s obligation to Bid and deliver the Operating Entity’s
Project Entitlement Percentage of the Project between the generator scheduling
point (i.e. point of interconnection) and the point of delivery requested by the
Operating Entity.
c. All Scheduling direction to NCPA by an Operating Entity shall utilize NCPA’s
web services and be performed in accordance with the procedures contained in
the NCPA Power Schedule Guide, as may be amended from time to time.
Provided, however, that until appropriate software (as reasonably determined by
NCPA's Assistant General Manager for Power Management) is available to TID,
TID may Bid or Self-Schedule by providing written notice or direction to NCPA via
fax or electronic means.
13. Reduced Steam Availability. In the event of an extended period of reduced
steam availability, the available steam from the Steamfield shall be allocated to
maximize the Efficiency of the Project, and operated pursuant to the Operational
Plan, or Modified Operational Plan, to best meet all Project Participant
requirements from the Project and to achieve the most Cost-Effective use of the
Project, within the objectives and parameters of such plans, so that available
capacity and energy are allocated to the Project Participants in accordance with
their Project Entitlement Percentages.
14. Reduced Transmission Capacity. In the event of an extended period of
reduced transmission capacity, the Power Plants shall be operated pursuant to
the Operational Plan, or Modified Operational Plan, to best meet all Project
Participant requirements from the Project and to achieve the most Cost-Effective
use of the Project, within the objectives and parameters of such plans, so that
available capacity and energy are allocated to the Project Participants in
accordance with their Project Entitlement Percentages.
15. Power Plant Repair, Retirement, Replacement and Enhancement. NCPA
shall allocate the costs of repair, retirement, replacement, or enhancement of the
Project to the Project Participants in accordance with their Project Entitlement
Percentages without regard to which part of the Project or Power Plant is
affected by the need for repair, retirement, replacement, or enhancement.
16. Power Plant Production Reduction, Suspension or Retirement. An
Operational Plan or a Modified Operational Plan may include objectives and
parameters for the reduction of production of any Power Plant, and the
suspension of production, or retirement of any Power Plant from service in the
Project. In the event of a long-term reduction or production, suspension, or
17
retirement of any Power Plant in the Project, (i) the selection of the Power Plant
for reduction, suspension, or retirement shall be made on the basis of which
remaining Power Plant or Power Plants will result in the most Cost-Effective
operation of the Project, and (ii) the Project Participants shall remain responsible
for any debt service remaining on Bonds issued to support the acquisition,
construction, completion, or refinancing of the Power Plants in accordance with
their Project No. 2 Entitlement Percentages and East Block Entitlement
Percentages, except as provided in section 14 of this Agreement. All other debt
service responsibility and costs, and the capacity and energy from the remaining
Power Plants shall be allocated to the Project Participants in accordance with
their Project Entitlement Percentages.
17. Notices. Notices shall be in writing and shall be delivered by hand effective
upon receipt or by over-night or express mail effective upon receipt or by
facsimile effective the first business day after receipt, addressed as follows:
NORTHERN CALIFORNIA POWER AGENCY
Attn: General Manager
651 Commerce Drive
Roseville, CA 95678
FAX (916) 783-7603
TURLOCK IRRIGATION DISTRICT
Attn: General Manager
333 E. Canal Drive
Turlock, CA 95381
FAX (209) 656-2143
CITY OF ALAMEDA CITY OF BIGGS
Attn: Utility Director . Attn.: City Administrator
2000 Grand Street 465 "C" Street
Alameda, CA 94501 Biggs, CA 95917
FAX (510) 748-3956 FAX (530) 868-5239
CITY OF GRIDLEY CITY OF HEALDSBURG
Attn.: Utility Director Attn.: City Administrator
685 Kentucky St. 401 Grove St.
Gridley, CA 95948 Healdsburg, CA 95448
FAX (530) 846-3229 FAX ( 707) 431-2710
CITY OF LODI CITY OF LOMPOC
18
Attn.: Utility Director Attn.: Utilities Director
1331 South Ham Lane P.O. Box 8001
Lodi, CA 95242 100 Civic Center Plaza
Lompoc, CA 93438
FAX ( 209) 333-6839 FAX (805) 875-8399
CITY OF PALO ALTO CITY OF ROSEVILLE
Attn: Director of Utilities Attn: Electric Utility Director
250 Hamilton Avenue 2090 Hilltop Circle
Palo Alto, CA 94301 Roseville, CA 95747
FAX (650) 321-0651 FAX (916) 784-3797
CITY OF SANTA CLARA CITY OF UKIAH
Attn: Utility Director Attn.: Utility Director
1500 Warburton Avenue 300 Seminary Avenue
Santa Clara, CA 95050 Ukiah, CA 95482
FAX (408) 249-0217 FAX (707) 463-6740
PLUMAS SIERRA RURAL ELECTRIC COOPERATIVE
Attn: General Manager
73233 Highway 70
Portola, CA 9612218.
FAX (530) 832-6070
Any Party to this Agreement may amend either its address for notice or facsimile
number at any time by providing written notice to the other Parties.
18. Facilities Agreement. This Agreement is a Facilities Schedule pursuant to
section 1.5 of the Facilities Agreement; provided, not withstanding Section 21.2
of the Facilities Agreement, that this Facilities Schedule may not be amended
except in accordance with Section 3b of this Agreement.
19. Project Agreements—Precedence, Interpretation and Severability. This
Agreement is a further statement and modification of the agreements by and
among NCPA and the Project Participants in Project No. 2 Agreement, Project
No. 3 Third Phase Agreement, and the Facilities Agreement, which is intended to
be harmonized with those agreements so as to eliminate conflict. This
Agreement shall not be deemed to modify or change any obligation of NCPA or
the Project Participants arising out of the Project No. 2 Agreement or the Project
No. 3 Third Phase Agreement to the holders of bonds, including but not limited to
the 2009 Series A Bonds relating to the Project. Nothing in this Agreement shall
in any way alter or diminish the obligations of the Project Participants pursuant to
19
section 5(b) of the Project No. 3 Third Phase Agreement. In the event of a
conflict between those agreements and this Agreement which does not adversely
affect the rights of a holder of bonds, including the 2009 Series A Bonds, this
Agreement shall take precedence. In the event of a conflict between this
Agreement and the Facilities Agreement, this Agreement shall take precedence.
Any provision of this Agreement found invalid by a court of competent jurisdiction
shall be severed from this Agreement if the remaining provisions will effectuate
the intent of the parties.
20. Agreements Terminated by this Agreement. The following agreements
relating to the Project are hereby terminated:
a. The Turlock Transfer Agreement (the “First Transfer Agreement”).
b. The letter agreement dated August 6, 1985 signed by TID and NCPA
with respect TID's rights under the Turlock Transfer Agreement.
c. The "Agreement Between the Turlock Irrigation District and the City of
Palo Alto" dated December 30, 1985 (the “Second Transfer Agreement”).
d. The "Layoff Equalization Agreement By and Between City of Biggs, City
of Gridley, City of Healdsburg, City of Lodi, Plumas-Sierra Rural Electric
Cooperative, City of Roseville, City of Palo Alto, and Turlock Irrigation District In
Support of the 1998 Hydroelectric and Geothermal Revenue Refunding Bonds of
the Northern California Power Agency," ("the Layoff Equalization Agreement")
with respect to the sharing of benefits from the refinancing of the Project and the
NCPA hydroelectric project, provides that it terminates upon termination of the
Turlock Transfer Agreement (referred to in the Layoff Equalization Agreement as
the "Layoff Agreement"). The Turlock Transfer Agreement is terminated by this
Agreement, and hence the Layoff Equalization Agreement is also terminated.
21. Rights and Obligations under the First and Second Transfer Agreements.
a. Notwithstanding the termination of the First and Second Transfer
Agreements pursuant to Section 20 of this Agreement, the Parties agree that the
City of Gridley, City of Palo Alto, and the Plumas-Sierra Rural Electric
Cooperative permanently transferred all of their rights, title, interests, and
benefits in the Permanent Transferred East Block Entitlement Percentage to TID
and that TID assumed all of the obligations, duties, and burdens associated with
the Permanent Transferred East Block Entitlement Percentage transferred to
TID, including but not limited to, financing, construction, operation, maintenance,
replacement, additions and betterments, and decommissioning costs associated
with the Permanent Transferred East Block Entitlement Percentage.
b. Under Section 11 of the First Transfer Agreement, the City of Gridley,
City of Palo Alto, and the Plumas-Sierra Rural Electric Cooperative agreed “that
20
the [TID] may vote at meetings of the Project Participants pursuant to Section 11
of the Third Phase Agreement as if it had the East Block Entitlement Percentage
equal to the Transferred East Block Entitlement Percentages, and the voting
rights of the Transferring Participants shall be reduced accordingly.”
Notwithstanding the termination of the First and Second Transfer Agreements
pursuant to Section 20 of this Agreement, the City of Gridley, City of Palo Alto,
and the Plumas-Sierra Rural Electric Cooperative agree to vote at any NCPA
Commission meeting TID’s Permanent Transferred East Block Entitlement
Percentages in Project No. 3 acquired from those agencies under the First and
Second Transfer Agreement in the manner directed by TID.
c. The Parties agree that nothing in this Section 21 is intended to apply to
the East Block Entitlement Percentages permanently retained by the City of
Gridley and the Plumas-Sierra Rural Electric Cooperative, and that nothing in this
Section 21 is intended to apply to the Transferred East Block Entitlement
Percentages not permanently transferred to TID.
22. Counterparts. This Agreement may be executed in several counterparts, all
or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
WHEREFORE, NCPA, upon authorization by its Commission sitting as a whole,
at a duly and regularly called meeting, and the Project Participants, after all due
authorization by their governing bodies, have executed this Agreement, as
evidenced by the signatures of their authorized representatives below.
SIGNATURE PAGES FOLLOW
Remainder of this Page is Blank
21
FIRST SIGNATURE PAGE
AMENDED AND RESTATED GEOTHERMAL OPERATING AGREEMENT
NORTHERN CALIFORNIA POWER TURLOCK IRRIGATION
AGENCY DISTRICT
By: __________________________ By:________________________
Its: General Manager Its: General Manager
Date: ___________________ Date:___________________
Approved as to form: Approved as to form:
_____________________________ __________________________
General Counsel General Counsel
CITY OF BIGGS CITY OF GRIDLEY
By: __________________________ By:________________________
Its: City Manager Its: City Manager
Date:___________________ Date:_________________
Approved as to form: Approved as to form:
_____________________________ __________________________
City Attorney City Attorney
CITY OF HEALDSBURG CITY OF LODI
By: ___________________________ By:________________________
Its: City Manager Its: City Manager
Date:_________________ Date:_________________
Approved as to form: Approved as to form:
_______________________________ __________________________
City Attorney City Attorney
SECOND SIGNATURE PAGE
AMENDED AND RESTATED GEOTHERMAL OPERATING AGREEMENT
22
CITY OF LOMPOC CITY OF PALO ALTO
By: ____________________________ By:________________________
Its: City Manager Its: City Manager
Date:________________ Date:________________
Approved as to form: Approved as to form:
________________________________ __________________________
City Attorney City Attorney
CITY OF ROSEVILLE CITY OF UKIAH
By: _____________________________ By:________________________
Its: City Manager Its: City Manager
Date:______________________ Date:___________________
Approved as to form: Approved as to form:
________________________________ __________________________
City Attorney City Attorney
PLUMAS SIERRA
RURAL ELECTRIC COOPERATIVE CITY OF SANTA CLARA
By:______________________________ By: _______________________
Its: General Manager Its: City Manager
Date:_______________________ Date: _____________________
Approved as to form: Approved as to form:
_________________________________ __________________________
General Counsel City Attorney
AMENDMENT NO. 1
TO
NORTHERN CALIFORNIA POWER AGENCY
FACILITIES AGREEMENT
This Amendment no. 1 is made as of April 1, 2011 by and between the Northern
California Power Agency, a joint powers agency ("NCPA"), certain of its member agencies, and
the Turlock Irrigation District, a California Irrigation District ("TID"), with reference to the
following:
A. NCPA and certain of its members, consisting of the Cities of Alameda, Biggs,
Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Roseville, Santa Clara and Ukiah; [the Port of
Oakland]; TID; and associate NCPA member Plumas Sierra Rural Electric Cooperative have
entered into a Facilities Agreement dated as of September 22, 1993.
B. The Facilities Agreement provides for the means by which NCPA provides services
to the NCPA generating projects, allocates costs to and among such projects, and by which the
project participants can provide direction to NCPA with respect to the governance and
operation of such projects.
C. At the time of its approval, the signatories to the Facilities Agreement did not
contemplate that a participant in an NCPA generating project could be a non-NCPA member.
Hence, the Facilities Agreement provides in section 1.17 that a "participant" in the Facilities
Agreement is a member of NCPA which is signatory to the Facilities Agreement, and in Article
4 that the Facilities Committee by which project participants in NCPA projects provide
direction to NCPA is composed of participants.
D. TID has given notice to NCPA of its withdrawal from NCPA effective April 1, 2011,
but will remain a project participant in the Geothermal Project no. 3. In an Amended and
Restated Geothermal Operating Agreement dated as of April 1, 2011, the participants in that
project, including TID, and NCPA have agreed to amend the Facilities Agreement as necessary
to provide TID the ability to remain a signatory to the Facilities Agreement and to have an on-
going participation on the Facilities Committee.
NOW, THEREFORE, the Parties agree as follows:
1. Section 4.9 is hereby added to Article 4 ("Facilities Committee") of the Facilities
Agreement to read as follows:
"4.9 Notwithstanding any other provision of this Agreement to the contrary, Turlock
Irrigation District shall be entitled to designate one member of the Facilities
Committee for so long as Turlock Irrigation District shall remain a project
participant in Geothermal Project No. 3, which member shall have voting rights
only with respect to those matters directly relating to said project."
EXECUTION VERSION
AMENDMENT 1 TO FACILITIES AGREEMENT
2. Amendments to the Facilities Agreement which do not impair the rights of TID as
provided in section 1 shall not require the consent of TID, provided that TID shall be given
written notice of any amendment to the Facilities Agreement.
3. In all other respects the Facilities Agreement shall remain in full force and effect.
WHEREFORE, NCPA upon authorization of its Commission, and the Facilities
Agreement participants, after all due authorization by their respective governing bodies, have
executed this First Amendment as evidenced by the signatures of their authorized
representatives below.
NORTHERN CALIFORNIA POWER TURLOCK IRRIGATION
AGENCY DISTRICT
By: __________________________ By:________________________
Its: General Manager Its: General Manager
Date: ___________________ Date:___________________
Approved as to form: Approved as to form:
_____________________________ __________________________
General Counsel General Counsel
CITY OF BIGGS CITY OF GRIDLEY
By: __________________________ By:________________________
Its: City Manager Its: City Manager
Date:___________________ Date:_________________
Approved as to form: Approved as to form:
_____________________________ __________________________
City Attorney City Attorney
CITY OF HEALDSBURG CITY OF LODI
By: ___________________________ By:________________________
Its: City Manager Its: City Manager
EXECUTION VERSION
AMENDMENT 1 TO FACILITIES AGREEMENT
Date:_________________ Date:_________________
Approved as to form: Approved as to form:
_______________________________ __________________________
City Attorney City Attorney
CITY OF LOMPOC CITY OF PALO ALTO
By: ____________________________ By:________________________
Its: City Manager Its: City Manager
Date:________________ Date:________________
Approved as to form: Approved as to form:
________________________________ __________________________
City Attorney City Attorney
CITY OF ROSEVILLE CITY OF UKIAH
By: _____________________________ By:________________________
Its: City Manager Its: City Manager
Date:______________________ Date:___________________
Approved as to form: Approved as to form:
________________________________ __________________________
City Attorney City Attorney
PLUMAS SIERRA RURAL ELECTRIC COOPERATIVE
By:______________________________
Its: General Manager
Date:_______________________
Approved as to form:
_________________________________
General Counsel
EXECUTION VERSION
AMENDMENT 1 TO FACILITIES AGREEMENT
EXECUTION VERSION
AMENDMENT 1 TO FACILITIES AGREEMENT
CITY OF SANTA CLARA
By: _______________________
Its: City Manager
Date: ______________________
Approved as to form:
___________________________
City Attorney
1586612.3
1586612.2
MEMBERSHIP WITHDRAWAL AND EXIT AGREEMENT BETWEEN
NORTHERN CALIFORNIA POWER AGENCY
AND
TURLOCK IRRIGATION DISTRICT
This Membership Withdrawal and Exit Agreement ("this Agreement") is
entered into as of April 1, 2011(“Effective Date”), by and between the Northern
California Power Agency (“NCPA”), a California joint powers authority, and the
Turlock Irrigation District (“TID”), a California irrigation district, (collectively, the
“Parties” or individually, “Party”), and
W I T N E S S E T H:
A. NCPA was created by a joint powers agreement first made on July 19,
1968, and which was most recently amended and restated on January 1, 2008
("the Joint Powers Agreement"); and
B. On September 27, 1984, the NCPA Commission approved
Supplement No. 1 to the Joint Powers Agreement, revised as of April 1, 1973,
admitting the TID as a member of NCPA, which Supplement became effective on
March 24, 1987, the date of TID’s execution of it; and
C. The Joint Powers Agreement provides in Article IV section 2(a) that
any member may terminate its membership upon two (2) years prior written
notice to all other members. TID has provided such two (2) year notice which
notice is effective on April 1, 2011 and TID shall no longer be a member of NCPA
from and after that date; and
D. This Agreement sets forth and resolves all outstanding issues between
the Parties; and
E. The Project Participants in the Geothermal Generating Project Number
3 and TID have entered into an Agreement for Transfer of Rights to Capacity
and Energy of Geothermal Generating Project No. 3, dated as of October 1,
1984 (the "First Transfer Agreement") by which the Project Participants
transferred to TID specified and varying Entitlement Percentages of Project
capacity and energy in each calendar year, and, from calendar year 2001 until
the end of the life of the Geothermal Generating Project Number 3, Gridley, Palo
Alto, and Plumas each permanently transferred certain Entitlement Percentages
of Project capacity and energy to TID. In addition, Palo Alto and TID entered into
an agreement dated December 3, 1985 ("the Second Transfer Agreement") by
which Palo Alto permanently transferred the remainder of its East Block
Entitlement Percentage to TID. The First Transfer Agreement and the Second
Transfer Agreement are collectively referred to as the "Transfer Agreements."
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F. TID and NCPA have entered into a letter agreement dated August 6,
1985 ("the Letter Agreement") by which NCPA's obligations to TID relative to
Geothermal Generating Project No. 3 in light of the First Transfer Agreement
were specified; and
G. The on-going rights and obligations of TID as a participant in NCPA
Geothermal Generating Project No. 3, subsequent to TID's withdrawal as a
member of NCPA, are separately resolved and agreed to in Amendment Number
Two to Agreement for Construction, and Financing of Geothermal Generating
Project Number 3 and in an Amended and Restated Geothermal Project
Operating Agreement (collectively, the "Geothermal Project Agreements"), and
Amendment No. 1 to Northern California Power Agency Facilities Agreement,
each of which is entered into concurrently with this Agreement; and
H. The Parties intend to provide each other mutual releases for all claims
and matters that have been resolved to date or are unknown.
NOW, THEREFORE, the Parties agree as follows:
1. Effective Date. This Agreement shall take effect on April 1, 2011.
2. Termination of Membership. On and after April 1, 2011, TID shall no longer
be a member of NCPA or a party to the Joint Powers Agreement, and shall be
deemed to have withdrawn from NCPA.
3. Claims Arising Prior to TID’s Termination of Membership.
a. The following known claims between NCPA and TID have arisen prior
to TID’s termination of membership.
(1) The amount owed by TID to NCPA pursuant to Article IV
section 2 (b) of the Joint Powers Agreement for TID’s pro-rata share of all debts,
liabilities and obligations of NCPA as of the date of termination. These debts
represent TID's share of obligations of NCPA for non-Geothermal Project No. 3
employees, including both pension and retiree medical benefits.
(2) The amounts invoiced by NCPA to TID in its “All Resources
Bills” for costs allegedly attributable to TID through March 31, 2011, which
invoices TID has paid under protest beginning in July 2010.
(3) NCPA’s claim that TID is required to pay the full amount of the
2010-2011 annual cash contribution pursuant to Article IV section 3 of the Joint
Powers Agreement even though TID has only been a member of NCPA for nine
of the twelve months during that period.
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(4) NCPA's claim that it has inadvertently failed to bill TID for
certain transmission costs relating to Geothermal Project No. 3, and that TID
must pay all such costs to NCPA upon presentation of the bill to TID.
(5) TID's claim for damages relating to the sale of renewable
energy credits from Geothermal Project No. 3 as set forth in the August 20, 2010
letter from James Farrar of TID to James Pope of NCPA.
b. The Parties acknowledge that $219,819.00 is the current amount
owing from TID to NCPA with respect to the claim listed in section 3(a)(1). This
amount has been included in the calculation of the "net" amount to be paid by
TID pursuant to section 3(d). The amount owed for the claim listed in section
3(a)(1) is not final, and shall be twice subject to "true-up" as provided in this
subsection and in accordance with the methodology in Exhibit "A", and may
therefore be either increased or decreased, as a consequence of anticipated
actuarial reports requested by NCPA (at its cost). The Parties agree that amount
shall be subject to true-up such that TID shall be responsible for 11.347% of the
4.181% legislative and regulatory share share of all actuarially determined cost
increases or decreases in NCPA’S unfunded actuarial accrued liability
attributable to non-NCPA Project employees, including legislative and regulatory
staff for pension and retiree medical benefits. As of June 30, 2011 the unfunded
liabilities were calculated to be $46,335,308 ($41,374,505 retirement, $4,960,803
medical) as of June 30, 2009.
(1) The amount shall be subject to true up in approximately
August, 2011 when the medical retiree report for the fiscal year ending
June 30, 2011 is provided to NCPA.
(2) The amount shall be further subject to true up in
approximately October, 2012 when the CalPERS retiree pension report for
the fiscal year ending June 30, 2011 is provided to NCPA.
NCPA shall provide notice to TID within ten (10) days following receipt of
each actuarial report as to any additional amounts due, as well as the
calculations by NCPA supporting the TID share. TID shall be entitled to review
the report and NCPA’s calculations. The Parties agree to mutually resolve any
significant inaccuracies in the report or in NCPA’s calculations. TID shall pay any
increase, or NCPA shall refund any decrease, in TID's share within 30 days after
each such notice.
(c) Amounts paid by TID that are Project Costs during FY2011, as
defined in the Amended and Restated Geothermal Project Operating Agreement
between NCPA and the Geothermal Project Participants, will be subject to the
annual true-up and settlement process by the NCPA Commission in accordance
with NCPA's standard procedures, at the same time and on an equal basis with
remaining NCPA members. Such true-up is estimated to occur in February,
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2012, and may result in a payment by NCPA to TID or by TID to NCPA in
addition to the net settlement amount stated in section 3(d). Non Project Costs,
including Legislative and Regulatory Program Costs and Natural Gas Information
Program Costs are settled as part of the net settlement amount described in
section 3d and will not be trued up.
NCPA shall provide notice and copies of all related staff reports to TID not less
than ten (10) days prior to the NCPA Commission meeting at which the true-up
and settlement is to occur. Following NCPA Commission action, NCPA shall
provide notice to TID of any increase or decrease in its power management costs
which have been determined. TID shall pay any increase, or NCPA shall refund
any decrease, in TID's share of power management costs within 30 days after
such notice.
(d) Subject to the true-up provisions of sections 3(b) 3(c) in full settlement
of all claims by NCPA against TID, and in full settlement of all claims by TID
against NCPA, NCPA acknowledges payment of $213,000 by TID which the
Parties agree is the net of the known claims by one against the other.
4. Mutual General Release.
The Parties hereby mutually waive and release each other from any and all
claims, debts, or obligations arising out of TID's membership in NCPA, the
Transfer Agreements, the Letter Agreement or the other agreements terminated
by the Amended and Restated Geothermal Project Operating Agreement,
whether such claims are known or unknown to them.
The Parties acknowledge that California Civil Code section 1542 provides as
follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of execution of the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
The Parties waive the provisions of Civil Code section 1542.
5. Notice. Any notice required by this Agreement shall be in writing and shall be
either delivered to or mailed by U.S. Mail, first class postage prepaid, addressed
as follows:
NORTHERN CALIFORNIA POWER AGENCY
Attn: James H. Pope, General Manager
651 Commerce Drive
Roseville, CA 95678
4
And
Attn: Michael F. Dean, NCPA General Counsel
Meyers Nave
555 Capitol Mall, suite 1200
Sacramento, CA 95814
TURLOCK IRRIGATION DISTRICT
Attn: General Manager
333 E. Canal Drive
Turlock, CA 95381
And
Attn: Roger Masuda, TID General Counsel
Griffith & Masuda, A Professional Law Corporation
517 East Olive Street
Turlock, CA 95380
6. Dispute Resolution. Notwithstanding the dispute resolution provisions which
may exist in the Joint Powers Agreement or in any other agreement between the
Parties to the contrary, the Parties agree that any dispute arising out of or in
connection with the provisions of this Agreement shall be resolved as provided in
this section. All such disputes shall be submitted to arbitration in accordance
with J.A.M.S./Endispute (“JAMS”), unless otherwise agreed by the Parties.
The Parties further agree:
a. Either Party may submit a matter to binding arbitration by
JAMS within sixty (60) days of the dispute arising. In all cases submitted
to JAMS for arbitration, the Parties agree: to a single arbitrator (who shall
be experienced in both the electric industry and public agency law); to
advance their respective administrative fees; and to advance in equal
shares the arbitrator’s fee.
b. The Parties incorporate the provisions of California Code of
Civil Procedure section 1283.05 into their agreement to arbitrate their
disputes, without the limitations as to depositions set forth in subdivision
(e) of section 1283.05.
c. Notwithstanding any rules or procedures of JAMS to the
contrary, the arbitrator shall be bound to render a decision in accordance
with applicable state and federal laws and shall issue written findings of
5
fact and conclusions of law (the “written opinion”). In any petition to
confirm, correct or vacate the arbitration award, the arbitrator’s written
opinion shall be subject to judicial review for the purpose of ensuring that it
conforms to applicable state and federal laws. Except for this limited right
of judicial review and other statutory grounds for correcting or vacating the
arbitrator’s award, the Parties agree that the decision of the arbitrator shall
be binding upon them. All costs associated with arbitration, including the
arbitrator's fees, shall be recovered by the prevailing party who shall be
designated by the arbitrator for this purpose. Each party shall bear its own
attorney's fees and expert witness fees.
d. This Agreement shall be construed in accordance with
California law. The venue for any mediation or arbitration under this
Agreement shall be Stockton, California, unless otherwise agreed by the
Parties.
7. Prior Agreements.
a. The following agreements between the Parties are hereby terminated:
i.. The "Energy Exchange Agreement" dated September 6, 1988.
ii.. The "Member Services Agreement" dated September 25, 1990.
iii.. The "Agreement for Sale of Capacity and Energy of Combustion
Turbine Project Number Two-Unit Two" dated August 1, 1992.
b. The Parties acknowledge that the Facilities Agreement, dated
September 22, 1993, provides that signatories to it are members of NCPA. The
Parties agree to cooperate in good faith to amend the Facilities Agreement as
may be necessary to permit TID to continue to participate in the Facilities
Committee established by the Facilities Agreement as contemplated by the
Amended and Restated Geothermal Operating Agreement entered into
concurrently with this Agreement.
c. The Parties acknowledge that the Facilities Agreement, as amended
pursuant to subsection b hereof to permit TID's participation in the Facilities
Committee, the Amended and Restated Geothermal Operating Agreement, and
the Agreement for Construction, Operation and Financing of Geothermal Project
Number 3, as amended by Amendment Number Two, entered into concurrently
with this Agreement, shall remain in full force and effect.
8. Interpretation. Each Party to this Agreement has been represented by its
counsel in the negotiation of this Agreement. In the event of any uncertainty, this
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Agreement shall not be construed in favor or against any individual Party by
reason of California Civil Code section 1654.
IN WITNESS WHEREOF, the parties have caused this agreement to be
approved and executed.
NORTHERN CALIFORNIA POWER TURLOCK IRRIGATION
AGENCY DISTRICT
By: __________________________ By:________________________
Its: General Manager Its: Assistant General Manager
Date: ___________________ Date:___________________
Approved as to form: Approved as to form:
_____________________________ __________________________
General Counsel General Counsel
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Exhibit A
Methodology for Determining True Up in Section 3b
The methodology for determining the TID share of any increased or decreased
liability pursuant to Section 3(b) shall be:
Medical Retiree Adjustment
(2011 unfunded medical liability determined by medical retiree actuarial reports-
$4,960,803) x (0.04181 Legislative & Regulatory Share of unfunded liability) x
(0.11347 TID Share) = True up of TID Share of NCPA’s Unfunded Actuarial
Accrued Liability for retiree medical
CalPERS Pension Adjustment
(2011 unfunded retirement liability determined by pension actuarial reports-
$41,374,505) x (0.04181 Legislative & Regulatory Share of unfunded liability) x
(0.11347 TID Share) = True up for TID Share of NCPA’s Unfunded Actuarial
Accrued Liability for CalPERS Pension
1572100.10
FOURTEENTH SUPPLEMENTAL
INDENTURE OF TRUST
between
NORTHERN CALIFORNIA POWER AGENCY
and
U.S. BANK NATIONAL ASSOCIATION, as TRUSTEE
relating to
Geothermal Project Number 3 Revenue Bonds
Dated as of April 1, 2011
OHS West:261076045.2
TABLE OF CONTENTS
Page
ARTICLE I AUTHORITY AND DEFINITIONS ............................................................... 2
101. Supplemental Indenture of Trust .......................................................................... 2
102. Authority for the Fourteenth Supplemental Indenture of Trust ............................ 2
103. Definitions............................................................................................................. 2
104. Rules of Construction ............................................................................................ 3
ARTICLE II AMENDMENTS TO ORIGINAL INDENTURE ........................................... 4
201. Amendments to Section 712 ................................................................................. 4
ARTICLE III MISCELLANEOUS ........................................................................................ 4
301. Effectiveness .......................................................................................................... 4
302. Bondholder Consent............................................................................................... 4
303. Indenture of Trust to Remain in Effect .................................................................. 5
304. Counterparts ........................................................................................................... 5
OHS West:261076045.2 i
OHS West:261076045.2
FOURTEENTH SUPPLEMENTAL INDENTURE OF TRUST
THIS FOURTEENTH SUPPLEMENTAL INDENTURE OF TRUST, made
and entered into as of April 1, 2011, by and between Northern California Power Agency, a joint
exercise of powers agency established pursuant to the laws of the State of California (“NCPA”),
and U.S. Bank National Association, a national banking association, incorporated under the laws
of the United States of America and authorized to accept and execute trusts of the character
herein set out, as successor trustee (the “Trustee”);
W I T N E S S E T H :
WHEREAS, NCPA has heretofore entered into an Indenture of Trust, dated as of
November 1, 1983 (the “Original Indenture of Trust”), as supplemented and amended by the
First Supplemental Indenture of Trust, dated as of November 1, 1983 (the “First Supplemental
Indenture of Trust”), the Second Supplemental Indenture of Trust, dated as of October 1, 1984
(the “Second Supplemental Indenture of Trust”), the Third Supplemental Indenture of Trust,
dated as of October 1, 1985 (the “Third Supplemental Indenture of Trust”), the Fourth
Supplemental Indenture of Trust, dated as of November 1, 1986 (the “Fourth Supplemental
Indenture of Trust”), the Fifth Supplemental Indenture of Trust, dated as of January 30, 1987 (the
“Fifth Supplemental Indenture of Trust”), the Sixth Supplemental Indenture of Trust, dated as of
May 1, 1993 (the “Sixth Supplemental Indenture of Trust”), the Seventh Supplemental Indenture
of Trust, dated as of September 1, 1994 (the “Seventh Supplemental Indenture of Trust”), the
Eighth Supplemental Indenture of Trust, dated as of April 1, 1996 (the “Eighth Supplemental
Indenture of Trust”), the Ninth Supplemental Indenture of Trust, dated as of April 1, 1996 (the
“Ninth Supplemental Indenture of Trust”), the Tenth Supplemental Indenture of Trust, dated as
of April 1, 1996 (the “Tenth Supplemental Indenture of Trust”), the Eleventh Supplemental
Indenture of Trust, dated as of August 1, 1998 (the “Eleventh Supplemental Indenture of Trust”),
the Twelfth Supplemental Indenture of Trust, dated as of August 1, 1998 (the “Twelfth
Supplemental Indenture of Trust”), and the Thirteenth Supplemental Indenture of Trust, dated as
of March 1, 2009 (the “Thirteenth Supplemental Indenture of Trust”), each by and between
NCPA and the Trustee (such Original Indenture of Trust, as amended and supplemented the
"Indenture of Trust"), to provide for the securing of Bonds (capitalized terms used herein and not
otherwise defined shall have the meanings given such terms pursuant to Section 103 hereof); and
WHEREAS, the only Bonds which remain Outstanding under the Indenture of
Trust are the $35,610,000 aggregate principal amount of Geothermal Project Number 3 Revenue
Bonds, 2009 Series A; and
WHEREAS, NCPA and the Parties have entered into Amendment Number Two
to the Project Number 3 Member Agreement; and
WHEREAS, Amendment Number Two provides, among other things, for the
Novation of TID for the Transferors with respect to the Transferred Project Entitlement
Percentage on the terms and conditions specified therein, including the Novation going into
effect only when no 2009 Series A Bonds remain Outstanding; and
WHEREAS, NCPA desires to amend Section 712 of the Original Indenture of
Trust to provide for the Project Number 3 Member Agreement being amended to permit the
Novation of TID for the Transferors with respect to the Transferred Project Entitlement
Percentage; and
OHS West:261076045.2 2
WHEREAS, Section 1001(7)) of the Original Indenture of Trust provides that at
any time and from time to time, NCPA and the Trustee may enter into a Supplemental Indenture
of Trust which, upon the filing with the Trustee of a copy thereof certified by an Authorized
NCPA Representative, shall be fully effective in accordance with its terms, to modify any of the
provisions of the Indenture of Trust in any respect whatever provided that such modification
shall be, and shall expressed to be, effective only after all Bonds of each Series Outstanding at
the date of execution and delivery of such Supplemental Indenture of Trust shall cease to be
Outstanding; and
WHEREAS, this Fourteenth Supplemental Indenture of Trust provides that the
amendments to Section 712 of the Original Indenture to permit the amendments of the Project
Number 3 Member Agreement with respect to the Novation shall go into effect when no 2009
Series A Bonds remain Outstanding; and
WHEREAS, all acts and things have been done and performed which are
necessary to make this Fourteenth Supplemental Indenture of Trust a valid and binding
agreement;
NOW, THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, THIS
FOURTEENTH SUPPLEMENTAL INDENTURE OF TRUST WITNESSETH:
That, in consideration of the premises, the acceptance by the Trustee of the trusts
hereby created and originally created by the Original Indenture of Trust, the mutual covenants
herein contained and the purchase and acceptance of the Bonds by the Holders thereof, and for
other valuable consideration, the receipt whereof is hereby acknowledged, and in order to secure
the payment of the principal of, Redemption Price, if any, and interest on the Bonds according to
their tenor and effect, and the performance and observance by NCPA of all the covenants and
conditions contained in the Indenture of Trust and the Bonds on its part to be performed, it is
agreed by and between NCPA and the Trustee as follows:
ARTICLE I
AUTHORITY AND DEFINITIONS
101. Supplemental Indenture of Trust. This Fourteenth Supplemental Indenture of
Trust is supplemental to the Original Indenture of Trust as heretofore amended and
supplemented.
102. Authority for the Fourteenth Supplemental Indenture of Trust. This
Fourteenth Supplemental Indenture of Trust is entered into in accordance with Article X of the
Original Indenture of Trust.
103. Definitions.
(a) Except as provided by this Fourteenth Supplemental Indenture of Trust, all
terms which are defined in Section 101 of the Original Indenture of Trust, Section 103 of the
First Supplemental Indenture of Trust, Section 103 of the Second Supplemental Indenture of
Trust, Section 103 of the Third Supplemental Indenture of Trust, Section 103 of the Fourth
Supplemental Indenture of Trust, Section 103 of the Fifth Supplemental Indenture of Trust,
Section 103 of the Sixth Supplemental Indenture of Trust, Section 103 of the Seventh
Supplemental Indenture of Trust, Section 103 of the Eighth Supplemental Indenture of Trust,
OHS West:261076045.2 3
Section 103 of the Ninth Supplemental Indenture of Trust, Section 103 of the Tenth
Supplemental Indenture of Trust, Section 103 of the Eleventh Supplemental Indenture of Trust,
Section 103 of the Twelfth Supplemental Indenture of Trust, or Section 103 of the Thirteenth
Supplemental Indenture of Trust, shall have the same meanings, respectively, in this Fourteenth
Supplemental Indenture of Trust as such terms are given in said Section 101 of the Original
Indenture of Trust, Section 103 of the First Supplemental Indenture of Trust, Section 103 of the
Second Supplemental Indenture of Trust, Section 103 of the Third Supplemental Indenture of
Trust, Section 103 of the Fourth Supplemental Indenture of Trust, Section 103 of the Fifth
Supplemental Indenture of Trust, Section 103 of the Sixth Supplemental Indenture of Trust,
Section 103 of the Seventh Supplemental Indenture of Trust, Section 103 of the Eighth
Supplemental Indenture of Trust, Section 103 of the Ninth Supplemental Indenture of Trust,
Section 103 of the Tenth Supplemental Indenture of Trust, Section 103 of the Eleventh
Supplemental Indenture of Trust, Section 103 of the Twelfth Supplemental Indenture of Trust, or
Section 103 of the Thirteenth Supplemental Indenture of Trust, respectively.
(b) Amendment Number Two Definitions. Except as provided by this
Fourteenth Supplemental Indenture of Trust, all terms which are defined in Amendment Number
Two (as defined in subsection (c) of this Section 103) shall have the same meanings,
respectively, in this Fourteenth Supplemental Indenture of Trust as such terms are given in
Amendment Number Two.
(c) Additional Definitions. The following terms shall, for all purposes of the
Indenture of Trust, have the following meanings set forth below:
Amendment Number Two means Amendment Number Two to Agreement for
Construction, Operation, and Financing of Geothermal Generating Project Number 3, dated April
1, 2011, by and among NCPA, the Cities of Alameda, Biggs, Gridley, Healdsburg, Lodi,
Lompoc, Palo Alto, Roseville, Santa Clara, and Ukiah, the Plumas Sierra Rural Electric
Cooperative, and the Turlock Irrigation District in the form attached hereto as Exhibit A.
Effective Time means the initial time when no 2009 Series A Bond of any
maturity remains Outstanding.
Fourteenth Supplemental Indenture of Trust means this Fourteenth
Supplemental Indenture of Trust, amending and supplementing the Original Indenture of Trust as
heretofore amended and supplemented.
Novation means: the release and discharge of the obligation of each of the
Transferors to make payments with respect to the Transferred Project Entitlement Percentage
pursuant to Section 5(f) of the Project Number 3 Member Agreement (as amended by
Amendment Number Two) to the extent the obligation to make such payments accrues after the
Effective Time.
104. Rules of Construction. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context
shall otherwise indicate, words importing the singular number shall include the plural number
and vice versa, and words importing persons shall include corporations and associations,
including public bodies, as well as natural persons. Defined terms shall include any variant of
the terms set forth in this Article I.
OHS West:261076045.2 4
The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder,” and any similar
terms, as used in this Fourteenth Supplemental Indenture of Trust, refer to this Fourteenth
Supplemental Indenture of Trust as a whole and not to any particular Article or Section hereof.
ARTICLE II
AMENDMENTS TO ORIGINAL INDENTURE
201. Amendments to Section 712. Subsection 1 of Section 712 of the Original
Indenture of Trust is amended in its entirety, as of the Effective Time, to read as follows:
NCPA shall receive and forthwith deposit in the Revenue Fund all amounts
payable to it pursuant to the Project Number 3 Member Agreement and the Project Number 2
Member Agreement or payable to it pursuant to any other contract for the use of NCPA Capacity
or any part thereof. NCPA shall enforce or cause to be enforced the provisions of the Project
Number 3 Member Agreement and the Project Number 2 Member Agreement and duly perform
its covenants and agreements thereunder. Except for the Novation, NCPA will not consent or
agree to or permit any rescission of or amendment to or otherwise take any action under or in
connection with the Project Number 3 Member Agreement and the Project Number 2 Member
Agreement which will reduce the payments required thereunder or which will in any manner
materially impair or materially adversely affect the rights of NCPA thereunder or the rights or
security of the Bondholders under the Indenture of Trust; however, nothing herein shall be
construed so as to prohibit any other amendment of the Project Number 3 Member Agreement
and the Project Number 2 Member Agreement. A copy of the Project Number 3 Member
Agreement and the Project Number 2 Member Agreement certified by an Authorized NCPA
Representative shall be filed with the Trustee, and a copy of any such amendment certified by an
Authorized NCPA Representative shall be filed with the Trustee.
ARTICLE III
MISCELLANEOUS
301. Effectiveness. This Fourteenth Supplemental Indenture of Trust shall be in full
force and effect from and after the execution and delivery hereof by NCPA and the Trustee and
the satisfaction of the requirements of subsection 7 of Section 1001 of the Original Indenture of
Trust with respect to this Fourteenth Supplemental Indenture of Trust; provided that the
amendment to Section 712 of the Original Indenture of Trust pursuant to Section 201 hereof
shall not go into effect until the Effective Time.
302. Reference in Bonds. Pursuant to subsection 7(ii)(b) of Section 1001 of the
Original Indenture of Trust, this Fourteenth Supplemental Indenture of Trust shall be specifically
referred to in the text of all Bonds of any Series authenticated and delivered after the date of
execution and delivery of this Fourteenth Supplemental Indenture of Trust and of Bonds issued
in exchange therefor or in place thereof.
303. Indenture of Trust to Remain in Effect. Save and except as heretofore
amended and supplemented and as amended and supplemented by this Fourteenth Supplemental
Indenture of Trust, the Indenture of Trust shall remain in full force and effect.
OHS West:261076045.2 5
304. Counterparts. This Fourteenth Supplemental Indenture of Trust may be
executed in any number of counterparts, each of which, when so executed and delivered, shall be
an original; but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Northern California Power Agency has caused these
presents to be signed in its name and on its behalf by its General Manager and to evidence its
acceptance of the trusts hereby created, the Trustee has caused these presents to be signed in its
name and on its behalf by one of its authorized officers, all as of the first day of April, 2011.
NORTHERN CALIFORNIA POWER
AGENCY
By:
Name: James H. Pope
Title: General Manager
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
Authorized Officer
FA 10 00 - 1 TBD, 2011
NCPA Facilities Agreement
Facilities Agreement Schedule FA 10.00
Federal Tax Guidelines Relating to Private Business Use
A. Scope
NCPA has issued a number of Bond issues (the “Bonds”) for the NCPA Projects
which have been “traditional” tax exempt bond or Build America Bond
obligations, which are “tax advantaged” under provisions of the Internal
Revenue Code (the “Tax Status”). This Facilities Schedule summarizes and
documents the various federal tax restrictions approved by the Commission to be
used as guidelines relating to private business use of the NCPA Projects and the
capacity and energy from the NCPA Projects required to qualify and maintain
the Tax Status of the Bonds. Failure to comply with the private business use
requirements set forth in this Facilities Schedule may adversely affect the Tax
Status of the Bonds.
B. Definitions
Unless defined in Section B of this Facilities Schedule, all terms used in this
Facilities Schedule with initial capitalization shall have the same meaning as
those contained in Article 1 of the Agreement.
a. Bonds means bonds, notes or other evidences of indebtedness of
NCPA (including, without limitation, contracts relating to letters of
credit or other credit enhancement devises, interest rate swap and
other agreements relating to interest rate or other cash-flow
exchanges such as those authorized by the Public Finance Contracts
Law, and other contracts which are characterized as debt by NCPA
at or prior the execution thereof) issued to finance or refinance a
NCPA Project and to finance or refinance any contributions-in-aid-
of-construction for construction necessary for the adjacent electric
system to interconnect with a NCPA Project and includes
additional bonds to complete a NCPA Project and may consist of
that portion of an issue of NCPA bonds, notes or other evidences of
indebtedness issued to finance the costs of a NCPA Project, which
portion is specifically identified as Bonds.
FA 10 00 - 2 TBD, 2011
b. Build America Bonds (“BABs”) means taxable municipal bonds
that feature tax credits and/or federal subsidies for bondholders
and state and local government bond issuers.
c. Internal Revenue Code means all federal tax laws.
d. Internal Revenue Service means the federal agency responsible for
administering and enforcing the Treasury Department’s revenue
laws, through the assessment and collection of taxes, determination
of pension plan qualification, and related activities.
e. Treasury Regulations means tax regulations issued by the Internal
Revenue Service.
C. Restrictions on Non-Governmental Use
Neither NCPA nor the Participants may expect that (i) more than five (5) percent
of the proceeds of a Bond issue will be used to make or finance loans to any
person other than a state or local governmental unit, or (ii) except as described
below, more than the permitted amount of the proceeds of a Bond issue (that is,
the lesser of 10 percent or $15 million, as applicable) will be used in any trade or
business carried on by any natural person or any activity carried on by anyone
other than a natural person or a state or local governmental unit.
“Use” includes the sale of power (whether consisting of capacity, energy, or both,
including the sale of ancillary services) to non-governmentally owned utilities
(including e.g., the federal government, Bonneville Power Administration and
Western Area Power Administration) pursuant to output or requirements
contracts as well as any other arrangements for the sale of power on terms
different from those available to the general public. Such may include contracts
with retail customers that contain provisions which obligate a customer to make
payments that are not contingent on the output requirements of the customer or
that obligate the customer to have output requirements (including provisions
which obligate the customer not to cease operations). The private business use
restrictions are applied by taking into account any arrangements NCPA or any of
the Participants have with non-exempt persons (generally, for these purposes
any entity or person other than a municipally owned utility) for the sale of power
from a NCPA Project. Use also includes providing a non-governmental person
with control, whether direct or indirect, over the operations, maintenance or
decision making as to when to run or not run a particular NCPA Project (in tax
FA 10 00 - 3 TBD, 2011
parlance such rights would be called “special legal entitlements”). Such special
legal entitlements also may create private business use.
Applicable Treasury Regulations provide an exception to private business use if
the non-governmental person uses the property (or the capacity or energy for the
property) as a member of the general public. This occurs if the “property is
intended to be available and in fact is reasonably available for use on the same
basis by natural persons not engaged in a trade or business.” Use on the same
basis as the general public may include a fee or charge for use, so long as the
rates charged are generally applicable and uniformly applied. These rates may
vary in certain respects, such as different rates based on volume, so long as the
difference in rates is customary and reasonable. Any arrangement that gives the
non-exempt person special priority rights or preferential benefits is not use on
the same basis as the general public.
D. Specific Private Business Use Exceptions Relating to the NCPA Projects
NCPA and the Participants will enter into a variety of arrangements with non-
exempt persons, including wholesale customers of NCPA, wholesale and retail
customers of the Participants, and non-governmental utilities and other
providers and purchasers of electric generation, transmission, and distribution
service. Each of these arrangements will be treated as private business use in
evaluating compliance with the limits described in Section B, except to the extent
that the arrangement either satisfies one of the following exceptions to the
limitations on private business use and private security or payments, or NCPA
or the Participants obtain an opinion of Bond Counsel to the effect that the
arrangement will not adversely affect the Tax Status of the Bonds:
1. in the case of sales of electric generation or distribution service, the term of
such transaction will not exceed three (3) years (including renewal
options) and will be negotiated, arm’s length arrangements that provide
for compensation at fair market value or are based on generally applicable
and uniformly applied rates, and the related facility (e.g. a NCPA Project)
was not financed with a principal purpose of providing that facility for
use by that non-governmental person;
2. in the case of sales of electric generation or distribution service, the
compensation for such service and any other payments in respect of such
use will not exceed NCPA’s or the Participant’s, as applicable, properly
allocable cost of ordinary and necessary expenses that are directly
FA 10 00 - 4 TBD, 2011
attributable to the operation of the financed property used by the non-
governmental person;
3. in the case of sales of electric generation or distribution service, the output
is sold (i) to a retail customer pursuant to a requirements contract that
does not require the customer to make payments unless it actually has
requirements, (ii) under a contract pursuant to which the average annual
payments made under the contract do not exceed the amount permitted
under the de minimis rule contained in the applicable regulations, (iii)
under a contract the terms of which comply with (1) above, or (iv) from
non-bond financed system resources of the Participant which are
physically capable of supplying the output being sold;
4. the arrangement will not involve use of the Project (e.g., non-bond
financed resources or contracts involving the resale of generation provide
by an investor owned utility to NCPA);
5. the use of the NCPA Projects that would constitute private business use is
allocable to (i) Bonds that have been “remediated” within the meaning of
Treasury Regulation section 1.141-12 (or repaid in their entirety), or (ii)
equity, or (iii) taxable bonds issued by NCPA, or (iv) issues of bonds that
have been fully repaid;
6. an agreement that provides for the swapping or pooling of output by one
or more non-governmental persons to the extent that: (i) the swapped
output is reasonably expected to be approximately equal in value
(determined over periods of one year or less), and (ii) the purpose of the
agreement is to enable each of the parties to satisfy different peak load
demands, to accommodate temporary outages, to diversify supply, or to
enhance reliability in accordance with prudent reliability standards; and
7. the use of the NCPA Project is by an entity that qualifies as an agency or
instrumentality of NCPA approved by the Internal Revenue Service or
Bond Counsel.
E. Sale of Renewable Energy Certificates
In a private letter ruling, the Internal Revenue Service concluded that under
certain circumstances the sale of renewable energy certificates (“RECs”) does not
create any private business use. If a Participant transacts to sell some or all of the
FA 10 00 - 5 TBD, 2011
RECs resulting from the generation at one or more of the NCPA Projects to non-
governmental person with contract terms longer than three (3) years (contracts of
three (3) years or less would meet one of the exceptions from private business
use described in Section C) such transaction must satisfy the following basic
requirements to satisfy the Internal Revenue Service:
1. that the purchase of RECs does not entitle the REC purchaser to any
electric energy from the NCPA Project;
2. the Participant will retain exclusive control over its entitlement to the
NCPA Project, its operations and any decision regarding how or whether
to operate the NCPA Project;
3. the Participant will not be under any obligation to produce, or cause to be
produced, any renewable energy or to operate, or cause the Project to be
operated at all or at any particular level;
4. the REC contracts will not give the REC purchaser any direct or indirect
voice in how any component of the NCPA Project will be operated or
maintained.
F. Compliance with Private Business Use Limits by Participants
Private business use limitations set forth in this Facilities Schedule apply in
aggregate to all actions by NCPA and the Participants. Accordingly, NCPA will
implement internal procedures and requirements necessary to assure compliance
with the private business use limits as specified in this Facilities Schedule,
including:
1. contractual obligations of the Participants to comply with private business
use limits and other requirements of the Internal Revenue Code, and
2. regularly surveying the Participants to determine compliance with the
private business use limits and other requirements of the Internal Revenue
Code.
Participants are required to comply with private business use limits and other
requirements of the Internal Revenue Code pursuant to applicable Project
Agreement, and Participants are strongly encouraged to established internal
procedures and requirements necessary to assure compliance.
City of Palo Alto (ID # 1497)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 2
(ID # 1497)
Summary Title: City Council Priorities
Title: Approval of the City Council Priorities Report for Calendar Year 2011
From:City Manager
Lead Department: City Manager
Recommendation
Staff recommends that Council approve the outline of Council priorities for calendar year 2011.
Executive Summary
The City Council held their annual retreat January 22, 2011 and reaffirmed their interest in
maintaining the following five priorities for the 2011 calendar year. The Policy and Services
Committee reviewed this item at their February 15th and March 8th meetings.
Strategic Priorities
City Finances Emergency Preparedness Environmental Sustainability
Land Use and Transportation Planning Youth Well-Being
Discussion
Since the retreat, staff has compiled a master list of the priorities and key goals under each
priority for the City Council’s information. This plan is based on current resource allocations
(i.e., staff and financial resources). Thus, should there be a material change in resources staff
would return to the City Council with a modified plan. Outlined in the attached documents are
the five strategic priorities and goals. The attachments include
a master worksheet showing each major priority, key goals, the lead department, and
March 21, 2011 Page 2 of 2
(ID # 1497)
checkmarks next to each goal indicating crossover with other priorities. For example,
completion of the IBRC long-term infrastructure needs is listed in the City Finances (CF)
category, but also has potential impacts on Emergency Preparedness (EP), Environmental
Sustainability (ES), Land Use and Transportation Planning (LUPT), and incorporates community
engagement (CE) and community partnership (CP) components. Several priority items will be
done through collaboration and coordination among several city departments. In addition, we
have included narrative summaries for each priority with additional details on department
actions to be taken to complete the priorities (See attachment B).
Timeline
All objectives identified are projected to be completed by the end of calendar year 2011 except
where noted in the written summaries.
Environmental Review
Environmental review may be required for specific projects and will be undertaken as those
individual projects are pursued.
Attachments:
·Attachment A: Master Excel Priorities Spreadsheet (XLS)
·Attachment B: Priority Narrative Summaries (PDF)
Prepared By:Katie Whitley, Administrative Assistant
Department Head:James Keene, City Manager
City Manager Approval: James Keene, City Manager
City Council Priorities De
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City Finances (CF)
Complete labor negotiations with all major bargaining groups HR x
Complete refuse fund study and stablization PW x ü ü ü
Complete economic development strategic plan MGR x ü ü ü ü ü ü
Execute new budget and fiscal measure to help ensure long-term financial stability ASD x ü ü
IBRC completes analysis of city long-term infrastructure needs and presents report to the City Council PW x ü ü ü ü ü
Emergency Preparedness (EP)
Conduct community exercise POL ü x ü ü
Evaluate a secondary electrical transmission line source UTL ü x ü ü ü
Implement recommendations of Foothills fire management plan FIR ü x
Implement Office of Emergency Services (OES) restructure POL ü x
Improve Emergency Operations readiness POL x ü ü
Environmental Sustainability (ES)
Evaluate construction of compositing digester or alternatives PW ü x
Evaluate plan to introduce electric vehicle (EV) charging stations at commercial and residential sites and city facilities UTL x ü ü
Establish formal collaboration with Stanford University MGR x ü
Explore methods to integrate Palo Alto Green into city sustainability programs MGR x ü ü
Prepare Urban Forest Master Plan PCE x ü ü
Land Use & Transportation Planning (LUTP)
Complete strategies and plans at the Development Center to improve customer service and accountability PCE ü x ü ü
Complete draft Rail Corridor Study outlining measures to provide for community land use, transportation, & corridor urban design PCE ü ü ü x
Complete Stanford University Medical Center renewal and replacement project PCE ü ü ü x
Substantially complete update of city Comprehensive Plan including draft Housing Element, 2 area Concept Plans PCE ü ü ü x ü ü ü
Facilitate in cooperation with local and regional agencies and organizations development of short and long-term action plan to sustain Caltrain MGR ü ü x ü ü
Actively participate in preparation of regional Sustainable Communities Strategy (SB375), Regional Housing Needs Allocation (RHNA)PCE ü ü x ü ü
Prepare Pedestrian and Bicycle Master Plan update PCE ü ü x ü ü ü
Youth Well Being (YWB)
Implement Project Safety Net CSD ü x
Monitor fundraising for Magical Street Bridge CSD ü ü x ü ü
Notes
City Finances (CF)
Emergency Preparedness (EP)
Environmental Sustainability (ES)
Land Use & Transportation Planning (LUTP)
Youth Well Being (YWB)
Community Engagement (CE)
Collaborative Partnerships (CP)
An X means that is the priority whereas a check indicates crossover with other priorities
Department Abbreviations
Administrative Services (ASD), City Manager (MGR), Community Services (CSD), Fire (FIR), Human Resources (HR), Planning and Community
Environment (PCE), Police (POL), Utilities (UTL)
City Finances
Page 1 of 11
City Council Strategic Priority Goals for Fiscal Year 2011
City Finances
Executive Summary
City Finance strategies form the foundation for many of the City Council identified priorities. A stable
financial picture in the short‐term and long‐term ensures the City’s ability to deliver on the all five City
Council Priorities in the areas of: Emergency Preparedness, Environmental Sustainability, Land Use &
Transportation and Youth Well‐Being. Sound City Finances are integral to Palo Alto’s quality of life.
A key principle of the City’s Finance objectives is to provide for the City’s finances in the near and long‐
term. For example, while the City in the normal course of business negotiates labor agreements on a
periodic basis the contacts envisioned during the cycle are ones where the City plans to make
meaningful long‐lasting changes to key City legacy costs (e.g., pension and health care). In addition, the
City is working toward developing a sustainable business model for funding ongoing infrastructure
needs while also eliminating a major backlog of projects in the City. These efforts will take time and yet
this investment is well worth the effort. This work will result in improving and the overall high quality of
life Palo Alto citizens have come to rely and expect from their City government. Identified below are five
key development goals for 2011:
1. Develop and execute new human resource contracts that help the City manage its labor costs to
a sustainable level over the long‐term
2. Execute an economic development program that supports and creates new municipal revenue
streams to support vital City services and positions the City for the 21st century innovation
economy
3. Outline a comprehensive initiative to fund ongoing infrastructure maintenance and fund the
large existing backlog of projects. A quality infrastructure base is vital to community quality of
life and to the City’s ability to attract and sustain a robust business base to support City services
4. Explore in‐depth available potential revenues along with expenditure reductions that enable the
City to create a long‐term sustainable fiscal ecosystem for the City so as to maintain and
ultimately enhance City service delivery and community quality of life. The solution to the City’s
finances must be multi‐dimensional and incorporate new or enhanced revenues, reset of our
long‐term labor and a review of new methods to deliver services
Page 2 of 11
Rationale for Goals Selection
City finances are integral to sustaining and enhancing the “dream” of what Palo Alto is all about which is
a community with an outstanding quality of life, an innovative community, a community where new
ideas thrive and grow, a place where families want to live and send their children to local schools and a
place where collaboration, community engagement and community partnerships are part of the inner
“fabric” of the place known as Palo Alto.
A solid City financial base, short and long‐term is the foundation of all the above. City finances enables
the community to provide the vital municipal services necessary to maintain and in Palo Alto to provide
the myriad number of enhanced community amenities and programs rarely found in any community in
North America of similar size.
There are significant macroeconomic changes occurring today that impact cities. These include a global
economic competitive environment, an environment of high economic uncertainty, super rapid change
in technological innovation and continued demographic changes impacting the ability of employers to
hire and retain talent. In addition, the State of California may be finally facing the reality of
restructuring itself where resources are aligned with expenditures and changing the dynamic of the
state relationship with local agencies (e.g.,. redevelopment proposal). If these changes come to fruition
it will have profound impacts on local government agencies.
Likewise Palo Alto is experiencing change as an organization. The City has seen the retirement of
several senior, mid‐level workers over the past two years and this trend is expected to continue given
the age demographic of the workforce and new changes in pension and health care benefit levels. All
the above trends give the City the ability to think about possibilities that could not be discussed or
considered before and to address the critical policy question about what should the City be doing and
how should it do it? There is also the opportunity now to:
Leverage technology and innovate in ways perhaps not considered before
New ways to structure the organization and organize the work
Set up new systems and methods to provide services (e.g., privatization)
As referenced recently in the Economist “Innovation is the single most important ingredient in any
modern economy”. Palo Alto has the ability to be a leader in local government service delivery
innovation if it executes well the City Finances priorities identified herein.
Page 3 of 11
City Finances
(Labor Negotiations)
Executive Summary
In 2010, Council reaffirmed the importance of attracting and retaining a quality workforce but
emphasized the critical need to balance this objective with a commitment to sustainable employee
compensation. In addition, Council directed that systemic problems and issues be addressed with
systemic solutions. As described in the City’s response to the Santa Clara County Grand Jury Report, the
City agrees that unsustainable employee costs must be aligned with available resources, taking into
consideration the City’s significant infrastructure needs and the public’s expectation of services. As
demonstrated by its balanced budgets, minimal use of reserves, Triple A credit rating, and excellent
annual outside audits, the City prides itself on responsible financial stewardship and management. It
fully intends to maintain these best practices and adjust costs and revenues as needed. However,
progress is dependent on the City’s success in its collaboration with its employee units. The City must
abide by contractual obligations of its labor contracts as well as legal requirements to meet and confer
and bargain in good faith over matters within the scope of representation. This places real and practical
constraints on the City’s ability to move forward with changes it may believe necessary, but which are
subject to negotiation. The City genuinely strives to reach agreements that ensure a sustainable
financial future and excellent services to the community.
In 2009, the City took the lead among Bay Area public agencies by initiating steps in contract
negotiations with Service Employees International Unit (SEIU) and Management and Professional
employees to implement a two‐tier retirement benefit by changing the retirement formula for new hires
to 2% @60. Furthermore, the City pursued and has now implemented an employee medical
contribution with non‐public safety employee groups (e.g., management, professionals, and SEIU
workers). Over the past year, the City has been involved in difficult negotiations with two out of the
four public safety unions: Local 1319, International Association of Firefighters (IAFF) and the Palo Alto
Police Manager’s Association (PAPMA). The other two sworn safety units will begin contract
negotiations in the spring 2011. Because many of the existing benefits were negotiated and approved
over an extended period of time and are long established, these are challenging negotiations and
difficult employee concessions to address in a short period of time.
One of the City’s primary labor relations goals is to agree to meaningful, long‐term structural changes to
employee compensation with all employee groups. Since the non‐safety employees represented by
SEIU and members of the Management and Professional unit have already made significant concessions
in their compensation, the City will be focused on reaching agreement on similar equitable
compensation concessions with all four of the safety units in negotiations this spring.
Goals identified for FY2011 are as follows and are not in rank order:
1. The Palo Alto Police Managers’ Association is a new bargaining unit. The City and PAPMA are in
negotiations to create their first Memorandum of Agreement (MOU).
2. The City has been negotiating with the Fire Fighters’ Association since May 2010. The City
determined that further productive movement toward a negotiated agreement cannot be
reasonably expected after 8 months of negotiations and therefore declared impasse on
February 15, 2011 and has initiated binding interest arbitration of the unresolved issues.
Page 4 of 11
3. The City typically negotiates with the Fire Chiefs’ Association after the Fire Fighters conclude.
Given the lack of progress as described above, the City will initiate negotiations with the Fire
Chiefs in the spring 2011 with the goal of reaching agreement in FY 2012.
4. The City and SEIU will meet in the spring 2011 to prepare a successor agreement that is
scheduled to expire June 30, 2011.
5. The Palo Alto Police Officers’ Association (PAPOA) deferred their scheduled wage increase for
one year to provide relief to the City’s budget and negotiated an additional year on their existing
contract for a new expiration date of June 30, 2011. The City will begin negotiations with
PAPOA in spring 2011.
Rationale for goals selection
Labor negotiations are an ongoing activity of a municipal operation. This is an activity that occurs on a
regular basis as Memorandum of Agreement’s (MOA’s) expire and need to be renegotiated. These
contracts are an integral component of City Finances as labor costs are typically 60% or higher of total
city general fund expenditures. What distinguishes this year’s negotiations from the norm is the
extraordinary strategic nature these contracts will have on the long‐term fiscal health of the City’s
finances. As referenced in the Executive Summary key bargaining groups have already made strategic
and fundamental long‐term structural changes to their contracts. It is the City’s goal to achieve similar
contracts with all bargaining units to assure the long‐term fiscal health of the City.
Page 5 of 11
City Finances
(Refuse Fund Study and Stabilization)
Executive Summary
Studying the Refuse Fund and executing a plan to balance and stabilize the fund is one of five goals
identified by the Palo Alto City Council to be achieved under the City Finances Priority. This enterprise
fund supports a large array of City services including garbage, recyclables, and compostables collection,
processing, and disposal, as well as street sweeping, Household Hazardous Waste services, and
supporting City‐owned facilities such as the Recycling Center and the Palo Alto landfill and composting
site. Due to multiple factors such as the success of the City’s Zero Waste services, the downturn in the
economy, and the use of reserve funds, the Refuse Fund financial health has been compromised. The
goals of the City are to:
1. Rebuild the Refuse Fund’s Rate Stabilization Reserve to a level that meets established
guidelines. This will include ensuring balanced annual operating budgets and establishing a
stable annual revenue stream for the fund.
2. Assess and realign refuse rates among users, as necessary. The City is finalizing a Cost of Service
study, and the results of this study will be used to evaluate the current Refuse rate structure and
make recommendations for changes.
3. Continue to work towards Zero Waste. The City has made great strides towards reaching this
goal, and much of its success is connected to the Refuse Funds conservation pricing rate
structure.
Rationale for Goals Selection
The Refuse Fund is a complex enterprise fund that supports key services and programs for the City.
Through a combination of influences occurring over several years, the Fund’s Rate Stabilization Reserve
has become negative must be rebuilt. A multi‐phased, multi‐year approach to stabilizing the Refuse
Fund and restructuring rates must be developed in 2011.
Page 6 of 11
City Finances
(Economic Development Strategic Plan)
Executive Summary
Economic Development is one of five key goals identified by the Palo Alto City Council to be achieved
under City Finances for FY2011. Economic Development is nearly always a strategic priority for local
municipal business retention, business expansion and business attraction strategies and have direct
correlation to revenues and City services. Stable and predictable revenues are critical to the
community’s quality of life which is dependent on delivery of sustainable City services. Identified below
are 5 economic development goals for FY2011. These goals are not in rank order:
1. Develop new revenue streams and innovative uses for under‐utilized City owned property
o Present by July 2012 to City Manager at least 1 possible income‐producing idea for
city‐owned land
2. Provide leadership in the outreach and messaging for the Development Center (DC)
Restructuring process
o Provide regular updates to business and community groups
o Work with PIO and media to ensure public awareness of progress and goals
Deliverables
Make 6 presentations to business community between January and June 2011
Host monthly meetings with PIO to determine messaging and outreach regarding the DC
Blueprint Project and send 2 DC Improvement press releases by July 2012
3. Outreach to the City’s largest revenue generating and most innovative companies
o Meet at least once with key company leaders, especially on real estate/facility
issues
Identify future expansion, relocation, or renovations plans if applicable, and
connect company representatives with staff at Development Center
Respond to any follow up items promptly‐ no longer than 3 business days.
Coordinate with city staff for additional follow‐up as appropriate
Deliverables
Conduct 20 general outreach meetings each month starting January 2012
Provide meeting summaries in newsletter and report to City Manager
3A. Visit strategically chosen businesses also including City Council, City Manager, and other key
staff in 2011 to have a focused discussion on using City resources to help retain/ grow their
presence in the City
Page 7 of 11
o Work with City Manager, City Council, Finance, Utility Advisory Commission, other
Boards/Commissions for input to develop plan to select companies to visit
Deliverable
Conduct 12 company site visits that include City Manager, Council Members, Boards and
Commission members and key company executives by January 2012
4. Create “Test Bed” partnerships, especially with innovative green/clean tech companies
o Explore finding suitable business location for test bed help desk
o Engage in promotional activities including:
Utility bill insert
Presentations to business trade organizations and neighborhood groups
Marketing Collateral
Deliverables
Identify staff team and hold brainstorming meetings in March 2011
Identify pilot projects and prepare draft business plan by June 2011
Implement pilot projects by January 31, 2012
5. Enhance City’s “Doing Business” Web Page and create engaging and effective marketing
collateral geared towards Palo Alto’s diverse business environment (i.e. retention and attraction
of different market segments) and transition to electronic marketing wherever possible.
o Engage in creative “web 2.0” strategies to improve messaging & info flow
Deliverables
By year end design/produce and present 3 marketing collateral pieces for City of Palo
Alto Economic Development
By July 2011, present report to City Manager on options for social media and web‐based
software, including determination on use of “Customer Analytics” software
Rationale for goals selection
A focus on finding new uses for city‐owned property could have a significant impact on our bottom line.
For instance, finding an appropriate site for a potential expansion or new location for an automobile
dealership, if successful, will result immediately in new revenues for the City. Estimated revenues for a
dealership could produce at least $100K or more per year in new annual revenues. In order to help
grow and or attract business in Palo Alto, we must enhance the Development Center to create a more
user‐friendly, transparent and predictable experience for customers. Communication and collaboration
across departments as well as with the community will help to streamline our process. If successful, not
Page 8 of 11
only will the process improve, but the DC itself can become a better marketing tool to attract and
expand business.
Communicating to businesses is the vital element to comprehending their issues and needs. It is
through this understanding that we can learn of potential opportunities, and best leverage the
resources at the City to assist businesses. By proactively engaging strategically chosen businesses in an
ongoing dialogue, we can build partnerships and improve our community, increasing our attractiveness
and in turn the City’s bottom line. As we move forward with economic development and sustainability
goals, we intuitively know that they must fuse. We understand that in order to maintain our leadership
as a global center of innovation, we must continue to attract the next wave of start‐up entrepreneurs,
cutting edge clean‐tech, bio‐tech, nanotech and research‐ based firms, while retaining the existing
companies that keep our character and charm. Working together with the Utilities Department (UTL)
we have a unique opportunity to create an effective “Test Bed”, a tool which can be used for the City to
partner with such companies, as well as with researchers in emerging fields. Developing an effective
system for collaboration between city/ residents/ business will be a great step forward in creating
tangible benefits that will help to attract/ retain such firms.
We should also have targeted marketing material at the ready with information tailored to different
business sectors and purposes. The web has become the number one source of information for
businesses, site locators and real estate professionals to initially start their search for places that may
meet the needs of their clients. The City therefore needs to have a state of the art website to present
the community to these key gatekeepers to ensure the city is competitive right at the initial site location
process. Emerging technologies should be explored to make sure that we have the most effective tools
available.
Page 9 of 11
City Finances
(Execute new budget and fiscal measures to ensure long‐term financial stability)
Executive Summary
The City currently completes and uses a Long‐Range Financial Forecast (LRFF). The forecast period
provides actual financial data for the most recent budget year, adopted and projected financial data for
the current budget year and projected financial data looking forward for ten years (to 2021). The LRFF is
used by the City to project and quantify a baseline projection of revenues, expenditures, cash flows and
fund balances. The forecast enables the City to take steps to plan in advance for potential revenue gains
and losses, expenditure increases/decreases, increased future liabilities and costs (e.g., health care and
PERS pension) and related items. The forecast is dynamic and subject to constant change and revision
based on the best available information. The forecast enables policy makers to evaluate financial
impacts of potential initiatives and to plan ahead to ensure the long‐term fiscal stability of the City. The
forecast also helps community members understand the organization’s present and future financial
capabilities and resource allocations to support services and programs.
The plan here is for the City to evaluate potential new revenues and service options that may enable the
City to realize new revenues and reduced expenditures. This action will help the City achieve a stronger
more sustainable fiscal model to support services and programs. For example, last year the City made
substantial changes to its PERS pension plan going to a new tiered program (2% @ 60) for non‐safety
personnel which will save the City considerable funds. In addition, the City will be implementing an
employee contribution to health care this year. The City needs to execute additional measures to
ensure long‐term financial sustainability. Completion of the goals identified below and the data
gathered from this work will be incorporated into the LRFF. Identified below are goals for FY2011.
These goals are not in rank order:
6. Identify new potential revenue sources including preparation of a report outlining various
potential revenue options, the pro’s and con’s of each option and the estimated potential
revenues. Potential new revenues options include but are not limited to:
a. Ambulance service subscription tax
b. Business operations tax
c. Citywide parcel tax
d. Increase in property transfer tax
e. Increase in transient occupancy tax
7. Develop plans to address increased employee compensation costs and develop plans to share
cost increase with employees.
8. Identify additional operational efficiencies, potential options to contract out various City
services, explore potential new partnerships with existing non‐profit organizations and non‐
governmental organizations and with other governmental organizations including adjacent
cities, and regional public agencies on the peninsula to deliver services and programs. Potential
ideas to consider include:
a. Advertising or naming rights for city facilities
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b. Analyze and review organizational structure for potential functional consolidation
options (e.g., placing all maintenance functions within one department) and
consolidation options with regional agencies that may provide similar services as the
City
c. Civilianize certain public safety management positions, property and evidence
management and specialist teams (e.g. SWAT)
d. Contracting out fleet maintenance and utility billing services
e. Contracting with other communities for regional emergency services dispatch
f. Creating an exclusive towing services contract in the city
g. Transferring animal care services to the county or to the human society
9. Identify a long‐term sustainable financial model to address City infrastructure project backlog
and develop as part of model plan to be able to fund ongoing preventive maintenance costs of
fundamental infrastructure. This model will be developed in coordination with the
Infrastructure Blue Ribbon Task Force data and work with the Finance Committee.
Rationale for goals selection
The rationale for selecting these goals is to develop a sustainable long‐term financial plan (LTFP) for the
City. More specifically we are seeking to explore potential alternative revenues and expenditure
reduction strategies that will enable the City to continue to deliver high quality services and program to
the community.
The LRFF report recently provided to the City Council Finance Committee outlines a number of long‐
term trends over the next ten years that necessitate a need for the City to explore and implement new
innovative techniques and strategies for delivering services. Just one example among many is
forecasters do not expect job growth and thus the unemployment rate to reach equilibrium for another
five to eight years. This one indicator, jobs, has a tremendous impact on the City finances as it impacts
three of the City’s main revenue streams: property, sales and utility user taxes.
Infrastructure quality is fundamental to local community quality of life. This includes infrastructure
system such as storm water, water, wastewater systems, roads and streets and city facilities. These
systems are integral to City service delivery. The City has a significant infrastructure backlog (in the
millions of dollars) and is the process of developing a plan to remedy the backlog and come up with a
sustainable long‐term approach to maintaining the City investments in its infrastructure assets.
The goals identified here will enable the City to outline a series of potentially meaningful revenue
alternatives that could help stabilize and offset the current volatile revenue streams (i.e., sales taxes)
that form the backbone of supporting City services. In addition, development of alternative service
delivery methodologies including working with potential non‐profit, non‐governmental and other public
agency partners offers the potential to significantly reduce public expenditures while maintaining if not
enhancing existing service delivery.
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City Finances
(Infrastructure Blue Ribbon Commission, IBRC)
Executive Summary
Action by the Infrastructure Blue Ribbon Commission (IBRC) is one of the key “City Finances” goals
established by Council for 2011. The IBRC was established to make recommendations to Council to
address the current backlog in Palo Alto’s Infrastructure needs. The IBRC will report back to Council in
the fall of 2011 after considering the following list of questions referred to it by Council:
What is the complete listing of the City’s infrastructure backlog and future needs?
What criteria should be used to prioritize this list of projects?
Are there ways the City’s infrastructure needs can be prioritized into 5 year increments that can
be financed and also effectively implemented given current staff resources?
What are potential financing mechanisms that could be used to address the City’s infrastructure
needs? Should there be a one‐time financing mechanism or some ongoing source of
infrastructure funding? What are the options for each of these choices?
Is a bond measure the best mechanism for funding the infrastructure backlog? If so, when
should this move forward and how could it be structured?
How can public/private partnerships be leveraged as an infrastructure funding mechanism?
How are City project cost estimates developed and are these in alignment with other local
jurisdictions?
How do Enterprise Fund infrastructure projects intersect with General Fund infrastructure
projects?
Rationale for goals selection
Palo Alto has an extensive and highly acclaimed system of City facilities. Its parks, open space,
libraries, and community centers of all types are one of the important reasons that Palo Alto is such
a desirable place to live. And yet those facilities have aged and spending to revitalize the facilities
has not kept up with the needs from that aging process. Many facilities now exceed their design
lives and upgrades are overdue. One of the main recommendations needed from the IBRC is how to
pay for and schedule the necessary work to refurbish the City facilities. The goal is to eliminate the
backlog of repair projects and put the City on a clear path of keeping up with maintenance needs in
the future. Like the environment around it, Palo Alto’s infrastructure must become truly
sustainable.
Emergency Preparedness
City Council Strategic Priority Goals for Fiscal Year 2011
Emergency Preparedness
Executive Summary
Emergency Preparedness is one of five goals that have been adopted by the Palo Alto City
Council for Fiscal Year 2011. The City of Palo Alto like any community in the Bay Area is
susceptible to a variety of natural hazards including earthquakes, floods, and wild land fires as
well as man‐made disasters such as plane crashes, terrorism and other catastrophes. The City is
committed to protect life, property and the environment through a number of activities
including preplanning, training, rapid emergency response and public safety education for the
benefit of the community. Below are the emergency preparedness goals for FY 2011 for the City
of Palo Alto. These goals are not in rank order:
1. The City will conduct one major Community emergency preparedness exercise. Staff
will work with community groups to plan and host a full‐scale exercise which will include
multiple neighborhood groups and City departments. This exercise will be consistent
with accepted national exercise guidelines
2. The City will evaluate and complete a feasibility analysis and report investigating
alternatives that install a secondary electrical transmission source to the City. The new
transmission source would be established in separate geographical area that would
eliminate the possibility of a single contingency outage interrupting power to the City
3. Implement recommendations of Foothills fire management plan to address treatment
and mitigation measures that are required to ensure the viability of evacuation routes
and protect life and property
4. Implement Office of Emergency Services (OES) restructuring founded on the consultants
report and focus on four key readiness areas: preparedness, mitigation, response and
recovery
5. Improve emergency operations readiness per the City emergency operations plan. The
City will work to better coordinate all facilities and personnel in the organization and
their ability to respond in a coordinated and cohesive fashion
_____________________________________________________________________
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Rationale for goals selection
A community emergency exercise will allow staff and community members to work together
during a simulation to test capabilities, communications, technology and personnel and will
enable the City to better prepare for an actual event. A feasibility report by year end regarding
the installation of a secondary transmission line in the City will enable the City to determine the
technical and financial feasibility of creating this type of emergency redundancy capability in the
community. If it is determined to move forward with installation of a new line it is projected
this work will take three to six years to complete given the regulatory requirements and costs.
Previous reports provided to the City Council have identified hazards and mitigation methods in
the Foothills area. Implementation of the plan will initiate the necessary mitigation steps. A
comprehensive report was recently completed evaluating the Office of Emergency Services
(OES). Implementation of the plan will increase City emergency preparedness and response and
community emergency response coordination. Improving emergency operations readiness per
the Emergency Operations Plan will improve and enhance community safety.
_____________________________________________________________________
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Emergency Preparedness
(Community Exercise)
Executive Summary
The City and the community seek to improve our response to major incidents. A coordinated,
well planned response requires an exercise component in order to rehearse and clarify roles, for
staff, residents and others. Such exercises are building blocks in support of a strategic, multi‐
year Training and Exercise Plan.
Deliverables
1.) City Departments to work with volunteer groups and external stakeholders to develop
the scope, purpose, objective and scenario for City/community exercise.
2.) Identify a joint community/staff exercise design team to coordinate/manage the exercise
and support community resilience.
3.) Encourage participation within community groups and volunteer organizations.
4.) Manage exercise which will evaluate:
‐ Intra‐City communications
‐ Sharing real‐time communications with external stakeholders
‐ Internal emergency preparedness procedures
5.) Develop an after‐action report and corrective action plan post‐exercise.
Rationale for Goal Selection
This exercise will allow staff and community members to work together during a simulation
which will test capabilities, communications, technology and personnel. The after‐action report
will provide staff and community members’ feedback about gaps and areas for improvement
which can be addressed. The exercise will also serve as a reminder that the City is committed to
a culture of preparedness. “It is a given that the City’s resources will be overwhelmed in a
disaster. It is, therefore, incumbent upon all residents and businesses to prepare themselves
and to understand the limitations of the City’s response efforts.” (City of Palo Alto Emergency
Operations Plan)
_____________________________________________________________________
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Emergency Preparedness
(Secondary Electrical Transmission Source)
Executive Summary
In February of 2010 the City of Palo Alto had electricity interrupted to the entire service area for
over 10 hours. This outage was due to an airplane leaving the Palo Alto Airport striking the
Pacific Gas and Electric Transmission lines. The purpose of this initiative is to investigate
alternatives that install a secondary electrical transmission source to the City. The new
transmission source would be established in separate geographical area that would eliminate
the possibility of a single contingency outage interrupting power to the City.
The following tasks are planned over the next 12 months:
Continue coordinating with PG&E and the Independent System Operator (ISO) on
including a transmission line connecting PG&E’s Ames Substation to Palo Alto’s Adobe
Creek Substation. This project would be part of the PG&E’s system plans to improve
transmission service in the Bay Area
Continue discussions with Stanford University on a project that would connect Palo
Alto’s Quarry Substation to Stanford’s Substation and to the Stanford Linear
Accelerator’s 230 kV Substation
Prepare a report for Council on viable alternatives for providing a secondary
transmission source and take action per City Council direction
This project is expected to take between 3 and 6 years to complete once a viable alternative is
determined due to planning and environmental requirements for a transmission facility.
_____________________________________________________________________
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Emergency Preparedness
(Implement Recommendations of Foothills Fire Management Plan)
Executive Summary
In 2009, the City commissioned a study to evaluate the fire potential in the wildland‐urban
interface. The study revealed that there are treatment and mitigation measures that are
required to ensure the viability of evacuation routes and to protect life and property.
Deliverables
1.) Extend consultant’s contract to assist staff in implementing Foothills Fire Management
Plan.
2.) Submit application to classify Foothills Fire Management Plan as a Community Wildfire
Protection Plan; explore grant eligibility under CWPP to fill the estimated $715,000
obligation.
3.) Seek Public Works CIP for ongoing mitigation activities to implement recommendations.
4.) Host three educational sessions for residents to review the community’s role in
mitigation, prevention, response and recovery.
5.) Apply for CALFIRE Work Crew to assist in mitigating identified hazards in the Foothills
Fire Management Plan.
Rationale for Goal Selection
Previous reports to Council have detailed the hazards that exist in the Foothills and the steps
necessary to mitigate these hazards. The Foothills consist of large open space areas/parks,
private residences, private recreation facilities, commercial buildings, critical infrastructure and
property owned by Stanford University. The rationale behind selecting this goal is to reduce the
risk of fire danger to these locations and ensure the safety of the residents. Council has
directed staff to develop strategies to implement the plan.
_____________________________________________________________________
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Emergency Preparedness
(Improve Emergency Operations Readiness)
Executive Summary
The City seeks, per its Emergency Operations Plan, “to incorporate and coordinate all facilities
and personnel…into an efficient organization, capable of responding in a coordinated and
cohesive fashion.” To better achieve this objective the City will make a number of
improvements in training, equipment and technology.
Deliverables
1.) Staff will implement a multi‐year, training and exercise plan designed to engage the
community and improve our response capabilities.
2.) Enhance interoperable communications and further develop our virtual consolidation of
dispatch with neighboring communities.
3.) Identify and seek grant funding of support equipment for emergency response
operations. Staff will explore regional partnerships and support joint planning
initiatives, such as the pending National Disaster Resiliency Center at NASA Moffett
Field.
4.) Develop and implement training for City staff on personal and family emergency
preparedness.
Rationale for Goal Selection
The City has legal obligations to maintain key capabilities to provide public safety, utilities and
other essential services to the community. Advanced preparation can reduce the impact on the
community and expedite recovery activities. These program improvements will support a more
comprehensive, coordinated response and recovery framework.
_____________________________________________________________________
Page 7 of 7
Emergency Preparedness
(Office of Emergency Services (OES) Restructure)
Executive Summary
In October 2010, the City Manager’s Office commissioned a study to review the City of Palo
Alto’s practices in emergency management. A subject matter expert with national credentials
was hired by the City to conduct a gap analysis and make recommendations to improve
emergency/disaster readiness. The consultant interviewed key stakeholders, inspected critical
infrastructure and reviewed emergency planning procedures. The consultant has written a
report and will present her recommendations to the City Council at a Study Session in the spring
of 2011.
The report will examine how the City and community can improve in the four key
emergency/disaster readiness categories: preparedness, mitigation, response and recovery.
The consultant will make recommendations as to where the activities of the Office of Emergency
Services should best be situated within the City organization. The report will also examine the
appropriate staffing and structure for these activities. Finally, the report will present
recommendations that can enhance the City’s coordination with the community.
Deliverables
1.) Upon receipt of the report, staff will review and analyze the consultant’s report. Staff
will evaluate financial, human resources and philosophical implications of the
recommendations.
2.) Staff will review the report with key stakeholders (Citizen Corps Council), the leadership
of community groups and obtain feedback/input.
3.) Staff will confer with the City Manager and recommend implementation of appropriate
action items.
4.) Staff will report back to Council and implement these action items.
Rationale for Goal Selection
Staff is responding to a directive as set by the City Council to our emergency preparedness
functions. The City has an obligation to ensure community readiness, through education,
training, outreach and exercise. The Office of Emergency Services will be restructured to
coordinate these complex activities across all City Departments and with the community to
ensure a unified, coordinated response.
Environmental Sustainability
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City Council Strategic Priority Goals for Fiscal Year 2011
Environmental Sustainability
Executive Summary
Environmental Sustainability is a core value and ongoing priority for the City. The City has been a leader
in this area and continues to make strides to be a leader on the Peninsula, in the Bay Area metropolitan
region and in North America. The City is a Certified Green Business, has adopted a Climate Protection
Plan (CPP), a Sustainability Policy, has many sustainability programs including the award‐winning Palo
Alto Green Program and continues to make strides in reducing Greenhouse Gas emissions. One of the
most recent examples was the initial installation of LED streetlights in the City. Identified below are five
key development goals for 2011.
1. We continue to look at our Utility plant operations for methods and strategies to increase our
ability to reduce the City’s greenhouse gas emissions (GHG). This year a major focus will be to
look at the financial practicality of new compositing digesters or their alternatives to reduce
GHG’s.
2. Fleet operations and gas vehicles are a major contributor to GHG emissions. Thus we are going
to explore the ability to install electric vehicle charging stations at various locations in the City to
facilitate and encourage use of electric vehicles and technology.
3. Stanford has a robust Sustainability program and several initiatives underway and ongoing in
this area. Stanford is also a leader in research and development of green technologies and
practices. The City, for the first time, is going to explore developing a more formal collaborative
relationship with the University to determine if there are synergies and potential partnerships
between the City and the University to enable both entities to leverage their combined efforts
to be leaders in sustainable communities and use of green technologies and practices.
4. The residents of Palo Alto have embraced many green practices on their own and with the
encouragement of the City. This includes recycling, use of available transit options (e.g.,
Caltrain), planting of trees and many other homegrown initiatives. The City also has a number
of sustainability programs and engages in several practices to encourage sustainability in the
community. This initiative will provide a focused effort in looking at strategies and tactics the
City and the community can engage in together to leverage knowledge, resources and talent to
build a more sustainable community.
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5. Palo Alto is a City with a considerable existing urban forest canopy. This canopy provides
considerable environmental and community quality of life benefits to the community. A master
plan will enable the City to create a long‐term plan for managing and enhancing this significant
asset and help the City meet its sustainability goals.
Rationale for Goals Selection
Environmental Sustainability is, as stated above, a core value of the City of Palo Alto. The City is one of
the foremost leaders in Environmental Sustainability (ES) in the nation and is positioned now and in the
future given current and projected initiatives to continue to build upon what has been and is a cutting
edge leadership role. All of the goals identified here reinforce this ES leadership position. The City
continues to adapt, enhance, change and execute new sustainability practices and initiatives. Palo Alto
has embraced ES for the long‐term and it is an integral part of the quality of life and fabric of what
makes Palo Alto “Palo Alto”.
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Environmental Sustainability
(Evaluation of Composting Digester and Alternatives)
Executive Summary
Evaluating alternatives for handling Palo Alto’s organic residuals (e.g., yard trimmings, food scraps and
wastewater solids) is a critical goal of Council’s Environmental Sustainability Priority. On April 5, 2010
Council directed staff to:
1. Hire a consultant to evaluate a Dry Anaerobic Digestion system
2. Prepare an applicable level EIR, focused on 8‐9 acres of Byxbee Park adjacent to the City’s
Regional Water Quality Control Plant
3. Conduct a Preliminary Analysis before completion of the study itself
4. Explore Energy Conversion Technologies in conjunction with the Regional Water Quality Control
Plant Long Range Facilities Planning
5. Explore Partnering with local agencies within 20 miles of Palo Alto
The Preliminary Analysis will be brought to Council in March or April, 2011 with the full study being
completed in the fall of 2011.
Rational for goals selection
With the closure of Palo Alto’s landfill and current compost facility in late 2011 and early 2012
respectively, the need to manage the City’s residuals becomes a key issue. While the City has the option
to take yard and food residuals to the Gilroy area for composting, and wastewater biosolids are
currently incinerated; other options must be explored which would reduce energy use and greenhouse
gas emissions. If Palo Alto is to meet its Climate Action, Zero Waste, Sustainability, and Externality
Reduction goals, alternatives must be carefully analyzed.
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Environmental Sustainability
(Electric Vehicle Charging Stations at commercial and residential sites and city facilities)
Executive Summary
New electric vehicles (EVs) are being introduced in the market place, and these EVs require new
charging infrastructure. Encouraging the use of EVs will reduce the community’s greenhouse gas (GHG)
emissions and will help meet the Council approved Climate Protection Plan goal of reducing municipal
and community GHG emissions by 15% below 2005 levels by 2020. Having publicly accessible EV
charging stations at City facilities is one way of encouraging the adoption of EVs in town.
The City has undertaken a number of steps to facilitate the adoption of EVs in Palo Alto to date. City
staff have provided charger technology information and permitting requirement for customers to install
chargers in their homes and businesses on the city website and via utility bill inserts; an assessment of
long term EV penetration in town has been undertaken along with an assessment of electric distribution
system infrastructure upgrade needs; EV charging is being encouraged in the City’s building code;
applied and obtained two state grants totaling $35,000 to install five EV chargers at publicly available
facilities. In addition, a number of charging stations are going to be installed at libraries utilizing
‘Measure N’ bond funds.
The following tasks are planned and approvals expected to be sought over the next 12 months:
1. Determine how to best leverage the state grant funds to install 5 chargers in publicly available
facilities. The 5 charging stations could cost $100,000 to $150,000 to install. Explore the
possibility of leveraging private equity capital to provide the funding shortfall
2. Determine the locations to install the chargers. At present, there are two charging spots at City
Hall and Alma Parking Garages, but these are older charger technology. Staff anticipates
installing three of the newer chargers at the same location, while maintaining the older charger
for a few more years. A fast level #3 charger is also being considered at the street level on
Hamilton Avenue in front of City Hall. Other public parking areas are also being evaluated for EV
charger installations.
3. A Request for Proposal (RFP) to solicit proposal from the private sector to optimally deploy
these chargers is planned. This RFP will provide an option for the private sector to utilize the
grants, add their own funds to install, own, and operate the charging station in town, and
provide a franchise fee to the City for utilizing public space to install these chargers. In the event
private sector funds are not available at satisfactory terms, Council approval is being sought to
utilize electric utility funds to make up the difference in cost.
4. Staff plan to bring to the Utility Advisory Commission and the Council a number of policy level
questions in the spring in this regard. These may include:
a. How best to leverage private capital to install EV chargers?
b. Should free EV charging be provided at City facilities to the public?
c. Should the employee commute program include incentives for EV charging?
d. How best to deploy charging stations and optimally utilize the limited parking space
available downtown as reserved spots for EV charging only?
e. What is the role of Utilities Department in installing EV chargers?
Page 5 of 8
f. Should the Utilities Department offer time‐differentiated residential electric retail rate
for EV owners to encourage charging during night time in order to reduce the adverse
impacts on the electrical grid and distribution system?
5. Much of these goals will be accomplished by December 2011, with all set goals expected to be
completed by June 2012.
Rationale for Goal Selection
EVs have the potential to reduce the community’s GHG foot print considerably over the long term.
Having a robust City policy to encourage EVs and to facilitate building a robust public charging
infrastructure in Palo Alto and in the region is critical for the success of EVs in town. The goal in 2011 is
to frame this policy for Council review/approval and to utilize the state grants available to make a robust
start in installing public charging stations at City facilities in 2011. It may take up to June 2012 to fully
implement all elements of the goal outlined above.
Page 6 of 8
Environmental Sustainability
(Establish formal collaboration with Stanford University)
Executive Summary
Stanford University represents the most progressive and innovative research into the area of
sustainability and climate change. Palo Alto, by virtue of its proximity and relationship to the University,
can leverage its green initiatives through enhanced collaboration with the University. On the University
side, there are many programs engaged in sustainable innovation. These include the Precourt Institute,
The Woods Institute for the Environment, and Sustainable Stanford just to name a few. The City, with its
own utilities, is uniquely positioned to partner with Stanford and the emerging talent coming through
these programs. While informal relations exist with Stanford, the city could develop strategic relations
around sustainability, allowing for resource sharing, best practices, and internship opportunities.
Goals
1. Organize a “Sustainability Partnership Summit” open to public, including Stanford and City Panelists
2. Organize a formal site visit to Y2E2 including key leaders in Planning, Utilities, and Public Works,
highlighting innovative construction and facilities management techniques utilized by Stanford.
3. Develop volunteer internship program for at least 1 sustainable initiative
Rationale for goal selection
In the past, Earth Day events have included a broad cross‐section of the community. This year, focusing
on the University/City relationship will provide a unique perspective not yet explored. The extent to
which Stanford has implemented sustainable building techniques on campus for new construction is
relatively unfamiliar to many on city staff. Increasing familiarity with the University’s innovative green
building techniques will stimulate creative interactions and thinking from city staff involved in green
building programs. Because Palo Alto owns its utility, there are unique opportunities for internships.
Many progressive programs suitable for graduate level interns could exist. Both the City and Stanford
could find mutual value in such an endeavor.
Page 7 of 8
Environmental Sustainability
(Explore methods to integrate Palo Alto Green into City Sustainability Programs)
Executive Summary
The City offers numerous sustainability programs, including PaloAltoGreen, which is one of the most
recognized and progressive renewable energy programs the Utility Department offers. Palo Alto is also
a community of highly engaged citizens. Following the Stanford model of an interdisciplinary approach
to sustainability, the City could begin to integrate activities such as Emergency Prep, Economic
Development, and Greenhouse Gas Reductions.
Goals
1. Form sub‐group including City Elected and Appointed Officials, Staff, and key community leaders to
explore connections to broaden the City’s renewable energy and sustainability programs. Employ
the triple bottom line principles in a variety of programs.
2. Bring the Citizen Core Council together with Sustainability Groups (such as CEAP) to explore issues
affecting the community’s preparedness in a changing climate.
3. Hold study session with Council, Planning Commission and Climate Change experts to understand
the policy implications of rising sea levels and other effects of global climate change.
Rationale for goal selection
Collaboration among staff and city leadership could produce new ideas and initiatives. Promoting a
fresh dialogue can stimulate creativity and foster innovation. The City’s policy framework needs to
respond to changing climatic conditions. Policy makers require the best information possible to ensure
appropriate actions and plans are implemented.
Page 8 of 8
Environmental Sustainability
(Urban Forest Master Plan)
Executive Summary
The Urban Forest Master Plan, partially funded by a grant from CALFIRE, is intended to provide a
strategic plan to help the City conserve and renew its urban forest, to establish procedures and
protocols to enhance the effectiveness of City operations and maintenance, and to provide for
consistent and effective monitoring of the urban forest. Key goals of the plan include:
1. Continuing to provide for protection of the environment, including trees, creeks, wildlife, and
open space
2. Enhancing the City’s environmental sustainability objectives, including its Climate Protection
Plan
3. Ensuring that the City has an accurate and complete picture of its Urban Forest
4. Establishing the urban forest as an asset and part of the City’s valuable infrastructure
5. Engaging the community as stewards of the Urban Forest
The process and timeline for preparation of the Urban Forest Master Plan began in December 2010,
when the City contracted with Hort Science, Inc. to work with a staff interdisciplinary team. In January,
the team conducted a successful online survey to which 650 people responded. During January and
February, the team interviewed over 100 staff members from all relevant departments. On February 7,
2011, the consultant introduced the project to the City Council at a Study Session. Future public
meetings and hearings will be scheduled in June and July to accommodate review of the draft plan and
adoption by the City Council.
Rationale for Goals Selection
The Urban Forest Master Plan is an important component of the City’s “sustainable” development goals.
Preserving and protecting the urban forest is a long held tradition in Palo Alto. In recent decades,
however, new and/or increased pressures associated with development and the provision of services
has introduced unprecedented competition for the protection of trees.
The Urban Forest is also an element of the City’s infrastructure and requires management and
maintenance as an asset valued for its environmental, aesthetic and economic benefits: energy
conservation, air quality improvement, CO2 reduction, storm‐water control, and enhanced property
values. The Urban Forest Master Plan will also be closely aligned with goals of other sustainability
programs such as water and energy conservation. It will also further the City’s goals of engaging the
community to foster sustainable natural resources. For example, the plan will establish the benefits of
choosing drought tolerant trees to minimize water use and shade for homes and parking lots to reduce
energy consumption.
Land Use and Transportation Planning
Page 1 of 13
City Council Strategic Priority Goals for Fiscal Year 2011
Land Use and Transportation Planning
Executive Summary
Land use and planning strategies are closely aligned with other Council priorities to protect and enhance
City Finances, to support Emergency Preparedness goals, to further the City’s Environmental
Sustainability objectives, and to encourage Youth Well‐Being. Land use and transportation are key
indicators of quality of life in Palo Alto. The overarching principle of the City’s Land Use and
Transportation objectives is to provide for “sustainable” development and services: growth,
rehabilitation and services that are sustainable in economic and fiscal terms, as well as in environmental
respects. The City desires to develop in ways that promotes efficient delivery of services, assures high
quality development and design, protects and broadens the City’s tax and revenue base, preserves and
enhances key environmental attributes, minimizes energy and water use, and promotes transportation
alternatives such as walking, bicycles, and transit. Identified below are seven key development goals for
2011:
1. Complete strategies and plans at the Development Center to improve customers service and
accountability
2. Complete draft Rail Corridor Study outlining measures to provide for community land use,
transportation and corridor urban design
3. Complete Stanford University Medical Center (SUMC) facilities and replacement project
4. Substantially complete update of City Comprehensive Plan Amendment/Housing Element
Update and 2 Area Concept Plans
5. Continue monitoring of High Speed Rail (HSR) activities and collaborative work with Peninsula
cities and regional agencies, work on a short and long‐term action plan to sustain Caltrain
6. Actively participate in preparation of regional Sustainable Communities Strategy (SB375),
Regional Housing Needs Allocation (RHNA)
7. Prepare Pedestrian and Bicycle Plan Master Plan update
Page 2 of 13
Rationale for Goals Selection
Land use and zoning decisions are integral to facilitating the preservation, development or
redevelopment of uses that contribute to the City’s economic vitality and tax base. Provision of
opportunities for hotels, auto dealers, and other retail uses will assist the City to meet its fiscal
responsibilities. A more efficient development review process will minimize staff resource needs while
providing for a more satisfied customer experience. The facilitation of these uses also provides needed
daily services to the City’s residents.
Transportation alternatives to single occupancy vehicles not only provide environmental (greenhouse
gas and other air quality) benefits, but can also be more cost‐effective and less impacting than
constructing more roadway space. A mix of transit, walking, and bicycle facilities also allows all segments
of the population, including children, seniors, and disabled persons, equal access to safe and efficient
transportation. Protection of the environment is fundamental to the City’s Comprehensive Plan goals
and policies, and provides economic benefits as well. Creeks, the hills, and the Baylands all contribute to
the aesthetic, ecological, recreational and educational values of Palo Alto. These areas also provide for
many of the recreational amenities available in the City.
The City must also recognize its role and relationships to the Bay Area region as a whole. The City may
benefit from taking a more active part in assuring an understanding of Palo Alto’s role as an
employment and education center in the Bay Area and Silicon Valley. At the same time, providing varied
housing opportunities for employees of Palo Alto businesses is an important asset for those employers.
Page 3 of 13
Blueprint for a New Development Center
(Complete strategies and plans at the Development Center to improve customer service and
accountability)
Executive Summary
The “Blueprint for a New Development Center” project is focused on improving the delivery of services
at the Development Center (DC) and increasing customer satisfaction. The City Manager’s public
statement committed to having measurable improvements implemented at the DC by the end of June
2011. The City Manager’s key objectives are the guideposts for the project initiative:
1. Creating a better customer service culture where there is predictability, clear standards, and a
performance measurement program in place to evaluate service delivery and assess customer
satisfaction.
2. Improving organizational efficiency of the Development Center and associated processes to
minimize costs and delays to customers.
3. Maintaining or enhancing community sustainability and economic development goals and objectives
through DC activities.
Rationale for goals selection
The Blueprint project is actively engaged with multiple departments and Development Center users, as
staff continues designing and refining an integrated system throughout 2011. Staff anticipates testing
and implementation of the design will commence in the first half of 2011. To produce wholesome and
sustained results, three initial staff and customer teams have been established to create momentum
and advance the project forward, including:
Staff Steering Committee – Directors and other senior managers from Planning, Building, Public
Works, Fire, City of Palo Alto Utilities (CPAU) and the City Manager’s Office are responsible for
project accountability, policy direction, decision making and issue resolution. This committee is
meeting twice a month to ensure the right staff is involved and they get the necessary resources
to produce the intended results.
Staff Action Team – Key staff representatives, from various departments, are responsible for
redesign of development services business processes, design of the piloting program protocols,
and implementation planning. Additional staff subcommittees are identified and assigned along
the way to address system related impacts (i.e. technology, publications, etc.). Staff is currently
meeting twice weekly to design the new integrated system and will follow‐up with the piloting
and implementation efforts this spring.
Development Center Customer Advisory Group – A customer group, representing a cross‐
section of DC users, has been assembled and meets on a monthly basis to help staff understand
successful service delivery criteria from the customer’s perspective. Their participation ensures
consistency of the design and implementation, provides feedback on ongoing service and
performance‐related issues, and communicates progress of the project to other customers and
City policy makers. At this stage, the customers, in conjunction with the Staff Action Team,
have clearly defined their desired outcomes and expectation for success.
Page 4 of 13
City Manager Monthly Progress Reports – These monthly updates are prepared by the DC
Blueprint System Improvement Manager and the System Design Consultant. The information
apprises the City Manager of progress; as well as, timely notification of potential issues or
constraints. As part of the Blueprint project communication plan, staff has created a City
website to keep everyone informed of the project progress at:
http://www.cityofpaloalto.org/depts/pln/development_center/dc_blueprint/default.asp.
The Blueprint project implements City goals by providing for efficiencies in development services for the
community and for the City budget with improved technology and a customer service philosophy.
Page 5 of 13
Palo Alto Rail Corridor Study
(Complete draft Rail Corridor Study outlining measures to provide for community land use,
transportation and corridor urban design)
Executive Summary
The Palo Alto Rail Corridor Study is intended to provide a vision for land use, transportation, and design
along the Caltrain right‐of‐way and adjacent areas. The plan would identify opportunities for growth
near transit while protecting nearby neighborhoods. The study would encourage more pedestrian and
bicycle friendly mobility, integral to furthering “sustainable development” in the city. The study will also
allow consideration of land use and urban design techniques to enhance the potential for economic
development and increased revenues and tax base within the corridor. Key goals related to the Council’s
priorities include:
1. Contributing to a sense of community and place in neighborhoods and commercial districts
2. Assuring a high quality of development and design
3. Protecting and broadening the City’s tax and revenue base
4. Preserving and enhancing key environmental features
5. Promoting transportation alternatives such as walking, bicycles, and transit
The Rail Corridor Study will be conducted by staff, a 17‐member Task Force, and an urban design
consultant. Public workshops and meetings with the Planning and Transportation Commission and City
Council will supplement the work of the Task Force and provide for extensive public input. The Study will
be conducted in three phases: 1) vision, 2) alternatives, and 3) a draft plan. Each phase will take
approximately four months and the final plan is expected to be considered by Council in early 2012.
Rationale for Goals Selection
Land use and zoning decisions are integral to facilitating the preservation, development or
redevelopment of uses that contribute to the City’s economic vitality and tax base. The City must
simultaneously enhance its neighborhoods by protecting impacts of development or, in this case,
transportation facilities (rail and roads). Protection of the environment is fundamental to the City’s
Comprehensive Plan goals and policies, and provides economic benefits as well. These areas also
provide for many of the recreational amenities available in the City.
Transportation alternatives to single occupancy vehicles not only provide environmental (greenhouse
gas and other air quality) benefits, but can also be more cost‐effective and less impacting than
constructing more roadway space. A mix of transit, walking, and bicycle facilities allows all segments of
the population, including children, seniors, and disabled persons, equal access to safe and efficient
transportation.
The Rail Corridor Study will address all of these goals for the corridor and will provide input to the
Comprehensive Plan, the California Avenue/Fry’s Area Concept Plan, and other ongoing planning and
transportation activities in the city.
Page 6 of 13
Stanford University Medical Center
Facilities Renewal and Replacement Project
(Complete Stanford University Medical Center renewal and replacement project)
Executive Summary
The Stanford University Medical Center (SUMC) Facilities Renewal and Replacement Project is a
comprehensive, multi‐year development project to rebuild and restore the SUMC and School of
Medicine facilities in Palo Alto. The project would satisfy the shared objectives between SUMC and the
City of Palo Alto to optimize the delivery of healthcare to patients and to meet regional needs for
emergency and disaster preparedness. The project applicant is proposing the changes and additions to
meet State mandated seismic safety standards (SB 1953) and to address capacity issues, changing
patient needs and modernization requirements. Various entitlements required for the project, including
certification of an Environmental Impact Report, Comprehensive Plan amendments, creation of a new
“Hospital” zoning district, Architectural Review of the proposed buildings, and a Development
Agreement that would set land use regulations for a 30‐year period in exchange of public benefits. Key
goals related to the Council’s priorities include:
1. Meeting regional needs for emergency preparedness
2. Minimizing environmental, financial and municipal infrastructure impacts on the City
3. Assuring a high quality of development and design
4. Promoting sustainable development and green building design principals throughout the
project
5. Promoting transportation alternatives such as walking, bicycles, and transit
Since the SUMC representatives first introduced the project in late 2006, City staff has worked to
identify the environmental impacts, conducted public outreach meetings to determine key project
objectives, prepared fiscal analysis, held preliminary design review meetings, and identified possible
public benefits to be included in the Development Agreement. In May 2010, the Draft EIR was released
for public comment. In February 2011, the Final EIR and “Response to Comments” was completed. It is
anticipated that the Architectural Review Board, Planning and Transportation Commission, and City
Council will complete their reviews of the project in May 2011.
Rationale for Goals Selection
The project would result in an increase of over 1.3 million square feet of new floor area and site
improvements that will affect how employees and visitors access and interact with the SUMC campus
operations. There is a great opportunity to incorporate green building features, sustainable
development, and state of the art urban design principles that would help achieve City goals and would
be a model for future development. The redevelopment of the SUMC and School of Medicine, designed
in a manner to address the region’s Disaster Preparedness Program, will significantly contribute to the
emergency preparedness goals of not only the City but the region as a whole. While there are many
public benefits inherent to the project, the impact of the proposed development could potentially result
in financial and infrastructure costs to the City. It is important that the Development Agreement address
these potential costs and minimize the project impacts.
The project will result in the creation of many new jobs that will ultimately be a financial benefit to the
City. In order to accommodate these jobs in a manner that meets the City’s environmental goals, the
project applicant will be expected to provide commute alternatives for employees. These alternatives
Page 7 of 13
not only provide environmental (greenhouse gas and other air quality) benefits, but can also be more
cost effective and less impactful than constructing more roadway space. A mix of transit, walking, and
bicycle facilities allows all segments of the population, including children, seniors, and disabled persons,
equal access to safe and efficient transportation.
Page 8 of 13
Comprehensive Plan Amendment/Housing Element Update
(Substantially complete update of City Comprehensive Plan including draft Housing Element, 2 Area
Concept Plans)
Executive Summary
The Palo Alto Comprehensive Plan Amendment and Housing Element Update are intended to provide
the framework for the City’s land use, housing, development and transportation policies. The
Comprehensive Plan Amendment focuses on two Area Concept Plans and on updating policies to 1)
assure provision of adequate support services to neighborhoods and businesses, 2) propose strategies
to retain and enhance retail and other commercial, revenue‐generating uses, and 3) ensure a theme of
“sustainability” throughout the City’s land use and transportation policies and programs. The Area
Concept Plans are being developed for: 1) the East Meadow/West Bayshore commercial/industrial area,
and 2) the California Avenue/Fry’s Area of mixed use development. The Housing Element is being
updated in accordance with State law requirements and will outline the City’s housing objectives
through the year 2014, including the provision of affordable housing units during that period. Key goals
related to the Council’s priorities include:
1. Contributing to a sense of community and place in neighborhoods and commercial districts
2. Assuring a high quality of development and design
3. Protecting and broadening the City’s tax and revenue base
4. Preserving and enhancing key environmental features
5. Accommodating housing for all segments of the population
6. Promoting transportation alternatives such as walking, bicycles, and transit
The Comprehensive Plan is expected to be complete in draft form by the end of 2011 and to then
undergo environmental review (Environmental Impact Report) in 2012, prior to adoption. The Area
Concept Plans have both received preliminary review by the Planning and Transportation Commission,
and are scheduled for City Council consideration in mid‐2011. A draft Housing Element will be
considered by Council in mid 2011 as well, and then will be forwarded to the State Department of
Housing and Community Development for its review.
Rationale for Goals Selection
The City’s Comprehensive Plan is the basis for most land use, development, transportation, and
infrastructure decisions in the city. Land use and zoning decisions are integral to facilitating the
preservation, development or redevelopment of uses that contribute to the City’s economic vitality and
tax base. Provision of retail, recreational, and educational uses assures that residents and businesses
enjoy a high quality of services. A mix of transit, walking, and bicycle facilities allows all segments of the
population, including children, seniors, and disabled persons, equal access to safe and efficient
transportation. Protection of the environment is fundamental to the City’s Comprehensive Plan goals
and policies, and provides economic benefits as well. The East Meadow/West Bayshore/San Antonio
Area Concept Plan implements City goals to protect existing commercial uses, better assure that
adequate public services are available to surrounding residential neighborhoods, and provide non‐
vehicular transportation connections to the Baylands and other amenities. The California Avenue/Fry’s
Area Concept Plan also serves to protect existing commercial and retail uses while providing the
potential for increased housing and mixed‐use opportunities and the creation of a pedestrian and transit
oriented neighborhood. The Housing Element Update will implement City goals to provide adequate
Page 9 of 13
workforce housing as well as housing for a variety of lower income households, while protecting the
value of existing residential neighborhoods.
Page 10 of 13
Land Use & Transportation Planning
(Facilitate in cooperation with local and regional agencies and organizations development of a short
and long‐term action plan to sustain Caltrain)
Executive Summary
Caltrain currently provides fixed rail commuter services to the City of Palo Alto. There are also two
Caltrain stations one located at University Avenue in Palo Alto and another at San Antonio in the City of
Mountain View. Palo Alto has the second highest Peninsula ridership numbers and Stanford University
represents over 50% of the Caltrain “go” commuter rail passes on the system. Thus, Caltrain is an
important component of the City’s transportation system and plays a critical role in helping local
employers and community residents in getting to and from their jobs to local and regional destinations.
Caltrain though is currently facing an unprecedented operating deficit (e.g., $30M) and is planning,
effective July 1 of this year, to make major service cuts to balance their budget. These cuts would leave
Caltrain providing commuter rail services during peak rush times. Caltrain is also the only major regional
commuter transportation system without a dedicated funding source.
Given the importance of Caltrain service to the Palo Alto business community, Stanford University, Palo
Alto residents and to the Peninsula regional transportation system the City is looking to participate,
partner with and support actions that would put in place a viable financial plan to secure short and long‐
term financial stability for Caltrain. Identified below are goals for FY2011. These goals are not in rank
order:
1. Host a Palo Alto community forum in partnership with the Silicon Valley Leadership Group
(SVLG) to communicate and inform community members about the current financial plight of
Caltrain and to secure ideas and suggestions from the community, riders, and businesses about
potential solutions to produce a viable financial model
2. Consult with our federal and state legislative advocacy firms to advise the City on what
methodologies, programs, and tools may be available to help financially support the
modernization of Caltrain (e.g., electrification, positive train control etc.)
3. Explore and evaluate with partners (including public agencies: San Francisco County and City,
San Mateo County, Santa Clara County, Metropolitan Transportation Commission (MTC), major
private employers, Stanford University and others) the viability of developing a dedicated
revenue stream to fund ongoing Caltrain operations (e.g., sales tax, parcel tax)
Rationale for goals selection
The rationale for selecting these goals is to develop a sustainable, long‐term financial plan for Caltrain
on the Peninsula. Caltrain is, as noted earlier, experiencing large operating deficits which will mean
significant service reductions in the near term. In addition, Caltrain does not have sufficient funding to
invest in capital plant modernization (e.g., electrification). This modernization would assist Caltrain in
increasing ridership which would help contribute to a more stabilized financial model for the system.
Page 11 of 13
Sustainable Community Strategy (SB375)
(Actively participate in preparation of regional Sustainable Communities Strategy (SB375), Regional
Housing Needs Allocation (RHNA)
Executive Summary
The Sustainable Communities Strategy (SCS) required by SB375 and the accompanying Regional Housing
Needs Allocation (RHNA) are important regional planning initiatives for the Bay Area. The City of Palo
Alto will be affected by the land use, housing and transportation policies and incentives associated with
the efforts of the regional agencies, particularly the Association of Bay Area Governments (ABAG) and
the Metropolitan Transportation Commission (MTC). The City expects to provide meaningful input to
these initiatives, and to work with other Santa Clara County cities to assure a voice for the sub‐region.
Key goals related to the Council’s priorities include:
1. Enhancing sustainability by promoting sustainable land development patterns and
facilitating alternative transportation modes
2. Participating in regional planning and transportation solutions where appropriate, and
assuring that housing opportunities accommodate multiple segments of the population
3. Using land use and zoning techniques to enhance the potential for economic development
and increased revenues and tax base
4. Contributing to a sense of community and place in neighborhoods and commercial districts
Rationale for Goals Selection
The City’s sustainability objectives are integral to its current and long‐range planning, and are embodied
in the Comprehensive Plan, the Climate Action Plan, and many other policies and programs. The
Sustainable Communities Strategy is an opportunity to implement these objectives within a regional
framework, providing for effective transportation alternatives, efficient land use patterns, and socially‐
responsible housing solutions (RHNA).
Active participation in the SCS and RHNA is critical to assure that the City’s goals of protecting the
character of its communities, encouraging adequate transportation alternatives, and providing an
equitable balance of economic growth with a reasonable accommodation of housing demands. The City
must also assure that the regional efforts are in sync with the Comprehensive Plan Amendment and
other citywide planning and transportation efforts.
The SCS and RHNA process will be intensive during 2011, though the final products for each will not be
approved until late 2012 or early 2013. The City’s Planning Director is active in regional and local
professional meetings to develop and review the SCS, the City Manager is involved in the countywide
managers’ association, and the Council participates in the Cities Association of Santa Clara County.
Councilmember Scharff is a member of the RHNA Housing Methodology Committee. Staff will present
regular updates and opportunities for direction and input to the SCS and RHNA processes to the
Planning and Transportation Commission and City Council throughout the year.
Page 12 of 13
Pedestrian and Bicycle Master Plan
(Prepare Pedestrian and Bicycle Master Plan Update)
Executive Summary
The current Bicycle Master Plan serves as the City’s guide for identifying and setting priorities for bicycle
transportation projects and programs in the community. The last update to the Bicycle Transportation
Plan occurred in 2003. This current update also includes a Pedestrian element for the first time,
providing an opportunity to include more robust projects and programs that benefit key transportation
infrastructure not normally evaluated in a bike‐only plan, including trail projects for recreational and
commute use. An updated Pedestrian and Bicycle Plan is also essential for accruing funding from
regional grant sources. This year, upon development of the plan, the City will embark on an aggressive
update of its bicycle and pedestrian facilities based on the following goals:
1. Continue to lead in providing for transportation modes other than single‐occupancy vehicles, in
order to provide alternatives to avoid traffic gridlock, enhance safety for children and adults,
and reduce greenhouse gas emissions.
2. Identify and implement Best Practices in bicycle and pedestrian system design for both new
projects and updates to existing facilities such as colored bike lanes, bike boxes, and non‐
intrusive detection methods.
3. Continue successful education efforts for the use of bike/walking transportation modes to
schools, but strengthen the link between neighborhood communities and schools through both
capital projects and education programs.
4. Implement bicycle and pedestrian facilities to link major employment centers in the City, such as
Stanford University, with existing transit facilities and other trail/street networks.
5. Identify and implement new innovations in bicycle design and pursue processes that allow their
implementation in the City of Palo Alto and beyond.
6. Identify and pursue regional grant sources to implement Bicycle and Pedestrian Master Plan
projects and programs such as the Highway 101 Bike/Ped Bridge at Adobe Creek.
Development of the new Bicycle and Pedestrian Master Plan is currently in process with the assistance
of consultant support. A Citywide community meeting will be held in March along with a Council study
session in April. Planning and Transportation Commission input will occur in February and June with
final City Council consideration in July. Implementation of the plan will begin immediately in the 2011‐
12 fiscal year.
Rationale for Goals Selection
The City of Palo Alto has long been a leader in the design of bicycle facilities and continues to see the
benefits of early education to youth in promoting walking and bicycle use as effective transportation
modes. Newer design standards now exist and the City of Palo Alto must modify its infrastructure to be
in line with national best practices. In addition, the City of Palo Alto has a unique opportunity to lead
the way in bicycle and pedestrian infrastructure design and program education because of its open
community acceptance to these transportation modes. Inclusion of a pedestrian element into the new
Page 13 of 13
plan for the first time also allows the City to better complete links between street infrastructure such as
bike lanes and sidewalks to park facilities and trails and allows the use of new Bicycle Expenditure Plan
fund sources for those efforts.
Youth Well‐Being
City Council Strategic Priority Goals for Fiscal Year 2011
Youth Well‐Being
(Implement Project Safety Net and Monitor fundraising for Magical Street Bridge)
Executive Summary
The City of Palo Alto plays two important roles with regard to Community Collaboration for
Youth Well‐Being. First, the City plays a role of convener and coordinator, bringing the
community together in order to effectively harness the tremendous community talent, expertise
and goodwill that surround youth and teens, so that our community may have the greatest
impact in fostering youth well‐being. A meaningful example of the City’s role as convener and
coordinator is seen in the Project Safety Net (PSN) Community Task Force. PSN is focused on
developing and implementing a comprehensive community‐based mental health plan for overall
youth and teen well‐being in Palo Alto. A focus in 2011 is to support PSN and the specific goals
as defined in the PSN Plan (www.PSNPaloAlto.org), which includes gatekeeper training,
Developmental Assets initiative; peer‐to‐peer engagement, teen education on drug and alcohol
abuse, track watch, youth forum and celebrating youth friendly businesses.
Secondly, the City plays a direct role providing programs, services and facilities for youth and
teens so they may thrive; this is also done in collaboration with the City Libraries such as Friends
and Foundations support. Examples include the variety of afterschool programs at the Palo Alto
Teen Center, Children’s Theatre, Junior Museum and Zoo, Art Center and Rinconada Pool. The
City’s capacity to provide programs, services and facilities for youth well‐being is dependent on
community collaboration through the substantial support of Friends groups and Foundations.
Supporting youth and teen programs and services along with the respective Friends groups and
Foundations will also be a priority for 2011. An exciting example of community collaboration can
be seen in the vision to build the “Magical Bridge Playground” from the Friends of the Palo Alto
Parks. The Magical Bridge Playground is planned for Mitchell Park and will be Palo Alto’s first
playground accessible to people of all abilities and all ages.
Below are some specific goals and expected outcomes related to the Council priority Community
Collaboration for Youth Well‐Being. It is important to note that the goals below are not the only
City activities that support youth well‐being but rather a select few that are particularly
pertinent for 2011:
2
1. Coordinate the Project Safety Net Community Task Force and guide the implementation
of the PSN Plan
Convene monthly Project Safety Net meetings to provide the space, atmosphere
and time for progress reports, community collaboration and decision making
Create a communications plan for Project Safety Net to keep the community
informed on the City’s support of youth and teens
Coordinate two community trainings on identifying individuals at risk of suicide
(gatekeeper training) and how to report suicide threats to the appropriate parental
and professional authorities
Develop and provide businesses with a simple set of specific opportunities to
support youth and teens
2. With Palo Alto Unified School District (PAUSD) create an effective and sustainable
structure for the Project Safety Net Community Task Force
Develop a Memorandum of Understanding between Project Safety Net Community
Task Force and its members defining roles, responsibilities and commitments
Create a strategic plan to sustain not only the day to day activities of PSN but more
importantly how various community efforts for youth well‐being work together
Secure private funding for PSN through grants, donations and other means
3. Incorporate the Developmental Assets into the planning, implementation and
evaluation of City programs and services for youth and teens
Include Developmental Assets language into job descriptions for staff that work with
youth and teens
Provide Developmental Assets training to all staff that work with youth and teens
Measure Developmental Asset outcomes in our youth and teen programs
4. City Council and staff to engage youth and teens in community decision making
Actively participate and help coordinate the 2011 Youth Forum
City Council to hold a study session with the Youth Council
Provide opportunities for teens to be involved in community decision making
through teen leadership groups and other means
3
5. Celebrate and recognize youth and teens along with community members that make an
outstanding contribution to supporting youth
Encourage and coordinate impromptu special events and recognition opportunities
to celebrate youth and teen accomplishments
Publically recognize community members and organizations that make an
outstanding contribution to supporting youth
6. Support the Friends of the Palo Alto Parks goal of building Palo Alto’s first universally
accessible playground
Monitor private fundraising efforts for the construction of the Magical Bridge
playground and report on the status of fundraising to the City Council
Rationale for goals selection
The rationale for selecting the goals described above is their potential for lasting impacts on
youth well‐being. The goals build on the 2010 work of the Project Safety Net Community Task,
which articulates a plan of action for supporting youth and teens in Palo Alto. The PSN plan
hinges on our ability to effectively leverage community resources and mobilize people, agencies
and groups with common interests to work together for youth well‐being. Consequently,
specific goals to create a sustainable Project Safety Net Community task Force are deemed
essential. Moreover, the City has a variety of youth and teen programs that will benefit from
the Developmental Assets model for youth well‐being. The goals define clear steps of
incorporating the Developmental Assets into the fabric of how we plan and evaluate programs
and services for youth and teens.
Lastly, the Magical Bridge Playground is called out specifically because it is a community
collaboration to build the first playground accessible to people of all abilities and all ages in Palo
Alto. Supporting the Friends of Palo Alto Parks as they raise funds to build this accessible
playground is a commitment to support children of all abilities.
City of Palo Alto (ID # 1505)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 2
(ID # 1505)
Summary Title: Amendment Three to Capitol Advocates Contract HSR
Title: Approval of Amendment Three to Contract S1013554 with Capitol
Advocates, Inc. to Extend the Term and Add $32,000 for a Total Not to Exceed
Amount of $125,500 Legislative Advocacy Services Related to High Speed Rail
From:City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the Council approve
(1)amendment number three to the contract with Capitol Advocates Inc. (CAI)
To extend the term to include March 1, 2011 through August, 2011 and add $32,000
for legislative advocacy services; and
(2)Reimbursement from the budget stabilization reserves to cover the additional costs for this
contract extension.
Executive Summary
The City Council Rail Committee met February 3rd and discussed extension of the contract with
CAI for an additional six months taking the contract through August of this year. The Committee
recommended that the Council approve such extension.
Background and Discussion
The City originally retained the services of CAI from February 2010 to June 30, 2010 (original
contract). The City then entered into a contract amendment one which extended the original
contract to October 31, 2010. The City then entered into contract amendment two which
extended the contract to February 28, 2011. Staff seeks contract amendment three to extend
the contract to August 31, 2011.
Contract amendment number two was at a rate of $5,000 per month plus expenses, which CAI
has been billing the City since that amendment was executed. The City recently received an
invoice for February in the amount of $5,117 which includes the monthly retainer fee of $5,000
+ $117 in expenses. The current fund balance is $4,000. In addition, CAI recently traveled to
Washington, DC to meet with congressional representatives concerning high speed rail in
California. The estimated trip expenses are $1,000. Therefore, staff is seeking $32,000 which
March 21, 2011 Page 2 of 2
(ID # 1505)
includes the monthly retainer fee for the next six months plus funds to cover the current
invoice for February and the Washington, DC trip.
The City Council Rail Committee reviewed extending the contract through August 2011 and
recommended approval. In addition, staff is seeking approval to fund the extension via
reimbursement from the budget stabilization reserves.
Timeline
Contract amendment number three will take the contract through August 31, 2011.
Attachments:
·Attachment A: Capitol Advocates, Inc. Contract (PDF)
·Attachment B: Amendment One to Capitol Advocates, Inc. Contract (PDF)
·Attachment C: Amendment Two to Capitol Advocates, Inc. Contract (PDF)
·Attachment D: Amendment Three to Capitol Advocates, Inc. Contract (PDF)
Prepared By:Katie Whitley, Administrative Assistant
Department Head:James Keene, City Manager
City Manager Approval: James Keene, City Manager
, . .,.
CITY OF PALO ALTO CONTRACT NO.: S10135594
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
CAPITOL ADVOCATES
FOR PROFESSIONAL SERVICES
This AGREEMENT is entered into on this 18th day of February, 2010, by and
between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and
CAPITOL ADVOCATES, a Professional Services Finn Consultant, located at Sacramento,
California (IICONSULTANT").
RECITALS
The·following recitals are a substantive portion of this Agreement.
A. CITY intends to retain consultant pertianing to the High Speed Rail Project ("Project") and
desires to engage a consultant to provide Government Affairs services in connection with the Project
("Services").
B. CONSULTANT has represented that it hasth:e necessary professional expertise.
qualifications, Bnd capability, and all required licenses andlor certifications to provide the Services.
C. CITY in reliance on these representations desires to engage CONSULTANT to provide the
Services as more fully described in Exhibit "A", attached to and made a part of this Agreement.
. NOW, THEREFORe, in consideration of the recitals, covenants, tenns, and conditions, this
Agreement, the parties agree: .
AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the SerVices described in
Exhibit "AI> in accol'dance with the tenris and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM. . .
The tenn ofthls'Agreement shall be from the date ofits full execution through June 30, 2010 unless.
tenninated earlier pursuant to Section 19 of this Agreement.
Professional Sel'llices
. Rev. December 1,2009
... -........ -
: ;
'. ~
I
I' ;
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the perfonnance of
Services under ibis Agreement. CONSULTANT shall complete the Services within thetenn of this
Agreement and iu accordance with the schedule set forth in Exhibit "B", attached to andm~de a part
of this Agreement." Any Services for which times for pel'fonnance are not specified in this
Agreement shall be commenced aud, completed by CONSULTANT in a reasonably prompt and
timely manner based upon the circumstances and direction' cornm)llli.cated to the CONSULTANT.
CITY's agreement to extend the term or the schedule for perfonnance shall not preclude recovery of
damages for delay if the extension is required due to the fault of CONSULTANT.
SECfION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT forperfonnance of the Services described in Exhibit "An, including both payment
for professional services and reimbUrsable expenses,'shall not exceed TwentyTwo Thousand Five
Hundred Dollars ($22,500.00). In the event Additional Services are authorized, the total
compensation for services and reimbursable expenses shall not exceed Twenty Five Hundred Dollars
($2,500)
Thereby the value of this agreement shall not exceed $25,000 (Contract plus Contingency) Dollars.
The applicable rates and schedule of payment are set out in Exhibit "C-l", entitled "HOURLY
RATE SCHEDULE," which is attached to and made a part of this Agreement.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions of
Exhibit "C", CONSULTANT shaH notre,ceive any compensation for Additional Services perfonned
without the prior wdtten authorization of CITY. Additional Servic~s shall mean any work that is
detennined by CITY to be necessary for the proper completion of the Project, but which is not
inc1uded within the Scope of SerVices described in Exhibit "A". '
SECTION 5. INVOICES. In order to request payment, CONSUL rANT shall submit monthly
invoices to the CI~Y describing the services performed and the applicable c~arg'es (including an
identification of personnel who perfolll1ed the serVices, hours worked, hourly rates, and
reimbursable expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C-l ").
If applicable, the invoice shall also describe the percentage of,completiqn of each task. The
information in CONSULTANT's payment requests shall be subject to verification by CITY.
CONSULTANT shall send all invoices to the City's project manag~r at the address specified in
Section 13 below. The City will generally process, and pay invoices within thirty (30) days of
receipt. ' ,
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Selvices sh~ll be
perfolll1ed by CONSULTANT ot under CONSULT ANT's supervision. CONSULTANT represents
tliat it possesses the professional and technical personnel necessary to perform the Selviccs required
by this Agreement and that the personnel have sufficient skill and experience to perform the Services
assigned to them. CONSULTANT represents that it, its employees and subconsultants, if pennitted,
have and shall maintain during the term of this Agreement all lic~nses, permits, qualifications,
insurance and approvals of whatever nature that are legally required to pcrfonn the Services.
All of the selvices to be furnished by CONSULTANT under this agreement shall meet the
: ~': .' . . '" .
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professional standard and quality that prevail among professionals in the same discipline and of
similar knowledge and skill engaged in related work throughout California under the same or similar
circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itselfinfonned of and
in compliance with all federal, state and local laws, ordinances, regulations, and orders that may
affect in any, manner the Project or the perfonnance of the SerVices or those engaged to perform
Services under this Agreement. CONSULTANT shall procure all pennits and licenses, pay all .
gharges and f~es, and give all notices l'equired by law in the perfonnance of the Services.
SECfIQN 8. ERRORS/OMISSIONS. CONSULT ANT shall COITeot, at no cost to CITY, any and
all elTors, omissions~ or ambiguities in the work product submitted to CITY,provided CITY gives
. notice to CONSULTANT; If CONSULTANT has prepared plans and specifications or other de~ign.
documents to constructth'e Project, CONSULTANT shall be obligated to correct any and all errors,
omissions or ambigulties discovered prior to and during the course of'construction oftbe Project.
This obligation shall survive tennination of the Agreement. 9
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a· public works
. project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%)
of the CITY's stated construction budget, CONSULTANT shall make recommendations to the
CITY for aligning· the PROJECT design with the budget, incorporate CITY approved
recommeridations, and revise the design to meet the Project budget, at ~o additional cost to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing
. the Services under this Agreement CONSULTANT. and any person employed by or contracted with,
CONSULTANT to fumish labor and/or materials under this Agreement, shall act as and be an
independent contractor and not an agent or employee of the CITY.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or
transfer any intel'estin this Agreement nor the performance of any of CONSULTANT's obligations
hereunder without the prior written consent of the city maruiger. Consent to one assignment will not
be deerriedto be consent to any subsequent assignment. Any assignment made without the approval'
.. of the city manager' will be void.
SECTION 12. SUBCONTRACTING.
CONSULTANT shall not subcontract any p01tion of the work to be perfolTOed Wlder this Agreement
without the prior written authorization of the city manager or designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Ravi Mehta as the
Fimi's Representative to have supervisory responsibility for the performance, progress,' and
execution of the Services and to .represent CONSULTANT during the daywto-day work on the
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Project. If circumstances cause the substitution of the project director, project coordinator, or any
other key personnel for any reason, the appointment of a substitute project director and the
assignment of any key new or replacement personnel will be subject to the prior written approval of
the CITY's project manager. CONSULTANT, at CITY's request, shall promptly remove personnel
who CITY fmds do notpcrfOlm the Services in an acceptable manner, are uncooperative, or prescnt
a threat to the ~dequate or timely completion of the Proj ect or a threat to the safety of persons or
property:
The City's project manager is Steve Emslie, Deputy City Manager Department, City of Palo Alto
Palo Alto, CA 94303, Telephone:650-329-2354. The project managerwHl be CONSULTANT's
point of contact with respect to perfonnance, progress and execution of the Services. The CITY may
designate an alternate project manager from time to time.
SECflON 14. OWNERSHIP OF MATElUALS. Upon delivery, all work product, including
withciut limitation, all writings,drawmgs, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement shall be and remain the
. exclusive property ofClTY without restriction or limitation upon their use. CONSULTANT agrees
that all'copyrights which arise from creation oftha work pursuant to this Agreement shall be vested
in CITY, and CONSULTANT waives and relinquishes all claims to copyright or othel' intellectual
property rights in favor of the CITY. Neither CONSULT ANTnorits contractors, if any, shall make
any of such materials available to any individual or organization without the prior written approval
of the City Manager or designee. CONSULTANT makes no representation Of the suitability of the
work product for use in or application to circumstances not contemplated by the scope of work.
SECTION 1.5 •. AUDITS. CONSULTANT will permit CITY to audit, at-any reasonable time
during the term of this Agreement and for three (3) years thereafter, CONSLJLTANT's records
pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and
retain such records for at least three (3) years after the expiration or earlier termination of this
Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnifY, defend and hold hannless CITY, its Council members, officers, employees and agents
(each an "Indemnified Party") from and against any imd all demands, claims, or liability of any
nature, including death or UUury to any person, property damage or any other loss, including all
costs and expenses of whatever nature including attorneys fees, experts fees, court costs and
disbursements ("Claims") resulting from, arising out of or in any manner related to perfonnance or
nonperfonnance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement; regardless of whether or not it is caused in part by an Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indenmify an Indemnified Party from Claims arising from the active
negligence, sole negligence or willful misconduct of an Indemnified Party.
16.3 ...... !Aell~~ep~~~~ofc:;9NSy~1'A.:NT's.~ervi~e.s!lnd~uties.1>y.GlTY.sb,!JllnQt.
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operate as a waiver of the right of indemnification. The provisions of tqis Section 16 shall survive
the expiration or early tennination of this Agreement. .
SECTION 17. WAIVERS. The waiver by eithel;pru:ty of any breach or violation of any covenant,
term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not
be deem.ed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of
any subsequent breach 01' violation Qftbe same or of any other term, covenrult, condition, provision,
. ordinance or law. .
SECTION 18. INSURANCE.
18.1. CONSULT AJ:IT. at its sole cost and expense; shall obtain andmruntain, in full
force and effect during the term oftlJis Agreement, the insurance coverage described in Exhibit "DII.
CONSULTANT and its co.ntractors, if any, shall obtain a policy endorsement n8.!Jling CITY as an
additionai instu'ed under any generalliabHity or automobile policy or policies.
18.2. All insurance covemge required hereunder shall be provided through carriers
with AM Best's Key Rating Guide ratings of A-:VII or higber which are licensed or authorized to
transact insurance business in the State of Califomia. Any and all contractors of CONSULTANT
retained to pelfonn Services under this Agreement will obtain and maintain, in full force and effect
dw·jng the term of this Agl'eement, identical insurance coverage, naming CITY as an additional
insured under such policies as required above.
I· 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently
with the execution of this Agreement. The certificates will be subject to tbe approval of CITY's Risk
Manager and will contain an endo:rsement stating that the insurance is primary coverage and will not
be canceled, or materially reduced in coverage or limitstby the insurer except after filing with the .
Purchasing Manager tbirty (30) daysl prior 'written notice of the cancellation or modification,
CONSULT A NT shall be responsible for ensuring that current certificates evidencing the insurance
are provided to CITY's Purchasing Manager during the entire tenn of this Agreement.
18.4. The procul'ing of such required policy or policies of insUl'ance will not be
construed to limit CONSULTANrs liability hereunder nor to fuum the indemnification provisions
of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be
obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as
a result of the Services perfollned under this Agreement, including such damage, injwy, or loss
. arising after the Agreement is terminated or the term has expired, I'
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
Section Deleted from Agreement.
5
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I '24.1. This Agreement is subjcctto the fiscal provisions of the Charter of the City of
Palo Alto and the Palo Alto Municipal Code. This Agreement will timninate without any penalty (a)
at the end of any fiscal year in the event that funds are not appl'opriated forthe following fiscal year,
or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of
the fiscal yeat and funds for this Agreement are no longer available. This Section 2{S shall take
precedence in the event of a conflict with any other covenant, tenn, condition, or provision of this
Agreement.
24.2. 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 25. MISCELLANEOUS PROVISIONS.
·25.1. This Agreement will be governed by the laws of the State of California.
25.2. In the event that an action is brought, the parties agree that trial of such action
will be vested exclusively in the state courts of California in the County of Santa Clara, State of
California.
25.3. The prevailing party in any action brought to enforce the provisions pftbis
Agreement may recover its reasonable costs and attorneys' fees expended in connection with that
actipn. The prevailing party shaH be entitled to recover an amOlmt equal to the fair market value of
1ega1 services provided by attotneys employed by it as well as any attorneys' fees paid to third
parties.
25.4. This document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which'is signed by the parties.
. 25.5. The covenants, tenns, conditions and provisions of this AgreementwiU apply
to, and will bind, the heirs, successors, executors, administrators, assignees~ and ~onsultants of the
parties.
25.6; If a court of competent jurisdiction fmds or rules that any provision of this
Agreement or any'amendment thereto is void or unenforceable, the unaffected provisions of this
Agreement and any amendments thereto will remain in full force and effect.
25.7. All 'exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules to this Agreement which, from time to time, may be referred to in any
duly executed amendment hereto are by such reference incorporated in this Agreement and will be
deemed to be a part of this Agreement. .
. 24.10 If, pursuant to this contract with CONSULTANT, City shares with
CONSULTANT personal infonnation as defmed in California Civil Code section 1798.81.5(d)
about.~_ Galifomif\ res~den~ ( .. Personal In~orm~tion")1. C;:ONS,lJl, r ~T s~an,m,a.~taiIl_~~~s<?,n~~1.~a~4 .... •• , • •••• " ••• , ............. " _ •. '" •••.•• ~_. , "'~' _.. .' •.. ••• • .. •• -.• •.. ~ _.. . . -._... . . •. • -I _ .•
7
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Profl!lisional Services
Rev, Oecember 1,2009
EXHIBIT "An
SCOPE OF SERVICES
Professional Services for State High Speed Rail Advocacy
Introduction .
The City of Palo Alto is actively participating in the implementation of the. California High
. Speed Rail Project (CAHSR) since the passage of Proposition lA in November 2008,
Because CAHSR is proposed to utili~ the existing Caltraill right-of~way owned collectively
by the Joint Powel'S Board (JPB), the project has the potential to profoundly change the
character and quality of the community. Because decisions effecting Palo Alto are happening
in Sacramento, the City of Palo Alto desires to retain effective advocacy.
The City ofPaIo Alto also recbgnizes the statewide importance ofCAHSR in providing a
sustainable altemate tra~sportation. CASHRhas the potential, if done con:ectly;·to be11efit
and enhance Palo Alto. .
The Palo Alto City Council has fonned a High Speed Rail Subcommittee comprised of four
Council Members appointed by the Mayor. The CitY Council has also adopted a set of
guiding principles which provide direction to the subcommittee when advocating various
City positions. The guiding principles are attached to the Scope of Services and shall be used
by the consultant when advocating on behalf of the City.
Scope of'Services
High Speed Rail Authority
High Speed Rail Authority oversees the implementation of the project statewide. The
consultant will be required to keep the City informed of Authority issues, proposals and other
activities. The consultant shall provide regular reports, highlight pending issues and advocate
City positions within the parameters of the Council adopted Guiding Principles.
Legislative
Because of the fast paced and dynamic nature of CAHSR pending legislature, the consultant
will need to report and highlight proposed bills and amendments impacting the
implementation in Palo Alto. Typical consultant activities may include meetings, photre calls
and email with elected officials and their staff. The consultant shall represent City positions
within the parameter of the Guiding Principles. The consultant shall frequently check in and
coordinate with the Palo Alto City Manager or his designee on legislative matters impacting
the City of Palo Alto.
Local Elected and Appointed Officials
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The CAUSR San Jose to San Francisco segment is managed through a Meniorandum of
Understanding with Caltrain Joint Power Board (JPB). Consequently the cOI!sultant will need
to advocate ~ity positions to local elected and appointed officials .. City positions shall be as
. directed by the City Council, Council Subcommittee or in conformance with the City's
Guiding Principles. Regular reports highlighting potential issues shall be provided to the
City.
CAHSR Project Team ·,1
CAHSR utilizes nwnerolls contractors to manage the iniplementation of the project. The
consultant will need to coordinate with designated project team members on a regular basis.
The consultant will provide regular updates and status reports to the City Manager or his
designee. .
Meetings
The consultant will from time to time be required to meet with City of Palo Alto Citi
Council, Conunitt~es, Board and CoIIimission as well as community groups. The purpose of
these meetings will be to provide status reports and to receive direction. Consultant may be
required to provide advice and recommendations on political and administrative strategies' _
relative to CAHSR:
....
. .... Ex.:I:IIBII.".W'.·
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SCHEDULE OF PERFORMANCE
CONSULTANT shall perfonn the Services as indicated in the Scope of Services (Exhibit A).
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EXHIBIT "e"
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services perfonned in
accordance with the tenns and conditions of this Agreement based on the hourly rate schedule
attached as Exhibit C~ 1. .
The compensation to be paid .to 'CONSULTANT Wlder this Agreement for all services
described in Exhibit "AU ("Services") shall be at a monthly retainer rate of$SOOO dollars per
month, plus reimbursable expenses, and shall not exceed $22,500. CONSULT ANT agrees to
complete all Services, including reimbursable expenses, within this amount. In the event
CITY authorizes Flny Additional Services, the maximUm compensation shall not exceed
$2500 dollars .. Therefore. maximum value of this agreement shall not exceed $25,000 dollars.
Any work performed or expenses inculTed 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
T)le administrative. overhead, secretarial time or secretarial overtime, word processing,
photocopying, in~house prm~ing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANt for the following reimbursable expenses at cost.
A Travel outside the S!lD Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subjectto the CitY of Palo Alto's policy forreimbursement of travel
. and meal expenses for City of Palo Alto employees .
.. B. Long distance telephone cellular phone, facsimile transmission and postage charges are
reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
infonnation. Any expense anticipated to be more than $500 shall be approved in advance by
the CITY's project manager. .
,ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorizatipn from the CITY. The CONSULT ANT, at the CITY's project manager's request,
. shall submit a detailed written proposal includirig a d~scription of the scope of services,
schedule, level of effort, and CONSULTANT's proposedmaxinnun compensation, including
rdmbursable expenses, for such services based on the rates set forth in Exhibit C-I. 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.
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:EXHIBIT "e-1"
HOURLY RATE SCHEDULE
Hourly Rate is $325 dollars per hour.
Monthly Retainer is $5000 plus expenses
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AMENDMENT NO. ONE TO CONTRACT NO. S10135594
BETWEEN THE CITY OF PALO ALTO AND
CAPITOL ADVOCATES, INC.
This Amendment No. One to Contract No. S10135594 ("Contract") is entered into
_______ , by and between the CITY OF PALO ALTO, a California chartered municipal
corporation ("CITY"), and Capitol Advocates, a Professional Services Firm, located at 1215 K
Street, 17th Floor, Sacramento, California 95814 ("CONSULTANT").
RE C IT AL S:
WHEREAS, the Contract was entered into in February 2010 between the parties for
the provision of governmental affairs services and legislative advocacy on the High Speed Rail
Project; and
WHEREAS, the parties wish to retroactively extend the term of this agreement to
include the period of July 2010 through February 2011, and to increase the total compensation under
the contract by an additional Forty-Five Thousand Dollars ($45,000) for a total not to exceed amount
of Seventy Thousand Dollars ($70,000).;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
Date --#
SECTION 1. Section 2 (Term) 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 February 28,2011 unless terminated earlier pursuant to Section 19 of this
Agreement."
SECTION 2: Section 4 (Compensation) 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," including both
payment for professional services and reimbursable expenses, shall not exceed Seventy
Thousand Dollars ($70,000). In the event Additional Services are authorized, the total
compensation for services and reimbursable expenses shall not exceed $70,000.
The applicable rates and schedule of payment are set out in Exhibits "C" and "C-l ," entitled
"COMPENSATION" and "HOURLY RATE SCHEDULE," respectively, which are attached
to and made a part of this Agreement.
Additional services, if any, shall be authorized in accordance with and subject to the
provisions of Exhibit "c." CONSULTANT shall not receive any compensation for
Additional Services performed without the prior written authorization of CITY. Additional
Services shall mean any work that is determined by CITY to be necessary for the proper
1
completion ofthe Project, but which is not included within the Scope of services described in
Exhibit "A.""
SECTION 3. Section 19 is hereby amended to read as follows:
"SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT
OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in
whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days
prior written notice thereof to CONSULTANT. Upon receipt of such notice,
CONSULTANT will immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services by giving thirty (30) days prior written notice thereofto CITY,
but only in the event ofa substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver
to the City Manager immediately any and all copies of studies, sketches, drawings,
computations, and other data, whether or not completed, prepared by CONSULTANT or its
contractors, ifany, or given to CONSULTANT or its contractors, ifany, in connection with
this Agreement. Such materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will
be paid for the Services rendered or materials delivered to CITY in accordance with the scope
of services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account of a
default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for
that portion of CONSUL T ANT's services which are of direct and immediate benefit to CITY
as such determination may be made by the City Manager acting in the reasonable exercise of
hislher discretion. The following Sections will survive any expiration or termination ofthis
Agreement: 14, 15, 16, 19.4,20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by
CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. "
SECTION 4. The following exhibit to the Contract is hereby added to read as set
forth in the attachment to this Amendment, which is incorporated in full by this reference:
a. Exhibit "C" entitled "COMPENSATION".
SECTION 5. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment on the date first above written.
2
Date --#
APPROVED AS TO FORM: CITY OF PALO ALTO
Sr. Deputy City Attorney City Manager
APPROVED:
[CONSULTANT FIRM]
Director of Administrative Services By: __________ _
Name: -----------Insurance Review
Title: ----------
By: ___________ _
Name: -----------
Title: ----------
Taxpayer Identification No.
Attachments:
EXHIBIT "C": COMPENSA nON
3
Date --#
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-l.
The total compensation to be paid to CONSULTANT under this Agreement for the full contract term
(February 2010 through February 2011) for all services described in Exhibit "A" ("Services") and
reimbursable expenses shall not exceed a total of Seventy Thousand Dollars ($70,000). For the
period of September 2010 through February 2011, the compensation to be paid to CONSULTANT
under this Agreement for all services described in Exhibit "A" ("Services") and reimbursable
expenses shall not exceed Five-Thousand Dollars ($5,000) per month. CONSULTANT agrees to
complete all Services, including reimbursable expenses, within the amounts set forth in this Exhibit
C.
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-l. 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
subj ect to all requirements and restrictions in this Agreement.
4
Date --#
AMENDMENT NO. TWO TO CONTRACT NO. S10135594
BETWEEN THE CITY OF PALO ALTO AND
CAPITOL ADVOCATES, INC.
This Amendment No. Two to Contract No. S10135594 ("Contract") is entered into
October 5, 2010, by and between the CITY OF PALO ALTO, a California chartered municipal
corporation ("CITY"), and Capitol Advocates Inc., a Professional Services Firm, located at 1215 K
Street, 17th Floor, Sacramento, California 95814 ("CONSULTANT").
RECIT ALS:
WHEREAS, the Contract was entered into in February 2010 between the parties for
the provision of governmental affairs services and legislative advocacy on the High Speed Rail
Proj ect; and
WHEREAS, the parties entered into a contract for legislative services that initially
ended JU)1e 30, 2010 and whereas this contract was amended to provide for services through October
31,2010; and
WHEREAS, the parties wish to extend the term of this agreement to include the
pyriod of November 1, 2010, through February 28,2011, amend the Scope of Services to include
additional legislative advocacy services as requested by CITY, and to increase the total compensation
under the contract by an additional Forty Thousand Dollars ($40,000) for a total not to exceed
amount of Eighty Five Thousand Dollars ($85,000).
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
Date --#
SECTION 1. Section 2 (Term) is hereby amended to read as follows:
"SECTION 2. TERM. The tenn of this agreement shall be from the date of its full
execution through February 28, 2011 unless tenninated earlier pursuant to Section 19 of this
Agreement."
SECTION 2. Section 4 (Compensation) is hereby amended to read as
follows:
"SECTION 4. NOT TO EXCEED COMPENSATION. The Compensation to be paid to
CONSULTANT for perfonnance of the Services described in Exhibit "A," including both
payment for professional services and reimbursable expenses, shall not exceed Eighty Five
Thousand Dollars ($85,000). In the event Additional Services are authorized, the total
compensation for services and reimbursable expenses shall not exceed $93,500.00.
1
The applicable rates and schedule of payment are set out in Exhibits "c" and "C-l ," entitled
"COMPENSA nON" and "HOURL Y RATE SCHEDULE," respectively, which are attached
to and made a part of this Agreement.
Additional services, if any, shall be authorized in accordance with and subject to the
provisions of Exhibit "C." CONSULTANT shall not receive any compensation for
Additional Services performed without the prior written authorization of CITY. Additional
Services shall mean any work that is determined by CITY to be necessary for the proper
completion of the Project, but which is not specifically included within the Scope of Services
described in Exhibit "A.", including, but not limited to, planning and facilitation of
additional meetings and other legislative advocacy activities.
SECTION 3. Section 19 is hereby amended to read as follows:
"SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT
OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in
whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days
prior written notice thereof to CONSULTANT. Upon receipt of such notice,
CONSULTANT will immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services by giving thirty (30) days prior written notice thereof to CITY,
but only in the event of a substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver
to the City Manager immediately any and all copies of studies, sketches, drawings,
computations, and other data, whether or not completed, prepared by CONSULTANT or its
contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with
this Agreement. Such materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will
be paid for the Services rendered or materials delivered to CITY in accordance with the scope
of services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account of a
default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for
that portion of CONSULTANT's services which are of direct and immediate benefit to CITY
as such determination may be made by the City Manager acting in the reasonable exercise of
hislher discretion. The following Sections will survive any expiration or termination of this
Agreement: 14, 15, 16, 19.4,20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by
CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. "
SECTION 4. The following exhibit to the Contract is hereby added to read as set
forth in the attachment to this Amendment, which is incorporated in full by this reference:
a. Exhibit "C" entitled "COMPENSATION".
2
Date --#
Except as herein modified, all other provisions of the Contract, including any exhibits
and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized
representatives executed this Amendment on the date first above written.
CITY OF PALO ALTO
City Manager (Required on contracts over
$85,000)
Purchasing Manager (Required on contracts
over $25,000)
Contracts Administrator (Required on
contracts under $25,000)
APPROVED AS TO FORM:
Senior Asst. City Attorney
(Required on Contracts over $25,000)
Attachments:
EXHIBIT "C": COMPENSA nON
Date --#
CAPITOL ADVOCATES, INC.
By: __________ _
Name: ----------------------
Title: _________________ --'--_
3
.' .
EXHIBIT "C"
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services perfonned in
accordance with the terms and conditions of this Agreement based on the hourly rate schedule
attached as Exhibit C-1.
The total compensation to be paid to CONSULTANT under this Agreement for the full contract term
(February 2010 through February 2011) for all services described in Exhibit "A" ("Services") and
reimbursable expenses shall not exceed a total of Eighty Five Thousand Dollars ($85,000), which
shall include a monthly fee of$5,000, plus fees for any additional services requested and approved in
writing by the City Manager/or designee. For the period of August 15, 2010 through September 15,
2010 the compensation to be paid to CONSULTANT under this Agreement for all services described
in Exhibit "A" ("Services") and reimbursable expenses shall not exceed Fifteen Thousand Dollars.
For the period of October, 2010, through February, 2011, the compensation to be paid to
CONSULTANT under this Agreement for all services described in Exhibit "A" ("Services") and
reimbursable expenses shall not exceed Five Thousand Dollars ($5,000) per month. CONSULTANT
agrees to complete all Services, including reimbursable expenses, within the amounts set forth in this
Exhibit C.
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-l. 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.
4
Date --#
1
AMENDMENT NO. THREE TO CONTRACT NO. S10135594
BETWEEN THE CITY OF PALO ALTO AND
CAPITOL ADVOCATES, INC.
This Amendment No. Three to Contract No.S10135594 (“Contract”) is entered
into March 1, 2011, by and between the CITY OF PALO ALTO, a California chartered
municipal corporation (“CITY”), and Capitol Advocates Inc., a Professional Services
Firm, located at 1215 K Street, 17th Floor, Sacramento, California 95814
(“CONSULTANT”).
R E C I T A L S:
WHEREAS, the Contract was entered into in February 2010 between the parties
for the provision of governmental affairs services and legislative advocacy on the High
Speed Rail Project; and
WHEREAS, the parties entered into a contract for legislative services that was
amended twice to provide for services through February 28, 2011; and
WHEREAS, the parties wish to extend the term of this agreement to include the
period of March 1, 2011 through August 31, 2011, and to increase the total compensation
under the contract by an additional Thirty-Two Thousand Dollars ($32,000) for a total
not to exceed amount of One-Hundred Twenty–Five Thousand Five Hundred Dollars
($125,500).
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 2 (Term) is hereby amended to read as follows:
“SECTION 2. TERM. The term of this agreement shall be from
the date of it full execution through August 31, 2011 unless
terminated earlier pursuant to Section 19 of this Agreement.”
SECTION 2. Section 4 (Compensation) 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,” including both payment for
professional services and reimbursable expenses, shall not exceed
One Hundred Twenty-Five Thousand Five Hundred Dollars
($125,500).”
The applicable rates and schedule of payment are set out in
Exhibits “C”.
2
And “C-1,” entitled “COMPENSATION” and “HOURLY RATE
SCHEDULE,” respectively, which are attached to and made part
of this Agreement.
Additional services, if any, shall be authorized in accordance with
and subject to the provisions of Exhibit “C.” CONSULTANT
shall not receive any compensation for Additional Services
performed without the prior written authorization of the CITY.
Additional Services shall mean any work that is determined by
CITY to be necessary for the proper completion of the Project, but
which is not specifically included within the Scope of Services
described in Exhibit “A.”, including, but not limited to, planning
and facilitation of additional meetings and other legislative
advocacy activities.
SECTION 3. The following exhibit to the Contract is hereby added to read as set
forth in the attachment to this Amendment, which is incorporated in full by this
reference:
a. Exhibit “C” entitled “COMPENSATION”.
Except as herein modified, all other provisions of the Contract, including any
exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized
representatives executed this Amendment on the date first above written.
CITY OF PALO ALTO CAPITOL ADVOCATES, INC.
__________________________________ By:_________________________
City Manager
Name:_______________________
Title:________________________
APPROVED AS TO FORM:
_________________________________
Senior Asst. City Attorney
Attachments:
EXHIBIT "C": COMPENSATION
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 total compensation to be paid to CONSULTANT under this Agreement for the full contract
term (March 1, 2011 though August 2011) for all services described in Exhibit “A” (“Services”)
and reimbursable expensed shall not exceed a total of One Hundred Twenty-Five Thousand Five
Hundred Dollars ($125,500), which shall include a monthly fee of $5,000, plus fees for any
additional services requested and approved in writing by the City Manager/or designee. For the
period of Mach 1, 2011 through August, 2011 the compensation to be paid to CONSULTANT
under this Agreement for all services described in Exhibit “A” (“Services”) and reimbursable
expenses shall not exceed Five Thousand Dollars ($5,000) per month. CONSULTANT agrees to
complete all Services, including reimbursable expenses, within the amounts set forth in this
Exhibit C.
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 be 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.