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Home My WebLink About2011-04-11 City Council Agenda PacketAdditional Information Standing Committee Meetings Standing Committee Packets from the City Manager Schedule of Meetings Schedule of Meetings from the City Clerk Tentative Agenda Tentative Agenda from the City Clerk Informational Report 1. Palo Alto library Projects January/February 2011 Report 2. Information Report on Natrual Gas Pipeline Safety 3. Water Utility Benchmark Study Public Letters to Council Supplemental Information 5 April 11, 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. City of Palo Alto (ID # 1586) City Council Staff Report Report Type: Study SessionMeeting Date: 4/11/2011 April 11, 2011 Page 1 of 3 (ID # 1586) Summary Title: Office of Emergency Services Study Title: Office of Emergency Services Study From:City Manager Lead Department: Police Recommendation Staff recommends that Council receive and comment on the attached report from the Urban Resilience Policy Group. Executive Summary Urban Resilience Policy Group was contracted to conduct a study to review disaster readiness activities and how to effectively structure the Office of Emergency Services within the City of Palo Alto. The consultant’s report reviews Palo Alto’s emergency readiness programs and provides a recommendation about the City’s staffing and organization for the Office of Emergency Services. The report also includes an assessment of the City’s capacity to prepare for, respond to and recover from natural and man-made disasters. Background The scope of this project was to provide a third party independent review of disaster readiness activities and how to effectively structure the Office of Emergency Services with the City. The City sought outside review to assess how current emergency preparedness activities are functioning and how the City can optimize our efforts and improve capabilities . The consultant examined the current status of emergency preparedness efforts within the City of Palo Alto including the Palo Alto CERT volunteer program, the Palo Alto Neighbors (PAN) initiatives, the Citizen Corps Council (CCC) and the Infrastructure Blue Ribbon Commission. The consultant also reviewed the operations of the Office of Emergency Services which is currently situated in the Fire Department within the Support Services Division. Currently the Office of Emergency Services is staffed by a coordinator and a part-time staff analyst. In preparing this report, the consultant made numerous site visits to key aspects of City infrastructure; interviewed City staff, Council, community members and other key stakeholders; attended City Council, Infrastructure Blue Ribbon Commission and community meetings and reviewed city data and reports relating to emergency management and disaster resiliency. April 11, 2011 Page 2 of 3 (ID # 1586) Six themes that developed in the interview process with staff and community stakeholders were tracked. These themes included: ·Leadership ·Collaboration ·Need for transparency ·Connections with the community and disconnects ·Need for enhanced support (for the initiative) ·Location of the Office of Emergency in the City organization Discussion The comprehensive report makes three recommendations to improve the state of emergency preparedness within the City of Palo Alto. The report also discusses financial considerations that could enable the implementation of these recommendations. The recommendations being made by the consultant include: Recommendation 1 Staff the Office of Emergency Services (OES) with a senior director (and professional staff) with cross-departmental authority and direct report responsibility to City executive management. Recommendation 2 Implement a plan to improve the current Emergency Operations Center (EOC) so it is located in a seismically safe facility with appropriate functional equipment and amenities. Designate and train a multi-disciplinary, Incident Command System (ICS)- focused EOC team staffed by the City’s senior management team. Recommendation 3 Consolidate information from existing technical studies and conduct additional analysis. -Part A: Establish an internal clearinghouse to compile and synthesize findings from recent and current planning studies, committee reports, budget materials and other technical and community findings on Palo Alto’s state of disaster readiness; April 11, 2011 Page 3 of 3 (ID # 1586) -Part B:Conduct a formal HAZUS (Hazards U.S.) risk assessment of the Palo Alto community with site-specific data for inclusion in a City-generated Hazard Mitigation Plan; -Part C:Add disaster readiness to the City’s annual public services survey; and, -Part D:Refer the issue of seismic/disaster vulnerability to the City’s Infrastructure Blue Ribbon Commission to survey the disaster/seismic vulnerability of Palo Alto’s built environment starting with facilities and systems essential to City operations Tonight the consultant will make a presentation that will include an overview of her methodology, key findings and recommendations to the City to improve City’s emergency preparedness functions. The City Manager will be prepared to return to Council with implementation recommendations and timelines. Attachments: ·OES Study Report 033111 (PDF) ·OES Study PowerPoint 040511 (PPT) Prepared By:Dennis Burns, Police Chief Department Head:Dennis Burns, Police Chief City Manager Approval: James Keene, City Manager Toward a Resilient Future: A Review of Palo Alto’s Emergency Readiness Prepared by Urban Resilience Policy March 31, 2011 URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 2 Table of Contents Acknowledgements 3 Introduction 5 Current Status 5 Background 6 Review Recommendations 7 Discussion 8 - Recommendation 1 8 - Recommendation 2 12 - Recommendation 3 13 Financial Considerations 16 Conclusion 17 Next Steps 18 Appendices 19 - Appendix A: Disaster Readiness in the Greater Bay Area 19 - Appendix B: Project Methodology 21 - Appendix C: Project Documents Reviewed 23 Endnotes 24 Endnote References 25 Select Bilbiography 26 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 3 Acknowledgements I’d like to thank the community members, city ofﬁcials, and Stanford University staff interviewed for this effort and who shared their vision for a more disaster resilient Palo Alto. Many people gave their time to meet with me and to discuss the challenges that they faced to keep community safety at the forefront. Members of the Palo Alto CERT Program and the Palo Alto Neighborhoods group were especially generous with information and commentary on this crucial disaster safety work. City Manager James Keene and Interim Public Safety Director Dennis Burns, along with their staff, provided the needed support for the research and interview visits. Mr. Keene, Chief Burns and staff freely shared observations about the City’s operations and the community’s engagement in this initiative. Ofﬁcer Ken Dueker and former assistant to the City Manager, Kelly Morariu, developed a suite of background materials that were essential reading for the review. The staff in the Ofﬁce of Emergency Services, Rich Malonee and Paul Lufkin, provided much-needed data and program history. Katie Whitley, in the City Manager’s Ofﬁce, assisted with interview arrangements; and, Barbara Teixeira, the Police Department’s coordinator, demonstrated adept logistics’ management through- out the review process. The following people contributed astute and helpful commentary on Palo Alto’s disaster readiness efforts in project interviews and public meetings: Community Members - The Honorable Judy Kleinberg, Palo Alto Mayor (2006) - Dr. Ray Bacchetti, Co-chair, Infrastructure Blue Ribbon Commission - Victoria Geen-Lew, Risk Manager, Palo Alto Uniﬁed School District - Linda Le Noir, Nurse, Palo Alto Uniﬁed School District - Ken Matzke, Red Cross Silicon Valley representative - Doug Kalish, Palo Alto CERT - Annette Ross, Palo Alto CERT - Ruth Satterthwaite, Palo Alto CERT - Bob Sikora, Palo Alto CERT - Annette Glankopf, Chair, Palo Alto Neighborhoods - Ann Crichton, Palo Alto Neighborhoods - Lydia Kou, Palo Alto Neighborhoods - Patrick Mufﬂer, Palo Alto Neighborhoods - Douglas Moran, Palo Alto Neighborhoods - Ken Allen, ARES-RACES TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 4 Palo Alto City Council - The Honorable Sid Espinosa, Mayor - The Honorable Yiaway Yeh, Vice Mayor - The Honorable Karen Holman, Member - The Honorable Larry Klein, Member - The Honorable Gail Price, Council Member - The Honorable Gregory Scharff, Member - The Honorable Greg Schmid, Member - The Honorable Nancy Shepherd, Member City Manager’s Ofﬁce - James Keene, City Manager - Pamela Antil, Assistant City Manager - Kelly Morariu, Former Assistant to the City Manager City of Palo Alto Staff - Dennis Burns, Interim Public Safety Director - Roger Bloom, Deputy Chief, Fire Department - Judy Jewel, Deputy Chief, Fire Department - Charles Cullen, Technology Director, Police Department - Valeria Fong, Utilities Department Director - Lalo Perez, General Services Department Director - Curtis Williams, Planning Director - Mike Sartor, Public Works Director - Tomm Marshall, Assistant Director, Utilities Department - Larry Perlin, Building Ofﬁcial, Planning Department - Rich Malonee, Interim Coordinator, Ofﬁce of Emergency Services - Paul Lufkin, Staff Coordinator, Palo Alto CERT - Ken Dueker, Homeland Security Coordinator - Barbara Teixeira, Special Assistant to Chief Burns - Linda Clerkson, Public Information Ofﬁcer, City Manager’s Ofﬁce - Christine Paras, Budget Analyst, General Services Department - Pete Hazarian, Budget Analyst, Police Department Stanford University Staff and Afﬁliates - Laura Wilson, Chief, Stanford University Police Department - Keith Perry, Ofﬁce of Emergency Services Coordinator - Greg Deirlein, Professor, Stanford University Engineering Department - Bernadette Burnes-Line, Ofﬁce of Emergency Management, Stanford Hospital and Clinics TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Introduction The Bay Area is susceptible to natural hazards such as ﬂooding, urban wild land ﬁres, and earth- quakes, and local cities must manage unexpected disruptions. Dealing as well with public health emergencies and technological and human-generated disasters, California communities have long experience with safety and risk management. Many national crisis management practices origi- nated in California. They were developed after repetitive disasters prompted policy and program initiatives based on using sophisticated disaster preparedness and response planning, intricate mutual aid systems and prudent building construction standards. The City of Palo Alto’s efforts to improve its emergency and disaster readiness are part of this larger pattern. The City Council continued this issue as a priority for the coming ﬁscal year, and the City Manager initiated assessments to improve the City’s knowledge about its emergency response and readiness capacity. Studies recently completed or underway include assessments of ﬁre services; emergency medical services; public safety building alternatives; ﬁre management; hazard mitigation; infrastructure systems and facilities; and after-action analysis of the City’s response to emergencies. Given the state and national economic climate, Palo Alto is to be com- mended for its progressive commitment to understanding and improving the City’s safety. The recent earthquakes in New Zealand and Japan, and the resulting tragic outcomes, make this community effort all the more urgent. Current Status Palo Alto has long experience with responsible attention to community safety. The City has accomplished emergency ﬁrst responders in the Police, Fire, Public Works and Utilities Departments. They manage the city’s expected disasters and effectively coordinate among themselves. Flood- plain management after the 1998 ﬂood on San Francisquito Creek has led to a successful model of inter-jurisdictional cooperation for risk reduction. Seismic safety measures that preceded the 1989 Loma Prieta earthquake promote safe construction; long time measures are in place to construct new buildings to safer earthquake standards that protect life safety. Current assessments of ﬁre safety; emergency medical services; ﬁre risk; ﬂoodplain issues; and, climate protection are being scrutinized to improve Palo Alto’s overall capacity to withstand disruptive crises. The next step for the City is to synthesize the ﬁndings from these varied studies and develop a strategy to increase community safety through preparedness, training, and risk reduction and management. To protect life, property, and the environment from natural and man-made disasters through preplanning, training, rapid emergency response, and public safety education for the beneﬁt of the community. —City of Palo Alto’s Statement on Community Safety URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 5 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS “We’re developing a ‘coherent vocabulary’ about these issues.” James Keene City Manager City of Palo Alto Background In October 2010, the City commissioned a review of its disaster readiness and how to effectively structure the Ofﬁce of Emergency Services. This review of Palo Alto’s emergency readiness programs will provide a recommendation about the City’s stafﬁng and organization for the ofﬁce, along with an assessment of the current status of the community and City capacity to prepare for, respond to and recover from natural disasters, climate change and other substantive disruptions. For the report’s purposes, “emergency/disaster readiness” will serve as the umbrella concept of review, rather than “emergency preparedness.” The broader idea of readiness speaks to a more holistic notion of community capacity to withstand a range of disruptive events. This range spans from typical emergencies (winter storms or structure ﬁres) that local authorities can readily handle to large-scale events such as earthquakes, wild land ﬁres, or public health and security crises that may exceed local response capacity. In June 2010, the Santa Clara County Civil Grand Jury writes in its report, “Disaster Preparedness in Our County and Cities” that: “…Each city is responsible for its own emergency services and has its own emergency operations center.” Local responsibility to conduct and manage immediate response to emergencies and disasters is a mandated responsibility. This is often delegated to operational departments without sufﬁcient resources, professional expertise or organizational authority to effect adequate preparation across municipal departments and within a community. Those tasked with the work must deal with signiﬁcantly reduced state and federal funding that, in the past, supplemented local allocations for disaster readiness. Palo Alto, however, has kept community safety an active policy issue for the last ﬁve years while many cash-strapped cities closed emergency services ofﬁces or reduced stafﬁng. The City Council and staff tracked emergency preparedness in the 2005–2007 budget as an ad hoc cross-depart- mental initiative. Past Mayor Judy Kleinberg convened the Palo Alto Red Ribbon Task Force which stated in its March 2008 meeting minutes that it: “…was formed to light a ﬁre.” The recent series of City-commissioned studies along with community efforts of the Palo Alto CERT / Palo Alto Neighborhood Disaster Activities’ (PANDA) volunteers, the Palo Alto Neighbors (PAN) initiatives, the Citizen Corps Council (CCC), and the Infrastructure Blue Ribbon Commission (IBRC) signal community appetite to study and discuss challenging risk management problems. The next step is to channel discussion and analysis to productive purpose with deﬁned, measurable outcomes. The City has to garner the political will and commitment to address a comprehensive approach for its emergency and disaster readiness initiative. Managing expectations and making incremental progress has to be part of the decision-making process among the interested and affected parties. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 6 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Review Recommendations Recommendation 1 Staff the Ofﬁce of Emergency Services (OES) with a senior director (and professional staff) with cross-departmental authority and direct report responsibility to City executive management; Recommendation 2 Implement a plan to improve the current Emergency Operations Center (EOC) so it is located in a seismically safe facility with appropriate and functional equipment and amenities. Designate and train a multi-disciplinary, Incident Command System (ICS)-focused EOC team staffed by the City’s senior management; Recommendation 3 Consolidate information from existing technical studies and conduct additional analysis: Part A: Establish an internal clearinghouse to compile and synthesize ﬁndings from recent and current planning studies, committee reports, budget materials and other technical and community ﬁndings on Palo Alto’s state of disaster readiness; Part B: Conduct a formal HAZUS (Hazards U.S.) risk assessment of the Palo Alto community with site-speciﬁc data for inclusion in a City-generated Hazard Mitigation Plan; Part C: Add disaster readiness questions to the City’s annual public services survey; and, Part D: Refer the issue of seismic/disaster vulnerability to the City’s Infrastructure Blue Ribbon Commission to survey the disaster/seismic vulnerability of Palo Alto’s built environment, starting with facilities and systems essential to City operations. The recommendations developed below could be accomplished within a two-year period; completed cost-effectively and managed substantially with internal staff. Palo Alto has signiﬁcant assets in this arena—strong community support; highly professional and capable staff; clear direction from elected leaders; healthy ﬁnancial capacity—a combination not typical in Bay Area communities. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 7 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Discussion Recommendation 1: Staff the Ofﬁce of Emergency Services (OES) with a senior director (and experienced professional staff) with cross-departmental authority and direct report responsibility to City executive management. Identiﬁed Gaps The existing Ofﬁce of Emergency Services structure and stafﬁng complement does not adequately address the City’s multiple needs for internal readiness and external coordination work. The OES is currently situated in the Fire Department and staffed by an interim coordinator (full-time) and a staff analyst (part-time); an assistant ﬁre chief is the OES unit supervisor. Given this position in the organization, OES does not have the authority to overcome planning and preparedness deﬁciencies. After conducting interviews with city staff stakeholders, it is clear that departments are working in their subject-matter areas of expertise and not coordinating effectively on emergency/disaster readiness. Departments do not fully consider beforehand their responsibility in crisis situations that cut across boundaries, sectors and jurisdictions. No single group has demonstrated crisis management or leadership on a comprehensive level, resulting in a fragmented and ineffective approach to response and readiness. This is reﬂected in recent staff ﬁndings from the 2010 plane crash incident, and in the project interviews. In the September 2010 City Council update on emergency preparedness, staff cited the need to update and/or complete the City Emergency Operations Plan (i.e., ﬁnalize missing annexes); Continuity of Operations Plan (COOP); Public Health Emergency Plan (includes Pandemic event planning); the Community Emergency Plan; and, the Foothills Fire/Emergency Plan. City staff assessments of recent disruptive events cite the need for a uniﬁed emergency management system with ways to track internal accountability for implementing lessons gained through direct experi- ence; incorporating best practices gleaned from the research and technical practice literature; and, mainstreaming OES operations into the organization’s and community’s life. Proposed Ofﬁce Structure and Stafﬁng The City is advised to appoint a Director of Emergency Services assigned at a senior staff level, with a position description that deﬁnes speciﬁc responsibility for the City’s overall emergency/ disaster readiness. The overall responsibilities would be to identify and compile information on local hazards; conduct a systematic community risk assessment; develop a comprehensive manage- ment approach to include prevention/mitigation, preparedness, response and recovery initiatives. Such an appointment would tangibly demonstrate the City’s commitment to overall community readiness. This position would be a direct report to the City’s executive management with organi- zation-wide authority. The work to be done warrants the City Council’s and City Manager’s imprimatur; quarterly performance reports can help keep the Council priority a front burner issue. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 8 “We need someone at the top of this command who has vision, staff and the appropriate funding.” Annette Glankopf, Co-chair Palo Alto Neighbors (PAN) TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS In addition, designate two professional staff positions and one administrative staff position to form an interdisciplinary OES to improve City and community readiness. Of the professional staff, one position would be designated as the City’s internal planning and preparedness coordinator; and, the second would serve as a community liaison for public safety, other community network coordination, and funds development. Administrative staff is crucial to support the OES team and manage the planning, training and scheduling logistics for city and community training initiatives. This recommendation could be implemented by re-casting current positions to the elevated, organi- zation-wide platform needed to ensure the City’s commitment to emergency/disaster readiness. Integrate Internal Efforts Emergency/disaster readiness ought to be a core competency for all senior staff, including depart- ment directors and deputy directors.1 Taking modest ﬁrst steps can develop the staff capacity: developing departmental emergency/disaster procedures; including readiness metrics in performance evaluations; institutionalizing Disaster Service Worker readiness beyond “paper compliance” with thorough training on departmental activities to complement emergency and disaster response. Updating and/or completing all emergency procedures and plans are essential steps for the City. The need for this was mentioned in many staff interviews, and cited in the September 2010 City Council update. Updating the City’s 2007 Emergency Operations Plan as well as departmental operating procedures; the continuity of operations plan; Public Health emergency planning; and, anti-terrorism and security procedures will raise awareness and establish improved coordination. Consistent emergency/disaster training and locally-generated disaster exercises will improve the general readiness quotient for all staff across department lines. Operational departments—Public Works, Utilities, Police and Fire Departments—are dependable in their response to in-the-moment emergencies. Their staff colleagues are not as well engaged. At present, staff in non-operational departments would beneﬁt from more in-depth brieﬁng on their disaster roles and duties. Regular training at the division and department levels can remedy this shortcoming and build functioning, multi-disciplinary teams. Harnessing the professional expertise and authority of the staff emergency preparedness working group and the more senior steering committee is critical. These internal staff groups are not sufﬁciently organized or staffed to make meaningful progress in planning, training and exercise efforts. Though there are diffused readiness efforts, scattered among city departments, the organi- zation uses these groups mostly for information sharing when they could be meaningfully used as decision-making and action-based groups. Authority and responsibility for disaster readiness is indeterminate; staff is caught in a confusing leadership gap, as cited by City staff interviewees and the TriData/ICMA February ﬁre services study. Continue the departmental planning and training that includes National Incident Management System (NIMS), state and regional disaster exercises, and Palo Alto-speciﬁc planning both within the city government and in the community with the private sector and City residents. Supplement generic disaster exercises with city-speciﬁcs for more in-depth capacity building. Palo Alto has program and operational components that, pulled together from varied departments, could form a cogent, more socially enticing and professional approach to community safety. 61% 61% of interviewees believe the Palo Alto OES requires more centralized leadership and vision. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 9 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Improve Community Coordination As cited in Palo Alto stakeholder interviews for this project and in City staff reports, disaster readiness efforts are diffused in the community. There are many groups with ambitious programs going on at the block, neighborhood and larger area levels. These need to be more closely knit together, respecting the niche role each program and effort plays in the larger work and honoring the traditions that community volunteers have established and assiduously maintain. Community support and good will could be strengthened by the City’s decisions on how to structure the Ofﬁce of Emergency Services and readiness initiatives. In its September 2010 report to the City Council on readiness issues, staff examines the situation with community groups working on emergency preparedness and the need to integrate the varied community efforts; improve ways for volunteers to connect; and to work on leader succession plans. These are all necessary tasks on which to embark and could begin immediately. Staff is perceived, for the most part, to shy away from community involvement. There are exceptions to this, but in general, it is time to change the organizational culture and enliven the interactions between the community and City staff. Such a change would be a signiﬁcant improvement, as would having staff interact with the community as equal partners, and not as clients or potential disaster victims. This would be a step towards improved civility and respect. Easing territorial issues in the community through diplomatic engagement is essential, as is melding community programs into a cohesive whole to lessen the confused boundaries among groups. The basis of a strong, resilient community is in its relationships, the “social capital” that is created through block and faith-based groups and other shared interest afﬁliations.2 This is an important aspect of Palo Alto’s potential for improved emergency/disaster readiness. Research shows that when neighbors know each other and have strong relationships, City Hall can more effectively partner to increase social network building and programs tailored to speciﬁc community needs like improved volunteer access in a crisis or speciﬁed procedures for making post-disaster donations. 42% 42% of interviewees believe there is signiﬁcant disconnect between the Palo Alto OES and the greater community. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 10 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Another challenge is for the varied neighborhood groups to work more closely together to support their common goal of a well-prepared city. The newly renamed Palo Alto Community Emergency Response Training (PA CERT), Palo Alto Neighborhoods (PAN) and other community groups would beneﬁt greatly if they were to more substantively align their efforts. As well, all community groups would improve their efﬁcacy if they were to promote more diversity in their membership. Inviting more young people, whether they are students or young families, to participate in these important community activities would be a welcome addition to the existing groups. It will spread the work to more people and build the successor base to the current leadership. Emergent leader- ship in the community needs more than sporadic interest from its government; the City needs to provide ongoing support for growing and maintaining engaged community networks and activities. Palo Alto’s community is a strong partner in disaster preparedness—people are engaged and clamor- ing to work with City leaders. This opportunity can be used to good purpose; it too rare a situation to squander by eroding the goodwill and trust of community leaders with indecision and inaction. The business, commercial and research sectors need to be invited into the larger community on a broader scale than currently is in place. Palo Alto’s major employers depend on the City’s ability to manage risk and protect private sector assets as well. Having a staff coordinator to strengthen and coordinate activities with the community and partner institutions/agencies will improve readiness and solidify relations between City Hall and professional groups. A recent study pub- lished by the National Research Council shows that communities with strong, pre-disaster bonds among sectors recover more readily after crises.3 The City’s outgoing public information is helpful on the City of Palo Alto website, through AlertSCC and other push technologies. Having a community coordinator in the OES program will supplement the capacity to distribute information and boost education and outreach goals. Having a full-time staff assignment will allow for more engaged contact, beyond what is possible now. It is in the best interests of all to cultivate a more robust partnership with Stanford University. Work- ing more closely with the Stanford University campus would be an entry point to invite students as interns in community outreach and organizing efforts to diversify and strengthen readiness efforts. Good relations between the City and campus are in place at the staff level, and bringing in the senior leadership as active colleagues in disaster readiness planning is another crucial aspect to be improved. 64% 64% of interviewees believe the Palo Alto OES needs to increase its collaborative efforts with other government agencies, community groups, and non-government organiza- tions involved in EMS. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 11 “PA CERT wants to work with cooperative independence.” Doug Kalish, Community Coordinator, PA CERT TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Recommendation 2: Implement a plan to improve the current Emergency Operations Center (EOC) so it is located in a seismically safe facility with appropriate and functional amenities. Designate and train a multi-disciplinary, Incident Command System (ICS)-focused EOC team staffed by the City’s senior management. The existing EOC is in a seismically unsafe Police Annex, as is the City’s public safety dispatch center and police department garage according to the June 2010 assessment report and discussions with City engineering, police and public works staff.4 This is not acceptable for many reasons. By state law, an essential service facility must be able to sustain disaster impacts and maintain con- tinuous functioning. Further, those who direct the emergency and disaster response for the Palo Alto community, Stanford University and in neighboring cities dependent on the City for municipal services need a secure, sturdy EOC. Other deﬁciencies cited in project interviews and staff reports include the structurally unsafe EOC physical environs; inadequate telecommunications capacity; lack of current technology needs and equipment for a fully functioning center; and, a lack of resilient baseline utilities in the room itself. Proposed Solution The City needs a seismically safe Public Safety Building, as outlined in the Public Safety Building Feasibility Study of Facility Alternatives, June 2010 and presented to the City Council. It is urgent that the City implement development of an interim EOC solution, optimally in conjunction with local institutions and partner agencies to conserve resources and to better realize the uniﬁed response goals for an ICS-centric disaster response and recovery system. The City’s 2010 acquisition of a state-of the-art Mobile EOC (MEOC) was an integral step to providing an alternate response center. The communications and information gathering tools in the vehicle are innovative and put Palo Alto in a much better response condition in the short-term. In a long-term disaster response and recovery period, it must be supplemented to be adequate to community needs. Interim solutions to explore would be using portable buildings sited in a secure, low-hazards area or sharing space with other City institutions and agencies. Palo Alto has a strong technology capacity and is exploring use of technical tools such as WebEOC, the state’s RIMS application, and other resources in addition to communications improvements with the new MobileEOC. These efforts must be continued and supported by the City’s leaders. A real, not virtual, EOC is important for ongoing emergency/disaster situations.5 Improved situational awareness emanates from working with a multi-disciplinary, ICS-based team to its best effect. This is a signiﬁcant strength in a crisis leveraging coordinated human capacity. This includes using technological tools for information gathering and problem-solving; though, the strength of the central EOC model is that is activates the people- and brain-power of the inter-sectoral response team. Over-reliance on technological tools can hinder decision-makers from looking at the big- picture in a crisis. In normal emergencies, the city responds adequately and efﬁciently. The Palo Alto staff, though, needs to strengthen its capacity to evolve more sophisticated response operations in situations beyond that typical emergency. Whether it is a regional earthquake, urban wild land ﬁre or a technological disaster like last September’s San Bruno gas pipe explosion, cities in metropolitan areas face complex emergencies that can have debilitating, cascading impacts. Teams develop versatile and nimble response reﬂexes from working together and building their social connections. Having the right physical environs to convene staff responders, community and senior leaders will enhance operational synergy in a multifaceted disaster. 50/50 Amongst interviewees who voiced their opinion on where the OES should be located, there is a relatively even split between City Manager’s Ofﬁce (5 of 33) and the Fire Department (4 of 33). URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 12 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Recommendation 3: Consolidate information from existing technical studies and conduct additional analysis. Part A: Establish an internal clearinghouse to compile and synthesize ﬁndings from recent and current planning studies, committee reports, budget materials and other technical and community ﬁndings on Palo Alto’s state of disaster readiness. Studies recently completed or underway include assessments of ﬁre services, emergency medical services; public safety building alternatives; ﬁre management; hazard mitigation; infrastructure systems and facilities; and after-action analysis of the City’s response to emergencies. There is scarce coordination, however, to link overall City planning to directly support disaster safety work through the Comprehensive Plan, Safety Element; Hazard Mitigation Plan, and Climate Change Adaptation Plan. These studies will provide quantiﬁable information about Palo Alto’s disaster readiness and emergency operational status. Managing the information ﬂow and analysis for the Fire Services assessment, the Fire Management Plan, the Hazard Mitigation Plan (still in draft) and the Community Safety Element (components of this are layered throughout the City’s Comprehensive Plan) is another gap to be ﬁlled. Little cohesive budget information is collected across departmental lines to document the City’s investment in community readiness and safety. An assessment of the City’s budget and allocations attributable to disaster readiness planning, training and risk reduction is called for. A multi-depart- ment review of the public safety departments, public works, utilities, planning and community development departments would yield the policy documents and budget information the City Council and senior staff need for targeted decision-making about emergency/disaster risk management. “We want a sustainable model for Palo Alto’s Ofﬁce of Emergency Services.” Dennis Burns, Chief Palo Alto Police Department URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 13 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS “The City has to assess its built environment.” Mike Sartor, Director Palo Alto Public Works’ Department Part B: Conduct a formal HAZUS (Hazards U.S.) risk assessment of the Palo Alto community with site-speciﬁc data for inclusion in a City-generated Hazard Mitigation Plan. Palo Alto’s cumulative risk, whether from natural, technological or human-generated disasters has not been adequately studied; disaster loss estimates as required by the Federal Emergency Management Agency (FEMA) have not been developed. With this lack of detailed information about potential, deﬁned risk, it is difﬁcult to know at present how to best address preparedness and risk prevention measures. HAZUS loss estimates for the City are a crucial planning tool for preparedness, response and recovery planning. Further, they are called for by FEMA when making post-disaster recovery claims and in the adoption of mandated hazard mitigation plans. Having speciﬁed mitigation projects cited in the plan will open Palo Alto’s eligibility for Pre-Disaster Mitigation funding, available annually through the state’s CalEMA disaster agency. Work with regional partners such as the U.S. Geological Survey, Santa Clara County, the Association of Bay Area Governments and FEMA Region IX to reﬁne existing, generic risk information for more detailed local planning needs. Currently, no detailed disaster loss estimates for Palo Alto are available, so informed decisions about prioritized investment for risk reduction from the City Council or other deliberative bodies could be clouded by inadequate data. Having a HAZUS study would be a useful tool for public consideration of disaster safety upgrades and improvements. Part C: Add disaster readiness questions to the City’s annual public services survey. Current knowledge about the overall capacity of residents to respond to and withstand disasters is anecdotal and sketchy at best. Community groups and the City keep records of the numbers of people trained in emergency response classes or those who participate in disaster exercises. These data, though, do not provide deﬁned measures of the actual ability of those counted to act effectively in a crisis situation. More precise information is needed. Palo Alto does an excellent job of assessing the current level of community satisfaction in its Annual Report on City Government Performance, conducted by the City Auditor. This, or a like vehicle, could be a helpful tool to measure the level of the City disaster preparedness and risk reduction efforts. With a small investment of inserting new questions into this year’s survey, the City can get an accurate notion of its preparedness capabilities with government and in the community. Such information could provide timely data on numbers of engaged, disaster-trained and ready-to- respond residents. It could also reveal the distribution and location of active neighborhood groups. This incremental data gathering will allow for more-informed decisions about opportune areas in which to cultivate community engagement. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 14 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Part D: Refer the issue of seismic/disaster vulnerability to the City’s Infrastructure Blue Ribbon Commission (IBRC) review to survey the disaster/seismic vulnerability of Palo Alto’s built environment, starting with facilities and systems essential to City operations. Palo Alto needs more information on the seismic and disaster resistance of its infrastructure systems and facilities, initially those designated as essential service buildings that must maintain continued operations throughout a disaster. The City’s facilities require engineering reviews and attention is warranted because of the community safety and recovery aspects of this issue. Many City facilities appear to be seismically sub-standard: the Police Annex, the Emergency Operations Center, City Hall, the Multi Services Center (MSC) which houses the Utilities’ and Public Works’ operational divisions. Engineering evaluations of these essential service facilities, as well as a systems’ interdependency analysis, would yield valuable information about the actual state of these buildings and systems. Such studies can be done fairly quickly and cost-effectively; current assessment methodologies designed for the rapid assessment of existing buildings are widely available.6 The IBRC, expert community members appointed by the City Council and through commission membership, was convened last year to review the City’s backlog of deferred infrastructure maintenance; repair and replacement projects; and, ﬁnancial resources needed to maintain Palo Alto’s buildings and public service systems. The group has not factored into its deliberations a survey of seismic/disaster vulnerability. It would be a signiﬁcant help to the City if the Commission were to add this issue to its work plan for the coming year. The IRBC is the right vehicle to take up this challenging matter of safety in the city’s systems and facilities and could convey ﬁndings on this topic regarding critical City’s assets. A 2006 study conducted by the National Institute for Building Sciences, commissioned by the Federal Emergency Management Agency, was the ﬁrst technical assessment to quantify the value of hazard mitigation (disaster risk reduction) and the efﬁcacy of addressing infrastructure safety. The study shows that for every dollar invested in pre-disaster mitigation, fours dollars are saved in post-disaster response and recovery costs. Just as in public health wellness initiatives, disaster risk prevention makes social and ﬁscal sense.7 The IBRC’s attention to disaster-related risks would bring added value to its already critical mission and ultimately help prevent building losses in a damaging earthquake. The recent catastrophe in Japan shows how interdependent building and utility systems can be crippled. Examining this risk in advance of the next disaster is a prudent task for the expert commission. 4 to 1 The analysis of the statisti- cally representative sample of FEMA grants awarded during the study period indicates that a dollar spent on mitigation saves society an average of $4.8 URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 15 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Financial Considerations The short-term funding for the report recommendations could be developed for the coming annual budget deliberations. Recommendation 1 The stafﬁng complement as speciﬁed above is likely possible by re-conﬁguring existing positions within City departments. This stafﬁng model could consist of four FTEs that include a senior OES director, two professional staff, and administrative staff. Recommendation 2 The EOC issues are already under consideration by the City Council with a varying range of costs depending on the selected solution. Currently, the project to relocate the EOC has been deemed too costly, and has been deferred. It is possible that outside funding could be obtained from federal mitigation funds available for local jurisdictions and by tapping currently under-utilized American Recovery and Reinvestment Act funds. Another option to explore is to explore the feasibility of creating a partnership for a multi-jurisdic- tion EOC that would serve partner agencies, institutions and neighboring cities. Palo Alto has examples of similar partnerships in the successful San Francisquito Creek Joint Powers Authority (the ﬂoodplain management/risk reduction initiative) and in its multi-city services agreements. Recommendation 3 The technical studies (a disaster loss estimate) and structural evaluations of essential service buildings could range between $35,00 for the HAZUS study and up to $300,000 for engineering and interdependency evaluations to determine the disaster resilience capacity of City Hall, the MSC, and other essential systems and service facilities. The clearinghouse efforts to coordinate and analyze various in-process planning studies could be managed by graduate student interns with some guidance from departmental staff at a minimal cost for stipends and administrative support. As Palo Alto considers interim planning to improve disaster readiness, it is prudent to scrutinize the City’s longer-term ﬁscal planning to ensure smoother post-disaster recovery. The Harvard Kennedy School (HKS) recently worked on an advance disaster recovery project with the City and County of San Francisco (CCSF). The HKS team recommended ﬁnancial planning measures9 to speed disaster recovery that included discussions to boost reserve funds; explore the use of mutual endow- ment funds and survivable credit instruments. Such ideas must be considered as part of the City’s ongoing disaster planning; useful guidance on post-event ﬁscal and economic recovery are discussed in an update the New York City Comptroller published after the 2001 World Trade Center attacks.10 The report outlines the impacts of lost revenue and increased municipal expenses for services and relief efforts. It is a primer on the consequences of disaster and local government ﬁnance. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 16 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS “Palo Alto is often caught between pride and complacence. If we are complacent, are we living on borrowed time?” Professor Ray Bacchetti Co-chair, Infrastructure Blue Ribbon Commission Conclusion San Francisco: A Bay Area Exemplar Bay Area communities have changed direction in their OES efforts since 9/11 and have focused on protecting against human-generated emergencies. Many communities have assigned disaster safety responsibilities to county Ofﬁces of Emergency Services as a cost-cutting measure. These are indicators that community safety and risk reduction for natural hazards have limited support. An informal survey of the State CalEMA ofﬁces, the regional Red Cross, and other technical groups yielded little substantive information on the “well-prepared city.” There were no uniform standards of assessment and no detailed feedback from ofﬁcial organizations as to what cities are well prepared and why. The hoped-for best practices review was not fruitful as few communities are actively engaged in effective disaster readiness that encompasses emergency response, community readiness, and risk mitigation. Investing in more than immediate emergency response capacity is seen as a luxury when cities contemplate low frequency, high consequence disasters. The salience of pressing needs—such as crime prevention, urban ﬁre suppression, or maintaining public services —trumps (sometimes understandably) long-term disaster risk management. San Francisco, Oakland, San Jose have garnered federal Urban Area Security Initiative (UASI) funds to keep law enforcement and direct incident response funded. In general, though, only one city has continued progress with its risk reduction and readiness initiatives. San Francisco has emerged in many ways as the regional leader on disaster safety and emergency response. UASI funding has kept the CCSF OES staffed at adequate levels, as San Francisco is the regional coordinating city for urban area security and is the ﬁscal agent for the nation’s largest federal funding pool for incident safety. As a city and county jurisdiction, San Francisco has more resources at hand for disaster planning; this economy of scale allows for deliberately leveraged local, state and federal funds. San Francisco’s seismic safety programs address ongoing risk issues through three initiatives: the Community Action Plan for Seismic Safety (CAPSS), the ResilientSF program, and the CCSF Enterprise Risk Management pilot. These three programs incrementally tackle community risk in residential buildings, in response and preparedness programs and through a comprehensive management system. San Francisco’s Neighborhood Empowerment Network is a critical compo- nent, as is the Lifelines Council, a municipal partnership with the City’s utility providers. In “The Resilient City” study,11 San Francisco Planning + Urban Research Association (SPUR) advisors outline an ambitious agenda to benchmark seismic safety outcomes. The innovative approach brings metric-based thinking to disaster recovery planning. This report is compatible with Palo Alto’s readiness priorities and provides the practical guidance to look at speciﬁc measures for post- disaster restoration of services, housing and economic well being. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 17 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Next Steps The National Academies of Science recently launched a study on national disaster resilience. In addition to the necessities of emergency response, the research committee sees that urban areas must tackle the challenges of reconstituting community beyond physical rebuilding after a major disaster. Resilience is seen as the next level of community preparedness. Along with the crucial emergency response programs that cities implement, promising approaches are emerging to incorpo- rate a steady, comprehensive effort over time to responsibly address risk into the larger framework of daily government and community activities. Preventative measures taken now through planning, preparedness and response initiatives will save lives, reduce human suffering and protect the City’s physical assets for a robust recovery after the next disaster hits. Palo Alto’s articulated emergency readiness objectives ﬁt this new norm. Palo Alto can leverage its varied and unusual resources—the university, community brain trust, municipal utilities operations—to increase resilience in the face of the unexpected. Building community resilience and strengthening capacity is more than emergency response. It includes planning, preparing, responding and recovering so that these actions can be integrated into the community’s daily life. “Social resilience in the face of disaster is not, itself, an activity—it is an outcome of effective social risk management activities. Developing the right level of resilience will ﬂow from judicious choices about where society can make the best investments in overall social risk reduction.” —Professor Herman B. Leonard and Dr. Arnold Howitt Integrative Risk Management: Advance Disaster Recovery, Ch. 2, SwissRe publication; 2010 URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 18 URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 19 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Appendices Appendix A: Disaster Readiness Practices in the Greater Bay Area Milpitas Ofﬁce of Emergency Services LOCATION Fire Department STAFF Emergency Manager (full-time employee); shares with Fire Administrator PROGRAMS Manages Strategic Actions for Emergencies (SAFE): neighborhood program (18 active teams, 250 people); promotes pre-disaster mitigation; participates and hosts the Emergency Preparedness Commission; collaborates with ARES/RACES; conducts public education programs CONTACT Ofﬁce of Emergency Services, 777 South Main Street, Milpitas, CA 408 586-2810 www.ci.milpitas.ca.gov/government/ﬁre/oes_safe.asp Berkeley Ofﬁce of Emergency Services LOCATION Fire Department N/A STAFF N/A PROGRAMS Offers tax reduction incentives for seismic work highlighted; conducts Getreadyberkeley.org neighborhood campaign; provides on-line preparedness links; provides CERT training at ﬁre department; offers program for neighborhood disaster supplies through local tax program; offers City Building and Safety Programs; manages BENS notiﬁcation program; offers Transfer Tax Reductions for Qualifying Seismic Work; manages Soft Story and Unreinforced Masonry Program (URM); maintains Disaster Mitigation Plan CONTACT Public Safety Building, 2100 Martin Luther King, Jr. Way, Berkeley, CA 94704 www.ci.berkeley.ca.us/disasterresistant/ Mountain View Ofﬁce of Emergency Services LOCATION Fire Department Training Safety STAFF Emergency Services Coordinator (half-time employee); Community Relations Ofﬁcer (half-time employee); Public Education Specialist (half-time employee) PROGRAMS Offers CERT Training; manages EOC; designs and conducts exercises; resource for schools, businesses, community groups, service organizations and neighborhood associations, providing information, training, assisting with exercises and participat- ing in community events; provides on-line map with CERT leaders’ names, contact info and geographic areas delineated; provides ﬁre and evacuation public education CONTACT Fire Department, 1000 Villa Street, Mountain View, CA 94041 650 903-6365 www.ci.mtnview.ca.us/city_hall/ﬁre/programs_n_services/disaster_preparedness.asp URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 20 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Sunnyvale Ofﬁce of Emergency Services LOCATION Public Safety Building STAFF Emergency Prep Coordinator (full-time employee); shares with Public Safety Administrator PROGRAMS Centerpiece: Sunnyvale Neighborhoods Actively Prepared (SNAP); trains in ICS CONTACT Department of Public Safety, 700 All America Way, Sunnyvale, CA 94086 408 730-7190 www.sunnyvale.ca.gov/Departments/PublicSafety/EmergencyPreparedness.aspx Santa Cruz Ofﬁce of Emergency Services LOCATION Ofﬁce of Emergency Services STAFF OES Manager (full-time employee); Administrative Secretary (quarter-time employee) PROGRAMS Conducted successful equine evacuation; trains volunteers and managed sponta- neous volunteers well; volunteers trained with backups—three deep; shelters identiﬁed; not a lot of home retroﬁt done—codes enforced for new construction; City buildings and schools have been retroﬁt; SEMS/NIMS based; collaborates with strong HAM radio/ARES teams. CONTACT Ofﬁce of Emergency Services, 701 Ocean Street, Santa Cruz, CA 95060 831 454-3188 http://sccounty01.co.santacruz.ca.us/oes/ URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 21 Appendix B: Project Methodology The overall project’s goal was the development of recommendations about the placement of the City’s Ofﬁce of Emergency Services and a review of Palo Alto’s readiness for disasters. I visited the community on numerous site visits over the course of four months; attended community meetings, City Council meetings as well as conducted site visits to the City’s primary essential service facilities. The multiple site visits included a brief review of the City’s Emergency Operations Center; ﬁre stations (including Fire Station 8); the school district administration building; the current Ofﬁce of Emergency Services site; the City’s Multi-Services Center; and, the water treatment facility. Many useful city documents and reports were provided for project research that included pertinent committee agendas and minutes; staff meeting notes; working group project plans and meeting minutes; City budget documents; and particular media reports that focused on the City’s disaster safety issues and coverage on speciﬁc incidents, such as the February 2010 plane crash emergency and community power outage. The city’s staff project managers asked that I conduct interviews with staff and community stakeholders. Forty interviews were conducted; of these, 33 were used to tabulate ﬁndings reﬂected in the review’s recommendations. The remaining seven interviews were of a more general background nature, rather than speciﬁc comments on the Ofﬁce of Emergency Services’ placement issues. All the interview materials were useful in the development of the ﬁnal recommendations as they addressed issues relative to the larger community readiness snapshot. Six themes that developed in the interview process were tracked: leadership; collaboration; need for transparency; disconnect with the community; lack of support (for the initiative); and, location of OES in the City organization. The discussion about these topics yielded useful, qualitative ﬁndings. In general, more quantitative investigation is needed from a broader sample as the City reﬁnes its efforts on disaster readiness programs and investment decisions. A recommendation is included in the report on a simple way to access more information from the larger Palo Alto community via the annual City services survey. Interview Themes Leadership - 61% (20 of 33) interviewees believe the Palo Alto OES requires more centralized leadership and vision. - This sentiment was shared rather evenly between city employees, local community, and outside organizations: 61% government to 56% community to 67% outside organizations Collaboration - 64% (21 of 33) interviewees believe the Palo Alto OES needs to increase its collaborative efforts with other government agencies, community groups, and other non-government organizations involved in EMS. - This sentiment is dominated by members of the community: 61% government to 78% community to 50% outside organizations Need for Transparency - One third (33% or 11 of 33) of interviewees believe the Palo Alto OES operations need increased transparency/clarity. - This opinion is dominated by members of outside organizations: 28% government to 31% community to 50% outside organizations TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 22 Disconnect with Community - 42% (14 of 33) interviewees believe there is signiﬁcant disconnect between the Palo Alto OES and the greater community - This opinion is dominated by members of the community: 33% government to 67% community to 33% outside organizations Lack of Support - 45% (15 of 33) interviewees expressed belief that the Palo Alto OES lacks proper support (in funds, recognized authority, legitimacy, etc.). - This opinion is dominated by both members of the city and community: 50% government to 56% community to 17% outside organizations Location - Amongst interviewees who voiced their opinion on where the OES should be located, there is a relatively even split between City Manager’s Ofﬁce (5 of 33) and the Fire Department (4 of 33) - This sentiment is split very evenly between all three types of respondents. URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 23 Appendix C: Project Documents Reviewed - City of Palo Alto Emergency Operations Plan 2007 - City of Palo Alto: September 13, 2010 Memorandum from the City Manager to the City Council: Update on City and Community Emergency Preparedness Activities - Presentation: Council Priority Update: Emergency Preparedness Monday, September 13, 2010 - City of Palo Alto: Terrorism Response Plan 2001 - City of Palo Alto: City Council Emergency Procedures, July 2008 - Introduction to Citizen Corps Council (presentation format) - Resolution 8974 to Integrate the CCC with the ESC - Steering Committee and Sector Descriptions - CCC Steering Committee Directory and biographies - Palo Alto Stanford CCC By Laws - City of Palo Alto: Emergency Planning & Homeland Security - Strategic Plan, 2009–2011 (conﬁdential draft) - Presentation: Palo Alto/Stanford Citizen Corps Council, July 2010 - Resolution 8974 to Integrate the CCC with the ESC - Steering Committee and Sector Descriptions - CCC Steering Committee Directory and Member Biographies - Palo Alto Stanford CCC By-Laws, Agenda Steering Committee Meeting, December 15, 2010 - Minutes Steering Committee Meeting - Neighborhood Disaster Committee Meeting, Sand Hill Corridor - PANDA Program Information - City of Palo Alto Fiscal Year 2011 Adopted Operating Budget - City of Palo Alto 1998–2010 Comprehensive Plan - ICMA/TriData presentation to the City Council: Fire Services Review (get actual title) - White Paper: Community Disaster Network (CDN): A Wireless Network for Disaster Response and Recovery - The City of Palo Alto’s After-Action Report on the February 2010 plane crash and power outage - Mayor Judy Kleinberg’s Red Ribbon Task Force: Minutes from the Final RRTF Meeting, March 17, 2008 - Report to the City Council: Study Session for Public Safety Building Feasibility Study of Facility Alternatives, June 2010 - Santa Clara County Civil Grand Jury June 2010 report: “Disaster Preparedness in Our County and Cities.” - Fire Area Management Plan - Hazard Mitigation Plan - Community Safety Element—embedded into the affected General Plan elements on an incremental basis - City of Palo Alto Service Efforts and Accomplishments - Report for Fiscal Year 2010: Annual Report on City Government Performance - Multiple site visits—EOC, ﬁre stations, school district, OES site, water treatment facility, MSC, Station 8 - Various committee agendas and minutes, staff meeting notes, working group project plans and meeting minutes, City budget documents, media reports TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 24 Endnotes 1 In the U.K., local government authorities must publish an annual community risk register; crisis and risk management are considered part of senior leaders’ portfolio assignments under the 2004 Civil Contingencies Act. 2 See “Community Resilience as a Metaphor, Theory, Set of Capacities, and Strategy for Disaster Readiness,” American Journal of Community Psychology, 41, 127-150. F.H. Norris, S.P. Stevens, B. Pfefferbaum, K.F. Wyche, & R.L. Pfefferbaum. 2008. 3 “Building Community Disaster Resilience Through Private-Public Collaboration,” The National Research Council; The National Academies Press; Washington, D.C. 2011. 4 “Study Session for Public Safety Building Feasibility Study of Facility Alternatives,” June 7, 2010. 5 See discussion in “Managing Crises: Responses to Large-Scale Emergencies,” 611-614. A.M. Howitt & H. B. Leonard, eds. Washington, D.C. CQ Press. 2009. 6 Consult materials for local governments available through the Federal Emergency Management Agency and the Applied Technology Council that are consensus-developed standards for evaluating existing structures. 7 “Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities.” Published by the Multihazard Mitigation Council, a council of the National Institute of Building Sciences; Washington, D.C. 2005 8 Multihazard Mitigation Council. (2005). Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities. Washington, DC: National Institute of Building Sciences. 9 Recommendations from the July 30, 2009 presentation to the City and County of San Francisco: “Accelerating Recovery from Landscape Scale Disasters,” Doug Ahlers, Arrietta Chakos, Arn Howitt and H.B. “Dutch” Leonard; Harvard Kennedy School Acting in Time Program. 10 “One Year Later: The Fiscal Impact of 9/11 on New York City,” W.C. Thompson; New York, N.Y.; City of New York 11 “The Resilient City: Deﬁning What San Francisco Needs From Its Seismic Mitigation Policies,” Chris Poland, San Francisco Planning + Urban Research Association (SPUR) Report; February, 2009 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 25 Endnote References - United Kingdom Cabinet Ofﬁce; The Civil Contingencies Act 2004. - “Community Resilience as a Metaphor, Theory, Set of Capacities, and Strategy for Disaster Readiness,” American Journal of Community Psychology, 41, 127-150. F.H. Norris, S.P. Stevens, B. Pfefferbaum, K.F. Wyche, & R.L. Pfefferbaum. 2008. - “Building Community Disaster Resilience Through Private-Public Collaboration,” The National Research Council; The National Academies Press; Washington, D.C. 2011. - “Study Session for Public Safety Building Feasibility Study of Facility Alternatives,” Report to the Palo Alto City Council; June 7, 2010. - Managing Crises: Responses to Large-Scale Emergencies; A.M. Howitt & H. B. Leonard, eds. Washington, D.C. CQ Press. 2009. - “Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities.” Published by the Multihazard Mitigation Council, a council of the National Institute of Building Sciences; Washington, D.C. 2005 - Presentation to the City & County of San Francisco: “Accelerating Recovery from Landscape Scale Disasters,” Doug Ahlers, Arrietta Chakos, Arn Howitt and H.B. “Dutch” Leonard; Harvard Kennedy School Acting in Time Program. July 30, 2009 - “One Year Later: The Fiscal Impact of 9/11 on New York City;” W.C. Thompson; New York, N.Y.; City of New York - “The Resilient City: Deﬁning What San Francisco Needs From Its Seismic Mitigation Policies;” Chris Poland, San Francisco Planning + Urban Research Association (SPUR) Report; February, 2009 TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS URBAN RESILIENCE POLICY . ARRIETTA CHAKOS . MARCH 31, 2011 26 Select Bibliography - Alesch, D. J., Arendt, L. A., & Holly, J. N. (2009). Managing for Long-Term Community Recovery in the Aftermath of Disaster. Fairfax, VA: Public Entity Risk Institute. - Colten, C. E., Kates, R. W., & Laska, S. B. (2008). Three Years after Katrina: Lessons for Community Resilience. Environment, 50(5), 36. - Comerio, M. C. (1998). Disaster Hits Home: New Policy for Urban Housing Recovery. Berkeley, CA: University of California Press. - Howitt, A. M., & Leonard, H. B., eds. (2009). Managing Crises: Responses to Large-Scale Emergencies. Washington, DC: CQ Press. - Johnson, L., Samant, L., & Frew, S. (2005). Planning for the Unexpected: Land Use Development and Risk. Report No. 531. Chicago, IL: American Planning Association. - Mileti, D., ed. (1999). Disasters by Design. Washington, DC: John Henry Press. - Multihazard Mitigation Council. (2005). Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities. Washington, DC: National Institute of Building Sciences. - Poland, C., Bonowitz, D., Maffei, J., & Barkley, J. (2009). The Resilient City, Part I: Before the Disaster. Urbanist, (479), 4-21. - Thompson, W. C. (2002). One Year Later: The Fiscal Impact of 9/11 on New York City. New York, NY: City of New York. - Wilson, R. C. (1991). The Loma Prieta Quake: What One City Learned. Washington, DC: International City Management Association. TOWARD A RESILIENT FUTURE: A REVIEW OF PALO ALTO’S EMERGENCY READINESS Toward a Resilient Future: A Review of Palo Alto’s Emergency Readiness Report to the Palo Alto Community and City Council, April 11, 2011 Arrietta Chakos To protect life, property, and the environment from natural and man- made disasters through preplanning, training, rapid emergency response, and public safety education for the benefit of the community. —City of Palo Alto’s Statement on Community Safety Project Overview Review of City of Palo Alto’s Disaster Readiness -City Manager’s Office commissioned study in October 2010 -Examine the City’s staffing and organization for the Office of Emergency Services -Current status of the community and City capacity to prepare for, respond to and recover from natural disasters, climate change and other substantive disruptions Project Approach -40 stakeholder interviews -Site visits to City facilities -Attendance at City Council meetings, community group and commission meetings -Review of City and community materials that included staff reports, Council reports and studies, readiness plans and media reports Community Safety Policy Initiatives -City Council designates emergency preparedness as a priority -Strengthening the city organization’s capacity to respond and recover from disasters -Assessing current operational strengths; update on internal planning and training Community Efforts Support the City’s Initiative -Palo Alto CERT: Focus on community disaster preparedness includes supplementing City response operations -Palo Alto Neighbors: Block-and neighborhood- level organizing for stronger social bonds -Citizen Corps Council: Linking multi-sectoral disaster planning with specified goals for pre- disaster coordination and emergency response Current Studies -Studies and plans to better understand Palo Alto’s readiness -The Fire Service study conducted by Tri Data/ICMA is example of ongoing assessments Current Studies -The City’s disaster response plans, emergency medical services, fire risk, floodplain management and continuity of operations updates are in process -Commission examining infrastructure maintenance needs The analysis of the statistically representative sample of FEMA grants awarded during the (MMC) study period indicates that a dollar spent on mitigation saves society an average of $4. 4:1 Palo Alto’s Current Readiness Status -City’s first responders ably manage in-the-moment emergencies -Recent Red Cross recognition for disaster preparedness work -Award from the regional Urban Area Security Initiative for City’s response plan Integrating Broader Disaster Issues -The City’s next challenge is to draw together its impressive preparedness efforts with longer-term planning and implementation -Link the City’s departments more effectively through consistent disaster training -Develop organization and community readiness measures that include risk reduction and leverage Palo Alto’s social capital quotient Review Recommendations Recommendation One -Staff the Office of Emergency Services (OES) with a senior director and professional staff -Designate that OES has cross-departmental authority within the City’s structure -Have the OES director serve as a direct report to City executive management Of interviewees believe the Palo Alto OES requires more centralized leadership. 61% Identified Gaps -Existing OES structure and staffing inadequate -OES does not have the organizational authority needed to overcome planning and preparedness deficiencies -Insufficient cross-departmental coordination on disaster response planning and internal accountability Proposed OES Structure and Staffing -Elevate OES to a more senior position in the City organization -Appoint a Director of Emergency Services -Designate two professional staff for internal and community coordination Integrate Internal Efforts -Make disaster readiness a core competency for staff -Coordinate readiness activities from a central point -Strengthen training and disaster exercises across department lines -Boost authority of existing planning groups Improve Community Coordination -Knit together community safety efforts -Support diplomatic discussion and engagement among community groups -Seek more diverse participants in all the programs -Be an active partner with Palo Alto residents, businesses and the Stanford University campus Of interviewees believe the Palo Alto OES needs to increase its collaborative efforts with other government agencies, community groups, and non-government organizations involved in EMS. 64% Recommendation Two -Implement a plan to locate the current Emergency Operations Center (EOC) in a seismically safe and appropriately functional facility -Designate & train a multi-disciplinary EOC team staffed by the City’s senior management Proposed Solution -City needs a seismically safe, functional EOC -Acquisition of the MobileEOC excellent interim step -Consider innovative options for a long-term solution–potential partnering with local institutions and partner agencies and development of a collaborative funding strategy -Designate a multi-disciplinary EOC team staffed by the City’s senior directors Recommendation Three Consolidate information from technical studies and conduct additional analysis: -Information clearinghouse -Palo Alto’s local risk conditions need further study -Bolster annual services survey -Advise IBR Commission to examine disaster/seismic resilience of facilities & systems Synthesizing Available and Needed Information -The City would benefit from a repository for the disaster readiness technical information -Information management and coordination are key issues -Compilation of disaster-related budget information is crucial to future decision-making Data Studies Needed -Development of disaster loss estimates using the federal assessment method, HAZUS -Tracking community readiness using the City’s annual public services survey as a vehicle for outreach and data gathering -Using quantified information as basis for planning and risk reduction decisions Distribution of percent loss, calculated as the ratio of economic loss due to building damage to building replacement value times 100, for each census tract. (State of California Department of Conservation) 1%) 0 0-1 ~H 5 . 10 10 _ 15 _ 15_20 _ 2fI. 6<l 50 tOO '0 Sh<lke/II~p Ground Motioll s Pi'; '~5 5· 10 10· 15 15 -20 20·21 50 t OO . l on NGA Gmllll d ~I OlioJlS Leverage Commission Study Findings -Refer the issue of disaster/seismic vulnerability to the City’s Infrastructure Blue Ribbon Commission -Potentially sub-standard essential services facilities and systems need review -Link findings to the commission’s current activities for the 2011 report to the City Council Fiscal Considerations Financial Strategies -Report recommendations can be addressed through short-term budget adjustments -Consider and plan for least-expected conditions -Long-term recovery issues—post-disaster economic well-being and community development—warrant deeper scrutiny Promising Practices in Disaster Readiness Metrics of Readiness -Defining measures to quantify actual readiness -Regional efforts on natural disaster preparedness are inconsistent; fewer cities maintain programs -San Francisco emerges as a promising model with sophisticated response systems, community organizing/preparedness, and ongoing risk reduction initiatives CAPSS Website HOME ABOUTIho AlIV\lIORY SF..,d NEWS..... COHTACTUS PROJECT COMMITTEE EARTMQUAKES REPORTS Next Steps Community Resilience as the New Norm -National studies and program examine the concept of “resilience” -Addressing the City’s broad portfolio of risk -Palo Alto’s policy objectives fit state-of-the-art thinking to incorporate preparedness, mitigation, response and recovery Urban Resilience Policy Arrietta Chakos arriettachakos@gmail.com arriettachakos.com City of Palo Alto (ID # 1508) City Council Staff Report Report Type: Study SessionMeeting Date: 4/11/2011 April 11, 2011 Page 1 of 14 (ID # 1508) Summary Title: Earth Day Staff Report Title: Update on City Sustainability and Environmental Initiatives Including a Report from the Community Environmental Action Partnership (CEAP) From:City Manager Lead Department: City Manager SUMMARY The following report updates information regarding the City’s sustainability and environmental initiatives brought to Council on April 19, 2010 (CMR 200:10) and outlines a study session topic which will be discussed at the Council meeting on April 11, 2011. The study session topic relates to improving existing building energy efficiency and how staff could implement a program to monitor and increase energy efficiency in commercial buildings in Palo Alto. BACKGROUND This report highlights only a portion of the many sustainability programs listed in the comprehensive inventory in Attachment 1. This inventory is broken into seven categories, similar to this report and divided again by what the City is required to do by law and other mandates, what the City and other regional organizations are doing, and what programs are offered to residential and commercial customers in Palo Alto. Staff reports that there is continued community support of many sustainability programs, despite the economic slowdown. Staff feels that the near term goals of the Climate Protection Plan developed in 2007 are feasible. Much of the success in reaching these goals is due to the increased rate of renewable energy in the City’s portfolio. Staff will continue to reach out to community organizations and the new emerging technology and piloting program has the potential for more tangible engagement with a wider group of residents and businesses. Our partnership with Stanford on research projects continues to be strong, and has included a series of collaborations with the Public Works department on wastewater treatment and reuse of resources contained in wastewater. The Utilities department is working with Stanford research staff and students on a pilot demand response program in the community.City staff have also guided several Stanford student groups in validating their ideas for innovative clean tech related products and services. A number of departments also have hired interns at various times of the year on important projects such as the Greenhouse Gas (GHG) inventory reports. April 11,2011 Page 2 of 14 (ID # 1508) The report is structured to provide an update on the following topics: A.Climate Change and Adaptation B.Energy Supply and Conservation C.Water Conservation and Resource Management D.Natural Environment E.Waste and Materials F.Built Environment G.Transportation DISCUSSION A. Climate Change and Adaptation: Climate Protection Plan and GHG Monitoring In December 2007 (CMR: 435:07), Council approved a Climate Protection Plan (CPP) that set short, medium, and long term goals to reduce municipal operations and community greenhouse gas (GHG) emissions. The plan is summarized in Attachment 2. The City’s long term goals were in line with California’s goals under the Global Warming Solutions Act of 2006 (AB32). Since the adoption of the City’s CPP in December 2007 and AB32 adoption in September 2006, the City and City of Palo Alto Utilities (CPAU) have undertaken many initiatives to reduce the community’s carbon foot print and better position CPAU to operate under the new AB32 related regulation expected to be implemented in 2012. National protocols are currently being developed for both municipal operations and community emissions. For instance, the community protocol that is being developed by ICLEI (Local Governments for a Sustainable USA) includes many more data points than our CPP in an effort to present a complete, well-rounded picture and to better enable benchmarking for and between cities. Once such protocols are established in the coming months, staff will evaluate whether an update or a recalibration of the original emissions calculation in the CPP from 2007 is necessary. The municipal operations Greenhouse Gas emissions numbers have been verified by California Climate Action Registry (CCAR) and for completing this effort, we were granted the status of Climate Action Leader. In January 2011, the City signed on to the Climate Registry (TCR), which will replace CCAR for public reporting. Due to the success in meeting and exceeding our municipal goals set for 2009, in April 2010 at staff’s recommendation, Council set a more ambitious target of reducing municipal emissions by 20% below the 2005 baseline by 2012. Waste reduction, employee commute programs, alternate fuel vehicles, efficiency measures and the major upgrades in our buildings and the water quality treatment plant are expected to be key drivers in meeting the new 2012 goal. Staff believes we will meet and potentially exceed this new municipal operation emissions goal for 2012. April 11,2011 Page 3 of 14 (ID # 1508) Staff believes that 2012 community goals are achievable with continued community engagement support of our many sustainability programs. However, if a recalibration of our emissions is completed, as required by new protocol requirements, a reassessment of our goals may be necessary. Although our 2020 goals are far away, Staff believes these may be more difficult to reach. Community Environmental Action Partnership The Community Environmental Action Partnership, a collaborative citywide initiative, engages the various segments of the Palo Alto community to identify opportunities and create and implement sustainable environmental solutions. CEAP Committee includes segment liaisons that include City Government, Business Community, Nonprofits, Neighborhoods, School Community, Faith Community, Stanford, and Medical Community. Each segment takes on projects which the committee as a whole supports in various ways. Attachment 4 is the complete report from each segment describing the various events and highlights from 2010. In addition, there definitely is opportunity for more volunteers to join, particularly in the medical, non-profit and faith segments. Please contact debra.vanduynhoven@cityofpaloalto.org, if you are interested in participating in CEAP. PaloAltoGreen Program Update The PaloAltoGreen renewable rate option remains stable with 21% of electric customers participating in the program. By far the majority of participants are residential. While the program remains the top program in the country by percentage of participation, participation has levelized due to the limited number of customers who wish to take on an added expense (particularly in this economy) and to the difficulty at reaching the next segment of customers, beyond those that are most strongly interested in green issues and renewable energy. The program participants collectively subscribed for 71,334 MWh of renewable energy credits (RECs) through the program in 2010; this generation is estimated to have displaced 38,775 tonnes of CO2 in 2010. The municipal operations subscribed for 8,988 MWh of RECs or 12% of the total amount purchased. Utilities Renewable Energy Supply In May 2010, Council approved new contracts for renewable energy supplies from two landfill- gas-to-energy projects. These projects are expected to begin operations in 2013. On April 11, 2011, the Council is expected to consider another renewable energy contract from a geothermal project, which is expected to begin operating in late 2012. With these additions to the electric supply portfolio, renewable energy will provide over 30% of the City’s total electricity needs by 2013. Increased renewable energy supply is a primary strategy in reducing the community GHG emissions. B. Energy Supply and Conservation: Gas Utility Long-term Plan (GULP) April 11,2011 Page 4 of 14 (ID # 1508) Utilities staff has worked with the Utilities Advisory Commission (UAC) since June 2010 to revise the Gas Utility Long-term Plan (GULP). The GULP addresses activities related to long-term (10 to 20 years) gas resource acquisition and management including implementation of related Council policies. Two GULP strategies are specifically related to the Council priority of Environmental Sustainability. One is directed at maximizing the efficiency of gas usage in the City. The strategy requires using a reasonable carbon adder to calculate cost-effectiveness so that the environmental aspect of efficiency is valued appropriately. Using a carbon adder ensures that the long-term liability of the costs of buying allowances for carbon emissions is incorporated into the investment decision for gas efficiency measures. The other strategy is focused on climate protection and requires staff to pursue cost-effective “green” gas, when it can be purchased for the cost of “brown” gas plus an appropriate carbon adder. Currently staff is pursuing several non-fossil fuel gas opportunities through Palo Alto’s Northern California Power Agency (NCPA) membership. If any cost-effective non-fossil fuel gas is available, it may be used for an extension of the PaloAltoGreen electric program to natural gas. The Council approved the GULP plan in March 2011 Long-term Electric Acquisition Plan (LEAP) Staff also worked with the UAC since June 2010 on revising the Long-term Electric Acquisition Plan (LEAP) in an effort to balance environmental and economic sustainability. The LEAP addresses the functions related to the pursuit and management of electric resources and includes implementation of related Council policies and plans for energy efficiency, renewable energy, and greenhouse gas (GHG) emissions reduction. The LEAP includes the maximization of cost-effective energy efficiency, examination of alternative ways to pursue renewable energy, and exploration of the feasibility of setting GHG emission reduction targets for the electric supply portfolio. The LEAP contains a Renewable Portfolio Standard (RPS) requiring 33% of the City’s electric usage to come from renewable energy supplies by 2015 with a rate impact of no more than 0.5 cents/kilowatt-hour. Thus, Palo Alto’s RPS is more aggressive than the requirement that is expected to become state law this year—33% renewable by 2020. Although renewable supplies are more expensive than traditional “brown” supplies, the plan is to first minimize all supplies by maximizing efficient use of energy. Reducing demand saves money and reduces the need to buy renewable energy. The Council approved the LEAP revisions in March 2011. LED Streetlight Replacement Palo Alto undertook an evaluation of alternative streetlight technologies in conjunction with the Pacific Northwest National Lab (PNNL) in summer 2009. The evaluation covered both Light Emitting Diode (LED) and induction streetlights compared to the existing High Pressure Sodium (HPS) streetlights on both residential and commercial streets. Results of the evaluation were published jointly with PNNL in June 2010. The report found that LED streetlights are more cost April 11,2011 Page 5 of 14 (ID # 1508) effective than induction and HPS streetlights based on energy and maintenance cost savings, with better illuminance performance compared to the other two streetlight technologies. Palo Alto issued an RFQ for the purchase of 600 LED streetlight fixtures (around 10% of the City’s streetlights) in September 2010 and received 20 bids. City Council approved the contract with Leotek for the purchase of the LED fixtures in November 2010. This project was funded by stimulus grant funds received by the City. These LED fixtures will replace existing 250W HPS fixtures on El Camino Real between San Antonio Road and University Avenue and also on Alma Street between San Antonio Road and University Avenue. Installation of the LED fixtures is projected to commence beginning in April and is expected to be completed within a month. Commercial Customer Demand Response Pilot Program The City plans to implement a pilot program to reducing electricity usage during high-demand periods in the summer. This “Demand Response” (DR) Program is intended to 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. By reducing customers’ electricity usage during these high-demand periods, the City’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 will be launched in May 2011 and will run for two years, after which time expanding the program will be evaluated. City Hall will be a participant in this pilot program. The Council approved the program in March 2011. Emerging Technologies Demonstration and Piloting Program Between our city-owned Utility, and our community comprised of tech-savvy early adopters, we have a great opportunity for partnership with the business community to encourage and implement emerging “clean” technologies, by attracting innovators with the opportunity to test their technologies.. Interdepartmental leaders are meeting to decide how best to structure such a program, keeping in mind the potential resource and policy implications. We expect to bring our ideas to UAC and Council for support and for volunteers to help set the criteria for selection and to serve on the committee that leads the selection of partners. By late spring, we expect our formalized system will be fully operational, with our first official pilot to launch by winter. C. Water Conservation and Resource Management: Recycled Water Update Highly treated wastewater from Palo Alto’s Regional Water Quality Control Plant is increasingly being used for landscape irrigation, to save precious potable water supplies for human consumption and use. Total recycled water deliveries have increased by 80 percent as the new distribution system in Mountain View’s “North of Bayshore” area began its first year of operation in 2010. As more customers come online, deliveries are projected to increase almost four-fold over pre-2010 years. To prepare for more distribution systems and increased use of April 11,2011 Page 6 of 14 (ID # 1508) recycled water, staff has been working to reduce the salinity of the water and remove the concern about its use on certain sensitive plant species. A number of key areas were identified in 2011 where salty groundwater is entering sewer lines. The Plant’s major Partners: Palo Alto, Mountain View and Los Altos, have now all adopted Palo Alto’s aggressive Salinity Reduction Policy and the areas found to be allowing infiltration will be fixed. Urban Water Management Plan (UWMP) The Utilities Department is in the process of updating Palo Alto's 2005 Urban Water Management Plan (UWMP). Urban Water Management Plans are prepared by California's urban water suppliers every five years to support their long-term resource planning and ensure adequate water supplies are available to meet existing and future water demands. The UWMP is must assess the reliability of water sources over a 20-year planning horizon considering normal, dry, and multiple dry years. The UWMP also provides a historical perspective for many of the numerous water supply and demand decisions that have been made over the years. Finally, the 2010 UWMP will contain the draft plan for the City of Palo Alto to meet its 20% water savings by 2020 obligations as outlined in state law (SB 7x) and reviewed by Council last April in CMR 212:10. Stormwater Rebate Program The Storm Drain Utility has offered a Stormwater Rebate Program to residents and businesses since 2008, providing financial incentives up to $1,000 (residential)/$10,000 (commercial) for measures that reduce stormwater runoff. Eligible measures include rain barrels, rainwater cisterns, permeable pavement, and green roofs. In addition to stormwater runoff reduction, some of these measures have supplementary sustainability benefits such as reduction in the use of potable water for landscape irrigation, reduction in the heat island effect of hardscape, and energy savings from reduced heating/cooling costs due to enhanced roof insulation. The stormwater rebates are available to all CPAU customers. Since 2008, rebates have been issued for 82 rain barrels and 28,500 square feet of pervious pavement. In 2011, the first rebate was issued for a green roof. The green roof was implemented on a new single-family residence, which was planted in sections with several various plant palettes. The roof garden is irrigated with an automatic drip irrigation system, but the irrigation may be able to be reduced or curtailed once the plants have become established. The green roof also increases the insulation rating of the roof and reduces the heat island effect of the house compared to a building with a conventional roof. D. Natural Environment: Urban Forest Master Plan The Urban Forest Master Plan is an important component of the City’s sustainable development goals. In recent decades, new and/or increased pressures associated with development and the provisions of services have introduced unprecedented pressures that sometimes conflict with 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 April 11,2011 Page 7 of 14 (ID # 1508) economic benefits: energy conservation, air quality improvement, CO2 reduction, storm-water control, and enhanced property values. 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. 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. Farm Shop Downtown Farmer’s Market In April 2009, the FarmShop at King Plaza (in front of City Hall) was launched with Capay Valley Growers. The original intent of this pilot program was to provide local, organic produce for the community and City employees, which is in line with the City’s overall goal of sustainability. Staff found that the original King Plaza location did not drive enough foot traffic to establish a self-sustaining market. Council was also concerned about the market management costs for the pilot program and directed staff to find an alternative solution or a volunteer to fill such a role. As a result the FarmShop Board moved the FarmShop to the newly renovated Lytton Plaza, found a volunteer market manager and a community group, Palo Alto Institute, who offered to become the fiscal support of the market. Unfortunately, the market has not flourished and the FarmShop Board is considering alternative locations or times. Bixby Park Opening Another 46 acres of closed landfill will be added to the 29 acres already open to the public at Byxbee Park this summer. The two sections of closed landfill that will be accessed are designated Phase IIA (closed in 1992) and Phase IIB (closed in 2000). Work is now underway that will prepare these areas for public access including importing and grading clean soil to repair low areas (settlement), undergrounding utility pipes and seeding the area with native grasses. The fence line between Byxbee Park and Phases IIA and IIB will be removed by July 1, 2011. Although funding is still needed for other amenities (such as improved trails, viewing platforms, hillocks and benches), opening the area to the public is a key first step. Another 51 acres will be added to this park in 2013 after final closure of the last active landfill section (Phase IIC) for a combined 126 acres of pastoral park. Pesticide Free Parks April 11,2011 Page 8 of 14 (ID # 1508) The City of Palo Alto is a Bay Area leader in reducing the amount and toxicity of its pesticides used in parks, open spaces and City facilities. Since 2005, total ecotoxic pesticide use has fallen 89% which is significant because ecotoxicity reduction is the primary driver of the City’s Integrated Pest Management Policy and adopted Bay-Friendly Landscaping principles. In 2010, staff experimented with designating Sarah Wallis Park in the California Avenue area as pesticide free, where no chemical controls for weeds, insects, fungi and rodents would be used. The pilot was successful and resulted in the Parks Department adding additional sites over the course of the year at: Ventura, Terman, El Palo Alto, Boulware, Hopkins, and Scott Parks. These locations join the pesticide-free facilities located at the Regional Water Quality Control Plant, Animal Services Center and three substations. With these additions, the Parks Department will have met its initial goal of having seven pesticide-free parks prior to its 2012 target date. Pesticide-free parks require more maintenance and a higher tolerance for weeds, but are safer for people and pets that use them and for local creeks which are sensitive to pesticide runoff. Staff will continue to evaluate the success of these pesticide-free parks, as well as look for other suitable locations. School fields are not sprayed and a pesticide-free buffer of 100 feet is kept around all creeks and playgrounds. Although the City is making significant steps to reduce its pesticide use and toxicity, the single largest source of pesticide pollution in Bay Area creeks continues to come from residential applications of pesticides, especially those used for insect control. Staff continues to promote the use of less toxic pest control for residential do-it-yourselfers by looking for Our Water, Our World shelf tags and factsheets in local garden and hardware stores and by visiting www.ourwaterourworld.org to learn more. Staff also encourages residents to use pest control companies that are EcoWise Certified–a rigorous Bay Area certification program that was developed by water quality and pest control professionals. E. Waste and Materials: Master Plan update to Water Quality Control Plant and Energy/Compost Feasibility Study The major components of Palo Alto’s Regional Water Quality Control Plant are now 40 years old and a Long Term Facilities Plan for refurbishing and upgrading the Plant is being developed. One of the key questions is how the wastewater solids should be managed in the future. Currently, the solids are incinerated, and other options to use the energy contained in the solids are now being explored. Also underway is a companion study looking at energy utilization from yard trimming and food scraps. Council directed Staff to study all three of these organic residuals. The first study to be completed will be the Energy/Compost Feasibility Study in the fall of 2011, with the Long Range Facilities Plan for the Plant to be completed in mid 2012. The goal is to find cost effective technologies to recover energy and other resources from yard trimmings, food scraps and wastewater solids; and to determine whether new facilities should be located in Palo Alto, or elsewhere. Zero Waste -Commercial Food Waste Roll-out report April 11,2011 Page 9 of 14 (ID # 1508) Commercial compostables service has been offered by the City’s collection contractor, GreenWaste of Palo Alto, since July 2009. GreenWaste’s outreach staff has actively targeted food waste-generating businesses (primarily restaurants) for participation in the compostables collection program. The average monthly tonnage of commercial compostables collected by GreenWaste has increased by 30% in FY11.As of January 2011, GreenWaste has collected and processed 6,382 tons of commercial compostables and is on track to meet their FY11 goal of 9,000 tons. Report on Polystyrene and Plastics Ban Local supermarkets and restaurants help reduce the amount of plastics entering creeks and the San Francisco Bay. In the past year and a half, Palo Alto restricted the use of single use plastic checkout bags at large supermarkets and expanded-polystyrene (foam) disposable food service containers at food service establishments. Staff confirmed that all seven of the large supermarkets stopped using single-use plastic checkout bags and that more than ninety-five percent of restaurants stopped using expanded-polystyrene (foam) disposable food containers. The restrictions helped reduce the quantity of plastic bags and expanded-polystyrene entering the natural environment, but there is still more work to be done. Therefore, in the near future staff will research broadening the plastic bag ban to include more stores and will investigate charging a fee for check-out bags. Green Purchasing In 2010 the two major green purchasing accomplishments included the addition of Bay Friendly standards for landscape maintenance to parks maintenance contractors and stronger less-toxic pest management standards for the new golf course contractor. Landscape maintenance features several requirements for OMRI Certified organic fertilizers, increased mulching to reduce the need for weeds, and keeping leaf litter around trees and planters where appropriate to return nutrients to the soil in lieu of increasing the need for additional fertilizer. The golf course contractor is required to use trapping for gophers and ground squirrels and various less- toxic approaches for golf course maintenance. Green Purchasing efforts in 2011 will focus on reducing plastics from the purchasing supply chain in tandem with the City of San Jose. The two cities are co-leading the effort. The project is in the beginning stages and will be reported on in 2012. In addition, the City’s office supply contract is being reviewed again with the intention of increasing recycled content and reduced- toxicity of key office products that are most used. F. Built Environment: Green Building Program Highlights The Green Building Program will reach three years of implementation in July of 2011. Implementation highlights include the following: ·789 permit applications were covered by the green building program in 2010, an increase of 83% from 2009. The increase in applications may be explained by the late 2009 ordinance amendment to decrease the construction and demolition debris April 11,2011 Page 10 of 14 (ID # 1508) diversion requirements for projects over $75,000 in valuation to $25,000. 32% of the applications were nonresidential and 68% residential. ·240 green buildings have been completed or are under construction. Sector and Certification Type # of Green Buildings Completed # of Green Buildings Pending Certification # of Green Buildings Under Construction Residential –Build It Green, Green Point Rated 26 35 125 Nonresidential –LEED Rating System (Verified by the City or USGBC) 21 12 21 ·18,325 tons (120 tons of salvage) of construction and demolition debris were diverted from the landfill for reuse or recycling amongst 465 permits in 2010. 5,050 tons (27%) were attributed to the demolition at 3445 Alma for the future Alma Plaza and 3700 Middlefield for the Mitchell Park Library and Community Center. ·$219,207,217 estimated to be spent on construction of green buildings. ·1,860,188 square feet of green building construction. ·> 2,122 people live or work in a green building. ·1,881,494 gallons of water per year are expected to be saved over state and national baselines. ·236,919 kWh of electricity per year are expected to be saved over state and national baselines. ·99,966 kBtu of gas per year are expected to be saved over state and national baselines ·9 commercial renovation projects provided the City with Energy Star Portfolio Manager benchmarking reports providing valuable data on operational performance. ·$188,620 in fees was collected in building permit revenue related to green building requirements (debris diversion fees totaled $137,089 and green building fees totaled $51,531.) ·$9,000 in fines were collected from 9 non-compliant projects (3 from 2009 and 6 from 2010). 6 permits were found noncompliant with waste diversion requirements resulting in an estimated 99 tons of waste not diverted from the landfill. April 11,2011 Page 11 of 14 (ID # 1508) ·Staff presented information about the City’s Green Building Program at the U.S. Green Building Council International Conference, Greenbuild, in Chicago and taught a class entitled “Introduction to the 2010 California Green Building Standards Code” throughout the state of California to more than 500 public agency staff and private sector professionals with CALBO (California Building Officials). Energy Efficiency in Existing Buildings Over the last few months several cities throughout the country have adopted, or are the in the process of adopting, energy performance audit and/or reporting requirements for existing buildings. In December 2010, staff presented Council with revisions to the City’s Green Building Program that included the ability to require energy performance reviews of buildings covered under the program during their operation. Council requested that staff return in 2011 with a more formal program that includes staff resource impacts, the percentage of buildings subject to the program and the frequency of reporting data. Sustainability and the Comprehensive Plan Amendment The existing Comprehensive Plan contains economic, equity and environmental policies that support the City's sustainability goals. Many of these policies are implemented by existing programs and plans. However, some policies do not have corresponding programs or plans, and there are also City sustainability programs and plans that do not relate to existing policies in the Comprehensive Plan. The existing Comprehensive Plan does not currently directly address important sustainability issues related to: local sustainable food systems, public education programs related to sustainability, LEED-ND (LEED for Neighborhood Development), High Speed Rail and sea-level rise. Staff and consultant propose three ways to address Sustainability in the Comprehensive Plan Amendment and will work with the Planning and Transportation Commission (PTC) subcommittee reviewing the policies and programs to develop sustainability text, including: 1.Review existing vision statements, goals, programs and policies to add sustainability support where appropriate and add a new definition in the glossary for "sustainability". 2.Consider additional sustainability topics not currently covered in the Comp Plan or other City policies or programs. 3.Restructure the Natural Environment Element to more comprehensively address environmental issues and current programs and policies adopted over the last 10 years. For example, new and existing goals would be developed around the major themes for this section.The new policies and programs implemented over the last several years (green building, zero waste, recycled water, climate protection plan, and renewable energy programs) would fall under these major themes and categories.The major themes and categories approach also provide greater flexibility for future environmental efforts and policies. City Facilities Energy Efficiency Projects April 11,2011 Page 12 of 14 (ID # 1508) City Hall was built in 1966 and most of the building systems were original to the building and needed refurbishment or replacement, so modern designs for these building systems were developed to provide greater energy efficiency.Construction work on this two phase project started in the fall of 2008.During the first phase the control system that regulates carbon monoxide in the parking garage was optimized.The exhaust fans on this system received new high efficiency motors.All of the air handling units were refurbished and received new high efficiency motors.The single boiler was replaced with three higher efficient boilers, which are staged according to demand.A primary and secondary pumping system with high efficient motors for the boiler system was also installed to achieve more efficient hot water pumping, along with a similar system for the chilled water system. The second phase of the project started in the fall of 2010.During this phase of the project most of the electric reheat coils were replaced with more efficient hot water reheat coils.On each of the floors all of the variable air volume boxes were replaced so there is better air flow and temperature control.Package HVAC units that served the 8th floor were replaced with variable air volume boxes that are fed from the existing house air handling system.A lighting control system was installed for the tower floors, which will allow for on/off scheduling of lighting systems.Lastly, upon completion of the project a new HVAC Energy Management Control System will be installed to optimize all of the mechanical systems to provide greater energy efficiency and better occupant comfort.The second phase is scheduled to be completed in the summer of 2011. It is preliminarily estimated that the Phase 1 upgrades resulted in a 10% reduction of electricity consumption; this is equivalent to greenhouse gas reduction of 160 tons per year and will result in an annual electric bill saving of over $33,000. A more detailed assessment, including water and natural gas savings will be formulated upon completion of the upgrades. G. Transportation: CNG Station Pilot Project In December 2010, Public Works launched a pilot program to allow public access to CNG fuel at the City’s Municipal Services Center (MSC). Customers are allowed access to the CNG dispensers between 9:00 AM and 2:00 PM, Monday through Friday. As of March 10, eight customers were participating. Public Works is currently in the process of repairing a surplus CNG compressor station at the MSC, and repurposing it to provide 24/7 public access. The dedicated public facility is expected to be operational in mid-May. EV Strategies and Efforts Over the past year a number of initiatives have developed to support the new and developing Electric Vehicle (EV) market. Staff is working to streamline the permit process for the installation of EV chargers at homes and businesses and is looking to take advantage of potential funding opportunities to install chargers at publicly accessible locations. The first opportunity is the Recharge America program, where the city will be receiving between 3 and 5 Coulomb chargers for free, provided that the City pays for the installation. April 11,2011 Page 13 of 14 (ID # 1508) Staff is targeting downtown garages for this project. Staff also reached out to the Palo Alto Unified School District, which will receive one free Coulomb charger for the District offices at 25 Churchill Ave. This project is expected to be completed by early summer. The second project is sponsored by Bay Area Air Quality Management District (BAAQMD) and the California energy Commission (CEC) from whom we have received $36,000 and $10,000 respectively to install 4 and 5 chargers in various locations in Palo Alto. This project will be completed by the end of the year. Both projects will help staff determine the current demand for EV chargers and will help in planning for future installations. Long-term plans for EV initiatives are to develop a City EV policy, residential and commercial permitting review, and plan to offer time-of-use (TOU) electric rates. ZipCar Over the past 10 months City staff worked with Stanford, ZipCar and the Sheraton to install 2 ZipCar spots in the Palo Alto Transit Center parking lot (in between the Sheraton Hotel and the CalTrain University Station). Stanford already had a successful ZipCar program with more than 26 vehicles in 12 locations and they wanted to partner with the City to expand that network. The cars became available on March 4th and immediately were reserved by both Stanford and community members. This program will allow for City staff to evaluate if there is a need to further expand this relationship. Bike Share The City of Palo Alto along with the Valley Transportation Authority (VTA) and the Cities of San Jose and Mountain View have been working on a countywide public bicycle sharing program that would have consisted of 100 bicycles throughout the Santa Clara County. In an effort to secure additional grant funding for a larger project, VTA partnered with the Bay Area Air Quality Management District (BAAQMD), San Francisco MTA, the County of San Mateo, SamTrans, and the City of Redwood City to secure a $4.29M grant from the Climate Initiatives Competitive Grant Program from the Metropolitan Transportation Commission. The City of Palo Alto is currently working with the VTA to implement the program and to identify site planning for potential bike share locations. The entire program will consist of approximately 1,000 bikes, with Santa Clara County receiving approximately 400 bikes. The number of bikes that will be based is Palo Alto has yet to be determined, but is estimated at about 100 bikes. The main bike share kiosks will be based at major Caltrain stations, with satellite pods spread out within three miles of the main kiosks. The bicycle share project is expected to begin operations in spring 2012. The City of Palo Alto also has an employee bike share program with approximately 40 bikes in various city facilities. It was launched in the fall of 2009 and this program recycled the bikes that were used for the Senior Games event. Unfortunately, this internal bike program is not used extensively, and does not have defined staffing or maintenance provisions. April 11,2011 Page 14 of 14 (ID # 1508) Employee Commute Program In July, 2010, the employee commute program was modified to enable benefits-eligible employees who use transit or ride in a vanpool to take full advantage of federal tax law. The City provides an equitable 25% subsidy for their qualified commute expenses, and the remainder is covered by pre-tax salary deductions up to the federal monthly maximum of $230. This resulted in typical savings of 52% of transit or vanpool costs, and has helped offset recent commute cost increases for these employees. The modified program also includes a tax-free $20 incentive for regular bike commuters, in the form of a voucher that can be used at any bike store for repairs, maintenance and equipment related to their bike commute. An evaluation of how these changes have impacted employee commute choices and the associated greenhouse gas emissions is planned for June, 2011. It will include participation statistics and an employee commute survey in conjunction with 511.org. Attachments: ·Attachment 1 Environmental Sustainability Programs and Plans in the City of Palo Alto (DOC) ·Attachment 2 Summary of Climate Protection Plan (DOC) ·Attachment 3 CEAP Report 2011 (DOC) Prepared By:Debra van Duynhoven, Department Head:James Keene, City Manager City Manager Approval: James Keene, City Manager Environmental Sustainability Programs and Plans in the City of Palo Alto Page 1 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * Climate Change and Adaptation including GHG inventories and mitigation measures ·CCAR (2010)/ The Climate Registry (2011) ·California’s new regulations in 2011-12 to implement Global Warming Solutions Act of 2006 (AB32) ·Western Climate Initiative ·Renewable Portfolio Standards –Internal mandate 20% by 2012 and 33% by 2015; Governor’s executive order and proposed CARD Rules 33% by 2020 and new laws proposed to codify this goal. ·Palo Alto 2007 Climate Protection Plan targets for 2012 and 2020 ·Palo Alto Climate Protection Plan and GHG Monitoring Program ·Utilities Renewable energy supply goal ·Participation in USEPA’s SF6 gas reduction and reporting program for Electric Utilities ·Community Environmental Action partnership (CEAP) – Green Team for City Operations ·Participation in Regional Programs and Initiatives (Bay Area Climate Change Collaborative, Joint Venture Silicon Valley – Climate Protection Task Force, Sustainable Silicon Valley, International Council for Local Environmental Initiatives (ICLEI), California Municipal utilities Association (CMUA), EV User Groups and Stanford) ·Community Environmental Action partnership (CEAP) ·Utilities conservation related programs ·Palo Alto Green – voluntary renewable energy program ·Community Environmental Action partnership (CEAP) ·Utilities conservation related programs ·Palo Alto Green – voluntary renewable energy program Energy Supply and Conservation including demand management, smart grid, alternative sources ·California Energy Code Amendments (Titles 20 & 24) ·Third Party Measurement and Verification ·Tiered Electricity rates to promote conservation ·Long Term Electric Acquisition Plan of 2011 (LEAP) ·10-Year Electric Efficiency Goals and Plan of 2010 ·Gas Utility Long-Term Plan of 2011 (GULP) ·Home energy efficiency analysis (Acterra Green@Home and on- line audits) ·Solar Water Heating program ·Photovoltaic (PV) Partners program ·Solar Water Heating program ·Photovoltaic (PV) Partners program ·Commercial Advantage Rebate Program ·Right Lights Plus Direct Install Program Environmental Sustainability Programs and Plans in the City of Palo Alto Page 2 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * ·Utility Efficiency and Conservation Reporting (SB1037 and AB2021) ·SB1 and AB920 –PV Net Metering and Rebates Act ·AB1470 –Solar Hot Water and Efficiency Act of 2007 ·10-Year Natural Gas Efficiency Goals and Plans of 2011 ·LED Street Lights Pilot Project of 2009 and installations planned in 2011 utilizing federal government stimulus funds ·City facilities energy efficiency goals/projects and city hall systems upgrades ·LED Traffic Signals ·Photovoltaic demonstration projects at MSC, Baylands Nature Center, Cubberley Community Center and Arastradero Gateway Nature Center ·SMART Energy rebate Program for appliances, insulation, furnaces, etc. ·Refrigerator Replacement & Recycling Incentives ·Residential Energy Assistance Program (low income) ·Lighting Pilot Projects ·Home Energy Reports (fall 2010) ·Home Efficiency Kits ·Improving Efficiency and Using Technology Workshops/Seminars ·Online Analysis Tools ·New Construction and Retrofit Rebates ·Home Energy Reports ·Commercial & Industrial Energy Efficiency Programs ·Electric Efficiency Financing Program (summer 2010) ·Commercial Kitchens Program ·School District Outreach & Incentives by Utilities ·Plug-in Program (distributed power generation) ·Interest Free Loan for Efficiency Upgrades in Commercial Buildings ·Commercial customer summer demand response pilot program 2011-12 Water conservation and resource management including water quality, storm water, waste water and bay water ·Water Efficient Landscape Ordinance ·Recycled Water Ordinance ·California Urban Water Conservation Council’s Best Management Practices ·State Green Building Code (CALGreen) ·SBx7-7 (20%x2020) ·Plumbing Code ·Upcoming Gray water code ·Various sanitary sewer ordinances to reduce ·CPAU Urban water Management Plan ·Water Conservation Implementation Plan (BAWSCA) ·20%x2020 potable water use reduction ·EPA WaterSense Partner ·Alliance for Water Efficiency (AWE) partner ·Demonstration gardens at Mitchell Park Library and Community Center, Downtown and Main Libraries ·Rebates & fixture ·Water wise house calls ·Water conservation rebate programs (landscape rebate program, ET controller rebates, high efficiency toilet rebate, & clothes washer rebate) ·Storm water rebates ·Save the Bay ·BAWSCA Workshops ·Santa Clara Valley Water District (SCVWD) Workshops ·Bay-Friendly Workshops and program ·Landscape Surveys ·Indoor Water Surveys ·Storm water rebates ·Water conservation rebate programs (landscape rebate program, ET controller rebates, high efficiency toilet & urinal installation & rebates, commercial clothes washers, water efficient technology incentives, submeters, pre-rinse spray valves) ·BAWSCA, SCVWD, Bay Friendly Workshops Environmental Sustainability Programs and Plans in the City of Palo Alto Page 3 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * copper, heavy metals, FOG (fats, oil, grease) and other pollutants ·Tiered Water rates to promote conservation ·Once-thru cooling ordinance ·Ahwahnee Principles adopted by Council ·Recycled water encouraged for use on construction sites for dust management retrofits ·Landscape irrigation system improvements ·CLEAN South Bay ·Complete ultraviolet light water disinfection unit ·Mercury reduction ·Reducing salinity of recycled water ·Integrated Pest Management Program ·Various pollution prevention efforts: tricolosan and pharmaceutical collection ·Conversion of turf fields to artificial turf at four sites ·Expansion of use of recycled water at park and median sites ·Water efficient landscape literature ·Our Water, Our World (less toxic pest control program at local hardware and garden centers) ·Pharmaceutical collection ·Mercury device collection ·School programs (Regional Water Quality Control Plant (RWQCP)led and County led) Natural Environment including land use issues, stewardship programs, parks, open space, biodiversity, invasive plant species contaminated sites and green purchasing practices, air quality and toxins ·Foothills Fire management Plan ·Baylands Conservation Plan ·Tree Preservation Ordinance ·Wood smoke Ordinance (requirements for wood burning stoves and fireplaces) ·Environmentally Preferred Purchasing ·Urban Forest master Plan -including Street tree inventory, Tree species data base, Block Side Species Replacement list, Updated Tree Removal Process ·Nature and Hiking programs ·Special events and educational programs ·Open space and trails ·Community gardens ·Junior museum ·Farmer’s markets (including Saturday’s Downtown market, Sunday’s Cal Ave market and the Downtown FarmShop) ·Acterra ·Canopy ·Committee for Green Foothills ·Environmental volunteers ·Green Business Program (run by County; facilitated for PA businesses by Public Works) ·Clean Bay Businesses Environmental Sustainability Programs and Plans in the City of Palo Alto Page 4 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * ·Nature and environmental interpretive centers and Junior Museum ·Open space habitat preservation ·Pesticide Free Parks ·Baylands conservation plan ·Foothills fire management plan ·Arastadero creek restoration ·San Francisquito Creek Flood Control ·Partnerships with Save The Bay, US Fish & Wildlife and Acterra for habitat restoration ·Friends of Foothills Park ·Friend of Palo Alto Parks ·Midpeninsula Regional Open Space district ·Peninsula Open space Trust (POST) Waste and materials including management of ZeroWaste, reuse, recycling, composting and cradle to cradle initiatives ·Zero Waste goal ·Demolition and Construction Diversion requirements ·Ordinance restricting polystyrene use by food service vendors ·Ordinance on single use carry-out shopping bags ·AB 939 ·AB 32 ·Zero Waste Operational Plan ·City facility recycling and composting programs ·SMaRT Station ·Product Stewardship/ Extended producer responsibility ·Green purchasing policy ·Paper reduction initiatives (CPP dept initiatives, double sided default, digital CMRs) ·Sustainable exhibits at Junior Museum ·Parks and Open Space Sustainable Operations ·Zero Waste Operational Plan ·BYOBag ·Palo Alto Recycling Drop-off Center ·HHW program (drop off and appointment) ·City–wide Garage Sale ·Curbside recycling and yard trimmings program ·Bay Friendly Gardening Workshops ·Zero Waste Operational Plan ·Composting program for commercial organics ·Business recycling program ·Demolition and Construction Diversion program ·Green Business Program ·BYOBag ·ZeroWaste Grant Program Environmental Sustainability Programs and Plans in the City of Palo Alto Page 5 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * ·Reduction of waste by facility renters at community centers Built Environment including urban planning, comprehensive plan, construction and demolition and green building ·Green Building Ordinance ·Demolition and Construction Diversion requirements ·Mitchell Park and all library projects ·Comprehensive plan ·New Construction and Retrofit Rebates ·Arastradero Gateway Educational Nature Center displays and building design ·Green Building Program ·Demolition and Construction Diversion program ·New Construction Rebate ·Green Building Program ·Demolition and Construction Diversion program ·New Construction Rebate Transportation including SB375 and AB32, shuttles, alternative commute, bike routes, high speed rail, EV and all forms of transportation ·SB375 ·AB32 ·Pedestrian Transit Oriented Development zones ·School Commute Corridor network ·City Employee alternative commute incentives ·Alternative fuel vehicles for City Fleet ·Biodiesel fuel program ·City and Regional Bike share ·EV charging stations at City Hall, downtown garages, and libraries – Summer of 2011 and 2012 ·Coordinated development of long term policy of EV and EV charging infrastructure –Fall 2011. ·Participation in the Bay Area Electric Vehicle Corridor Program and various joint grant opportunities. ·Bicycle Transportation ·Palo Alto Free Community shuttles ·Stanford Margarite Shuttles ·CalTrain ·VTA Routes ·Samtrans ·Way2go program ·511.org ·Palo Alto Bicycle Advisory Committee ·High Speed Rail ·CalTrain and the CalTrain Deer Creek Shuttle ·VTA Routes ·Samtrans ·High Speed Rail ·511.org Environmental Sustainability Programs and Plans in the City of Palo Alto Page 6 of 2 * Related agencies and programs listed in Italics Goal and Requirements (State and Assembly Bills (SB/AB), Codes, Ordinances and Mandates) Municipal and Regional Operations (including goals and programs) * Residential (including goals and programs) * Commercial (including goals and programs) * Plan ·Fire Engine Exhaust filtration spec ·Regional planning and coordination ·Pedestrian and Transit- Orientated Development ·Safe Routes To Parks program ·Bay Area Air Quality Management Transportation Fund for Clean Air (TFCA) program Page 1 of 5 Summary of Climate Protection Plan of December 2007 & Overarching Strategy to Meet GHG Reduction Goals of 2020 (CMR:435: 07) A. Summary Description of the 2007 Climate Protection Plan In December 2007 Council approved a Climate Protection Plan (CPP) that set a short, medium, and long term goals to reduce City operations and community greenhouse gas (GHG) emissions. These goals were: 1.Short Term Goal: By 2009, the City will reduce emissions by 5% from 2005 emission levels for a total reduction of 3,266 metric tons of CO2. 2.Medium Term Goal: By 2012 the City and Community will reduce emissions by 5% from 2005 emissions level for a total reduction of 29,702 metric tons of CO2. 3.Long Term Goals: By 2020, the City and Community will reduce emissions by 15% of 2005 levels, equal to 119,140 metric tons of CO2, and bring the community in line with State emission reduction goals. Outlined below in Figure 1 and Figure 2 are the City’s and Community’s GHG emissions profiles, as outlined in the 2007 CPP. The City’s emissions of 65,329 Metric Tons of CO2e (MT CO2e) and the community’s emissions of 728,720 MT CO2e combined is equivalent to approximately 14 tonnes per resident.Electricity and natural gas related emissions account for approximately 40% of the 793,621 MT CO2e total municipal plus community emissions.(Note: the natural gas leakage estimate has since been substantially revised downwards, from 19,358 MT CO2e to 4,717 MTCO2e.) Figure 1: Municipal GHG Emission Sources in 2005 (65,329 MT CO2e) Page 2 of 5 Figure 2: Community GHG Emission Sources in 2005 (726,720 MT CO2e) Source: Climate Protection Plan: December 2007 B. Short Term GHG Reduction Goals The City undertook a number of departmental level initiatives to meet the goal to reduce municipal GHG emissions by 5% at the end of 2009. Utilities energy efficiency and conservation programs were integral part of this effort. The initiative was classified under five main categories: employee education, electricity conservation and efficiency upgrades, paper use reduction, commute reduction, and waste reduction. A revised 2005 benchmark of 29,364 MT CO2e was established.This lower benchmark down from 65, 329 MT, figure 1 above) reflects the reduced estimate for natural gas leakage and biogenic emissions from the waste water treatment plant because the facility serves other cities too and Palo Alto has minimal control over those emissions. In April 2010, staff reported to Council that municipal GHG emissions declined by 11% in 2009 relative to the revised baseline year of 2005 (excluding employee commute estimates) (CMR: 194:10). Emissions were down from 29,364 MT CO2e to 25,518 MT CO2e. The principle contributors to this reduction are outlined below: ·Major upgrades and process improvements at the water quality plant, accounted for 75% of the reduction o Replace natural gas used in the biosolids incinerator emission control equipment with landfill gas that had previously been burned in a flare o Improve aeration system and replace air diffusers Page 3 of 5 o Install more efficient motors and lighting fixtures ·Upgrade building systems and fixtures o Lighting fixture upgrades at the Elwell Court building o Reduced lighting levels at selected locations o City hall upgrades: motors, boilers, HVAC system (in progress) C. Measurement and Reporting of GHG Emissions In order to meet the long term GHG reductions, which is the difference between the 2005 GHG estimates and the 2020 emissions, a robust and consistent measurement algorithm needs to be established. The 2007 CPP estimates for 2005 emission was based on the ICLEI methodologies prevailing at that time. These methodologies are being revised and updated, and considerable research has gone it to measurement and quantifying techniques over the past 4 years, as AB32 implementation regulations were developed. Staff is following those measurement methodologies and coalescing our initial estimates with the new ones to develop a more robust baseline GHG estimate for 2005 in order to more accurately measure the change the emission since then. This is a continuous process, and will have a more definitive update to Council in 2012 as AB32 implementation begins in earnest in California. Utilities Staff have developed a robust understanding of GHG measurement techniques for utility operations by participating in the voluntary GHG emissions reporting program since 2006. In 2006, the City reported its 2005 municipal GHG emissions estimates to the California Climate Action Registry (CCAR), and has filed these reports every year since. A summary of emissions from 2005 to 2009 is shown in Figure 3 below.1 In 2010 The Climate Registry (TCR) has taken over the function of CCAR, and the City will be reporting its 2010 municipal emissions to TCR in the coming months. The graphics are provided for illustrative purposes, to show how the measurement of all six GHG gases (CO2, CH4, N2O, HFCs, PFCs, SF6) is important, and how the actual emissions associated with the City’s electricity supply varies widely with the hydro electricity generation in the electric supply portfolio. As an example, year 2006 was very wet and the City got a lot more hydroelectric supply, replacing market purchases (primarily consisting of natural gas based electricity supply) which the City otherwise would have purchased. It also includes methane (CH4) and nitrous oxide (N2O)from fugitive and process emissions which the City began reporting in 2008. 1 Several things to note about the year-by-year differences shown in Figure 3: ·Biogenic emissions from the landfill are optionally reported in CCAR and were not part of the 2005 report. ·For 2005 through 2007 only CO2 emissions were report. In 2008 and 2009 the City reported CO2 emissions as well as emissions of CH4, N2O, HFCs, PFCs, and SF6 –hence the presence of the Process and Fugitive Emissions categories in these years’ reports. ·The Process Emissions category primarily reflects N2O emissions from the Regional Water Quality Control Plant’s (RWQCP) operations. ·The Fugitive Emissions category reflects leakage from the natural gas distribution system as well as leakage of CH4 from the landfill. ·The Stationary Combustion category includes natural gas consumed by the City’s COBUG as well as for building heating use. And in the 2008 and 2009 reports it also encompasses N2O emissions from the wastewater sludge incinerator at the RWQCP. Page 4 of 5 Figure 3: Municipal Operations GHG Emission Sources, 2005-2009 0 10,000 20,000 30,000 40,000 50,000 60,000 2005 2006 2007 2008 2009 Mu n i c i p a l E m i s s i o n s ( T o n n e s C O 2 e ) Page 5 of 5 Despite all this effort, it is still possible that local development related emissions (more dense, but yet more building volumes and greater transportation needs related to population and economic growth) could negate much of the GHG emission reductions. Actually meeting the 15% community reduction growth will highly dependant on this inter-play between these two factors. In addition to initiatives within the City to reduce GHGs, the community is also focused on making a global impact based on technologies and ideas developed here in Palo Alto. Encouraging creative ideas and new thinking at our schools amongst our youngsters, collaboration with Stanford to develop new ideas and products, opening up the community to be a test bed to experiment with technology developed in Silicon Valley, and partnering with our sister cities in other countries are some of the ways in which Palo Alto can make a positive impact in reaching out to the globe and leave a lasting imprint towards reaching the global GHG reduction goals of 2050. 2011 ANNUAL REPORT Report to Council -Earth Day April 2011 2011 CEAP Annual Report page 2 CEAP The City of Palo Alto and community groups came together in 2008 to create the Community Environmental Action Partnership (CEAP), dedicated to improving the collaboration on important environmental issues. In particular, CEAP was created to help the community reach the goals in the 2007 Palo Alto Climate Protection Plan. In our inaugural meeting on March 5th, 2008, community members collaboratively defined CEAP's mission and goals. CEAP Mission: To bring the various segments of our community together to share knowledge, build mutual understanding, leverage resources, and both create and implement innovative environmental solutions. Goals: ·Identify and implement top-priority environmental initiatives with measurable objectives. ·Educate and engage each segment of the community in environmental initiatives that fit their needs. ·Create a vehicle for communication, education and awareness among the City and all segments of the community. ·Leverage resources and actions among segments by aligning and coordinating efforts. ·Connect with expertise, input and initiatives from the community and beyond to inform, improve and inspire innovative ideas and programs. ·Track and report progress toward objectives to the community. Organization The community is divided into eight “Segments (see below), and a “Liaison” is appointed to each. The Liaisons, which serve as an Executive Committee, meet monthly, but the goal is to have much of the work done by the Segments. The Segments and Liaisons are as follows: Segment Liaison Neighborhoods Lisa Altieri Faith Community Ben Hammett/Nancy Olson Schools Walt Hays Business Mark Sabin/Lisa van Dusen Medical Community Krisanne Hanson Government Wendy Hediger/Debra van Duynhoven Stanford Lucy Wicks Non-Profit Organizations Lauren Swezy 2011 CEAP Annual Report page 3 School Segment Introduction The work of this segment is carried out by the Sustainable Schools Committee (SSC), who goal is to assist the PAUSD in becoming more sustainable, particularly by reducing waste and resource use. It meets monthly, with the assistance and guidance of co-CBO Bob Golton and other District staff as appropriate. Members include representatives from the City’s Zero Waste Program and City Utilities (CPAU). Actions Action1 Wendy Hediger of the City’s Zero Waste Program hired the nonprofit Strategic Energy Initiatives (SEI) to help parents and students form and sustain Green Teams at as many public and private schools in the City as indicated interest. Action 2 Wendy, Zea Luce of Greenwaste, and Duane Kester (in charge of custodians) worked with Green Teams in rolling out a new program of recycling and composting at each school, involving three bins, posters, demonstrations, bin monitors, and other educational tools, achieving a 60% diversion rate and reducing the number of bins and pickups at every school. The total cost of garbage still increased because of substantial rate increases. However, if the schools maintain the same level of service for the rest of the school year, the District will have achieved $230,000 in avoided costs it would otherwise have paid. Action 3 The SSC worked with District staff in contracting to install PV on the Science Resource Center (SRC). (The Committee now also meets there whenever possible.} In addition, after months of deliberation and bids as high as $60,000, parent and SSC member Al Yuen designed, built and donated an Interactive Solar Display to be installed in front of the SRC. (The District did incur some costs for a foundation and ADA compliance.) The Display was so popular that Science Resource Head Rachel Jordan allocated $17,000 of the annual $50,000 educational grant from CPAU to have one built and installed at every school. Action 4 Committee member Karen Mathys worked with District staff in developing an Energy Monitoring Program, under which the District now generates a monthly report on comparative electricity, gas and water usage at each school and distributes it to the principals. Karen also produced a checklist of suggested ways for schools to reduce such usage. Action 5 Karen, Lisa Benatar, and Nico Janik worked with the District in developing a program they call “Get SET” (Save Energy Today), which includes a protocol for shutting down appliances during school breaks, saving significant energy. Action 6 With District cooperation, the three architectural firms implementing bond programs presented their plans and proposed sustainability features to the SRC. The Committee recommended that the District ask architect Lisa Gelfgand to oversee the sustainability aspects of all programs, and the recommendation was accepted. Action 7 The SSC had debated various PV programs for several years without coming to any conclusion. In July, however, Lisa Benatar presented the Solar Subcommittee with an analysis showing that with the conservative assumption of utility costs increasing by only 3%/year, and assuming that CPAU’s highest rebates are not exhausted before the District applies, purchase of 135 kW of PV for $800,000 would achieve cumulative savings of over $1.3 million over 25 years. Lindsay Joye of CPAU verified that analysis. With Bob’s help, Lisa, Lindsay and Walt presented that analysis 2011 CEAP Annual Report page 4 to Kevin, and the decision was made to install that amount of PV on five new buildings being built under the bond program. Action 8 After presentations from Energy Education, Inc. of their program to reduce energy use through behavior modification (costing $300,000/year over a four-year contract but potentially saving up to $4 million over 10 years), three volunteers on the SSC, Al Yuen, Karen Matthys and Bret Andersen, offered to provide some of the proposed energy management services on a volunteer basis, calling themselves the Resource Efficiency Team (RET), and the SRC approved. They recruited master graphic artist Kris Loew to develop attractive teaching aids and started to work with some pilot schools. However, Al and Karen got busy with work, leaving the entire RET program to Bret. While Bret is making a valiant effort, Walt believes that the job has proven too big for volunteers and is therefore recommending reconsideration of EEI. Action 9 The SRC put on one Green Team conference in the spring and another in the fall, where team members shared mutually inspiring programs and discussed solutions to common problems. New member David Greene, proprietor of the Live Green store downtown, which sells green items like materials for waste-free lunches, agreed to chair a Green Team Subcommittee Action 10 Having invested City funds in developing Green Teams and rolling out the new waste reduction program, Wendy and others expressed concern that without stronger staff support, both programs would wane. The SSC spent a good part of two meetings brainstorming how to generate greater support. Wendy developed a “checklist” of possible ways to do so, and Bob presented it to the principals at the beginning of the school year but got some pushback, possibly because the principals thought they were being asked to take all the actions on the list (while the real intent was to give a range of options). The SSC also decided to ask Kevin to include a request for support in one of his periodic emails to parents and principals. He did include such a request in one email to parents in January, after clearing it with principals (thereby accomplishing both tasks with one letter). The Committee is grateful for his help. Action 11 To achieve water savings, the CPAU has a program which would pay the District $1.50/square foot up to $30,000 for sod and irrigation materials on any conversion of lawn to drought-tolerant garden. The SRC decided to develop a demonstration garden next to the SRC so parents and principals could see what such a conversion would look like. Nico Janik, working with Claire Elliott of Acterra, took on the project, developed a complete plan and budget, and set a date for planting. Then Maintenance Supervisor Chuck McDonnell advised that the garden would probably fail without first undertaking a year’s program of weed removal, so the project was temporarily halted. However, Nico is working with Chuck to initiate the necessary weeding program so the garden can be planted next fall. In the meantime, Walt is exploring using a garden at Gamble Garden as a model. Action 12 The SSC met with Food Supervisor Alva Spence to talk about ways to eliminate materials that can’t be recycled or composted, and also offer healthier meals. Kristen Anderson followed up, and substantial progress has been made. An update, including samples of the new utensils and food, is scheduled for the February meeting. Future Plans 1.Continue with semi-annual Green Team conferences, and work with the District to generate greater staff support for the teams and activities like recycling and composting. 2.Complete demonstration garden and encourage schools to convert some non-play spaces. Also consider including a small model of rainwater harvesting. 3.Persuade the Board to finally adopt the Tree Policy proposed a couple of years ago. 4.Continue to pursue progress toward healthful and waste-free lunches. 2011 CEAP Annual Report page 5 5.Build on the savings achieved by the RET, by either investing in professional energy management internally or hiring a contractor such as EEI. Walt Hays, Sustainable Schools Committee Chair Nonprofit Segment Introduction Many nonprofits are struggling to stay afloat in this difficult economy.With limited resources, most are focusing their efforts on core programs. Environmental sustainability related to building operations, employee habits (commuting, recycling, etc.), and environmentally preferred purchasing policies are often overlooked. Through Connect the Dots, a nonprofit that helps other nonprofits green their facilities, the Nonprofit Segment of Community Environmental Action Partnership (CEAP) has been educating organizations within Palo Alto, and those doing business in Palo Alto, on the value of going green. We have taken the following actions over the past year: Action 1 Partnered with Zea Luce of GreenWaste to help Palo Alto Community Child Care (PACCC) improve recycling programs and implement composting in 19 facilities. Action 2 Consulted with Santa Clara County Girl Scouts, which has a facility in Palo Alto. Discussed the value of and options of “going green.” Action 3 Consulted with Children’s Health Council, Avenidas, the State Courthouse (which houses MayView Community Health Center), and three other nonprofits in Palo Alto to educate facilities managers on sustainability programs offered by the City of Palo Alto. Set up audits with RightLights (energy auditor) and WaterWise Consulting (water auditor) for four of these nonprofits. Action 4 Alerted members of the Nonprofit Segment of CEAP about upcoming environmental events. Future Plans 1. Work with additional Palo Alto nonprofits to schedule energy and water audits, and to educate them on the value of adopting environmental business strategies. 2. Help nonprofits conserve natural resources and save money, so they have more funds for core programs. 3. Continue to alert nonprofits about environmental programs and events. 4. Increase nonprofit participation in the Nonprofit Segment of CEAP. 5. Consider conducting educational events specifically for Palo Alto nonprofits. Neighborhoods Segment The Neighborhoods segment of the Community Environmental Action Partnership (CEAP) is continuing to work to engage members of our Palo Alto Neighborhoods in environmental education and action, particularly lowering our carbon footprint. Towards this effort, the Neighborhoods segment has worked on the following projects over the last year in 2010: 1)Green Teams in Palo Alto Neighborhoods! In 2010 we had our first year for our new Green Team in College Terrace and started outreach for a Green Team in Greenmeadow. In order to address the environmental challenges we face, like Global Warming, it will require action and lifestyle changes for all of us. These types of changes are fostered by communication and support among neighbors. So the primary project of the Neighborhoods Segment is to launch Green Teams in Palo Alto Neighborhoods to begin to create dialog, awareness and support in the community for positive environmental change. 2)Green Team actions & events: We had a number of successful events organized by the Green Teams in 2010, many of which engaged all of Palo Alto in environmental activities including education, action and fun! 1)Green Teams! 2011 CEAP Annual Report page 6 2010 was the first full year for our College Terrace Green Team and they are doing great! The Barron Park Green Team was in full swing in it’s second year. In fall of 2010 we reached out to Greenmeadow and are working on launching a new team in this neighborhood. For 2011 we have a large City wide project coming up and will be calling for volunteers across all the Neighborhoods in Palo Alto to participate. This will help us to expand the project out to other neighborhoods and get more involvement in the Green Teams. We are also working on a website that will help other neighborhoods to organize and engage in the Green Teams project. 2)Green Teams Action Events 2010: 2010 was the year of the big project for our Green Teams! We had two very large and successful projects –a Green Home Tour organized by the Barron Park Green Team and the Bike Palo Alto! event organized by the two Green Teams, College Terrace and Barron Park jointly. Both events were a great success, drawing over 300 people each! Barron Park Green Home Tour: The Barron Park Green Team organized a Green Home Tour in June, 2010. The project was lead and organized by Lynnie Melena, who organized a similar event in 2008 in Barron Park. All of the team worked hard to make the event a great success! The tour included 12 homes all with different green features, some more than one. We had everything from solar panels, passive solar design and construction to native and organic gardens. The tour also included lectures at four different lectures at four of the houses on the tour –getting started with composting, native plants, planting vegetables and chickens. The lectures were very popular, particularly the talk on chickens! The tour was a great success with over 300 participants. Bike Palo Alto!: The College Terrace Green Team and the Barron Park Green Team joined forces to organize Bike Palo Alto! in October 2010.This event was the idea of Robyn Duby, the co-chair of the College Terrace Green Team. Robyn’s idea was to get people out on their bikes and have a fun experience biking through Palo Alto. We came together and organized the event as a fun day of biking in Palo Alto where participants could learn about safety tips and the great bike routes in Palo Alto and have some fun! The goal was to encourage people to choose their bikes more often for local trips. All participants received a Palo Alto area bike map as well as a map with a specific ride for the day. Participants chose from three different rides –up North to Menlo Park, East to the Baylands or South to Mountain View. Each route had fun vendor stops along the way such as free ice cream at Baskin Robbins, free fruit at JJ&F Market and Mollie Stones and a free mug at Starbucks. We also had additional activities at the main location, Escondido School, including free bike maintenance provided by Mike’s Bikes, bike registration provided by the Palo Alto Fire Department, information on local bike resources and home make cookies! The event was a great success with over 300 participants. We had many asking if we were going to do this again next year, so we have decided to do Bike Palo Alto! #2 in 2011. In addition to these two large projects, the Green Teams had a few other small events and activities including team planning meetings, a Christmas potluck and “Green” Elephant gift exchange, the College Terrace Group worked through the Low Carbon Diet class, booths and activities at neighborhood events and weatherization parties. Future Plans We are planning to launch a few new Green Teams this year, possibly in Green meadow or other neighborhoods. We are also working on setting up a website to help the Green Teams organize and provide information on reducing carbon footprint to the neighborhoods. For events, we are planning to continue to create events in the neighborhoods and citywide to encourage environmental education and action. The Barron Park and College Terrace Green Teams have great plans for the upcoming year: (We are currently in our planning process and don’t have our final votes in on our projects for 2011 for both teams. So far we have our Bike Palo Alto! #2 planned for 2011 along with a tree planting in Barron Park. I will add these as soon as we have info in February.) 2011 CEAP Annual Report page 7 Jointly: Bike Palo Alto! #2 –the College Terrace and Barron Park Green Teams will be working together to host Bike Palo Alto! 2011. This year we will be expanding on our experience from 2010 and working to make this a bigger event engaging people from all across Palo Alto. Barron Park Green Team projects planned for 2011: ·Recycling Tour and outreach –the Barron Park Green Team is planning to set up a tour of the Green Waste facility in San Jose to see where our recycling goes and learn more about our new program and how we can get to Zero Waste! We will also visit Sierra Pacific Recycling, a commercial recycling facility in Redwood City. We are also considering other outreach activities to engage Barron Park neighbors in meeting the Zero Waste goal. ·Matadero Creek Restoration –the Barron Park Green Team will be partnering with Acterra to do a native plant restoration project at Matadero Creek. This will be a great project to engage neighbors in removing non-native species and planting natives in our own backyard. We will have several workdays with the project starting this summer/fall ·The Barron Park Green Team is also planning a few smaller events including possibly movie nights or book discussions on environmental topics. The College Terrace Green Team project plan 2011: ·California Avenue Improvement Project –the College Terrace Green Team is planning to stay in touch with the progress of the improvement plan development to inform members, attend meetings and give input on the project. We would like to encourage a bike and pedestrian friendly plan! ·Tool lending library –the College Terrace Green Team is looking at ways to create a website or other method for neighbors to lend and borrow tools and other items. Lending locally allows us to avoid purchasing new items and lower our carbon footprint! ·Outreach events –the College Terrace Green Team will be hosting outreach events to introduce neighbors to the Green Team and upcoming projects to expend membership. Submitted by Lisa Altieri, CEAP Neighborhoods Segment Liaison Medical Segment The Medical Segment has three large-scale medical organizations who are each active on their campus initiatives relative to sustainable improvements. In 2010, outreach to the smaller organizations who may be interested in greening their environments was established as a goal. This included outreach to medical offices, free-standing surgical centers, property managers for medically-intense office buildings within Palo Alto and regional Santa Clara County. The team organized a Medical Greening Conference targeted to these entities. Maria Biggs, as her project for Acterra's “Be the Change” program, took on organizing the event. The planning committee also included Krisanne Hanson, at that time Project Manager in the General Services Division of the Stanford University Medical Center; Dr. Cindy Russell, chair of the Environment Committee of the Santa Clara County Medical Association (SCCMA), and Walt Hays. The attendance was disappointing, but the program was informative and inspiring, and a video of it is on the SCCMA web site. The conference flyer follows Stanford University Medical Center’s update Stanford University Medical Center -Sustainability Highlights Infrastructure ·One of 100 hospitals participating nationally in year-long pilot program with the Green Guide for Healthcare’s (GGHC),Operation Section. There are ten sections in total and SUMC selected six to participate in; Integrated Operations and Education, Environmental Services (green cleaning), Foodservices, Facilities Management, Waste Management and Environmentally Preferable Purchasing. Allows for teams to compare fully realized “green operations” listed in the GGHC guide with our current systems, identifying areas of opportunity to improve. ·Applied for 2011 environmental award with Practice Greenhealth and received “Partner for Change” award two years running. Practice Greenhealth is a national healthcare 2011 CEAP Annual Report page 8 membership network, nearing 1000+ members seeking to green respective healthcare operations. SUMC will accept the award at CleanMed Conference in April. ·Resources applied to dedicate leadership for Sustainability program; new department formed, initial funds applied to support recycling container purchases, position approved to create Sustainability Director position. This process will be a conduit for communication, coordination, education and activation of the diverse portfolio of sustainable actions and reporting results. Waste Management Actions ·Completed capital construction project at Stanford Hospital dock, installing second compactor to streamline waste handling and prepare facility for single-stream recycling programs to be added in 2011. ·Implemented spring-cleaning and de-cluttering project called “Operation Clean Sweep”, in February through April of 2010. Results include removing 24.9 tons from operational areas in the hospital, sorted items for storage and staging off unit, repair, reuse, donation and recycling with only 1.8 tons entering the landfill –a 93% diversion rate for this large- scale project! One outcome of this cleaning and sorting project was our 1st Annual “Office Supply Swap Meet” held during Administrative Professional’s Week. 35 office professionals dropped off 1.2 tons of excess office supplies and returned to swap, with only 500 pounds remaining, all of which were donated to RAFT. Both programs were so popular they will return in 2011! ·Implemented green waste composting in December of 2009, with one complete year’s results totaling 291 tons diverted from landfill, through Greenwaste’s commercial composting operation. ·Completed preparations for implementing cafeteria-composting program, scheduled for spring 2011 implementation. ·In 2010, SUMC again achieved 1,000 tons per year diversion rate through donation and recycling efforts! Sustainable Food Operations ·Converted disposable serviceware items in Cafeterias to biodegradable products. ·Foodservice leaders expanded sustainable food programs in 2010 through: o Full implementation of “Farm Fresh” program offering organic meals to our patients on regular diets. Organic meals are prepared with recipes from Jesse Cool, local organic Chef, Restaurateur and cookbook author. Our patients receive a copy of the recipes to prepare soups at home. The team prepares an average of 300 organic meals per month! ·Local and organic food offerings in both cafeterias continue to expand into all areas with meat, dairy, produce, baked goods, plus daily vegetarian offerings now available. Staff has welcomed it with open arms! Utilities Conservation ·Completed detailed lighting retrofit opportunity analysis and prioritized projects for funding, CPAU rebate application and implementation. In 2010, two were completed with annual savings of 550,019 kWh and three additional projects are in final review with state OSHPD; expected implementation spring of 2011. ·Received complete review of water savings opportunities with Santa Clara Valley Water District and City of Palo Alto team leaders, related to primary water meter surveys. Prioritizing opportunities complete; plumbing fixtures selected for trial and performance testing with full-scale implementation expected in 2011. New Hospital Design Planning and development continues with architectural and sign plans for the Replacement Hospitals project with both buildings seeking LEED© qualifications. 2011 Program Plans With SUMC’s participation in the Green Guide for Healthcare, Operations Section Pilot Program, naturally occurring teams have been formed around the six areas of focus; Education, Green Cleaning, Foodservices, Facilities Management, Waste Management and Environmentally Preferable Purchasing. In 2011 we will add team members to these areas, create a Green Team Steering committee and develop individual department green teams. 2011 CEAP Annual Report page 9 · Attention Physicians and Office Managers How to Green Your Medical Practice Saving Green by Going Green Panel & Discussion Topics Include: Developing a green plan Greening your front office Green Pharmaceutical Program Energy & Resource Conservation Medical Waste Regulation and Recycling Tuesday, June 1st 6:00 PM to 8:30 PM Stanford University Frances C. Arrillaga Alumni Center 326 Galvez St., Stanford, CA Free Parking A cornucopia of delicious hors d’oeuvres will be served. Speakers include: Dr. George Tingwald “The Greening of Healthcare: From a Local to a Global Perspective -Acclaimed physician architect and planning director of Stanford Hospital, Dr. Tingwald is a chief consultant for the upcoming PBS documentary “The Greening of Medicine and Healthcare”. Dr. Joel Kreisberg “Greening your Medical Practice”-Dr. Kreisberg of the Teleosis Institute is a national leader in helping physicians transform their offices to promote health for people and the environment. He is dedicated to empower healthcare providers to become environmental stewards by practicing sustainability. For Information call the SCCMA at 408-998-8850 or visit www.sccma-mcms.org Sponsored by Stanford Hospitals & Clinics, Lucile Packard Children’s Hospital Foundation, Santa Clara County Medical Association and the Palo Alto Community Environmental Action Partnership (CEAP) There are many ways to save money. One important way is to green your office. We will present practical steps in this process, which will benefit your patients, yourself and the planet. Learn, share and be part of the solution. Learn more about green solutions at the Green Vendor Fair 2011 CEAP Annual Report page 10 Government Segment Introduction The Government segment of the Community Environmental Action Partnership (CEAP) was formed to educate and engage City of Palo Alto employees in environmental initiatives. Toward this effort, the Government segment formed a Green Team, a forum for employees interested in environmental protection to share ideas for improving the organization’s environmental performance and to create and implement projects that make these improvements a reality. The Green Team worked on the following projects in 2010: ·Zero Waste Services Roll-Out To City Facilities ·Mitchell Park Irrigation Project ·Great Race for Clean Air ·Bay-Friendly Demonstration Garden Zero Waste Services Roll-Out This project rolled out new recycling, composting and garbage service to all city facilities. The new services changed both how waste is sorted by employees and how it is collected. Sorting -Compostables were be added to collection –new green containers were placed in all work areas to collect compostable materials. Collection –Custodial staff now collect recyclables from desk areas. Staff is responsible for emptying their desk-side garbage containers into the larger work area collection containers. The new Zero Waste services reduced garbage service levels for City facilities (e.g., City Hall, WQCP, MSC, Fire Stations, Libraries) by 30%, increased recycling service levels by over 50% and added compostables service. Comparing the baseline (June 2009 services) with June 2010 services, the City is avoiding $120,000 in annual disposal costs. Mitchell Park Irrigation Project The Mitchell Park Irrigation Project retrofitted the irrigation of a parking island at Mitchell Park from fixed non-uv resistant plastic risers to Rainbird 1800 series pop-ups. The previous system used approximately 125 gallons per minute with 34 fixed risers using full circle nozzles. Now the entire parking island is currently using approximately 43 gallons per minute. That's almost a 2/3 water reduction per minute! Great Race for Clean Air During the months of August and September, City of Palo Alto employees participated in the 2010 Great Race for Clean Air Challenge, sponsored by the Bay Area Air Quality Management District and 511.org.This friendly competition among Bay Area employers during the smoggiest months of the year helped raise awareness that solo driving to work is a major contributor to both regional air quality problems and CO2 emissions, and individual choices can make a difference. A total of 88 City of Palo Alto employees registered on the Great Race web site, logging in green transit, carpooling, walking and bike commute trips saving 17.2 tons of CO2 emissions. The City of Palo Alto and Facebook actually tied for highest participation among large organizations (over 1000 employees) in Santa Clara County. Each was recognized with trophies and commendations at the meeting of the Santa Clara County Board of Supervisors on December 7, 2010. Bay-Friendly Demonstration Garden This project is a collaborative effort involving the City Green Team, City Departments and Acterra to create a demonstration garden at Lucie Stern Community Center to help the community learn about the benefits and beauty of Bay-Friendly gardens. This project is still in the planning phase and is scheduled to be completed in 2011. Future Plans Plans for the coming year, include the following: 1) Continuation of the Bay-Friendly Demonstration Garden project; 2) Brown Bag Talks; and 3) Holiday Waste Reduction Tips Prepared by Wendy Hediger, Kathy Durham and Miguel Chacon January 2011. 2011 CEAP Annual Report page 11 Business Segment The Business Segment Liaison is Mark Sabin who is also involved in WaveOne and thus this report is focused on WaveOne’s activities. Wave One Highlights 2009-2010 ·Created a comprehensive framework for creating Conservation Research Center for Small Businesses in Downtown Palo Alto, including: §Assembled a high level board of advisors including leaders in Energy Efficiency, Construction &Technology, Labor & Training, Education, Communications & Media, Legal & Financial and Community Relations §Specified viable emerging technologies including bi-level lighting, commercial kitchen variable speed hood fans and other emerging technologies §Increased community visibility through expansion of community relationships, including successfully advocating for the launch of innovative off-bill financing for small business efficiency measures ·Completed Certified Green Business process for a total of 40 Palo Alto businesses (8 additional pending) ·Wave One has worked with and supported more than 35 additional businesses to support them in implementing water, energy and other resource efficiency measures and adopting green practices (more than 83 businesses total.) ·Wave One became a Certified Green Business July 2010. ·Premier Properties Management became a Certified Green Business in July 2009 with Wave One support. Each Certified Green Business: §conserve resources, prevents pollution and sets an example by: §purchase only recycled-content paper and copying double-sided §use less toxic cleaning products §convert to more efficient lighting systems to save energy §conserve water with low-flow toilets and faucet aerators §change waste stream practices toward the goal of Zero Waste by optimizing composting, recycling and reuse §provided evidence of compliance with local hazardous materials regulations ·Worked with all previously certified Wave One clients to initiate commercial composting after service began in July 2009. ·Completed survey of Wave One Certified Green Businesses, summarizing priorities, experience, changes and impacts of going through the CGB process. §Quantitative reduction calculations are pending receipt of utility bill information ·Created Environmental Leadership Profiles for Certified Green Businesses ·Created and expanded comprehensive database of 3.5 million square feet of commercial real estate in Downtown Palo Alto businesses including: Owner information, Property manager information (if applicable), Square footage (for building and tenants), Tenant information, Year built, Tenant Contact information, Lighting & Plumbing retrofit information (if available) ·Provided support for implementation of new CPAU Off-bill Financing Program for Small Commercial Energy Efficiency Initiatives ·Worked with policy makers on market/incentive-based programs to encourage commercial energy efficiency ·Presented commercial efficiency program report as part of Earth Day activities at the City Council ·Hosted delegations from China, Denmark and the Netherlands to exchange information on local energy and resource efficiency initiatives 2011 CEAP Annual Report page 12 Stanford Segment Stanford University has been a member segment of the Palo Alto Community Environmental Action Partnership (CEAP) since CEAP’s inception in March 2008. The Stanford University segment of CEAP provides a link between larger CEAP efforts and the sustainability efforts undertaken by the Stanford community. In pursuing its academic mission, Stanford University is committed to being a leader in the research, teaching and institutional practice of environmental sustainability. The university is therefore committed to following core sustainability principles in all facets of planning and operations so that Stanford can lessen its environmental impact, ensure a healthy community and contribute to global solutions. 2010 Actions The 2009-2010 Sustainable Stanford: A Year in Review is now available online. This report is produced by the Office of Sustainability,as one of the many deliverables that make sustainability a tangible part of the Stanford experience. Beyond an annual report, this publication catalogs the many efforts within a large campus that contribute to a steady pulse of sustainability milestones and accomplishments. This report is available at http://sustainable.stanford.edu/publications_and_reports. 2010 Highlights §Stanford’s Drive-Alone Rate Drops to 48 Percent Stanford University’s employee drive alone rate dropped from 72 percent in 2002 to 48 percent in 2010. If all university commuters (employees and students) are counted, the drive alone rate is even lower at 43 percent. Reaching this point where more than half of the university’s commuting employees choose alternative transportation instead of driving alone is a major milestone for Stanford. §Growing our Sustainability Staff Jiffy Vermylen joined Stanford University’s Office of Sustainability in March 2010 to support further development and implementation of campus wide sustainable Stanford initiatives. Her portfolio includes rollouts of the department/building level conservation programs, related communications and training to the campus community, and overall program evaluation, especially for the built environment. Gerry Hamilton joined Stanford University’s Department of Sustainability and Energy Management in June 2010. In his new role, he directs the activities of the new Facilities Energy Management (FEM) program, which includes the operation of campus Building Management Systems, oversight of the university’s Sustainable IT program, and supervision of Energy Retrofit Projects. As Associate Director, Gerry will ensure that buildings and associated processes are operated efficiently and that new facilities incorporate best practices for energy use. §Academic Class Offering CEE/ES 109 Green Buildings and Behavior, a course made possible through collaborative effort between the Office of Sustainability and the Woods Institute for the Environment, concluded in March. The course aimed to engage students in Stanford’s sustainability, and featured more than 20 academic faculty and staff who lectured on topics including energy efficiency, water use, waste management, sustainable food, and transportation systems. The 12 undergraduates completed audits for two School of Earth Sciences buildings, Mitchell and Braun, which represent the fourth and fifth campus buildings of 60 scheduled to undergo the efficiency interventions targeted by the Building Level Sustainability Program. During the spring and summer, select class participants will capitalize on the course’s momentum and join the Office of Sustainability as Student Sustainability Coordinators to help further deploy the Building Level Sustainability Program. 2011 CEAP Annual Report page 13 §Building Level Sustainability Program The Office of Sustainability, in collaboration with the Woods Institute, various units in Sustainability and Energy Management, and Zones Management, launched an individual action based resource conservation program at Stanford Schools and Departments that can be exercised at a building level. Designed for building level conservation action by individuals, this program complements efficiency improvement at the infrastructure level and jointly accomplishes resource conservation and carbon footprint reduction goals. The program incorporates occupant-led resource conservation actions and a ‘green action menu’ that can be tailored for a School or Department’s building selected by the Office of Sustainability. The occupant awareness and action directly contributes to resource conservation, lower utility bills, and knowledge of a more collaborative work environment that is consistent with the university’s commitment to sustainability as a core value. The program also encourages awareness and creativity among building occupants, which in turn can inform infrastructure decisions. Structure of Sustainability and Energy Management (SEM) Sustainability is a core value at Stanford –demonstrated in academics, operations, communications, and events. Central to the academic endeavor is the Initiative on the Environment and Sustainability, supporting interdisciplinary research and teaching in all seven of Stanford’s schools, as well as in centers, institutes and programs across campus. Sustainability and Energy Management (SEM)1, is the operational and programmatic undertaking in this field. Sustainable Stanford is also the central coordination and strategic hub for the interdisciplinary Sustainability Working Group convened in 2006 and the various Sustainability Working Teams (SWTs) that formed in 2008.2 SWTs bring together campus operations leaders, faculty with related subject matter expertise, and students to advance progress in each of the major elements of Sustainable Stanford, including: Energy & Atmosphere, Green Buildings, Transportation, Water, Waste Minimization, Green Procurement and Food Supply, Communications & Campus Community Relations, Evaluation & Reporting, and Green Funds for students. Complementary to operational efficiency measures being undertaken by campus facilities managers, distinct and education-oriented programmatic initiatives are underway to make sustainability more actionable and visible to campus community. Our website is http://sustainable.stanford.edu, with quarterly newsletters at < http://sustainable.stanford.edu/newsletter. Third Party Grading §For the third consecutive time, and the fourth time in the last five years, Stanford received an “A-“ grade on the Sustainable Endowments Institute’s College Sustainability Report Card. As such, Stanford joins 51 other schools as Overall Campus Sustainability Leaders out of the 322 surveyed institutions. Stanford earned straight “A” grades in the following topic areas: administration, climate change and energy, food and recycling, green building, student involvement, transportation, investment priorities,and shareholder engagement. The “A” in climate change and energy represents an improvement over the “B” earned in that category last year, and recognizes the formalization of the university’s Energy and Climate Plan, among other energy conservation programs. The full survey responses for all participating institutions can be found online. (www.greenreportcard.org) §The 2010 Sierra Magazine’s green rating Stanford ranks #5 out of 162 schools surveyed.This is a strong overall improvement from 26th place (out of 135) last year. http://www.sierraclub.org/sierra/201009/coolschools/top100.aspx §Stanford was included in The Princeton Review’s first ever Guide to 286 Green Colleges, produced in partnership with the U.S. Green Building Council (USGBC) and released on 1 <http://lbre.stanford.edu/sem/>2 <http://sustainable.stanford.edu/working_group_and_teams> 2011 CEAP Annual Report page 14 Earth Day 2010. The Princeton Review specifically praises Stanford’s Transportation Demand Management program and building-level energy conservation programs in the half-page profile. The Guide to 286 Green Colleges is free and available to the public at http://www.princetonreview.com/green-guide.aspx. Future Plans and Ongoing Actions The Sustainability Working Group and Working Teams will continue to develop and implement actions key to creating a sustainable campus. Our website (http://sustainablestanford.stanford.edu/) continues to be the best resource for up to date actions and results. Stanford, through the Office of Government and Community Relations will continue to participate as a segment of the Community Environmental Action Partnership. We are committed to continuing to reach beyond our campus borders to support actions aimed at creating a healthy environment for all. For further information on the wide range of activities related to Stanford University’s commitment to sustainability please visit http://sustainablestanford.stanford.edu/. For more information on Stanford’s role as a segment of the Palo Alto Community Environment Action Partnership (CEAP), please contact Lucy Wicks, Assistant Director of Community Relations, Office of Government and Community Relations, at lwicks@stanford.edu or 650-725- 3339. CITY OF PALO ALTO PROCLAMATION National Library Week 2011 Proclamation WHEREAS, April 10 through 16, 2011, is celebrated as National Library Week; and WHEREAS, the City of Palo Alto Library system is a treasure in our community and provides lifelong learning and a place to explore, to gather, and to enjoy; and WHEREAS, we live in an information age and our libraries provide equity of access and are a gateway to knowledge and services for all residents; and WHEREAS, our libraries are places for our children and teens to check out the latest books, do research for school projects, get help with homework, and are wonderful, safe places; and WHEREAS, with overwhelming community support the citizens of Palo Alto passed Measure N in 2008 to renovate the Downtown and Main Libraries and to rebuild Mitchell Park Library and Community Center; and WHEREAS, the Palo Alto Library Foundation’s mission is to spearhead fundraising campaigns to support a modern, dynamic library system that serves the needs of everyone in our city; and WHEREAS, the Council of the City of Palo Alto extends grateful appreciation to the Palo Alto Library Foundation for their efforts to fill our renovated and new libraries and community center with modern furniture, dozens of new computers, audio-visual equipment for the study and program rooms, and tens of thousands of new books and electronic resources. NOW, THEREFORE, I, Sidney A. Espinosa, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim April 10 through 16, 2011 National Library Week. I encourage all residents to visit the Library this week to take advantage of the wonderful library resources at your library. Presented: April 2011 _________________________ Sidney A. Espinosa Mayor Campaign Council Jocetyn Atexander Ray Bacchetti James Baer Anne Warner Cribbs Andy Doty Gary Fazzino Megan Swezey Fogarty John Herr May Herr Peter Hero Sandra Hirsh Gloria Hom Don Kennedy Larry Ktein Tony Ktein Judy Kteinberg John Melton David Mitchett Sigrid Pinsky Nancy Ptayer Stephen Ptayer Dan Russet[ Amit Singhat Roger Smith Esther Wojcicki Board Members Bern Beecham Atison Cormack Lenore Jones Yulin Lee Mary Jo Levy Pandu Nayak Lynne Russett Susie Thom Lanie Wheeter Past Presidents Katharine Mitter Mary Jean Ptace Mission of the Palo Alto Library Foundation (PALF) The Pato Atto Library Foundation (PALF) is a nonprofit 501(cX3) organization working with our community to provide significant resources to our five libraries, which make up the Pato Atto Library system. PALF was founded in 2001, operates with a Board of Directors and two part-time staff members, and has over 1,000 donors. The foundation's nonprofit status was obtained in 2002. The mission of the Pato Atto Library Foundation is to spearhead fundraising campaigns to support a modern, dynamic tibrary system that meets the needs of everyone in our city. History of the Foundation The renovations and rebuitding of the City of Palo Alto Library system is a true example of a pubtic/private partnership among the City of Pato Alto, the citizens of Pato Atto, private donors, and the Pato Atto Library Foundation. ln our first campaign, the Palo Atto Library Foundation raised 538,000 to expand and refurbish the Teen Zones at Mitchett Park and Main libraries. With that smatl but successful campaign under our belt, we initiated a targer capital campaign in 2007 to renovate and expand the Chitdren's Library. The foundation has raised just over 51,000,000 in private donations specificatly for this cherished [ibrary. Passage of Measure N (November 2008) Palo Alto's Main Library and the Mitchett Park Library and Community Center were opened in 1958 and, by 2008, no longer supported the changing needs of the community. Downtown Library was built in 1971. These facitities had inadequate etectrical systems to meet the demands of today's etectronics. They were not seismicatty safe and were not ADA accessibte. They lacked spaces for peopte to work together and for programming to be offered. ln November 2008 the voters of Pato Alto overwhetmingty passed Measure N. This 576 mitlion library bond measure funds a brand new Mitchetl Park Library and Community Center, study and program spaces and a complete renovation for Main Library, and a reconfigured and renewed Downtown Library. The new Mitchett library wi[[ be more than four times larger than the present outmoded [ibrary and will provide shetf space for many more books. Launch our Libraries Campaign Bond measure monies from Measure N can onty be used for design and construction costs. They cannot be used for furniture, computers and other etectronic resources, as we[[ as additions to the coltections. The PaLo Atto Library Foundation launched its largest fundraising campaign in 2010 to fitt these new and futty renovated libraries with at[ the things that make them work - comfortabte, modern furniture, the latest in computer technotogy and etectronic resources, and thousands of additions to the cotlections. Our campaign inctudes 51 mitlion for new books, ebooks and other resources. PaloAltoLibraryFoundation I P.O. Box 181 PaloAlto, CA94302 I 650.329.2516 I info@palf.org I www.palf.org RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO MARY MINTO UPON HER RETIREMENT WHEREAS, Mary Minto was hired in 1972 as a Library Assistant working at the Children’s Library and rose to the position of Head of the Library’s Division of Collections and Technical Services; and WHEREAS, in her 39 years of service, Mary Minto made many significant contributions to the Library and the citizens of Palo Alto; and WHEREAS, throughout her career, Mary Minto worked in both the public and technical services sections of the Library and at all of the existing library branches; and WHEREAS, Mary Minto served from 1985 until 1991 as the administrator of the Library’s first comprehensive library computer and software system, and led the development of many library technology improvements, including the online catalog; and WHEREAS, Mary Minto has been responsible for overseeing the acquisition, development and maintenance of the Library’s book, media, and electronic collections; and WHEREAS, Mary Minto was instrumental in developing plans for the library bond measure projects and for several library renovation projects; and WHEREAS, Mary Minto has hired and trained many library staff members and is known and admired for her dedication, work ethic, responsiveness, and supportive management style; and WHEREAS, Mary Minto has represented the Library Department on the City’s Management and Professional Compensation Committee. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Palo Alto, together with the citizens of this community, hereby gratefully records its appreciation, esteem and admiration for the outstanding public service and leadership rendered by Mary Minto, along with our best wishes for a rewarding and fulfilling life during retirement. INTRODUCED AND PASSED: April 11, 2011 ATTEST: APPROVED: _________________ _________________ City Clerk Mayor APPROVED AS TO FORM: __________________ _________________ City Attorney City Manager City of Palo Alto (ID # 1420) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 4 (ID # 1420) Summary Title: Approval of Hazmat Removal Contract for Art Center Title: Approval of a Contract with Tradestaff Contracting Services in a Total Amount Not to Exceed $167,500 for Hazardous Material Removal at the Palo Alto Art Center (PF-07000, Art Center Electrical and Mechanical Upgrades) From:City Manager Lead Department: Public Works RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute a general services agreement between the City of Palo Alto and Tradestaff Contracting Services, Inc. (Attachment A), in the amount of $139,500 for the hazardous materials abatement at the Palo Alto Art Center. 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Tradestaff Contracting Services, Inc., for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $28,000 (20%). BACKGROUND The 28,000 square foot Art Center facility and its building infrastructure and systems have not been significantly upgraded since the facility was constructed in 1951 as Palo Alto’s City Hall. The only major repairs made to the facility have been seismic improvements in 1987. In 1999, the Palo Alto Art Center Foundation (the Foundation) began to address the need for renovations proactively by focusing on two programmatic concerns and facility challenges: 1) the need for upgrades to the gallery spaces of the Art Center to support the popular exhibition program, and 2) the need for additional children’s art classrooms and program space to meet the demand in the community. In March, 1999, the Palo Alto City Council approved a proposal from the Palo Alto Art Center Foundation to explore the development of a public/private partnership that would make possible a capital campaign to expand and renovate the Art Center. The City and the Foundation jointly developed a Design Agreement. When the Agreement was initiated, the Foundation had intended to manage the project through all phases of design and April 11, 2011 Page 2 of 4 (ID # 1420) construction, however, during design development, the City’s portion of the project scope became a larger percentage of the overall project, and more technically involved. As a result of this change, the Foundation and City staff recommended that, and received Council approval for the City managing the bid and construction phases (CMR:168:09). The City’s scope of work includes mechanical, electrical, and accessibility upgrades to the facility, while the Foundation’s scope of work includes the creation of a Children’s Wing and an upgrade of the exhibition galleries. While the scope of City-sponsored work differs from the Foundation-sponsored work, both parties agree that it will be more efficient, cost-effective, and less disruptive to the community to have the work completed concurrently. In addition to the above-mentioned electrical, mechanical and Children’s Wing improvements, the City has added deferred-maintenance items to the project such as a new roof, new gutters, new downspouts, seismic upgrade to roofing envelope, exterior painting, new carpets, additional interior painting, termite treatment and dry rot repairs, new window safety glazing, exterior lighting improvements, and repair to damaged tile planters in the courtyard area. The City will also be adding a 1% for public art as part of the overall Art Center renovation project. In addition, the Art Center auditorium was identified as the preferred location for a temporary library during the renovation of the adjacent Main Library (CMR:435:10). The auditorium was not part of the Art Center improvement project, but will have improved lighting, carpeting and other amenities to make it suitable as a temporary library. Discussion Hazardous materials such as asbestos and lead must be removed from the Art Center prior to the main construction effort that will begin this summer. Given the age of the facility, the hazardous material is located throughout the building, including the roofing underlayment. Removal of this material by means of a contract with Tradestaff Contracting Services will save time on the Art Center construction schedule by not waiting until a general contractor is under contract to begin the removal. It will also save money in that the general contractor will not mark-up the fees of a hazardous material subcontractor. A formal Request for Quotations (RFQ) for the Art Center hazardous materials abatement was advertised on February 28, 2011. The bidding period was 23 days. Bids were received from 13 contractors on March 22, 2011, as listed on the attached bid summary (Attachment B). Bids ranged from a low of $139,500 to a high of $767,190. Summary of Bid Process Bid Name/Number RFQ 140517 Palo Alto Art Center Hazardous Materials Abatement Project Proposed Length of Project 30 calendar days Number of Bids Mailed to Contractors 22 Number of Bids Mailed to Builder’s Exchanges 0 April 11, 2011 Page 3 of 4 (ID # 1420) Total Days to Respond to Bid 23 Pre-Bid Meeting?Yes Number of Company Attendees at Pre-Bid Meeting 15 Number of Bids Received 13 Bid Price Range*Low of $139,500 to a high of $767,190 *Bid summary provided in Attachment B Staff has reviewed all bids submitted and recommends that the bid of $139,500 submitted by Tradestaff Contracting Services, Inc., be accepted and that Tradestaff Contracting Services, Inc., be declared the lowest responsible bidder. The bid is 43 percent below the engineer’s estimate of $245,000. The low bids for this project can be attributed to the current depressed economic conditions,which are highly conducive to competitive bidding. Staff confirmed with the Contractor’s State License Board that the contractor has an active license on file. Staff checked references supplied by the contractor for previous work performed and found no major complaints. A contingency amount of 20 percent is requested because of the age of the building and the large areas undergoing remediation, which increases the potential for unforeseen building conditions such as additional termites or dry rot areas. RESOURCE IMPACT Funds for the hazardous material removal are available in the Capital Improvement Program Project PF-07000, Art Center Electrical and Mechanical Upgrades. Per the funding agreement with the Foundation, the cost of this work will be borne only by the City as it is deferred maintenance. Staff may return to Council at the time of the award of the larger construction contract in order to cover any increased costs due to the inclusion of deferred maintenance items into the project. POLICY IMPLICATIONS Removing hazardous materials is consistent with the City’s goal to reduce the infrastructure backlog. Hazardous material removal and other deferred maintenance items that are part of the Art Center renovation project will be removed from the City’s backlog list by the Infrastructure Task Force. TIMELINE Staff relocation to the Lucie Stern Center lower office level and other locations throughout the City is in progress and once completed will be followed shortly thereafter by the removal of any hazardous materials. Construction on the primary major renovations, including the temporary Main Library in the auditorium, is expected to begin in the summer of 2011 and be completed April 11, 2011 Page 4 of 4 (ID # 1420) in the summer of 2012. Construction on the Main Library is expected to begin at the end of 2012, shortly after the opening of the new Mitchell Park Library and Community Center. ENVIRONMENTAL REVIEW This removal of hazardous materials was determined to be exempt from the California Environmental Quality Act (CEQA) review pursuant to Section 15301, “existing facilities.” Attachments: ·Attachment A-Contract (PDF) ·Attachment B-Bid Summary (PDF) Prepared By:Karen Bengard, Senior Engineer Department Head:J. Michael Sartor, Interim Director City Manager Approval: James Keene, City Manager CITY OF PALO ALTO CONTRACT NO.: C11140517 1 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc GENERAL SERVICES AGREEMENT THIS AGREEMENT made and entered into on the ________ day of April, 2011, by and between the CITY OF PALO ALTO, a California Chartered Municipal Corporation (“CITY”), and TRADESTAFF CONTRACTING SERVICES, a California corporation, with offices located at Route 2 Box 347, La Honda, CA 94020, Telephone Number: 650-851-6969 (“CONTRACTOR”). In consideration of their mutual covenants, the parties hereto agree as follows: 1. SERVICES. CONTRACTOR shall provide or furnish the services (“Services”) described in the Scope of Services, attached as Exhibit A. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement: “A” - Scope of Services “B” - Schedule of Performance “C” - Compensation “D” - Insurance Requirements “E” - Performance and/or Payment Bond (Not applicable) “F” - Liquidated Damages (Not applicable) CONTRACT IS NOT COMPLETE UNLESS ALL EXHIBITS ARE ATTACHED. 3. TERM. The term of this Agreement shall be from the date of its full execution through the completion of the services in accordance with the Schedule of Performance attached as Exhibit “B”, subject to the provisions of Section Q and V of the General Terms and Conditions. 4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the schedule set forth in the Schedule of Performance, attached as Exhibit B. Time is of the essence in this Agreement. 5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not to exceed compensation for the full performance of the Services and reimbursable expenses, if any: The total maximum lump sum compensation of dollars ($ ); OR The sum of dollars ($ ) per hour, not to exceed a total maximum compensation amount of dollars ($ ); OR A sum calculated in accordance with the fee schedule set forth in Exhibit C, not to exceed a total maximum compensation amount of one hundred thirty-nine thousand five hundred dollars ($139,500.00). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. The City has set aside the sum of twenty-eight thousand ($28,000.00) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, CITY OF PALO ALTO CONTRACT NO.: C11140517 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc 2 level of effort, and CONTRACTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. 6. COMPENSATION DURING ADDITIONAL TERMS. CONTRACTOR’S compensation rates for each additional term shall be the same as the original term; OR CONTRACTOR’s compensation rates shall be adjusted effective on the commencement of each Additional Term. The lump sum compensation amount, hourly rates, or fees, whichever is applicable as set forth in section 5 above, shall be adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco- Oakland- San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR’s compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR’s compensation rates shall be reflected in a written amendment to this Agreement. 7. INVOICING. Send all invoices to the CITY, Attention: Project Manager. The Project Manager is: Karen Bengard, Public Works Department, P.O. Box 10250, Palo Alto, CA 94303, Telephone: 650-329-2636. Invoices shall be submitted in arrears for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of Services performed during the invoice period and are subject to verification by CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt. GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includes and is limited to the terms and conditions set forth in sections 1 through 6 above, these general terms and conditions and the attached exhibits. B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the services described in Section 1 of this Agreement, entitled “SERVICES,” and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on CONTRACTOR’s representations regarding its skills, knowledge, and certifications. CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations. C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by CONTRACTOR shall at all times be considered an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement. D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors. CITY OF PALO ALTO CONTRACT NO.: C11140517 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc 3 E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR’s business. F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws, ordinances, regulations, and orders. G. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR’s performance of the Services. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR’s performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR’s request. When the grounds described above are removed, payment shall be made for amounts withheld because of them. H. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR expressly warrants that all materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any material or service not in compliance with these warranties, including incomplete, inaccurate, or defective material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from completion of the Services and shall survive the completion of the Services or termination of this Agreement. I. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONTRACTOR’s work is completed in a satisfactory manner and complies with the provisions of this Agreement. J. CITY’S PROPERTY. Any reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. K. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR’s records pertaining to matters covered by this Agreement. CONTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement. L. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement. M. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described in Exhibit D. Insurance must be provided by companies with a Best’s Key rating of A-:VII or higher and which are otherwise acceptable to the City’s Risk Manager. The City’s Risk Manager must approve deductibles and self-insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the City’s Risk Manager. CONTRACTOR shall provide certificates of such policies or other evidence of coverage satisfactory to CITY’s Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and CITY OF PALO ALTO CONTRACT NO.: C11140517 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc 4 endorsements to the CITY’s Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit CONTRACTOR’s liability or obligation to indemnify CITY under this Agreement. N. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section M relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney’s fees, courts costs and costs of alternative dispute resolution), arising out of, or resulting in any way from or in connection with the performance of this Agreement. The CONTRACTOR’s obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that the CONTRACTOR shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of the CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Contract. O. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. P. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services. Q. TERMINATION. The City Manager may terminate this Agreement without cause by giving ten (10) days’ prior written notice thereof to CONTRACTOR. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager may terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. CITY, CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination if for cause, CITY may deduct from such payment the amount of actual damage, if any, sustained by CITY due to Contractor’s failure to perform its material obligations under this Agreement. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection with this Agreement. Such materials shall become the property of CITY. R. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written consent of the CITY. No amendments, changes or variations of any kind are authorized without the written consent of the CITY. S. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Contract. CONTRACTOR further covenants that, in the performance of this Contract, it will not employ any person having such an interest. CONTRACTOR certifies that no City Officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with contractor has any interest, CITY OF PALO ALTO CONTRACT NO.: C11140517 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc 5 direct or indirect, which could conflict with the faithful performance of this Contract. CONTRACTOR agrees to advise CITY if any conflict arises. T. GOVERNING LAW. This contract shall be governed and interpreted by the laws of the State of California. U. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. V. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Contract are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Contract. W. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONTRACTOR shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department which are incorporated by reference and may be amended from time to time. CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Contractor shall comply with the following zero waste requirements: • All printed materials provided by Contractor to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Contractor on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Contractor, at no additional cost to the City, for reuse or recycling. Contractor shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. X. AUTHORITY. The individual(s) executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Y. CONTRACT TERMS: All unchecked boxes do not apply to this Contract. EXHIBIT A Rev. 01/15/04 PALO ALTO ART CENTER HAZARDOUS MATERIALS ABATEMENT PROJECT CONTRACT C11140517 Contractor shall perform the hazardous materials abatement at the Palo Alto Art Center located at 1313 Newell Road, Palo Alto, CA. Contractors to furnish all labor, material, facilities, equipment, transportation, services, employee training and testing as required to perform the work at the Palo Alto Art Center for mold and asbestos removal and lead related construction work, encapsulation, decontamination, disposal, and all other work per the latest regulations from the US. Environmental Protections Agency (EPA); Cal-EPA; the Occupational Safety and Health Administration (OSHA); the State of California Department of Industrial Relations (Cal/OSHA); the recommendations of the National Institute of Occupations Safety and Health (NIOSH); and any other applicable federal state and local government regulations, including all incidental and related work as required by the scope of services and general requirements detailed on the specifications in Exhibit A herein. The Asbestos Survey and Evaluation, and the Lead Survey and Evaluation included in the Request for Quotations (RFQ) 140517 are incorporated here by reference. CITY OF PALO ALTO CONTRACT NO.: C11140517 Rev. January 11, 2010 E:\Files from H DRIVE\RFQ Files\RFQ140517 Palo Alto Art Center Hazardous Materials Abatement Project\Docs related to contract\Contract C11140517 Tradestaff Contracting Services.doc EXHIBIT B SCHEDULE OF PERFORMANCE CONTRACTOR shall perform the Services so as to complete the task within the time period specified below. The time to complete the task may be increased or decreased by mutual written agreement of the project managers for CONTRACTOR and CITY so long as all work is completed within the term of the Agreement. Upon request CONTRACTOR shall provide a detailed schedule of work consistent with the schedule below. Task Complete _X_ Days or ___ Weeks From NTP 1. Perform all hazardous materials abatement at the Palo Alto Art Center facility in accordance with the Scope listed in Exhibit A. 30 Calendar days Art Center Haz Mat Abatement Project Attachment D - Bid Summary RFQ# 140517 # BASE BID A DESCRIPTION QUANTITY UNITS 1 Wall/Ceiling sheetrock, joint tape and compound 60,000 SF 0.73$ 43,800.00$ 0.94$ 56,400.00$ 1.00$ 60,000.00$ 2 Tan 12 x 12 vinyl floor tile w/black mastic 40 SF 3.00$ 120.00$ 7.93$ 317.20$ 3.00$ 120.00$ 3 Gray 9 x 9 vinyl floor tile w/non-asbestos mastic 40 SF 2.00$ 80.00$ 5.92$ 236.80$ 3.00$ 120.00$ 4 Tan 12 x 12 vinyl floor tile (w/fissures) w/black mastic 3,500 SF 1.60$ 5,600.00$ 1.44$ 5,040.00$ 2.50$ 8,750.00$ 5 Gray 9 x 9 vinyl floor tile w/black mastic 1,500 SF 1.50$ 2,250.00$ 1.44$ 2,160.00$ 2.50$ 3,750.00$ 6 Black mastic below black 12 x 12 vinyl floor tile 2,000 SF 1.00$ 2,000.00$ 1.45$ 2,900.00$ 2.50$ 5,000.00$ 7 Beige 12 x 12 vinyl floor tile and black mastic 7,500 SF 1.50$ 11,250.00$ 1.21$ 9,075.00$ 2.25$ 16,875.00$ 8 White TSI on water pipes 3,000 SF 2.00$ 6,000.00$ 5.08$ 15,240.00$ 4.00$ 12,000.00$ 9 White pipe hanger insulation paper 100 SF 1.50$ 150.00$ 6.62$ 662.00$ 5.00$ 500.00$ 10 Gray/black roof felt below roof shake 32,000 SF 0.90$ 28,800.00$ 1.56$ 49,920.00$ 1.70$ 54,400.00$ 11 Gray mastic for roof mounted mechanical 10 SF 30.00$ 300.00$ 67.20$ 672.00$ 15.00$ 150.00$ 12 Roof covering 1 LS 19,520.00$ 19,520.00$ 11,204.70$ 11,204.70$ 17,000.00$ 17,000.00$ 13 Mold remediation 1 SF 370.00$ 370.00$ 361.73$ 361.73$ 5.00$ 5.00$ 14 Lights removal 1 LS 2,810.00$ 2,810.00$ 3,134.99$ 3,134.99$ 1,800.00$ 1,800.00$ 15 Dry rot allowance 1 LS 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 16 Tree protection 1 LS 1,800.00$ 1,800.00$ 1,231.15$ 1,231.15$ 1,500.00$ 1,500.00$ 17 Art protection 1 LS 2,650.00$ 2,650.00$ 1,427.98$ 1,427.98$ 5,000.00$ 5,000.00$ 18 Fencing 1 LS 2,500.00$ 2,500.00$ 3,725.00$ 3,725.00$ 4,800.00$ 4,800.00$ 19 Drywall ceiling allowance 1 LS 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ BASE BID A TOTAL 139,500.00$ 173,208.55$ 201,270.00$ Tradestaff Contracting Asbestos ManagementMidwest Env. 1 of 5 Art Center Haz Mat Abatement Project Attachment D - Bid Summary RFQ# 140517 # BASE BID A DESCRIPTION QUANTITY UNITS 1 Wall/Ceiling sheetrock, joint tape and compound 60,000 SF 2 Tan 12 x 12 vinyl floor tile w/black mastic 40 SF 3 Gray 9 x 9 vinyl floor tile w/non-asbestos mastic 40 SF 4 Tan 12 x 12 vinyl floor tile (w/fissures) w/black mastic 3,500 SF 5 Gray 9 x 9 vinyl floor tile w/black mastic 1,500 SF 6 Black mastic below black 12 x 12 vinyl floor tile 2,000 SF 7 Beige 12 x 12 vinyl floor tile and black mastic 7,500 SF 8 White TSI on water pipes 3,000 SF 9 White pipe hanger insulation paper 100 SF 10 Gray/black roof felt below roof shake 32,000 SF 11 Gray mastic for roof mounted mechanical 10 SF 12 Roof covering 1 LS 13 Mold remediation 1 SF 14 Lights removal 1 LS 15 Dry rot allowance 1 LS 16 Tree protection 1 LS 17 Art protection 1 LS 18 Fencing 1 LS 19 Drywall ceiling allowance 1 LS BASE BID A TOTAL 0.95$ 57,000.00$ 2.01$ 120,600.00$ 1.00$ 60,000.00$ 10.00$ 400.00$ 1.85$ 74.00$ 2.75$ 110.00$ 10.00$ 400.00$ 1.85$ 74.00$ 2.75$ 110.00$ 1.75$ 6,125.00$ 1.85$ 6,475.00$ 2.25$ 7,875.00$ 1.75$ 2,625.00$ 1.85$ 2,775.00$ 2.25$ 3,375.00$ 1.75$ 3,500.00$ 1.85$ 3,700.00$ 2.25$ 4,500.00$ 1.75$ 13,125.00$ 1.85$ 13,875.00$ 2.00$ 15,000.00$ 8.00$ 24,000.00$ 2.00$ 6,000.00$ 4.00$ 12,000.00$ 10.00$ 1,000.00$ 3.00$ 300.00$ 5.00$ 500.00$ 1.75$ 56,000.00$ 1.85$ 59,200.00$ 3.00$ 96,000.00$ 75.00$ 750.00$ 1.85$ 18.50$ 2.75$ 27.50$ 25,500.00$ 25,500.00$ 2,904.00$ 2,904.00$ 25,000.00$ 25,000.00$ 1,000.00$ 1,000.00$ 5.00$ 5.00$ 5.00$ 5.00$ 4,800.00$ 4,800.00$ 4,000.00$ 4,000.00$ 4,614.00$ 4,614.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 8,000.00$ 8,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 7,500.00$ 7,500.00$ 5,000.00$ 5,000.00$ 4,000.00$ 4,000.00$ 5,000.00$ 5,000.00$ 15,000.00$ 15,000.00$ 2,200.00$ 2,200.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 226,225.00$ 254,500.50$ 249,816.50$ Flores SierraProfessional Asbestos Urban Metro Env. 2 of 5 Art Center Haz Mat Abatement Project Attachment D - Bid Summary RFQ# 140517 # BASE BID A DESCRIPTION QUANTITY UNITS 1 Wall/Ceiling sheetrock, joint tape and compound 60,000 SF 2 Tan 12 x 12 vinyl floor tile w/black mastic 40 SF 3 Gray 9 x 9 vinyl floor tile w/non-asbestos mastic 40 SF 4 Tan 12 x 12 vinyl floor tile (w/fissures) w/black mastic 3,500 SF 5 Gray 9 x 9 vinyl floor tile w/black mastic 1,500 SF 6 Black mastic below black 12 x 12 vinyl floor tile 2,000 SF 7 Beige 12 x 12 vinyl floor tile and black mastic 7,500 SF 8 White TSI on water pipes 3,000 SF 9 White pipe hanger insulation paper 100 SF 10 Gray/black roof felt below roof shake 32,000 SF 11 Gray mastic for roof mounted mechanical 10 SF 12 Roof covering 1 LS 13 Mold remediation 1 SF 14 Lights removal 1 LS 15 Dry rot allowance 1 LS 16 Tree protection 1 LS 17 Art protection 1 LS 18 Fencing 1 LS 19 Drywall ceiling allowance 1 LS BASE BID A TOTAL 0.80$ 48,000.00$ 1.80$ 108,000.00$ 1.35$ 81,000.00$ 1.8000$ 72.00$ 2.00$ 80.00$ 4.30$ 172.00$ 0.90$ 36.00$ 2.00$ 80.00$ 4.30$ 172.00$ 1.80$ 6,300.00$ 2.00$ 7,000.00$ 4.30$ 15,050.00$ 1.80$ 2,700.00$ 2.00$ 3,000.00$ 4.30$ 6,450.00$ 1.50$ 3,000.00$ 2.00$ 4,000.00$ 4.30$ 8,600.00$ 1.80$ 13,500.00$ 2.00$ 15,000.00$ 4.30$ 32,250.00$ 12.00$ 36,000.00$ 7.00$ 21,000.00$ 24.80$ 74,400.00$ 25.00$ 2,500.00$ 10.00$ 1,000.00$ 45.00$ 4,500.00$ 2.90$ 92,800.00$ 2.00$ 64,000.00$ 1.88$ 60,160.00$ 4.00$ 40.00$ 80.00$ 800.00$ 6.00$ 60.00$ 15,500.00$ 15,500.00$ 14,000.00$ 14,000.00$ 11,000.00$ 11,000.00$ 5.00$ 5.00$ 200.00$ 200.00$ 330.00$ 330.00$ 1,608.00$ 1,608.00$ 15,000.00$ 15,000.00$ 1,700.00$ 1,700.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 9,000.00$ 9,000.00$ 2,000.00$ 2,000.00$ 1,500.00$ 1,500.00$ 9,000.00$ 9,000.00$ 1,500.00$ 1,500.00$ 1,000.00$ 1,000.00$ 6,000.00$ 6,000.00$ 4,000.00$ 4,000.00$ 6,200.00$ 6,200.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 255,561.00$ 270,160.00$ 314,044.00$ Reliance Construction PARCRestec Contractors 3 of 5 Art Center Haz Mat Abatement Project Attachment D - Bid Summary RFQ# 140517 # BASE BID A DESCRIPTION QUANTITY UNITS 1 Wall/Ceiling sheetrock, joint tape and compound 60,000 SF 2 Tan 12 x 12 vinyl floor tile w/black mastic 40 SF 3 Gray 9 x 9 vinyl floor tile w/non-asbestos mastic 40 SF 4 Tan 12 x 12 vinyl floor tile (w/fissures) w/black mastic 3,500 SF 5 Gray 9 x 9 vinyl floor tile w/black mastic 1,500 SF 6 Black mastic below black 12 x 12 vinyl floor tile 2,000 SF 7 Beige 12 x 12 vinyl floor tile and black mastic 7,500 SF 8 White TSI on water pipes 3,000 SF 9 White pipe hanger insulation paper 100 SF 10 Gray/black roof felt below roof shake 32,000 SF 11 Gray mastic for roof mounted mechanical 10 SF 12 Roof covering 1 LS 13 Mold remediation 1 SF 14 Lights removal 1 LS 15 Dry rot allowance 1 LS 16 Tree protection 1 LS 17 Art protection 1 LS 18 Fencing 1 LS 19 Drywall ceiling allowance 1 LS BASE BID A TOTAL 2.00$ 120,000.00$ 2.00$ 120,000.00$ 3.00$ 180,000.00$ 8.00$ 320.00$ 2.00$ 80.00$ 3.00$ 120.00$ 8.00$ 320.00$ 2.00$ 80.00$ 3.00$ 120.00$ 2.00$ 7,000.00$ 2.00$ 7,000.00$ 3.00$ 10,500.00$ 2.00$ 3,000.00$ 2.00$ 3,000.00$ 3.00$ 4,500.00$ 2.00$ 4,000.00$ 2.00$ 4,000.00$ 3.00$ 6,000.00$ 2.00$ 15,000.00$ 2.00$ 15,000.00$ 3.00$ 22,500.00$ 7.00$ 21,000.00$ 15.00$ 45,000.00$ 20.00$ 60,000.00$ 40.00$ 4,000.00$ 50.00$ 5,000.00$ 20.00$ 2,000.00$ 2.50$ 80,000.00$ 3.24$ 103,680.00$ 3.00$ 96,000.00$ 60.00$ 600.00$ 10.00$ 100.00$ 10.00$ 100.00$ 38,000.00$ 38,000.00$ 16,000.00$ 16,000.00$ 44,000.00$ 44,000.00$ 500.00$ 500.00$ 100.00$ 100.00$ 10.00$ 10.00$ 4,300.00$ 4,300.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,000.00$ 2,500.00$ 2,500.00$ 2,000.00$ 2,000.00$ 20,000.00$ 20,000.00$ 2,500.00$ 2,500.00$ 3,000.00$ 3,000.00$ 10,000.00$ 10,000.00$ 7,500.00$ 7,500.00$ 1,500.00$ 1,500.00$ 10,000.00$ 10,000.00$ 7,500.00$ 7,500.00$ 7,500.00$ 7,500.00$ 75,000.00$ 75,000.00$ 320,040.00$ 340,040.00$ 547,850.00$ American TechBayview Env. Janus Corp 4 of 5 Art Center Haz Mat Abatement Project Attachment D - Bid Summary RFQ# 140517 # BASE BID A DESCRIPTION QUANTITY UNITS 1 Wall/Ceiling sheetrock, joint tape and compound 60,000 SF 2 Tan 12 x 12 vinyl floor tile w/black mastic 40 SF 3 Gray 9 x 9 vinyl floor tile w/non-asbestos mastic 40 SF 4 Tan 12 x 12 vinyl floor tile (w/fissures) w/black mastic 3,500 SF 5 Gray 9 x 9 vinyl floor tile w/black mastic 1,500 SF 6 Black mastic below black 12 x 12 vinyl floor tile 2,000 SF 7 Beige 12 x 12 vinyl floor tile and black mastic 7,500 SF 8 White TSI on water pipes 3,000 SF 9 White pipe hanger insulation paper 100 SF 10 Gray/black roof felt below roof shake 32,000 SF 11 Gray mastic for roof mounted mechanical 10 SF 12 Roof covering 1 LS 13 Mold remediation 1 SF 14 Lights removal 1 LS 15 Dry rot allowance 1 LS 16 Tree protection 1 LS 17 Art protection 1 LS 18 Fencing 1 LS 19 Drywall ceiling allowance 1 LS BASE BID A TOTAL 2.50$ 150,000.00$ 2.2500$ 90.00$ 2.25$ 90.00$ 2.25$ 7,875.00$ 2.25$ 3,375.00$ 2.25$ 4,500.00$ 2.25$ 16,875.00$ 20.00$ 60,000.00$ 20.00$ 2,000.00$ 14.50$ 464,000.00$ 50.00$ 500.00$ 27,000.00$ 27,000.00$ 100.00$ 100.00$ 3,760.00$ 3,760.00$ 2,000.00$ 2,000.00$ 4,000.00$ 4,000.00$ 6,000.00$ 6,000.00$ 78,000.00$ 78,000.00$ 7,500.00$ 7,500.00$ 837,665.00$ Meza Env. 5 of 5 CITY OF PALO ALTO OFFICE OF THE CITY CLERK April 11, 2011 The Honorable City Council Palo Alto, California Cancellation of Council Meeting of April 18, 2011 Council is requested to cancel the Council meeting of April 18, 2011 due to the lack of a quorum from the beginning of Passover. Department Head: Donna Grider, City Clerk Updated: 4/6/2011 9:50 AM by Donna Grider Page 2 City of Palo Alto (ID # 1532) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 2 (ID # 1532) Council Priority: Environmental Sustainability Summary Title: Te n-Year Gas Energy Efficiency Goals Title: Finance Committee Recommendation to Approve the 2011 Ten-Year Gas Energy Efficiency Goals From:City Manager Lead Department: Utilities Recommendation Staff, the Utilities Advisory Commission (UAC), and the Finance Committee recommend that the Council approve the 2011 Ten-Year Gas Energy Efficiency Goals for the period 2011 to 2020. Summary In 2007, Council approved the first ten-year gas energy efficiency (EE) goals, which were to reduce gas usage by 3.5% by 2017. The proposed updated goal is to reduce gas usage by 5.5% by 2020. These more aggressive goals will require a broad range of EE programs targeted at all gas uses and all customer types. Staff is preparing an implementation plan designed to meet the increased goals for both gas and electric EE. At its January 12, 2011 meeting, the UAC voted to recommend Council approve the proposed gas EE goals. Committee Review and Recommendations At the March 1, 2011 meeting of the Finance Committee, staff presented the Proposed 2011 Ten-Year Gas EE Goals (Attachment 1: Staff Report ID #1356). The report contains a description of the methodology used to update the gas EE goals, the proposed annual gas EE goal, the ten- year cumulative goal, and the projected annual gas EE program costs. During discussion, the Finance Committee recognized the aggressiveness of the proposed goals. Committee members also pointed out that the utility bill would likely increase for most residential customers due to the fact that only a small fraction of them can take advantage of gas EE programs when they replace their water heater, furnace or boiler. Staff was encouraged to look into a “clunker” program to incent customers to replace old water heaters and also to reduce the hassle and cost of obtaining water heater permits. After discussion, the Finance Committee voted unanimously (4-0) to support the recommendation that City Council approve the 2011 Ten-Year Gas EE Goals. The notes from the March 1, 2011 Finance Committee meeting are provided as Attachment 2. April 11, 2011 Page 2 of 2 (ID # 1532) Resource Impact Although the report contains preliminary estimates of the costs of achieving the proposed ten- year gas EE goals, the EE Implementation Plan will contain further details, including projected budgets and any additional staffing that may be required to process in-house rebates, as well as to manage contracts for third-party administered programs. Policy Implications Approval of this recommendation conforms to the Council-approved Gas Utility Long-term Plan (GULP) Guideline, which calls for the deployment of all cost-effective, reliable and feasible EE and solar heating opportunities. The proposed gas EE goals will also help achieve the Council approved greenhouse gas emissions reduction targets by 2020. Environmental Review Approval of the ten-year gas EE goals does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Thus, no environmental review is required. Attachments: ·Attachment 1: Finance Committee Staff Report #1356 -Proposed Ten-Year Gas Energy Efficiciency Goals (PDF) ·Attachment 2: Excerpt of Draft Minutes from March 1 Finance Committee Meeting (DOC) Prepared By:Christine Tam, Resource Planner Department Head:Valerie Fong, Director City Manager Approval: James Keene, City Manager City of Palo Alto (ID # 1356) Finance Committee Staff Report Report Type:Meeting Date: 3/1/2011 March 01, 2011 Page 1 of 6 (ID # 1356) Title: Proposed Ten-Year Gas Energy Efficiency Goals Subject: Proposed Ten-Year Gas Energy Efficiency Goals From:City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee recommend that the City Council approve the proposed ten-year gas energy efficiency (EE) goals for the period 2011 to 2020. Executive Summary The attached report describes the process used to update the gas efficiency goals for the next ten years that were last updated in 2007. In 2007, the ten-year goal approved by Council was to reduce gas usage by 3.5% by 2017. The updated ten-year goal is to reduce gas usage by 5.5% by 2020. More resources will be required to achieve this goal, which is more than 50% higher than the previous 10-year goal. The next step is the development of the gas and electric EE Implementation Plan, which is expected to be complete in the Spring of 2011. That plan will contain more details on the programs that will be implemented to achieve the EE goals and the cost of those programs. Background The City Council approved the 2007 Ten-Year EE Plan (2007 EE Plan) in April 2007 (CMR:216:07) that established ten-year cumulative electric and gas efficiency goals of 3.5% by 2017. In addition to the 10-year cumulative goal, the 2007 EE Plan established annual gas efficiency targets for the City of Palo Alto (City). Since the adoption of the 2007 EE Plan, annual gas savings have steadily increased each year. However, the cumulative 3-year gas EE actual achievements for FY 2008 through FY 2010 were lower than the goals set in the 2007 EE Plan. The table below provides a summary of the gas EE goals and achievements for the past three years. Attachment 1 March 01, 2011 Page 2 of 6 (ID # 1356) Table 1: Gas Efficiency Achievements for FY 2008-FY2010 FY 2008 (Actual) FY 2009 (Actual) FY 2010 (Projections) 3-Year Total Gas Efficiency -Goals Annual gas savings (therms)76,800 86,400 99,200 262,400 Percent of Annual load 0.25%0.28%0.32%0.85% Gas Efficiency -Achievements Annual gas savings (therms)35,237 88,028*106,479 229,744 Percent of Annual load 0.11%0.28%0.39%0.76% * The gas efficiency savings in FY 2009 was originally estimated to be 146,028 therms. However, based on the recently completed consultant’s evaluation of actual program savings, this number has been adjusted downward to 88,028 therms. Specifically, the originally assumed savings used in the replacement of steam traps at six dry- cleaning facilities were higher than the verified savings. Much progress has been made in expanding gas efficiency programs since 2007. In addition to ongoing commercial and residential rebate programs, the City has contracted with third-party vendors to deliver additional gas EE projects to customers. These include contracts with the California Center for Sustainable Energy, which administers the Solar Water Heating program, and Enovity, which administers the Commercial and Industrial EE Program targeting both gas and electric efficiency opportunities for large commercial and industrial customers. A low- income program to directly install equipment, appliances and materials such as weather stripping was in place prior to 2007. Discussion Every three years, the City updates the ten-year EE goals. The Council adopted new ten-year EE goals for electricity in May 2010 (CMR: 218:10). The attached report describes the process used to develop the updated EE goals for natural gas and provides a recommendation for updated annual gas efficiency targets for the period from 2011 to 2020. This process to develop the updated goals begins with the consultant’s re-evaluation of the energy saving opportunities. Such opportunities typically assume physical, long-lasting changes to buildings and equipment that result in lower energy usage. First, the potential for gas energy savings is estimated based on gas efficiency measures that are presently available commercially. Then, the portion of “cost-effective” gas savings potential is determined by screening out the non-cost-effective gas efficiency measures. Finally, staff proposes annual efficiency targets that take into account customer awareness and willingness to adopt efficiency measures based on a reasonable and feasible timeline. Forty gas efficiency measures –19 residential and 21 commercial –were evaluated. The maximum possible gas energy savings from these measures is estimated to be about 45% of the total gas usage in the City. However, not all of the measures are cost-effective. The total Attachment 1 March 01, 2011 Page 3 of 6 (ID # 1356) amount of gas savings that would accrue if all cost-effective measures were implemented is about 34% of the City’s gas usage. Based on these results and the City’s success to date in implementing gas efficiency measures, the recommended updated gas efficiency goal is to reduce the City’s gas usage by 5.5% from gas efficiency measures by 2020. This is an increase of over 50% from the ten-year gas efficiency goal set in 2007. Within both the residential and commercial sectors, more than half of the savings potential comes from space heating equipment and building shell improvements. Figure 1 below shows the proposed new annual goals for the period 2011 to 2020 compared to the annual goals set in 2007 and the actual achievements for FY 2007 through FY 2009. Figure 1 Actual and New Annual Gas EE savings 0.11% 0.28% 0.39% 0.40% 0.45% 0.50% 0.55% 0.60% 0.60% 0 40 80 120 160 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 '000 Therms Percentages represent EE savings relative to load Actual New Gas EE targets from 2007 Gas Efficiency Plan Additional resources beyond what was used in the last three years will be required to achieve these new higher proposed goals. Figure 2 shows the actual gas EE program expenditures for FY 2008 through FY 2010, and the projected program expenditures to achieve the proposed gas efficiency goals. Note that the total expenditures in FY 2009 included a one-time set up cost for the solar water heating program. These projections will be further developed with the EE Implementation Plan, which is expected to be presented in the Spring of 2011 to the UAC. Figure 2 Attachment 1 March 01, 2011 Page 4 of 6 (ID # 1356) Actual and Projected Annual Gas EE Program Expenditures* $0.3 $0.5 $0.6 $0.7 $0.8 $0.9 $1.0 $1.1 $1.1 $1.2 $1.2 $1.2 $0.5 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Millions Actual Projected * includes Solar Water Heating program costs Retail Rate and Bill Impacts Energy efficiency is an investment that returns savings over a 10-to 20-year period, depending on the useful life of the EE measure. To meet the proposed ten-year gas efficiency goals, the program costs are expected to result in retail rates that are 4% to 5% higher by 2020 compared to retail rates if no gas EE programs were in place. However, despite the higher retail rates, average customer bills will decline since the measures selected for implementation are cost- effective. While participants in programs will see their bills decline, non-participants will see bill increases. Greenhouse Gas Emissions Reductions The City’s 2007 Climate Protection Plan (CPP) includes an annual carbon dioxide (CO2) emissions reduction target of 7,300 tonnes for gas efficiency programs and 1,500 tonnes for solar water heating by 2020. The proposed ten-year gas efficiency targets, combined with the actual gas efficiency savings since FY 2008, are projected to reduce GHG emissions by 10,200 tonnes per year in 2020, thereby exceeding the CPP target. Timeline An EE Implementation Plan will be developed to meet the EE targets for both gas and electricity. It will include the results of a current solicitation for new program ideas to be administered by third parties. Once program proposals are received and evaluated, staff will recommend that the City Council approve contracts for specific new EE programs. Upon approval, the programs will be included in the implementation plan. The EE Implementation Plan will be presented to the UAC in Spring 2011 after the solicitation process is complete. The EE Implementation Plan will address the efficiency measures to be included in the programs, including both staff- administered programs and those administered by third-party vendors. Attachment 1 March 01, 2011 Page 5 of 6 (ID # 1356) Gas efficiency targets will be updated again in 2013. Gas efficiency equipment costs and actual gas efficiency achievements between FY 2011 and FY 2012 will be taken into consideration at that time when establishing new ten-year gas savings goals. Commission Review and Recommendations Staff provided a presentation on the proposed ten-year gas efficiency goals and the methodology behind the estimated gas EE potential at the January 12, 2011 UAC meeting. During the discussion, staff clarified that only efficiency savings above the City’s building code requirements can be counted as achievements of the utility efficiency programs. The bulk of the potential for gas savings is from improvements to space heating for residential and commercial customers, followed by water heating. Staff confirmed that the proposed gas efficiency goals are similar to those of the California Investor-Owned Utilities such as PG&E. Commissioner Berry noted that unlike electric efficiency, which helps to avoid building new generation and transmission equipment, the benefit of gas efficiency is limited to lowering greenhouse gas emissions. After discussion, the UAC voted 5-1 to recommend Council approval of the proposed gas efficiency goals. Commissioner Melton opposed the motion given the challenging economic environment that customers are currently facing. Instead, he supported maintaining the current goals as opposed to increasing the goals and the EE program budget to meet the more aggressive goals. The notes from the UAC’s January 12, 2011 meeting are provided in Attachment B. Resource Impact Although this report contains preliminary estimates of the costs of achieving the proposed updated ten-year gas EE goals, the EE Implementation Plan will contain further details, including projected budgets and any additional staffing that may be required to process in-house rebates, as well as to manage contracts for third-party administered programs. Policy Implications Approval of this recommendation conforms to the Council-approved Gas Utility Long-term Plan (GULP) Guideline, which calls for the deployment of all cost-effective, reliable and feasible EE and solar heating opportunities as high priority resources. The proposed gas efficiency goals will also help achieve the Council approved greenhouse gas emissions reduction targets by 2020. Environmental Review Approval of this recommendation does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Thus, no environmental review is required. Attachment 1 March 01, 2011 Page 6 of 6 (ID # 1356) This report was prepared jointly by Christine Tam (Resource Planner), Joyce Kinnear (Manager, Utility Marketing Services) and Shiva Swaminathan (Senior Resource Planner). Attachments: ·Attachment A: Gas EE Goals (DOC) ·Attachment B: UAC Minutes January 12, 2011 (PDF) Prepared By:Christine Tam, Resource Planner Department Head:Valerie Fong, Director City Manager Approval: James Keene, City Manager Attachment 1 Page 1 of 17 2010 Gas Energy Efficiency Goals Table of Contents EXECUTIVE SUMMARY.............................................................................................................3 New Goals are Aggressive.........................................................................................................3 Goals Developed Using a Comprehensive Analysis .................................................................3 Detailed Implementation Plan is Being Developed...................................................................3 BACKGROUND.............................................................................................................................3 Purpose ......................................................................................................................................3 City Gas Consumption History..................................................................................................4 The 2007 Ten-Year Gas Energy Efficiency Goals and Achievements.......................................4 Gas Efficiency is Key Part of the Gas Utility Long-term Plan..................................................6 Gas Efficiency is Consistent with Climate Protection Plan.......................................................6 PROCESS........................................................................................................................................7 What are the Potential Gas Saving Measures?..........................................................................7 Profile of Palo Alto’s Gas Use.............................................................................................7 Gas Saving Measures Included in the Analysis...................................................................8 How Much Gas Savings Are Possible?.....................................................................................9 Which Measures are Cost-Effective?........................................................................................9 How Much Gas Savings Can Be Achieved From Utilities Programs?.....................................9 RESULTS......................................................................................................................................10 Summary of Achievable Gas Efficiency Savings ....................................................................10 Where Can We Get the Most Gas Savings?............................................................................11 Which Measures are Cost-Effective?......................................................................................12 Solar Hot Water Heating Systems...........................................................................................12 PROPOSED GAS SAVINGS GOALS .........................................................................................13 Proposed Annual Gas Efficiency Goals...................................................................................13 Proposed Ten-Year Gas Savings Goal ....................................................................................13 Greenhouse Gas Reductions....................................................................................................14 PROJECTED COSTS TO MEET THE PROPOSED GOALS.....................................................15 Gas Efficiency Program Costs Are Projected to Rise..............................................................15 Retail Rate and Bill Impacts....................................................................................................15 LIST OF APPENDICES................................................................................................................16 A.Cost-Effectiveness Tests for Energy Efficiency Programs............................................16 B.Gas Efficiency Measures ...............................................................................................16 C.Modeling Assumptions..................................................................................................16 D.Fuel Switching Analysis................................................................................................17 E.Sensitivity Analysis .......................................................................................................17 F.Solar Water Heating Program in Palo Alto ...................................................................17 G.Gas Efficiency Goals Comparison.................................................................................17 Attachment 1 Page 2 of 17 List of Figures Figure 1: Gas Usage –History and Forecast ...................................................................................4 Figure 2: 2007 Gas Savings Goals...................................................................................................5 Figure 3: Gas Uses of Commercial Customers................................................................................8 Figure 4: Gas Uses of Residential Customers .................................................................................8 Figure 5: Potential Gas Savings.....................................................................................................10 Figure 6: Gas Savings Potential by End Uses................................................................................12 Figure 7: Gas Savings –Historical Actual and Future Goals........................................................13 Figure 8: Cumulative 10-year Gas Savings...................................................................................14 Figure 9: Actual and Projected Gas EE Program Expenses .........................................................15 List of Tables Table 1: Gas Efficiency Achievements for FY 2008-2010..............................................................5 Table 2: Estimated community-wide emissions and CO2 emissions reduction impacts of utility program goals..................................................................................................................................6 Table 3: Potential Residential Gas Savings by End Use ...............................................................11 Table 4: Potential Commercial Gas Savings by End Use..............................................................11 Attachment 1 Page 3 of 17 2010 Gas Energy Efficiency Goals EXECUTIVE SUMMARY New Goals are Aggressive The best natural gas resource is cost-effective energy efficiency. By not buying natural gas, everyone saves –gas consumers, the utility and the environment. Before making commitments to purchase gas supplies, the City attempts to ensure that the gas consumption is the most efficient it can be. The City has long had a large arrayof energy efficiency programs and has ramped them up in recent years. In 2007, for the first time, the City adopted 10-year energy efficiency goals. Every three years, the goals are re-evaluated. The goals set in 2007 were exceeded,and the proposed goals for the next 10- years are higher still. The 10-year goal set in 2007 was to save 3.5% of the City’s gas use by FY 2017. The proposed new 10-year goal is to save 5.5% of the gas used in the City by FY 2020. This aggressive goal is reflective of the Gas Utility Long-term Plan’s objective to “Ensure the deployment of all feasible, reliable, cost-effective energy efficiency measures.” The new proposed goals are based on updated technology and market parameters, as well as actual efficiency achievements in the past three years. The cost to achieve the new aggressive goals will be higher than it has been in the past for energy efficiency,as it gets harder to achieve new gas savings every year. Goals Developed Using a Comprehensive Analysis The process used to evaluate the opportunities for gas savings involved several steps. First,40 gas saving measures were identified. The total possible energy savings for each measure were evaluated regardless of cost. This analysis concluded that a maximum of 45% of the City’s gas usage could be saved if all measures were implemented by all customers. Second, the estimated cost of implementing each of these measures was compared to the cost of buying natural gas. Measures that are not cost-effective (i.e. avoided cost of gas is less than the measure implementation cost) are screened out. The result of this analysis was that up to 34% of the City’s gas usage could be saved if all cost-effective measures were fully implemented. Finally, based on actual program results to date and projected customer awareness and willingness to adopt efficiency measures, a set of energy savings goals over a ten-year period was developed. Detailed Implementation Plan is Being Developed An Energy Efficiency Implementation Plan is being prepared and is expected to be completed in the Spring of 2011. That plan will contain details on the programs to be implemented as well as program cost estimates and will discuss any other resources that may be needed to achieve the new goals. BACKGROUND Purpose This report provides the analysis to support staff’s recommendations for gas efficiency goals for 2011 Attachment 1 Page 4 of 17 2011 to 2020 for the City of Palo Alto Utilities (CPAU). The purpose of this analysis is to evaluate the opportunities for gas energy efficiency in Palo Alto and to establish a set of 10-year gas efficiency goals. These goals will update the goals in the 2007 Ten-Year Energy Efficiency(EE) Plan approved by the City Council in April 2007. City Gas Consumption History The City’s usage of natural gas is shown in Figure 1 below. The figure shows that gas usage has declined from a peak in FY 1973 of about 45.6 million therms per year to usage in FY 2010 of about 31.8 million therms per year. Gas usage is projected to decline further due to the implementation of gas efficiency programs to meet the proposed goals of 5.5% of the gas usage by 2020. Figure 1: Gas Usage –History and Forecast City of Palo Alto - Natural Gas Annual Usage 0 5 10 15 20 25 30 35 40 45 50 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 Fiscal Year Million Therms/Year actual forecast New Gas Savings from 10-year Goal The 2007 Ten-Year Gas Energy Efficiency Goals and Achievements The City Council approved the 2007 Ten-Year Energy Efficiency (EE) Plan (2007 EE Plan) in April 2007 (CMR:216:07) that established ten-year cumulative electric and gas efficiencygoals of 3.5% by 2017. The primary aim of cost-effective EE programs is to reduce utility supply costs and hence average customer bills while reducing the City’s carbon footprint. In addition to the 10-year cumulative targets, the 2007 EE Plan established annual gas efficiency targets for Palo Alto as shown in Figure 2. The total (cumulative) gas EE savings goal for the period 2008 to 2017 was 3.5% of annual gas load by 2017. Attachment 1 Page 5 of 17 Figure 2: 2007 Gas Savings Goals 2007 Ten Year Gas Efficiency Plan: 10-ye ar cumulative gas savings =3.5% 0.25%0.28%0.32% 0.35% 0.36% 0.36%0.36%0.36% 0.36% 0.36% - 40 80 120 160 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 '000 Therms Percentages represent EE savings relative to load Since the adoption of the 2007 Ten-Year Gas Efficiency Plan,annual gas savings have steadily increased each year. Table 1 provides a summaryof the EE goals, achievements and expenditures for the past three years. The gas efficiency achievements include savings from the Solar Water Heating Program. Table 1: Gas Efficiency Achievements for FY 2008-2010 FY 2008 (Actuals) FY 2009 (Actuals) FY 2010 (Projections) 3-Year Total Gas Efficiency -Goals Annual gas savings (therms)76,800 86,400 99,200 262,400 Percent of Annual load 0.25%0.28%0.32%0.85% Gas Efficiency -Achievements Annual gas savings (therms)35,237 88,028*106,479 229,744 Percent of Annual load 0.11%0.28%0.39%0.76% Program Expenditures Public Benefit funds $281,837 $418,684 $445,680 $1,146,201 Supplemental funds (for solar water heating program) $0 $89,870 $37,151 $127,022 Total Cost $281,837 $508,554 $482,831 $1,273,223 * The gas efficiency savings from FY 2009 was originally 146,028 therm. However, based on the recently completed consultant’s evaluation of program savings, this number has been adjusted downward to 88,028 therms. Specifically, the originally assumed savings used in the replacement of steam traps at six dry-cleaning facilities were higher than the verified savings. The percentage of gas efficiency savings to annual load has also been reduced from 0.49% to 0.28%. As a result of the adjustment, the three-year cumulative savings are below the goals. Attachment 1 Page 6 of 17 Much progress has been made in expanding gas efficiency programs since 2007. In addition to ongoing commercial and residential rebate programs, the City has contracted with third-party vendors to deliver gas energy efficiency projects to customers. These include contracts with the California Center for Sustainable Energy, which administers the Solar Water Heating program, and Enovity, which administers the Commercial and Industrial Energy Efficiency Program targeting both gas and electric efficiency opportunities for large commercial and industrial customers. A direct install program for low-income residential customers was in place prior to 2007. Gas Efficiency is Key Part of the Gas Utility Long-term Plan In August 2010, the Utilities Advisory Commission (UAC) recommended that the City Council approve the updated Gas Utility Long-Term Plan (GULP) Objectives and Strategies with a focus on balancing environmental and economic sustainability. The updated GULPStrategy #3 recognizes the importance of energy efficiency as a resource. GULP Strategy #3: Ensure the deployment of all feasible, cost-effective energy efficiency measures by: (a) Developing and implementing a ten-year gas efficiency plan every three years that includes a reasonable carbon price premium for traditional gas supplies; and (b) Considering the impact (costs, benefits, and GHG emissions) of substituting electricity-using appliances for gas-using appliances and vice versa in the ten-year gas efficiency plan. Gas Efficiency is Consistent with Climate Protection Plan The City’s Climate Protection Plan (CPP) adopted by Council in December 2007 (CMR: 435:07) contained the table below, which summarizes the estimated community-wide 2005 CO2 emissions from electricity and natural gas use, and projected 2020 emissions with impact of each major utility program area for which quantitative estimates had been completed at the time of the adoption of the CPP. The CPP establishes a goal to reduce the City’s CO2 emission to 90% of the 2005 level by 2020. Table 2: Estimated community-wide emissions and CO2 emissions reduction impacts of utility program goals. Electric Metric Tons CO2/Year Natural Gas Metric Tons CO2/Year Reference Year 2005 145,000 165,000 Base Case 2020 (load growth with no efficiency reduction)178,600 174,000 Efficiency -15,800 -7,300 Solar -3,800 -1,500 Mandatory Renewable Energy Supply -91,500 TBD Voluntary Renewable Energy Supply -36,500 -16,400 Total In-Community Reduction -147,600 -25,200 Net In-City Emissions 31,000 (21% of 2005) 148,800 (90% of 2005) Attachment 1 Page 7 of 17 Electric Metric Tons CO2/Year Natural Gas Metric Tons CO2/Year Low-Carbon Supply (net savings realized by state) -20,000 n/a Net Emissions 11,000 (8% of 2005) 148,800 (90% of 2005) As shown in Table 2, the total expected CO2 emissions reduction in 2020 from Utilities gas programs is 25,200 metric tons (or tonnes). The projected CO2 emissions reductions for gas efficiency programs were based on the 2007 gas EE targets. The CO2 emissions reductions estimate for solar assumed that a solar hot water and space heating incentive program would be implemented consistent with the California Solar Initiative and AB 1470, or 500 residential installations of solar water heating systems. In addition, the estimates assumed 100 installations of residential solar pool heating systems. A voluntary renewable gas supply similar to the PaloAltoGreen program for electricity was also assumed to account for a significant part of the CO2 emissions reductions attributable to gas utility programs. However, the premium for renewable gas supplies was found to be too high to be acceptable to customers. The Gas Utility Long-term Plan (GULP) Implementation Plan includes the continued pursuit of reasonably priced non-fossil gas for a voluntary program. PROCESS The process of establishing a target for gas savings has several steps. The first step is to identify the potential measures, i.e. physical, long-lasting changes to the building as well as more efficient equipment, that result in lower gas usage. The potential for each of these measures to save gas is estimated. Second, the cost-effectiveness of each measure is evaluated. This consists of estimating the savings from not having to purchase gas supplies and the implementation cost of the measure, which includes the EE program administrative cost. Finally, the fraction of the cost-effective gas savings that can be achieved is estimated. Each of these steps is described in this section. What are the Potential Gas Saving Measures? Profile of Palo Alto’s Gas Use Around 45% of the natural gas supplied to the City is consumed by residential customers, with businesses consuming the remaining 55%. Space heating and water heating account for the bulk of gas usage. Figure 3 and Figure 4 show how gas is used by commercial and residential customers within CEC Forecasting Climate Zone (FCZ)4. Attachment 1 Page 8 of 17 Figure 3: Gas Uses of Commercial Customers within FCZ 4 Commercial Gas End Use Distribution Heating, 38.5% Cooling, 0.5% Water Heating, 34.6% Cooking, 20.3% Pr ocess, 5.7%Misc,0.4% Source: Statewide Commercial End Use Study, California Energy Commission report, 2006 Figure 4:Gas Uses of Residential Customers within FCZ 4 Residential Gas End Use Distribution Water Heating, 48% Space Heating, 42% Pool/Spa Heating, 4%Clothes Dryer, 2% Range/ Oven, 4% Source: Statewide Residential Appliance Saturation Survey, California Energy Commission report, 2010 If Palo Alto’s usage pattern mirrors that of Forecasting Climate Zone 4, then space heating and water heating account for around 80% of the gas usage in the City. Thus, these two end uses are where the bulk of the gas savings could accrue. Gas Saving Measures Included in the Analysis To help in the analysis, the City engaged a consultant to enhance the model that was developed for members of Northern California Power Agency (NCPA) to evaluate the electric efficiency potential for the 2010 Electric EE Plan. The model analyzed 40 gas efficiency measures –19 for residential customers and 21 for commercial customers. These measures are listed in Appendix B and include clothes washers, dishwashers, space heating equipment, improvements to the building shell (e.g. wall and ceiling insulation, better windows), water heaters, low flow showerheads and faucets, pipe and duct insulation, cooling equipment, and solar water heating equipment. Emerging technologies that have not yet been widely commercialized or do not have reliable energy savings estimates were excluded from the analysis. Attachment 1 Page 9 of 17 How Much Gas Savings Are Possible? The total amount of gas savings that are possible if all of the identified measures are implemented is equal to 13.8 million therms per year, or about 45% of the projected total citywide gas consumption in 2020. The details of how much energy savings can be achieved by each measure is found in Appendix B. The total amount of energy that can possibly be saved is also called the “technical potential.” Technical potential represents the amount of energy efficiency savings that could be achieved if economic and market barriers did not exist. It takes into account the energy savings of efficiency measures (or equipment), the quantity of applicable equipment in each facility, the number of facilities in a utility’s service area, and the efficiency measure’s current market saturation. Technical potential estimates include measures that may not be cost-effective. These estimates, while not realistically obtainable, are used to establish the outer boundary of what might be achieved. The model calculates the technical potential based on all available gas EE measures. For competing technologies such as high-efficiency water heaters, tankless water heaters and solar water heaters, only the most efficient technology is included in the technical potential. Which Measures are Cost-Effective? The cost-effectiveness of each measure was estimated based on the savings that would accrue from not having to purchase gas supplies and the cost of installing the measures plus the cost of administering an EE program.Details of the cost-effectiveness calculations are provided in Appendix A. The total amount of gas savings if all of the cost-effective measures are implemented is about 10.4 million therms per year, or about 34% of the total citywide gas consumption in 2020. The total amount of cost-effective gas savings is also called the “economic potential.” Economic potential represents the portion of the technical energy efficiency potential that is “cost-effective” from a societal perspective, as defined by the Total Resource Cost (TRC) test. The model takes into account gas, electric and water savings when determining the cost-effectiveness of efficiency measures. Economic potential does not consider market barriers that limit a voluntary efficiency program’s success in encouraging customers to install energy efficiency measures. The measures that are technically feasible, but are not cost-effective include condensing water heaters, tankless water heaters and solar water heaters. If prices for condensing water heaters and solar water heaters decline in the future, the economic potential will increase. How Much Gas Savings Can Be Achieved From Utilities Programs? The total amount of gas savings that can be achieved from Utilities programs is called the “market potential.” Market potential is an estimate of the portion of the economic potential that could be attributed to utility energy efficiency programs. Additional gas savings are attributed to building and appliance standards, although these savings cannot be counted towards the goals. Market potential is modeled to vary with parameters, such as the amount of incentives, customer willingness to pull permits, and other factors such as customer awareness and willingness to adopt measures. Attachment 1 Page 10 of 17 Market potential at 5.5%is less than the full economic potential of 34% because most gas EE measures are major appliances or improvement projects requiring significant financial commitments. For the commercial sector, business owners are not likely to invest in efficient equipment with a simple payback over two years. Residential installation of space or water heating systems is typically costly and complicated, often requiring construction and related permits. Lengthy equipment turnover cycles are another market barrier to realizing the full economic potential. Business owners and homeowners often choose to keep an older piece of equipment instead of purchasing a new efficient model with lower energy costs, if the payback period is more than one or two years.This is particularlytrue in a moderate climate where reductions in utility bills are often not large or are limited to a short time period.Residents are often reluctant to pull permits for hot water heaters and other similar measures. It is estimated that, in Palo Alto, less than 30% of residents who may be installing new water heaters are pulling permits. Since utility incentives are only paid to customers who pull all required permits, market potential for utility programs is further reduced. The estimated market potential is calibrated based on program achievements between FY 2008 and FY 2010. The model also calculates the future cost-effectiveness and annual costs of gas efficiency programs, which include the program administration cost and the cost of incentives (i.e. rebates). RESULTS Summary of Achievable Gas Efficiency Savings The gas EE potential model determined a technical potential of 45% gas energy savings by 2020. Since some of the measures that are technically feasible are not cost-effective, the economic potential is only 34% by 2020. The market potential in 2020 is 5.5% of the projected gas needs in 2020. Figure 5 compares the technical, economic and market gas EE potential in 2020 for CPAU. Figure 5: Potential Gas Savings Gas Efficiency Potential Summary 0 2 4 6 8 10 12 14 16 Technical Economic Market 45% 34% 5.5% Percentages show EE potential relative to load forecast in 2020. Million therms Attachment 1 Page 11 of 17 Where Can We Get the Most Gas Savings? Table 3 below shows the amount of potential gas savings for each end use for residential customers. More detail for individual measures is available in Appendix B. Table 3: Potential Residential Gas Savings by End Use The potential gas savings for commercial customer end uses are shown in Table 4 below.More detail for individual measures is available in Appendix B. Table 4: Potential Commercial Gas Savings by End Use Figure 6 shows the distribution of gas savings “market potential”by end use for the residential and commercial sectors.For both sectors, much of the cost-effective efficiency potential lies in the opportunityto upgrade building insulation and space heating equipment (HVAC/Building Shell). The expected gas savings from replacing residential water heaters with more efficient units is small compared to the economic potential because many residents replace their water heaters without getting a permit, a step that is required in order to receive a rebate.This does not mean that there will not be gas savings, just that the savings will not be counted in a Utilities program. Gas End Uses Technical Potential (therms) Economic Potential (therms) Market Potential (therms) Clothes washer 108,321 108,321 97,526 Dishwasher 24,240 24,240 16,275 Space Heating/Building Shell 6,040,044 5,217,176 624,305 Water Heating 3,602,769 2,171,761 180,754 TOTALS 9,775,375 7,521,495 918,860 Gas End Uses Technical Potential (therms) Economic Potential (therms) Market Potential (therms) Cooking 773,088 673,743 13,034 Space Heating/Building Shell 2,391,079 1,773,852 506,849 Water Heating 898,861 547,602 288,930 TOTALS 4,063,028 2,956,196 808,813 Attachment 1 Page 12 of 17 Figure 6: Gas Savings Potential by End Uses Residential Gas EE Market Potential by End Use (2011) HVAC/ Building Shell 55% Water Heating 16% Appliances 29% Comme rcial Gas EE Market Potential by End Use (2011) HVAC/ Building Shell 64% Water Heating 34% Cooking 2% Which Measures are Cost-Effective? The model projects that the gas efficiency portfolio will have a societal benefit-to-cost ratio (or TRC ratio) of 1.3, indicating that the portfolio is cost-effective.In general, commercial gas efficiency measures are more cost-effective than residential measures. Some residential gas efficiency measures, such as solar water heaters and tankless water heaters, are not cost-effective due to the high measure installation cost. Solar water heaters, while not cost- effective, are included in the program due to state law requirements. Other measures such as clothes washers are not cost-effective based on gas savings only, but are when gas, water and electric savings are included.Appendix B lists the gas efficiency measures included in the analysis and the TRC ratio for each measure based on its gas, water and electric savings. CPAU generally does not promote or provide rebates for measures that are not cost-effective unless mandated by law, as in the case of solar water heaters. In the case of tankless and condensing water heaters, due to customer interest in these technologies and the potential to reduce greenhouse gas emissions, these measures were added to the rebate program. Solar Hot Water Heating Systems The model assumes that the number of solar water heating systems installed by 2020 will not meet the goals in the City’s Climate Protection Plan of 500 residential systems plus 100 solar pool heating systems. Instead, the model projects about 300 residential solar water heaters installed between 2010 and 2020. Per state law (AB1470), the total state goal is 200,000 by 2017, of which Palo Alto’s share is 530.Since Palo Alto started its current solar water heating (SWH)program in 2008,the program has provided rebates for 19 systems.Despite a utility rebate of up to $1,500 per household and a 30% federal tax credit (through 2016), the upfront investment cost of a residential SWH system remains a significant barrier to adoption.Currently, the capital cost for these systems ranges between $7,000 and $15,000. Unless the cost of SWH systems drops significantly or the program Attachment 1 Page 13 of 17 implementation approach is changed, Palo Alto is not likely to meet the goals for SWH installations by 2020.See Appendix F for a detailed discussion on the City’s solar water heating program. PROPOSED GAS SAVINGS GOALS Proposed Annual Gas Efficiency Goals Based on the analysis results and the gas efficiencyachievements between FY 2008 and FY 2010, the proposed annual incremental gas efficiency goals are 0.4%, 0.45%, and 0.5%of forecast gas load in FY 2011, FY 2012 and FY 2013, respectively. These goals are higher than the goals set in the 2007 EE Plan. Beyond the next three years, the proposed incremental gas efficiencygoals climb to 0.55% in FY 2014 and then level off when the annual incremental goal reaches 0.6% in FY 2016 through FY 2020, as shown in Figure 7. Figure 7: Gas Savings –Historical Actual and Future Goals Actual and New Annual Gas EE savings 0.11% 0.28% 0.39% 0.40% 0.45% 0.50% 0.55%0.60% 0.60% 0 40 80 120 160 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 '000 Therms Percentages represent EE savings relative to load Actual New Gas EE targets from 2007 Gas Efficiency Plan Proposed Ten-Year Gas Savings Goal Figure 8 shows that the proposed gas efficiency goals will reach a 5.5%cumulative load reduction by FY 2020. This is 50% more than the 10-year gas savings goal of 3.5% that was adopted in 2007. The proposed annual goals for FY 2011, FY 2012 and FY 2013 are 14%, 28% and 40% higher than the gas savings achieved in FY 2010.These aggressive targets are consistent with the City’s environmental goals and the goals of the Gas Utility Long-term Plan (GULP). Attachment 1 Page 14 of 17 Figure 8: Cumulative 10-year Gas Savings 10-Year Projected Cumulative Gas EE savings 5.5% 4.9% 4.3% 3.7% 3.1% 2.5% 1.9% 1.35% 0.8% 0.4% - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 '000 Therms Percentages represent cumulative EE s avings relative to load Natural gas usage is primarily related to comfort end uses—space and water heating. In addition,the majority of new efficient technologies in development are for electric appliances and equipment and not for those fueled by natural gas. These two factors in addition to the high upfront cost of many natural gas efficiency measures, such as furnaces and hot water heaters, tend to result in lower gas saving achievements. As experienced by CPAU, actual electric efficiency achievements were higher than the actual gas efficiency achievements for the last three years. Likewise, future energy efficiency targets can be expected to be lower for natural gas than for electricity. Without a decline in upfront equipment and installation cost, the targets for the natural gas utility will be more difficult to reach in the future than for those of the electric utility. The goals in this report must be considered “stretch goals.” The 10-year goals are updated every three years. In three years, when the next study of the potential for gas savings is completed, an analysis of actual achievements will be included with the updated goals to further refine natural gas efficiency targets. The impacts from the proposed ten-year gas efficiency targets will extend well beyond 2020. Some gas efficiency measures, such as boilers and furnaces, can last more than 20 years. The gas savings from EE measures installed in 2020 will degrade over time,but persist through 2039. Greenhouse Gas Reductions Based on the actual gas savings achievements between FY 2008 and FY 2010, and the proposed gas efficiency targets between FY 2011 and FY 2020, the reduction in carbon dioxide (CO2) in 2020 is projected to be 10,200 tonnes per year, of which 300 tonnes is attributed to residential solar water heater installations. This exceeds the annual combined reduction target for gas efficiency (7,300 tonnes) and solar water heating (1,500 tonnes) programs in the City’s 2007 Climate Protection Plan (CPP). Overall, the cost of CO2 emissions reduction is around $70 per tonne. The CPP assumes that the number of solar water heating systems installed by 2020 will reach 600 (500 residential water heating systems plus 100 solar pool heating systems).However, the SWH program has been experiencing slow customer uptake since its launch in 2008. The proposed 10-year Attachment 1 Page 15 of 17 year gas efficiency targets assume that the number of solar water heating systems installed between 2010 and 2020 to be around 300. If the CPP target for the SWH program is met, a total of 10,800 annual tonnes of CO2 reduction will be achieved. PROJECTED COSTS TO MEET THE PROPOSED GOALS Gas Efficiency Program Costs Are Projected to Rise Commensurate with the higher gas savings goals, the implementation cost for gas efficiency programs will also increase.In FY 2010, gas efficiency program expenditures, including administrative cost and customer rebates, were approximately$500,000. The projected gas efficiency program costs for FY 2013 are projected to be more than 60% higher than the program costs in FY 2010.Figure 9 shows the actual gas EE program expenditures for FY 2008 through FY 2010,and the projected program expenditures to achieve the proposed gas efficiency goals.Note that the total expenditures in FY 2009 included a one time set-up cost for the Solar Water Heating Program. Figure 9: Actual and Projected Gas EE Program Expenses Actual and Projected Annual Gas EE program Expenditures* $0.3 $0.5 $0.6 $0.7 $0.8 $0.9 $1.0 $1.1 $1.1 $1.2 $1.2 $1.2 $0.5 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Millions Actual Projected * includes Solar Water Heating program costs The costs projected here are preliminary estimates and will be further refined in the Energy Efficiency Implementation Plan that will be presented in the Spring of 2011. Retail Rate and Bill Impacts Gas efficiency program expenditures impact retail rates in two ways.First, the program budget increases the revenue requirements for the gas utility in the short term. For the cost-effective measures, the savings that accrue from not having to purchase gas supplies are greater than the gas efficiency program expenses over the lifetime of the measures since program and rebate costs occur early in the measure life. Second, lower gas usage means that fixed costs (capital and operating costs Attachment 1 Page 16 of 17 to run the gas utility) must be distributed over a lower gas sales volume, which increases the gas retail rate in both the short-and long-term. In 1996, despite no state mandated “public benefits” charge for gas efficiency programs, the City proactively adopted a funding target of between 0.75% and 1.25% of natural gas revenues for Demand Side Management (DSM) programs (CMR:209:96). In 2000, however, the California legislature mandated a new public benefits surcharge on all natural gas customers throughout the state, including customers of publicly owned utilities,to fund gas efficiency programs (AB 1002). The City meets the requirements of this mandate by locally providing efficiency, low income and other natural gas programs through natural gas rates. During the last several years, the City has spent an average of 1% of the natural gas utility’s revenues for efficiency programs, with additional funding for the solar water heating program (which reduces natural gas purchases) coming from the natural gas supply budget. The retail rate impact in FY 2020 of the preliminary program budget is estimated to be between 4% and 5% higher than with no gas EE programs. Since 1% of the gas utility revenue has already been budgeted for gas DSM programs, which have achieved approximately 0.35% savings, the projected additional rate impact from the higher gas EE targets in FY 2020 is between 2% and 3%. Energy efficiency is an investment that returns savings over a 10-to 20-year period, depending on the life of the equipment. The energy savings will result in lower average utility bills. The projected average bill savings is around 1% by 2020 based on the gas EE program costs and proposed gas EE savings targets.Participants in the gas efficiency programs will realize reduced gas bills, while non- participants will experience an increase in gas bills. The retail rate impacts expected from the proposed gas savings targets and the program funding levels will be further refined in the EE Implementation Plan, which will be completed in the Spring of 2011. LIST OF APPENDICES A.Cost-Effectiveness Tests for Energy Efficiency Programs This appendix contains explanations of the cost-effectiveness tests used to evaluate energy efficiency measures. It also includes a list of the criteria used to evaluate energy efficiency programs. B.Gas Efficiency Measures Appendix B lists the gas efficiency measures that were evaluated to determine the potential for gas savings. It contains tables of residential and commercial gas savings measures and shows the results of the analysis, including the Total Resource Cost cost-effectiveness test ratio and the technical and market potential for each measure. C.Modeling Assumptions This appendix lists the key assumptions that were used to evaluate the cost-effectiveness of each gas saving measure. Attachment 1 Page 17 of 17 D.Fuel Switching Analysis Appendix D contains an analysis of the cost-effectiveness of switching from gas-using appliances to electric-using appliances (and vice versa) for certain end uses (water heating and space heating). The analysis compares the costs to the customer and to the utility of using gas versus electricity for each of these end uses using a variety of different technologies. E.Sensitivity Analysis Several assumptions are made in the evaluation of the potential for gas savings and each of the assumptions about the future is uncertain.Appendix E contains an analysis of the potential for gas savings if some of the key assumptions are changed. For example, the sensitivity analysis shows how the potential for gas savings change when gas prices are lower or higher than the prices assumed in the base case analysis. F.Solar Water Heating Program in Palo Alto This appendix provides more detail on the evaluation of Palo Alto’s solar water heating program. It includes an assessment of the cost of CO2 emissions reductions by water heating technologies, including solar water heating systems. G.Gas Efficiency Goals Comparison This appendix compares the gas efficiency goals and achievement of CPAU with that of PG&E, SoCalGas and SDG&E. Attachment 1 Page A-1 APPENDIX A: COST-EFFECTIVENESS TESTS FOR ENERGY EFFICIENCY PROGRAMS The primary aim of cost-effective energy efficiency programs is to reduce utility cost and hence customer bills while improving the environment. Though customer bills for those who participate in programs will be reduced, the retail rate will tend to increase as distribution system related fixed cost are spread over a smaller volume of energy sales. Thus, those who do not increase their equipments efficiency will have higher utility bills.All customers have the option to participate in one or more of the efficiency incentives. Cost-effectiveness can be measured in many ways. The four perspectives most commonly used in efficiency program cost-effectiveness testing are: 1.Participant:An energy efficiency measure that provides net savings to a customer is cost- effective for them as a “participant.”If a customer’s initial investment, after accounting for utility rebates and tax incentives, can be recouped with lower operating cost over the life of the measure, the measure is considered cost- effective from a participant’s perspective. 2.Utility:A measure that lowers overall cost for the utility is cost-effective for the utility (also referred to as “Program Administrator”). For CPAU, this could also be considered the “all ratepayers test” or “average utility bill test,” as it reflects the change in the utility bill to the average customer. To be cost- effective from the utility perspective, the cost of the program (administrative and rebate costs) must be less than the savings from not purchasing the energy supply. 3.Total Resource:If the combination of the utility and all customers together save money, it is cost-effective from a “Total Resource Cost (TRC)”or societal viewpoint. This is the cost-effectiveness criteria that is required by the CEC and is used in CPAU reporting.For Palo Alto, the cost savings include the cost of carbon emissions by the use of a “carbon adder” to the other supply cost savings. 4.Non-Participant: Even if the bill for the average customer shrinks significantly, retail rates could increase slightly, so that customers who do not reduce consumption could see a slight increase in rates and therefore bills. This effect is due to the portion of retail revenue that must be collected to payfor fixed costs. For this reason it is important to design diverse programs to be widely available in order to facilitate efficiencyimplementation in as broad a manner as possible. The Non-Participant perspective is also called the Rate Impact perspective. The Total Resource Cost reflects the financial perspective of the Palo Alto community as a whole. The Utility Cost, Participant, and Rate Impact perspectives should be balanced to ensure lower average bills and sufficient incentives to achieve participation The costs and benefits that are used to calculate the benefit-cost ratios for each of these different perspectives are illustrated below: Attachment 1 Page A-2 Table A1: Cost-Effectiveness Perspectives and Associated Costs and Benefits Cost Effectiveness Test Costs Benefits Participant Cost Test (PCT) Does the participant save money? Measure Cost Incentive to customer Bill Savings Tax Savings Utility Cost Test (UCT) –Average Bill Are utility revenue requirements lowered? Incentive to customer Program Delivery Cost Avoided Supply Costs Total Resource Cost Test (TRC) Sum of Participant + Non-participant Are total community expenditures lowered? Measure Cost Program Delivery Cost Avoided Supply Costs Tax Savings Rate Impact Measure (RIM) Also known as non-participant test Are utility rates lowered? Incentives to customer Lost Revenues (=Bill Savings) Program Delivery Cost Avoided Supply Costs Efficiency Program Design and Screening Criteria Staff will continue to use the following standards when evaluating specific efficiency programs: ·The Total Resource Cost (TRC) perspective for ranking energy efficiency measures and contrasting energy efficiency investments with supply alternatives from a communitystandpoint. This is the perspective that is required for reporting to the CEC and for comparing with other utilities. ·Avoided supply costs include energy, transmission and distribution costs, transmission and distribution line losses, the cost to maintain grid reliability with sufficient reserve capacity, and externality cost. ·The Utility Cost, Participant, and Rate Impact perspectives are reviewed to maintain lower average bills with sufficient incentives to achieve participation. ·Since there will be participants and non-participants for any program, CPAU will develop a portfolio of programs to allow as many people as possible opportunities to participate in programs. ·CPAU’s Low Income Program serves customers who are least able to afford efficiency upgrades on their own. These customers receive free lighting upgrades, weatherization, and other energy saving measures. In addition, refrigerators and furnaces can be repaired or replaced, if needed. This reduces the total utility bill cost to these customers. ·Include a greenhouse gas adder when computing avoided supply cost. This adder is acknowledgment of the environmental cost of greenhouse gas emissions. An actual financial cost for greenhouse gas emissions may be levied in the future under potential “cap-and-trade” legislation. Using a greenhouse gas adder improves the cost-effectiveness of efficiency measures and energy savings reduce the likelihood of CPAU paying for greenhouse gas emissions allocations associated with the energy supplies delivered.CPAU currently uses the carbon adder stated in the Climate Protection Plan ($20/tonne in 2007 increasing by 5% per year). Attachment 1 Page B-1 APPENDIX B: GAS EFFICIENCY MEASURES The tables below list the gas efficiency measures included in the EE potential analysis, the calculated TRC ratio for each measure based on combined gas, electric and water savings, and whether CPAU currently offers rebate for the measure. Emerging technologies that have not yet been widely commercialized or do not have reliable energy savings estimates are excluded from the analysis. Ground source heat pumps (GSHP) were not included in the analysis.While the installation of a GSHP system could deliver gas and electric savings by lowering the air conditioning load and possibly eliminating the space heating load, the applicability of this technology for the residential sector in Palo Alto is very low due to the moderate climate and high up-front investment (a typical installation of a GSHP system for a 2,000 square foot home costs $14,000 more than a conventional air-conditioning system). There are other Northern California municipal utilities, including Redding Electric and Plumas Sierra Rural Co-op, which offer rebates for residential GSHP systems. Despite the higher summer temperatures and longer winter season in these utility service territories, payback for a GSHP system without a utility rebate in these other areas could exceed 20 years. For the commercial sector, the high investment cost is a major factor deterring the adoption of GSHP systems. There are two GSHP systems installed at Palo Alto commercial buildings–one at the Children’s Library, and the other at the 2183 Park Blvd (McDonald Building) as a technology demonstration project. The installation at the McDonald Building had a total project cost of around $140,000 in 2003, of which 50% was funded by the City (CMR:487:03). Based on the annual gas and electricity savings, the GSHP installation at the McDonald Building has a payback of 11 years without the City’s funding. The GSHP system at the Children’s Library costs around $140,000 more than a conventional system and took almost two years to complete. Engineering staff involved in the project cited various potential barriers to installing GSHP systems, including the lack of qualified drillers and installers, and the high upfront cost of bore field construction. Attachment 1 Page B-2 Table B1: Residential Gas Efficiency Measures Notes: 1.The technical potential for competing technologies, e.g. different water heaters, is based on the savings of the most efficient technology of the group, with less efficient technologies being assigned zero technical potential. 2.The technical potential assigned to solar water heaters is the total water heating potential from the residential single family sector, while the technical potential assigned to condensing water heaters is the total water heating potential from the residential multi-family sector. The model assumes no solar water heating installations in the residential multi-family sector. 3.These measures are assigned a market potential even though they are not cost-effective due to the popularity of the measures among customers and the fact that other utilities provide rebates for these measures. 4.Measures that have no customer rebate history are assigned a market potential of zero. 5.Solar water heaters are not cost-effective but are included in the Gas Efficiency portfolio in order to comply with state regulatory mandates. Measure End use category TRC ratio Rebate offered Technical Potential in 2020 (therms/yr) Market Potential in 2020 (therms/yr) Clothes washer (Modified Energy Factor >= 2.4, Water Factor >= 4.0) Appliances 1.12 if gas dryer 1.02 if elect dryer Yes 108,321 97,526 Dishwasher Appliances 1.07 Yes 24,240 16,275 Windows (U-factor 0.25)HVAC/Shell 0.08 No 380,167 0 Duct Sealing/ Repair HVAC/Shell 0.34 No 205,289 0 Wall Insulation (R0 to R13)HVAC/Shell 0.65 Yes 1,303,074 95,685 (3) Ceiling Insulation (R19 to R30)HVAC/Shell 1.32 Yes 1,218,832 100,659 Furnace (AFUE 96)HVAC/Shell 1.75 Yes 1,769,722 174,691 Infiltration Control HVAC/Shell 1.76 Yes 1,162,960 95,995 Furnace (AFUE 92)HVAC/Shell 2.08 Yes 0 (1)157,275 Solar Water Heater Water Heating 0.18 Yes (5)1,675,901 (2)31,714 Tankless Water Heater Water Heating 0.58 Yes 0 (1)48,065 (3) Condensing Water Heater Water Heating 0.96 Yes 957,714 (2)0 (4) Low Flow Shower Water Heating 1.03 Yes 149,450 5,320 Boiler (AFUE 94) (multi-family only)Water Heating 1.11 Yes 282,952 25,704 Water Heater (Energy Factor >= 0.8)Water Heating 1.38 Yes 0 (1)41,730 Water Recirculating Pump (multi-family only) Water Heating 1.51 Yes 345,631 3,233 Faucet Aerator Water Heating 1.76 Yes 82,350 3,271 Water Heater (Energy Factor >= 0.67)Water Heating 3.21 Yes 0 (1)18,131 Pipe Wrap Water Heating 3.95 Yes 108,773 3,586 Totals 9,775,375 918,860 Attachment 1 Page B-3 Table B2: Commercial Gas Efficiency Measures Notes: 1.The technical potential for competing technologies, e.g. different water heaters, is based on the savings of the most efficient technology of the group, with less efficient technologies being assigned zero technical potential. 2.Convection gas ovens, efficient gas griddles, and combination ovens are not cost-effective but are included in the Gas Efficiency portfolio to expand efficiency offerings to the hard-to-reach restaurant sector. These measures could be cost-effective if electric savings are included. PG&E also currently offers gas efficiency rebates for these measures. 3.Solar water heaters are not cost-effective but are included in the Gas Efficiency portfolio in order to comply with state regulatory mandate. Measure End use category TRC ratio Rebate offered Technical Potential in 2020 (therms/yr) Market Potential in 2020 (therms/yr) Combination Oven Cooking 0.56 Yes 17,024 350 (2) Power Burner Conveyor Belt Oven Cooking 0.57 No 138,346 0 Convection Gas Oven Cooking 0.68 Yes 49,382 1,014 (2) Efficient Griddle -Gas Cooking 0.83 Yes 57,177 1,174 (2) Catalytic Infrared Gas Fryer Cooking 1.22 Yes 186,500 3,829 Rack/tray Oven Cooking 1.45 Yes 197,054 4,046 Rotisserie Oven Cooking 1.61 Yes 2,614 54 Vent Hood Controls Cooking 1.74 Yes 42,813 879 Charbroiler Cooking 1.80 Yes 39,101 803 Food Steamer Cooking 2.82 Yes 39,167 804 Salamander Broiler Cooking 2.95 Yes 3,295 68 Pizza Oven Cooking 3.94 Yes 615 13 Gas Boiler Tuneup HVAC/Shell 0.88 No 617,227 0 Space Heating Boiler (>= 95% efficient)HVAC/Shell 1.09 Yes 897,744 295,021 Thermostat Controls on A/C Units HVAC/Shell 3.93 Yes 765,628 186,785 Boiler Pipe Insulation HVAC/Shell 6.60 Yes 110,480 25,043 Solar Water Heater Water Heating 0.26 Yes (3)468,360 4,349 Tankless Gas Water Heater Water Heating 1.11 Yes 0 (1)54,289 Com Horizontal Axis Clothes Washer Water Heating 1.30 Yes 386,712 105,313 Hot Water Recirc Pump Time Clock Water Heating 2.77 Yes 43,789 23,599 High Efficiency Gas Water Heater Water Heating 4.14 Yes 0 (1)101,380 Totals 4,063,028 808,813 Attachment 1 Page C-1 APPENDIX C: MODELING ASSUMPTIONS Key assumptions used in the Gas Efficiency Potential model are listed below: ·Palo Alto’s avoided cost for natural gas supplies levelized over a 20-year period is around $0.90/therm. This includes the cost of gas, local transportation, and a carbon adder in accordance with the City’s Climate Protection Plan. ·The distribution of gas versus electric space heating, water heating and clothes dryers among residential customers are based on statewide survey results.Among single family homes, the share of gas space heating, gas water heating and gas clothes dryers are 98%, 99% and 55% respectively (electric space heating, electric water heating and electric clothes dryers represent 2%, 1% and 45% of single family homes). The share of gas space heating, water heating and clothes dryers are lower among multifamily homes:75%, 71% and 11% respectively. ·Utilities programs which provide rebates for residential gas water heater replacements are paid for less than 10% of the annual water heater replacements. Part of the reason for this is the fact that most residential customers do not apply for a rebate when changing out water heaters to avoid the hassles and cost of getting a permit.The City issues about 275 permits for water heaters each year, but about 1000 residential water heaters are estimated to be replaced annually in Palo Alto (assuming one water heater per each of the 14,600 single-family homes in Palo Alto and an average useful life of 15 years per water heater). A total of 49 and 60 water heater rebates (excluding rebates for solar water heaters) were processed in FY 2010 and FY 2009 respectively. ·The penetration of energy efficient technologies is assumed to be similar to that of PG&E customers in the same climate zone. This benchmarking data is based on statewide surveys completed for both residential and commercial customers.These assumptions may not be fully accurate, but specific information about Palo Alto is not available at this time. ·Projected gas efficiency savings include savings from free-riders. Free riders are customers who would have purchased the energy efficient equipment without additional financial incentives and, therefore,the savings from these equipment purchases would have occurred without utility EE programs. For electric efficiency achievements, the California Energy Commission requires that municipal utilities establish goals that are net of free-riders. However,no such regulatory requirement exists for setting gas efficiency goals. ·Energy savings and cost assumptions for each gas savings measure reflect the most recent data available from Palo Alto’s efficiency program tracking database and other gas efficiencypotential studies. The model does not assume future price declines for any of the gas efficiency measures covered in the analysis. Attachment 1 Page D-1 APPENDIX D: Fuel Switching Analysis As directed in the proposed 2010 GULP Implementation Plan and the City Council Colleagues’ Memo dated May 3, 2010, staff evaluated the cost-effectiveness of substituting gas-using appliances for electric-using appliances and vice versa. The two measures covered under this evaluation are residential water heaters and space heaters.The analysis found that currently there is no cost- effective fuel switching opportunity for residential water heating and space heating. Water Heating Statewide, 99% of single family homes and 71% of multifamily homes have gas water heaters. Staff reviewed the available water heating technologies for residential homes and compared the present value of customer costs and the societal net benefits of switching from a standard gas water heater to an alternative water heater technology. Results are summarized in Figure D1. The present value of total customer cost includes the installed cost of the water heater, annual utility costs, minus utility rebate and the 30% Federal Tax Credit for solar water heaters.The Federal Tax Credit for other energy efficient water heaters is due to expire in December 31, 2010 and is, therefore,not included in the calculation. The societal net benefit is calculated relative to a standard gas water heater; a positive societal net benefit indicates that the measure is cost-effective compared to a standard gas water heater, whereas a negative societal net benefit indicates that it is not cost-effective compared to a standard gas water heater. Figure D1 Replacing a Standard Gas Water Heater: Customer Costs & Net Benefits ($6) ($3) $0 $3 $6 $9 $12 G1 G2 G3 G4 G5 E1 E2 E3 Thousands Present Value of Total Customer Cost (incl. utilityrebate and federal tax incentive for SWH) Societal Net Benefits compared to Standard GasWater Heater Cost-effective when societal net benefit greater than 0 G1 = Standard gas water heater (EF = 0.62)E1 = standard electric water heater (EF = 0.90)G2 = High-efficiency gas water heater (EF = 0.67)E2 = High-efficiency electric water heater (EF = 0.95) G3 = Ta nkless gas water heater E3 = Heat Pump electric water heater (EF = 2.2)G4 = Condensing gas water heater (EF = 0.8 or higher)G5 = solar water heating with gas backup Attachment 1 Page D-2 Figure D1 shows that after rebates and tax incentives, high-efficiency gas water heaters, tankless water heaters,condensing water heater, and heat pump electric water heaters all have lower total customer costs than a standard efficiency gas water heater. The only efficiency measure that is cost- effective from a societal perspective is the non-condensing, high-efficiency gas water heater.Solar water heating is the least cost-effective relative to other water heating technologies due to its high equipment installation and administration cost of a solar hot water heating incentive program. The potential for cost-effective fuel switching is based on the societal net benefits of the three types of electric water heaters relative to the standard gas water heater. The analysis shows that none of the electric water heating technologies is cost-effective from a societal perspective compared to the standard gas water heater.It is also unlikely to be cost-effective to switch from electric water heating to gas water heating if a new gas line needs to be added. Space Heating Staff undertook a similar analysis for residential space heating.Based on statewide statistics, approximately 98% of the single-family homes and 75% of the multi-family homes have gas space heating systems (gas furnace or boilers). Staff compared the present value of customer costs and the societal net benefits of switching from a standard gas furnace to either a high efficiency gas furnace or an air-source heat pump.The results of the analysis are summarized in Figure D2. The analysis found that a high efficiency gas furnace has lower customer costs compared to a standard gas furnace and is cost-effective from the societal perspective. The high efficiency air source heat pump, on the other hand, is more expensive and not cost-effective compared to the conventional gas furnace. Based on this analysis, staff concludes that currently there is no cost-effective opportunity for switching from gas to electric residential space heating systems. Figure D2 Replacing a Conventional Gas Furnace: Customer Costs & Net Benefits ($8) ($4) $0 $4 $8 $12 $16 Conventional Gas Furnace High Eff Gas Furnace High Eff Air Source Heat Pump Thousands Present Value of Total Customer Cost (incl. utility rebate) Societal Net Benefits compared to Conventional Gas Furnace Attachment 1 Page F-1 APPENDIX E: SENSITIVITY ANALYSIS As part of the analysis, staff looked at other scenarios with different assumptions to compare the projected market potential and EE program budget with the base case results. The scenario descriptions and results are summarized below. Scenario Results Base Case: ·Include carbon adder as directed in the 2007 Climate Protection Plan; ·Slow adoption of solar water heating systems and do not meet SWH goals by 2020 ·Economic potential of gas efficiency in 2020 represents around 34% of load. ·Cumulative market potential of 5.5% by 2020. ·Annual gas efficiency program budget increase of around $100,000 to $120,000 per year for FY 2011 through FY 2015. ·Rate impact of between 2 to 3% by 2020 due to additional supply funds to pay for gas efficiency programs. Scenario 1: ·High gas prices (approx. 30% higher than base case) ·Retail rates around 15% higher than base case ·Economic potential in 2020 increases to 36% of load. ·Cumulative market potential increases to 6.2% by 2020. ·Increased gas efficiency program budget, with estimated rate impact of around 4% by 2020. Scenario 2: ·Do not include carbon adder in gas cost ·Retail rate remains unchanged ·Economic potential in 2020 decreases to 29% of load. ·No change to market potential and program budget. Scenario 3: ·Aggressively market solar water heating systems to meet CPP target for the SWH program by 2020 ·Cumulative market potential increase to 5.9% by 2020. ·Program budget remains the same between 2011 and 2015, then starts to get higher beginning 2016 as the number of rebated SWH units begins to ramp up. Cumulative program budget between FY 2016 to FY 2020 is around $700,000 higher than base case, with a 0.5% higher rate impact by 2020. Attachment 1 Page F-1 APPENDIX F: SOLAR WATER HEATING PROGRAM IN PALO ALTO The Palo Alto’s 2007 Climate Protection Plan (CPP)established City-wide CO2 emission reduction goals of 15% of 2005 levels by 2020. This is equivalent to 119,140 metric tons (or tonnes)of CO2 emissions reductions per year. Specific CO2 emission reduction goals are assigned to Utilities energy efficiency and solar energy programs, as shown in Table F1. Table F1: CO2 emission reduction goals for utility programs by 2020 Electric Metric Tons CO2 per year Gas Metric Tons CO2 per year Efficiency Programs -15,800 -7,300 Solar -3,800 -1,500 Mandatory Renewable Energy Supply -91,500 TBD Voluntary Renewable Energy Supply -36,500 -16,400 Based on the gas and electric efficiency program achievements between FY 2008 and FY 2010, and the Council-adopted 2010 Ten-Year Electric Efficiency Plan and the proposed gas efficiency goals in this report, Utilities is on track to meet the CPP emission reduction goals for gas energy efficiency. There is less certainty on whether the solar programs will be able to meet the goal for CO2 emissions reductions. The CPP called for the implementation of a solar water heating program, with a target of 500 residential systems with estimated CO2 emissions reductions of 500 metric tons per year, plus another 100 pool heating systems, with estimated CO2 emissions reductions of 1,000 metric tons per year, for a combined CO2 emissions reductions of 1,500 metric tons per year. The CPP made a number of assumptions in setting these targets, including: ·The cost of a residential solar water system was assumed to be around $3,000 to $6,000; ·The average gas savings for each solar hot water heating system was assumed to be 188 therms per year; ·The total number of pools in Palo Alto was assumed to be 4,000; and ·The average gas savings for each solar pool system was assumed to be 1,850 therms per year. Since the launch of the Solar Water Heating (SWH)program in 2008, which is administered by the Center for Sustainable Energy California (CSEC), rebates have been paid for 19 systems, two of which have electric back-up water heating and do not provide gas savings. The SWH program offers a rebate of up to $1,500 per residential solar water heating system. Due to state law requirements, no rebate is offered for solar pool systems.Based on the systems which received rebates to date, the average cost per system is $8,800, with average annual gas savings of 125 therms per unit1. CSEC has evaluated the feasibility of a solar pool heating system for the Rinconada swimming pool, the only city-owned swimming pool in Palo Alto. Annual gas savings based on a solar heating 1 This amount of energy savings is less than the energy savings estimated in the Climate Protection Plan, which assumed gas savings of 188 therms per year for solar hot water heating. The cost for the systems is higher than the cost assumed in the CPP. Attachment 1 Page F-2 system for the 7,500 square feet lap pool is around 15,000 therms.Other year-round public swimming pools in Palo Alto are located at Palo Alto High School, Gunn High School, JLS Middle School, Terman Middle School and Jordan Middle School.While there are swimming pools in apartment and condominium complexes within Palo Alto, these pools are typically not heated. The cost of CO2 emissions reduction from a solar water heating system is far higher than other energy efficient gas water heaters. Table F2 compares the cost of CO2 emissions reduction for various energy efficient water heating technologies including solar water heaters. Only the high efficiency gas water heater shows a negative cost of emissions reduction, which indicates that the measure (replacing standard efficiency gas water heater with a high efficiencygas water heater) has life-cycle cost savings even with no carbon adder. Table F2: Cost of CO2 emission reduction by water heating technologies Efficient water heating technology $ per tonne of CO2 emission reduction High efficiency gas water heater (EF = 0.67)($60) Tankless gas water heater $90 Condensing gas water heater (EF > 0.8)$100 Solar water heaters $450 High efficiency air source heat pump water heater $20 The current SWH program will not likely reach the emissions reduction goal in the CPP. Staff will review other program approaches including bulk buy and customer financing to reduce costs and increase program participation. Attachment 1 Page G-1 APPENDIX G: GAS EFFICIENCY GOALS COMPARISON The gas efficiency goals for PG&E, SoCalGas and SDG&E are adopted by the CPUC. These goals are developed in a similar process as the CPAU’s gas efficiency goals. The recommended gas efficiency goals for CPAU are on par with the IOUs’ gas efficiency goals.Also, the achieved gas savings as percentage of load in 2009 for CPAU is similar to that of the IOUs. Table G1: Gas Efficiency Goals Comparison 2006 2007 2008 2009 2010 2011 2012 2013 CPAU Goals Achievement na na na na 0.25% 0.28% 0.32% 0.11% 0.28% 0.39% 3-yr cumulative: 0.78% 0.40% --------- 0.45% --------- 0.50% --------- PG&E Goals Achievement 0.26% 0.33% 0.40% 3-yr cumulative: 1.02% 0.36% 0.28% 0.39% --------- 0.41% --------- 0.59% --------- na --------- SoCalG Goals Achievement 0.20% 0.25% 0.31% 3-yr cumulative: 0.72% 0.37% 0.28% 0.38% --------- 0.40% -------- 0.42% --------- na --------- SDG&E Goals Achievement 0.47% 0.57% 0.68% 3-yr cumulative: 0.60% 0.63% 0.28% 0.66% --------- 0.71% --------- 0.75% --------- na --------- Attachment 1 FINAL UTILITIES ADVISORY COMMISSION – SPECIAL MEETING MINUTES OF JANUARY 12, 2011 CALL TO ORDER Chair Waldfogel called to order at 7:05 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Commissioners Berry, Cook, Foster, Keller, Melton and Chair Waldfogel and Council Member Scharff. Absent: Commissioner Eglash ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES The Minutes from the December 1, 2010, UAC meeting was approved as presented, with the motion moved by Commissioner Melton and seconded by Commissioner Cook. AGENDA REVIEW No changes to the agenda were requested. REPORTS FROM COMMISSION MEETINGS/EVENTS No Commission Meeting Reports. UTILITIES DIRECTOR REPORT Utilities Director Valerie Fong delivered an oral report on the following items: 1. Hydro Conditions: So far, Sierra precipitation has been about 200% of normal to date and snowpack is above 150% of normal to date. Weather forecasts for three months out are for colder than average with about average precipitation. Reservoir levels are above average with Shasta and Folsom reservoirs at their maximum allowable levels with flood control storage reservations. Western forecasts its Base Resource volume to be about average for the coming 12 months. NCPA forecasts Calaveras generation to be above average. 2. Ram Geopower: In February 2008, Palo Alto agreed to participate in a Power Purchase Agreement (PPA) between NCPA and Western Geo for up to 5 average MW of renewable geothermal energy at a price of $98/MWh. However, Western Geo was taken over by another company and the original price in the PPA cannot be maintained. NCPA has negotiated a replacement PPA with a new price of $113/MWh. Silicon Valley Power (SVP) will subscribe to most of the output. We are working on a letter of intent with SVP to allow Palo Alto to come back in a few months to subscribe to up to 30% of the output at the same price and terms available to SVP. In exchange, Palo Alto will need to agree to execute a withdrawal agreement from the original agreement clearing the way for SVP to move forward. Staff hopes to bring this to UAC this summer with a recommendation and an update on our renewable portfolio standard. Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 1 of 7 Attachment 1 3. Anaerobic Digester Update: In January the Public Works department will release its consultant’s draft analysis of the feasibility of locating a compost-to-energy project at the City’s landfill site. The project being studied would involve anaerobic digestion of yard waste, food waste, and possibly biosolids from the wastewater treatment plant. The resulting methane would be used to generate renewable power. The draft analysis will be released on the City’s website on January 24. The initial results of the study will be presented to the community in February and in front of the City Council in late March. A presentation to the UAC is planned for March or April, and all comments will be included in the final report to Council to be delivered in September. 4. LED Holiday Light Program: Customers received a coupon in their November utility bills that allowed them to exchange a working strand of incandescent holiday lights for a strand of LED lights. We purchased 744 multi-colored and 96 white LED ENERGY STAR rated strands for the holiday exchange. The lights were displayed in the office along with a watt counter to show customers the electric usage of both old and new bulbs. We received a lot of positive feedback on our display and on our marketing piece, which included a graph showing the difference in electric use between the bulb types. A total of 502 strands were exchanged, equaling 12,077 kWh in savings. Approximately 300 strands remain in addition to the 100 in storage from last year. The excess strands will be placed in storage and used for next year’s program. 330 pounds of old strands have been recycled as of January 12, 2011, costing $165. 5. UAC Calendar: Rolling calendar of upcoming items for UAC meetings. UNFINISHED BUSINESS 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. NEW BUSINESS ITEM 1: DISCUSSION: Home Energy Reports Status Update Utilities Marketing Services Manager, Joyce Kinnear, introduced three members of the vendor team from OPOWER who are helping to put together the Home Energy Reports program. She then provided a presentation on the history of the program development, a discussion of the first report roll-out in November, and a brief overview of the customer feedback and concerns. Of note is that 18,648 customers have received the report and only 34 have asked to op-out. About twice as many customers as the opt-out number have requested more information on the program and about other ways that the utility can assist Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 2 of 7 Attachment 1 them in reducing energy usage. Most of the questions about the program have been related to concerns about privacy and whether the neighbor comparisons are accurate. She explained that customer usage information is kept private and that no other person can identify an individual person’s energy usage. The explanation for how the comparison is developed and that it provides useful information to customers was given. Commissioner Foster raised the question about why customers who have solar electric (PV) systems can not receive the reports. Stephanie Berner of OPOWER said that the product works on usage information, so the modules do not work for customers who have zero usage. She pointed that that primarily due to Palo Alto’s request, OPOWER is looking at potentially adding this capability in the future. Commissioner Keller asked if it would be possible to add water to the reports’ energy (gas and electric) comparison. Kinnear said that Palo Alto has requested this capability. Berner added that many utilities in the west would like this capability, and that the addition of water to the reports is on the way. Chair Waldfogel appreciated the discussion about privacy issues, but he wanted to make sure that all questions were completely dealt with. He asked for specific details on the internal controls at OPOWER and in how data transfers were completed with appropriate security. Berner responded that OPOWER gets the customers and usage data from the City in a secure, encrypted process. OPOWER follows standards industry controls internally for the housing of the data. Also, no individual customer or personally identifiable information is presented to anyone other than that customer. Clayton Schloss of OPOWER added that the website portal is also gated, so that customers can only access their own information through the website. Chair Waldfogel requested details on the ownership of the data and its usage. Berner responded that the data can only be used with the program and is the City’s property. Commissioner Cook asked whether the opt-out rate (about 0.18%) is typical for this type of program. Berner said that it is an unusually low rate. Schloss added that customers typically are the most likely to opt out and are the most vocal in the first mailing or two. Cook also asked for more details on how the tip module is developed for the customer reports. Berner said that the modules help to turn what is learned from the report into action. The tips vary by both individual report and by cycle. They can be targeted to a particular usage pattern. Commissioner Keller wondered if customers who do reduce energy usage will receive a pat on the back. Commissioner Foster pointed out that the program contract allows for 10 reports, and that customers should get updates on their usage. He also mentioned that while OPOWER is serving many utilities, Palo Alto is one of the first to have nearly all customers in the program, and he is pleased that most customers can receive this benefit. ITEM 2: ACTION: Water Shortage Implementation Plan Senior Resource Planner Nico Procos provided a presentation, including the background, on the development of the proposed plan to split up the water available in a water shortage condition (drought) among the member agencies of the Bay Area Water Supply and Conservation Agency (BAWSCA). Under the plan, water is divided by a formula which is weighted one-third on the Individual Supply Guarantee (the long-term contractual entitlement) and two-thirds on a seasonal usage calculation that penalizes water use in the summer months. The formula is also bounded so that no agency is reduced less than 10% and no agency is reduced more than 20% more than the average reduction for all agencies. The formula also includes an adjustment for East Palo Alto to ensure that agency has enough water to meet basic health and safety requirements. The formula expires in 2018 and is only in effect for water shortages that require water use reductions of up to 20%. Procos stated that, for Palo Alto, the formula is not as beneficial as the expired formula, but results in a lower reduction than the average reduction for the BAWSCA agencies. Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 3 of 7 Attachment 1 Procos stated that the representatives of all the BAWSCA agencies that were involved in the development and negotiation of the formula unanimously agreed to recommend the proposed formula to their governing boards. If any agency does not approve the proposed formula, then the BAWSCA Board would consider approval of a formula. If the BAWSCA Board were unable to approve a formula, then the San Francisco Public Utilities Commission (SFPUC) would decide on the formula. Commissioner Cook asked what happens if there is a reduction of greater than 20%. Assistant Director Jane Ratchye replied that the SFPUC would determine the reduction formula in that event. However, Ratchye noted that the SFPUC has adopted level of service goals for its Water System Improvement Program such that the greatest water supply reduction is 20%. In addition, since the 1987 through 1992 drought, the SFPUC has adjusted its system operations to make water shortages less likely by preserving water in storage rather than producing electricity and by calling for water use reductions earlier in a multi- year drought event. Chair Waldfogel asked if the formula would have been triggered in the past. Ratchye stated that she hadn’t done the analysis, but said that she thinks it would have been triggered in the 1987 through 1992 drought. Commissioner Berry inquired about the default process if any of the BAWSCA members did not approve the new formula. Specifically, did staff have a sense what the SFPUC might do if they had to make a decision on the process? Procos responded that the contract is clear that the BAWSCA Board of Director’s would be given an opportunity to approve a new formula and the SFPUC would only act if the board did not. Procos added that it is likely that the BAWSCA Board would exercise its authority to resolve the issue. However, assuming the SFPUC was given the opportunity, Procos does not know what approach it may take. ACTION: Commissioner Berry made a motion to recommend Council approval of the proposed Water Shortage Implementation Plan. Commissioner Melton seconded the motion. The motion carried unanimously (6-0). ITEM 3: DISCUSSION: Draft 2011 Utilities Strategic Plan Assistant Director Jane Ratchye stated that the Utilities Strategic Plan is close to final, but that she is soliciting additional feedback before bringing the plan back to the UAC for action at the next (February) meeting of the UAC. She provided a presentation of the highlights of the four themes of the strategic plan: safety and reliability, customer service excellence, cost management, and environmental sustainability. One strategy that was added was to ensure that the strategy itself was implemented as this will require resources to manage, track and report regularly so that the UAC and Council can follow the progress towards completion of the initiatives and whether the performance targets are met. Commissioner Berry stated that he was very involved with staff in the development of the strategic plan and requested that the UAC use this opportunity tonight to provide staff feedback on the draft plan so that it can be finalized for consideration at the next meeting. Commissioner Keller asked why objective BP1 (ensure a reliable supply of utility resources) did not include anything about back-up supplies and emergency preparedness. Ratchye said that not all Utilities activities are reflected in the Strategic Plan, but it is intended to capture those areas that need continued focus and, especially, those areas that need improvements, changes in focus, additional resources, or changes in practice or operations. Commissioner Keller asked if there needs to be a placeholder for important issues that may not be an issue now, but could be in the future. Ratchye stated that the strategic plan will Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 4 of 7 Attachment 1 necessarily change as we move forward with implementation and that new initiatives will be added as others are completed. Since the plan will be reported on every six months, there will be opportunities to make adjustments to the strategic objectives and performance measures. Regarding objectives BP4 and BP6 relating to customer service, Commissioner Keller asked if there was a way to add outreach for new development. She is concerned that there are resource efficiency opportunities for new buildings that could be incorporated in the design phase. She suggested coordinating with the City’s Economic Development Manager to determine any upcoming development plans. Regarding objective PT1 (be an attractive place to work), Commissioner Keller noted that the performance measure relates only to new employees and not to retaining valued existing employees. Chair Waldfogel stated the draft strategic plan omits the rate of return to the City provided by the Utilities Department and, since it is a key element of the City’s revenues and the Utilities expenses, it should be captured in the strategic plan. He recommended the financial perspective as the location for an objective related to the City as a stakeholder. Council Member Scharff commented that the stable rate objective is embedded in the strategic plan, but that is premature since the laddering strategy and rate stability issue will be reconsidered by the UAC and Council as a result of an added implementation task in the proposed Gas Utility Long-term Plan (GULP). He added that the performance measure for objective C3 (I expect to pay a reasonable bill) should not necessarily be the aggregate Utilities bill, but rather each fund separately. Otherwise, the information about the relative position of each fund is lost. Commissioner Berry added that he did not think the performance measure for objective C3 related to the annual rate change should necessarily be the same for all Utilities funds. Ratchye acknowledged that, at least in the short term, rate increases for water are likely to be higher than 10% per year. Commissioner Berry stated that, if that was the case, it is not a good idea to include a performance measure that you know you are not likely to meet and suggested having different targets for each fund. This would signal to the Council and public what the direction of rate changes are likely to be. Commissioner Keller added that predictable rates are valuable if communicated to customers to allow them to make informed investment decisions regarding efficient appliances and other improvements. Regarding objective C4 (care for our environment), Commissioner Cook stated that environmental sustainability should be across all operations. He indicated that he supported objective PT4 (investigate and adopt innovative technologies) and agreed with Chair Waldfogel that the equity transfer should be added to the financial perspective. Minimizing financial risk should be incorporated into the financial perspective as well. Commissioner Cook also indicated that environmental sustainability should be included in the mission statement. Commissioner Foster agreed that environmental sustainability should be included in the mission statement and that the last phrase “…in support of the vibrant community of Palo Alto” should be omitted. Commissioner Foster stated that objective C1 (I receive safe and reliable service) is about service interruptions, yet the performance measure was about response time after an interruption. He suggested that the measure should be related to the number of interruptions/outages. Regarding objective PT4 (investigate and adopt innovative technologies), Commissioner Foster recommended additional clarity on the performance measure target of three new technologies evaluated per year. He wanted to ensure that it was at least a somewhat extensive evaluation, perhaps including a trial or pilot program, rather than solely a paper economic evaluation. Commissioner Foster also stated that the performance measure and target for objective F3 regarding rate structures essentially is a policy change and this type of policy change should be debated and discussed prior to be incorporated into the strategic plan. Ratchye responded that Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 5 of 7 Attachment 1 she agreed with Commissioner Foster’s suggestion and will move the idea to a strategic initiative as something that should be addressed and a policy call made. Commissioner Berry stated that the performance measure for objective PT1 (be an attractive place to work) should be employee satisfaction as determined by a regular, periodic survey. He suggested that this is the best way to determine if employees feel that they are working in an attractive place. It is also a way for management to address any issues that are raised. Regarding objective C1 (I receive safe and reliable service), Commissioner Berry advised that recovery time is important as well as number of outages. ITEM 4: ACTION: Proposed Ten-Year Gas Energy Efficiency Goals Resource Planner Christine Tam provided a presentation on the development of the ten-year gas energy efficiency (EE) goals. She showed that over 90% of residential gas use is for water and space heating. For commercial customers, about 75% of gas used is for water and space heating with about 20% for cooking. Tam stated that the goals were developed by first assessing 40 gas efficiency measures to determine how much gas could possibly be saved. This is the technical potential and is equal to about 45% of the total gas usage. The amount that can be saved with cost-effective energy efficiency measures is equal to about 34% of the total City gas usage. Tam indicated that there are many barriers to achieving the entire “economic potential” and that the achievable, or “market,” potential is about 5.5% of the Citywide gas usage. This 5.5% is the proposed ten-year gas EE goal. Commissioner Keller asked whether the projected potential capture savings from new construction projects. Kinnear responded that only energy savings above the City’s building code, or the CALGREEN requirements, which exceeds the Title 24 building code. UMS staff is working with the Building Planning department to offer rebates to new construction projects with energy savings that exceeds the City’s building code. Tam explained that the bulk of the savings potential is for space heating for both residential and commercial customers. The next biggest end use with the potential for saving gas is for water heating. For residential customers, barriers to achieving the full economic potential include: high upfront costs, long payback periods, long equipment life, the fact that contractors often do not have high efficiency alternatives in stock, and the fact that water heater permits are time consuming at a point of immediate need, thus reducing customer compliance with requirements. For commercial customers, the barriers include the lack of incentives for either tenants or landlords in multi-tenant, rented buildings and business uncertainty and cash flow issues for small businesses. Tam noted that the proposed ten-year goals are similar to those of PG&E and other California utilities. Since the proposed annual goals are higher than in the past three years, costs for the programs – both for program administration and rebates and incentives – are expected to increase over the ten-year period. In summary, Tam advised that the goals are aggressive – 5.5% compared to the 3.2% ten-year goal set three years ago. She added that the proposed goals were developed using a comprehensive analysis and that the implementation plan – expected in the spring – will contain more details on programs and resource requirements. The plan is to seek all gas EE savings possible and that the goals should be achievable if the resources are increased. Commissioner Foster asked if staff evaluated a dramatically ramped up program to capture a larger share of the economic potential. Tam stated that scenario analyses were performed concluding that the impact on retail rates goes up dramatically to capture a greater fraction of the potential. Commissioner Foster added that the triple net leases definitely remove the incentive for either party – the landlord or the tenant – to invest in improvements and equipment that would result in energy savings. He also noted the fact that solar hot water heating systems were so non cost-effective. He said that since the potential for savings is Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 6 of 7 Attachment 1 Utilities Advisory Commission Minutes Approved on: February 2, 2011 Page 7 of 7 so high for the water heating end use that we need to find a way to improve the economics of solar hot water heating installations. Chair Waldfogel indicated that he and others on the UAC undoubtedly have many comments on how to achieve the gas EE savings goals most effectively, but that the implementation plan may be the most appropriate place to make those comments. At this time, the establishment of the goals is the issue. Commissioner Berry questioned the economic incentive to save gas for the utility. He noted that for the electric utility, avoiding increased electric load or reducing load through energy efficiency can result in avoiding the cost of large, expensive generation and/or transmission equipment. On the gas side, this is less apparent until there is a real market for carbon emissions. Commissioner Melton indicated that increasing the gas EE goal is not necessarily the right thing to do. He indicated that it may not be economic to do so and may not be the right economic environment to reduce gas sales. He indicated support for maintaining the current goals as we need to spend more money for a smaller result. ACTION: Commissioner Foster made a motion to recommend Council approval of the proposed ten-year gas energy efficiency goals for the period 2011 to 2020. Commissioner Cook seconded the motion. The motion carried (5-1) with Commissioner Melton voting no. ITEM 5: ACTION: Form an Ad Hoc Committee on Innovation, Technology and Projects ACTION: Chair Waldfogel appointed Commissioners Foster, Keller and Cook to the Ad Hoc Committee on Innovation, Technology and Projects. By Section 4.1 of the UAC’s proposed Bylaws, this Ad Hoc committee will be in place until June 30, 2011. ITEM 6: ACTION: Potential Topic(s) for Discussion at Future UAC Meetings None COMMISSIONER COMMENTS Commissioner Cook announced that on January 25, 2011 he would be attending the first session of the Northern California Power Agency’s (NCPA) Strategic Issues Conference – NCPA 101 History and Introduction. Meeting adjourned at 10:00 P.M. Respectfully submitted, Marites Ward City of Palo Alto Utilities Attachment 1 Attachment 2 1 FINANCE COMMITTEE Regular Meeting March 1, 2011 EXCERPT 5. Proposed Ten-Year Gas Energy Efficiency Goals Resource Planner, Christine Tam presented the ten-year gas efficiency savings goals for 2011-2020. She overviewed the following topics: 1) natural gas usage and efficiency potential in Palo Alto; 2) barriers to achieving full gas efficiency potential; 3) proposed 2011-2020 gas energy efficiency (EE) goals; and 4) projected 2011-2020 gas efficiency program budget. She spoke on how gas EE goals were set, which included technical, economic and market potential factors. She spoke on the historic and projected annual gas usage in Palo Alto. The gas EE goals were aggressive and were much higher than goals set in 2007. Comprehensive analysis was performed when setting the gas EE goals. The implementation plan would provide more detail on programs to achieve goals, and on budget and resource requirements. Staff recommended that the Finance Committee recommend to the Council to approve the proposed ten- year gas EE goals for 2011-2020. Staff requested the Council approve the gas EE goals in March 2011. Staff would present the gas EE goals implementation plan to the Utilities Advisory Commission and Council in Spring 2011. The next update of the gas EE goals was scheduled in 2013. Council Member Schmid said the City spent one percent of gas utility revenues. The Staff Report said program costs were expected to result in retail rates that were four to five percent higher by 2020, compared to retail rates if no gas EE programs were in place. He inquired whether the one percent was an additional expenditure. Ms. Tam said the one percent expenditure was what Staff spent on gas revenues totaling approximately $500,000. The Utilities Department spent approximately $500,000 on gas efficiency programs. Utilities Director, Valerie Fong said the expenditure was similar to how Staff organized electric efficiency programs. Attachment 2 2 Council Member Schmid inquired what the four to five percent expenditure referenced. Ms. Tam said it was the retail rate impact. Council Member Schmid said customers would be paying five percent higher rates. He inquired whether this increase would be parallel to the five percent rate increase on renewable energy. Ms. Tam said that was correct. She spoke on how an average customer bill would reduce, in the long run, due to gas EE goals. Ms.Fong said customers would be using less energy, therefore purchasing fewer energy units. Council Member Schmid inquired whether a customer’s average monthly bill would be five percent higher. Ms. Fong said purchasing fewer units, at a higher rate, may contribute to a lower bill. Council Member Schmid asked if Staff’s expectation was customers would have a one percent increase on monthly energy bills. Ms. Tam said the expectation was that the average bill would be one percent lower by 2020. Chair Scharff said the replacement of water heaters appeared to be the largest factor in achieving lower energy bills. It was his belief customers, who replaced water heaters, would see a reduction in monthly bills. Assistant Director of Utilities Customer Support Services, Tom Auzenne spoke on the various factors that would contribute to gas efficiency. Customers participating in rebates for more efficient units would save more; however, it would cost more initially. Council Member Shepherd believed that Staff’s recommendations were aggressive and possibly unachievable. The model assumed that the number of solar water heating systems installed by 2020 will not meet the goals in the City’s Climate Protection Plan of 500 residential systems,plus 100 solar pool heating systems.Instead, the model projected about 300 residential solar water heaters installed between 2010 and 2020.She inquired what plans were in place to support this aggressive direction. Attachment 2 3 Ms. Fong said Staff would return in May 2011 with a plan on how to achieve gas EE goals. Ms. Tam said the Utilities Marketing Services Department sent out a request for proposal (RFP) for third-party gas EE goal programs in November 2010. Staff was currently evaluating bids received. Council Member Shepherd inquired whether marketing would include educating customers on when to perform certain utility functions, such as laundry. Ms. Tam said many hotels and senior housing developments have started looking into ozone laundry systems. Staff was analyzing emerging technologies for the EE Communications Plan. Mr. Auzenne said electric utility usage was 80 percent commercial and 20 percent residential. Gas and water utility usage was 50 percent commercial and 50 percent residential. Many received RFP proposals were commercially based. Assistant Director of Utilities for Resource Management, Jane Ratchye indicated Staff was confident in achieving the entire “economic potential” and that the achievable, or “market” potential was about 5.5 percent of the Citywide gas usage. Council Member Shepherd inquired whether Staff would return with strategies to support the gas EE goals. Ms. Fong said that was correct. Council Member Shepherd said Palo Alto was a leader in innovation. She wanted to ensure Staff was capturing the maximum leadership capacity on this initiative. Ms. Fong said Staff would analyze the RFP’s with a financial and innovative mindset. . Council Member Shepherd said Staff may be cutting out new technologies that have transpired. She felt Staff was working on the best attempt to incorporate both principles. Ms. Fong said extremely expensive innovations would probably not be considered. Attachment 2 4 Council Member Yeh said the budget expenditures were linear. He inquired whether Staff was required to perform all gas EE goal work at this moment. It was his belief more pertinent information would be available in the next couple months. Mr. Auzenne said every three years Staff performed a ten-year goal. Staff would have an opportunity to adjust gas EE goals. Ms. Fong said the City would achieve, or not achieve, goals depending on the State’s electrical program. Ms. Tam said the State had a 10-year electrical program that the City voluntarily participated in. Ms. Fong said the City would be required to give up funding if it chose not to participate in the State’s electrical goal program. Council Member Yeh said the initiative primarily relied on solar water heaters. He inquired whether there was a State deadline that was driving the Staff Report. Mr. Auzenne spoke on the timing issues regarding the RFP and implementation plan. Ms. Fong suggested that the Staff Report be adopted, and Staff could return with revisions if needed. Chair Scharff said Staff was recommending the gas EE goal be changed from three percent to five percent. Staff would return with an implementation plan on the expenditure of funding. Ms. Fong said that was correct. Staff would subsequently return annually with a budget request. Chair Scharff inquired how much funding would go to the State if the City did not participate in its electrical program. Ms. Fong said approximately one percent of revenue costs. Chair Scharff inquired on State law regarding solar water heating. Attachment 2 5 Ms. Fong said State law required that the City implement a solar water heating program. Chair Scharff said, if the City did nothing else, it would be required to implement a solar water heating program. Ms. Fong said that was correct. Chair Scharff inquired on the RFP bids received for gas utilities. He inquired what the bidders suggested the City implement. Mr. Auzenne said he was uncomfortable disclosing this information because the City was currently in negotiation with bidders. He spoke on hard-to-reach customer segments in commercial and multi-family buildings. Chair Scharff inquired on the gas EE goal recommendation process. He inquired whether bidders would suggest new technologies that the City would than establish a rebate for. Mr. Auzenne said that was correct. He said some suggested programs were more cost effective than others. Chair Scharff said the largest issue was on water and space heating. He said replacing a water heater before it failed was recommended. He inquired how much a water heater would cost to replace. He inquired what type of rebate the City offered. Ms. Tam said a tank water heater cost approximately $1000. The rebate was $80. Mr. Auzenne said a permit to replace a water heater was $85.00. Chair Scharff said lowering the permit fee for the replacement of water heaters may be beneficial. Ms. Fong believed the permit fees were cost-based. She would follow up with the Planning and Environmental Services Department. Ms. Tam said customers could replace old water heaters with high efficiency models, without pulling a permit. In this instance, the Utilities Department would not be able to count the energy savings. Attachment 2 6 Council Member Shepherd said Staff would be returning with the implementation plan. She inquired whether it would be useful to hold this conversation at that time. Chair Scharff inquired on the types of strategies that Staff would be returning with. His understanding was that Staff would be returning with strategies on rebates. Ms. Fong said Staff was evaluating the submitted RFP’s and would make recommendations. Chair Scharff spoke on his concern that Staff was not targeting efforts in the most efficient way to achieve gas EE goals. Ms. Fong said Staff, as an obligation, followed the RFP process. MOTION: Council Member Shepherd moved, seconded by Yeh, that the Finance Committee recommend that the City Council approve the proposed ten-year gas energy efficiency goals for the period of 2011-2020. MOTION PASSED 4-0. City of Palo Alto (ID # 1558) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 3 (ID # 1558) Summary Title: BID Preliminary Re-Authorization Title: Preliminary Approval of the Report of the Advisory Board for Fiscal Year 2012 in Connection with the Palo Alto Downtown Business Improvement District and Adoption of Resolution Declaring its Intention to Levy an Assessment Against Businesses within the Downtown Palo Alto Business Improvement District for Fiscal Year 2012 and Setting a Time and Place for a Public Hearing on May 2, at 7:00 PM or Thereafter, in the City Council Chambers From:City Manager Lead Department: City Manager Recommendation Staff recommends that City Council: (a)Preliminarily approve the Business Improvement District (BID) Advisory Board’s 2012 Budget Report for the BID (Attachment 1) and; (b)Adopt a Resolution of Intention to Levy Assessments in the Palo Alto Downtown Business Improvement District for fiscal year 2012, setting a date and time for the public hearing on the levy of the proposed assessments for May 2, 2011, at 7:00 PM, or thereafter, in the City Council Chambers (Attachment 3) Executive Summary This Council action includes a preliminary approval of the BID Board’s annual report, and sets a time and place for a public hearing for the staff presentation, and to determine any objections to the assessments. Since the BID inception in 2004, a number of activities consistent with State BID law have been accomplished by the Palo Alto Downtown Business and Professional Association (PADBPA), the entity with which the City contracts to provide services to the 800+ businesses assessed in the Downtown. These include addressing the three main issues facing downtown businesses: cleanliness, safety, and attractiveness, as well as participation in zoning and other matters affecting downtown businesses. Assessments for BID businesses are based on the size, type and location of the business. Assessments range from $50 for individually owned professional businesses to $500 annually for financial institutions. The PADBPA has monthly open meetings governed by the Ralph M. Brown Act which any business or individual can attend. April 11, 2011 Page 2 of 3 (ID # 1558) Background The Palo Alto Downtown Business Improvement District (BID) was established by the City Council in 2004 pursuant to the California Parking and business Improvement Area Law to promote the economic revitalization and physical maintenance of the Palo Alto Downtown business district. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association (PADBPA), a non-profit corporation, as the Advisory Board for the BID. The Board’s purpose is to advise the Council on the method and basis for levy of assessments in the BID and the expenditure of revenues derived from the assessments. Pursuant to BID law, the Advisory Board must annually submit to the Council a report that proposes a budget for the upcoming fiscal year for the BID. The report must: 1) propose any boundary changes in the BID; 2) list the improvements and activities to be provided in the fiscal year; 3) estimate the cost to provide the improvements and activities; 4) set forth the method and basis for levy of assessments; 5) identify surplus or deficit revenues carried over from the prior fiscal year; and 6) identify amounts of contributions from sources other than assessments. The Council must then: 1) review the report and preliminarily approve it as proposed or as changed by the Council; 2) adopt a resolution of intention to levy the assessments for the upcoming fiscal year; and 3) set a date and time for the public hearing on the levy of assessments in the BID. Absent a majority protest at the public hearing on May 2, 2011, at the conclusion of the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year 2012 as filed or as modified by the Council. The adoption of the resolution constitutes the levying of the BID assessments for fiscal year 2012. Discussion The Advisory Board has prepared a report (Attachment 1) for the Council’s consideration which includes the proposed budget for the Palo Alto Downtown BID for fiscal year 2012. As required by BID law, the report has been filed with the City Clerk and contains a list of the improvements, activities, and associated costs proposed in the BID for fiscal year 2012. The Advisory Board has recommended no change in the BID boundaries or the method and basis for levying assessments. A map of the BID is attached (Attachment 2). The proposed assessments in the BID for fiscal year 2011 are the same as the assessments in fiscal year 2010-2011. No increases are proposed. The budget report for fiscal year 2012 was reviewed and approved by the Palo Alto Downtown Business and Professional Association at its board meeting on April 5th, 2011. April 11, 2011 Page 3 of 3 (ID # 1558) Resource Impact Adoption of the proposed BID budget does not directly impact City revenue. BID assessments are restricted for use exclusively by the BID. It is anticipated that a healthy BID will encourage vitality in the retail community and consequently result in additional sales tax revenue for the City. Some staff effort is expended annually to administer the collection of the BID. Staff will continue to monitor staff administrative time devoted to the collection of BID assessments to assure that City costs do not exceed estimates for these services. The cost and collection of BID assessments past 60 days is borne by the BID. The Attorney's Office will continue to provide legal oversight to the BID during the annual reauthorization process. Administrative Services staff provides assistance in the collection of BID assessments. The Economic Development Manager will continue to provide oversight to the BID and will prepare the annual reauthorization. Environmental Review This action by the City Council does not meet the definition of a project under Section 21065 of the California Environmental Quality Act, and therefore no environmental assessment is necessary. Attachments: ·Attachment 1: Annual Report --FYE#1D7DF1 (DOC) ·Attachment 2: BID Map (PDF) ·Attachment 3: BID Resolution_FY2012 (PDF) Prepared By:Thomas Fehrenbach, Econ Dev Mgr Department Head:James Keene, City Manager City Manager Approval: James Keene, City Manager 1 Introduction This report from the Advisory Board of the Palo Alto Downtown Business & Professional Association (“PAd”) was prepared for City Council to review for the annual reauthorization of the Downtown Palo Alto Business Improvement District (“BID”) pursuant to Section 36533 of the Parking and Business Improvement Law of 1989 (Section 36500 and following of the California Streets and Highways code) (the “Law”). This report is for the proposed fiscal year for the BID commencing July 1, 2011 and ending June 30, 2012. (“Fiscal Year 2011-12”). As required by the Law, this report contains the following information: I.Any proposed changes in BID boundaries and benefit zones within the BID; II.The improvements and activities to be provided for Fiscal Year 2011-12; III.An estimate of the cost of providing the improvements and the activities for Fiscal Year 2011- 12; IV.The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2011-12. V.The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. VI.The amount of any contributions to be made from sources other than assessments levied pursuant to the Law. Submitted by Anne E. Senti-Willis, Chair, and Russell S. Cohen, Executive Director on behalf of the Advisory Board (“Advisory Board”) of the Palo Alto Downtown Business & Professional Association (“PAd”). The Advisory Board approved this report on April 5,2011. Received on file in the Office of the City Clerk of the City of Palo Alto on April 5, 2011. 3 Section II: Improvements and Planned Activities for 2011-12 Programs, Events and Activities: A more attractive Downtown: ·A robust cleaning schedule along with improved cleaning equipment including a higher pressure; hot water device to allow for gum removal is being explored through a partnership with the City of Palo Alto and its vendors. ·An active lamppost banner schedule is in place for both spring and summer and is in development for fall and winter. ·Lighting and landscaping improvements are in development for Cogswell Park. ·Rules of engagement have been developed for Lytton Plaza and signs have been posted in the Plaza with instruction on how to obtain event permits and pertinent contact information. ·Work continues with the Palo Alto Police Department to address aggressive panhandling and loitering conflicts. ·Work continues with the Downtown Streets Team, North County Alternative Services, InnVision, Palo Alto Police Department and the City of Palo Alto Public Works Facilities and Operations Divisions to address both area cleanliness and area’s complex transient population issues, with special emphasis on Downtown public parking garages and alleyways. ·Exploring landscaping enhancements with Palo Alto Garden Club and City of Palo Alto Parks Department. ·Ensure that twinkle lights on Downtown street trees are well maintained and coordinated with other twinkle lights in or near Downtown. ·Work with the City of Palo Alto Economic Development Manager to develop and implement restaurant outdoor seating guidelines and process. A more informed Downtown: ·Work is underway to create a Downtown Ambassador program. Currently the Downtown Streets Team (DST) administers a tiered system employing participants to clean Downtown streets and alleyways in exchange for food and housing vouchers. Participants are rewarded and promoted through tiers based on performance. The introduction of a new tier, “Downtown Ambassador,” will become the ultimate reward. These “Ambassadors” will be neatly uniformed and well educated about Downtown events and businesses. They will function as Downtown concierges for visitors and patrons of Downtown Palo Alto. Funding will come from multiple private/public partnerships. ·Revitalization of the block captain program is under discussion. 4 ·Board member recruitment/development is underway with special attention given to diversity. Desired diversity would include a variety of business types represented on the board, including but not limited to Financial, Technology, Retail, Medical, Restaurant, Real Estate, and Hospitality as well as at least one representative from more distant points within the district. A more connected Downtown: Web presence: ·Re-engineer website to communicate with district members. ·B2B focused. This refocus will allow members to build relationships amongst fellow members of the district, be better informed about events, issues and programs that affect their businesses directly. ·Give business of all kinds a better connection to PAd for specific advocacy needs. ·Web site will function as a portal for archival information—minutes, agendas and a members’ only contact list. ·Social media may be employed to provide a more immediate outreach opportunity to members and the public. ·A comprehensive email database is being developed in order to design an effective electronic communication strategy. Surveys ·Both electronic and on the street, personal outreach and surveys are ongoing in order to determine what successes can be capitalized upon and what concerns need to be addressed regarding doing business in Downtown Palo Alto. Partnerships ·Building relationships with Stanford Dean of Student Activities, Athletic Events Marketing Director, Office of Government and Community Relations and University Real Estate Office to enhance connectivity and encourage Stanford visitors and community members to come downtown. ·Other partnership discussions underway include, Palo Alto Community Fund, Palo Alto Institute, Palo Alto Art Center, Kiwanis, Palo Alto Chamber of Commerce and more. Outreach ·Through vigorous outreach, the PAd member data base has been updated and made more accurate resulting in approximately 160 new member listings representing approximately $20,000 in additional assessments. ·Ongoing outreach to members regarding issues that might affect the success of their day-to-day activities, (i.e. special events, street closures, temporary sidewalk obstructions, etc.) Note: SF 5 Giants Trophy appearance downtown and Parade of Champions event are examples of this face- to-face, personal outreach effort. A more efficient Downtown: ·The appointment of Steve Banks as a single point of contact within the City of Palo Alto Public Works Department for Downtown infrastructure issues has been made. ·A series of Roundtable Forums at the Garden Court Hotel including the April 21st forum entitled, “In search of the Perfect Public Parking Program” featuring experts in parking strategy and technology including, Tilly Chang and Jeff Koehler from the San Francisco Transportation Authority, Dan Zack from the City of Redwood City and Jaime Rodriguez from the City of Palo Alto help educate PAd members about this important topic. ·Other roundtable forums are being planned with topics of interest for PAd members. ·Support efforts to modernize the lamppost banner and sign code/ordinance. ·Continued improvement of way-finding signage including but not limited to public parking way- finding. ·Supporting the ongoing efforts to streamline the permitting process through the City of Palo Alto Development Center. ·PAd now administers and facilitates the former Palo Alto Chamber of Commerce Parking Committee as much of the work plan discussed by this committee is downtown-centric. A more active Downtown: ·Brown Bag Lunchtime Concert series in addition to Friday Night Jam Sessions is being explored for Lytton Plaza as well as other Downtown locations. ·The revitalization and future of the Lytton Plaza, Wednesday afternoon “Farm Shop” concept is under discussion. ·An annual Earth Day celebration called “The Downtown Palo Alto Clean Green Street Scene” will debut on Friday, April 22 in Lytton Plaza featuring poetry slam, recycled fashion show, merchant giveaways and more. Partners include the City of Palo Alto, Cit of Palo Alto Utilities, Acterra, Canopy, the Palo Alto Elementary and High School Districts and more. ·Support, promote and expand World Music Day. ·Support and promote The Palo Alto Gran Fondo Bicycle Ride and Taste of Palo Alto on September 17, 2011. 6 ·Support the efforts of the San Mateo County Convention and Visitors Bureau and ongoing Stanford events and opportunities to drive more visitors to Downtown Palo Alto from the Stanford campus. ·Help promote United Nations Association Film Festival, Stanford Jazz Summers, Palo Alto Institute Film Festival and TheaterWorks programs. ·Transition oversight and promotion of a vibrant and well-used Lytton Plaza from the Friends of Lytton Plaza 7 Section III: Budget for 2011-12 The total funds available for activities for this fiscal year are estimated to be $29,715. The budget for providing the activities is set forth as follows: BID 2011/12 Budget INCOME Total Non-Assessment Sources Assessments $145,000 Allowance for Uncollectible Assessments ($23,000) Other Revenue $17,715 $17,175 09-10 Surplus Carryover $20,000 TOTAL INCOME $159,715 $17,715 EXPENSES Operating Expenses Staff Salaries Executive Director Salary $60,000 Payroll taxes and expense $6,000 Office Supplies & Expenses $1,500 Internet/Website Maintenance $6,000 Telephone $900 Rent $3,120 Reauthorization Advertising $2,500 Audit-Tax Returns $4,000 Legal $1,000 $1,000 Insurance -Liability $1,800 Workman's Comp $1,000 Nominating $1,500 Contingencies $13,500 Subtotal --Operating Expenses $102,320 $1,000 Programs, Marketing and Events Permit Fees $1,000 Banners $4,000 $2,000 Breakfast Roundtables $11,475 $8,175 Events $6,000 $6,000 Member Outreach & Communication $3,000 Downtown Streets Team $5,000 District Improvement $26,420 Subtotal --Programs, Marketing & Events $56,895 $16,715 TOTAL EXPENSES $159,715 $17,715 8 Section IV: Method and Basis of Levying the Assessment Cost Benefit Analysis / Bid Assessments The method and basis of levying the assessment is provided in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2011-12 and is not changed from the FY 2010-11 assessment. There have been no changes made to the Cost-Benefit Analysis or to the BID Assessments since they were approved by City Council on February 2, 2004. The method of calculation used to determine the cost and benefit to each business located in the BID is described below. The BID assessments are based on three criteria: the type of business, the location of the business and the size of the business. It has been consistently demonstrated that the typical BID program places a higher priority on activities such as commercial marketing. As a result, the retail and restaurant establishments in the BID are assessed more than service and professional businesses in the district. While service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more than professional businesses such as medical, dental, architectural, consultant and legal offices with their minimal advertising and promotion needs. For these reasons, various business types are assessed according to the benefit that they receive from the BID, as follows: Ø Retail and Restaurant 100% of base amount Ø Service 75% of base amount Ø Professional 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. The location of a business also determines the degree of benefit that accrues to that business. Centrally located businesses tend to benefit more, as do businesses located on the ground floor. For this reason, A and B benefit zones have been identified for the BID. In Palo Alto, Zone A benefit businesses are assessed 100% of the base benefit assessment while Zone B businesses are assessed 75%. A third criterion is used in the BID to determine benefit. This criterion, the size of the business, takes into consideration the number of full time employees employed by the business. Please refer to Attachment 1 for a more complete understanding of the application of these three variables to establish BID benefit. Attachment 2 is the BID assessment for each business located within the BID boundaries. Applying the criteria identified in Attachment 1, a summary of the assessment that applies to each business by size, type and location is outlined. In addition to the Cost-Benefit Analysis, the assessments include the following criteria: 9 Ø An exemption for “single person professional businesses” that have 25% or fewer full time equivalent (“FTE”), including the business owner. This covers employees who work less than 10 hours a week (based on a 40 hour work week; an FTE equals approximately 2000 hours annually) Ø An assessment specifically for “single person businesses” that have 26% FTE to 1 FTE in the professional business category of the BID (An FTE equals approximately 2000 hours annually) Ø The tiering of other professional businesses by size based (according to benefit) on the “single person business” criteria This outline provides information by which a business can determine its annual assessment based on objective criteria. Except where otherwise defined, all terms shall have the meanings identified below: Definitions of Business Types in the Downtown Business Improvement District Retailers and Restaurants:Businesses that buy or resell goods such as clothing stores, shoe stores, office supplies as well as businesses that sell prepared food and drink. Service Businesses:Businesses that sell services such as beauty or barber shops, repair shops, most automotive businesses, dry cleaners, art and dance studios, printing firms, film processing companies, travel agencies, entertainment businesses such as theatres, etc. Hotel and Lodging: These include businesses that have as their main business the lodging of customers. This is restricted to residential businesses that provide lodging services to customers for less than 30 days. Professional Businesses:Businesses that require advanced and/or specialized licenses or academic degrees such as architects, engineers, attorneys, chiropractors, dentists, doctors, accountants, optometrists, realtors, insurance brokers, venture capital firms, consultants, advertising and marketing professionals and mortgage brokers and similar professions. Financial Institutions:Includes banking, savings and loan institutions and credit unions. Additional clarification on business definitions will be defined according to Section 18.04.030 (Definitions)of the Palo Alto Municipal Code. The Advisory Board recommends that the following businesses be exempt from the BID assessment: Ø New businesses established in the BID area following the annual assessment for the year in which they locate in the BID area Ø Non-profit organizations Ø Newspapers Ø “Single person professional businesses” that have 25% or less FTE, including the business owner The Assessment calculated shall be paid to the City no later 30 days after receipt of the invoice with the amount of the annual assessment sent by the City. A second notice will be mailed as a reminder to businesses that have not remitted payment by that date. Late payment will be subject to a 10% late fee. 10 Section V: Revenue Surplus or Deficit Based on the revenue balance on 02/28/11 of $71,430, the PAd expects a surplus carryover of $20,000. Expected expenses for the remainder of FY 10-11 are as follows: Current Revenue Balance $71,430 Expected expenses for remaining FYE6/30/2011 Staff Salaries $25,000 Elections & Annual Report $3,500 Office & Operating Expenses $10,000 Outside Audit $4,000 Reauthorization Advertising $2,500 Downtown Streets Team $5,000 Rent $1,300 Total Expected Expense $51,300 Expected Carryover $20,000 Section VI: Non-assessment Income It is estimated that $ 17,715.00 will be raised in fundraising, and sponsor support. Additionally, anticipate in kind contribution towards expenses for Fiscal Year 2010-11. Projected Income for Fiscal Year 2011-12 Roundtable Breakfasts (donation)$8,175 Legal (donation)$1,000 Banners $2,000 Events $6,000 Total $17,175 11 Section VII: PAd Board of Directors by Business Type Retailers and Restaurants Robert Beschiem,Tamarine Restaurant Claudia Cornejo, Caffè del Doge Whitney Denson, Five Ten Gifts Georgie Gleim, Gleim the Jeweler Jeff Selzer, Palo Alto Bicycles Abraham Khalil, A.K Insurance Services, KanZeman, Mediterranean Wraps Hotel and Lodging Barbara Gross, Garden Court Hotel Service Businesses Stacey Yates,SkinSpirit Financial Institutions Deborah Pappas, Borel Private Bank &Trust Company Professional Organizations Anne E. Senti-Willis, Thoits, Love, Hershberger & McLean LIAISONS Palo Alto Chamber of Commerce Paula Sandas,President & CEO Downtown Streets Team Eileen Richardson, Executive Director City Of Palo Alto Greg Scharff,Palo Alto City Council Thomas Fehrenbach, Manager of Economic Development 1 Attachment 1 ATTACHMENT 1 A General Statement Regarding Cost-Benefit Analysis For BID Businesses Using The Traditional Three Criteria Formula Criteria 1) Type of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Type Of Business: In a review of 200 California Business Improvement Districts, it is consistently demonstrated that the typical BID Program places a higher priority on Commercial Marketing Programs than on Civic Beautification and Commercial Recruitment Programs. With that trend in mind, retail and restaurant businesses, with their emphasis on,and need for, commercial marketing, are traditionally assessed more than less marketing-sensitive service-oriented or professional-oriented businesses. However, while service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more, (from commercial marketing programs), than professional businesses such as medical, dental and legal offices with their minimal advertising and promotion needs. Therefore, set forth below, is an example of how various business types might be considered regarding the computation of the annual benefit assessment. • Retail and Restaurant: 100% of base amount • Service: 75% of base amount • Professional: 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. Lodging businesses are assessed based on the total number of rooms because it is a more equitable manner of determining size. Many lodging businesses have many part time employees, but revenues are based on the room occupancies of the hotel, not the goods sold or serviced provided by employees. Criteria 2) Location of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Location of Business: It has also been consistently demonstrated that the more centrally located businesses tend to benefit from BID activities and services to a greater degree than businesses located toward the periphery of the proposed BID boundaries. Events and activities tend to originate in the central core of the Downtown area and spread benefit to the outer areas with diminishing energy and impact, much like the ripple effect of a stone tossed into a body of calm water. Furthermore, ground floor businesses tend to benefit to a greater degree than businesses located in upper floors. Therefore, in some cases, a new BID's annual benefit assessment formula also takes these street level criteria into account. As mentioned above, special events, fairs, festivals and other activities tend to take place within, or along, the Main Street core rather than in the areas at the periphery of the Downtown core. Additionally, BID-sponsored seasonal decorations, public art projects, street banners and street furniture tend to be located within the immediate core area. 2 Attachment 1 Therefore, businesses located within the most central area of the proposed BID are considered to be within "Zone A" which should be considered the primary benefit zone. There is typically a "secondary zone" or "Zone B" within most proposed BID areas. This area receives less benefit than Zone A and should be assessed accordingly. An example of how different zones might be treated regarding the computation of the annual benefit assessment is as follows. • Zone A: 100% of base benefit assessment • Zone B: 75% of base benefit assessment In the case of Downtown Palo Alto, it is recommended that all Zone A upper floor businesses, as well as any other businesses located at the periphery of the proposed BID, be considered as Zone B businesses. Please refer to the map in Attachment I. Criteria 3) Size of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Size of Business: In approximately 50% of newly established BIDs, a third assessment criterion is used. This criterion involves the size of each individual business that is based upon the businesses’ total number of full-time employees. Full-time employees are those working a total of 2,000 hours per year. Part-time employees are grouped into full-time job positions, i.e., two half-time employees total one full-time. Fractions are rounded down to the nearest whole number with no less than one person as a minimum for business. An example of how various business sizes might be treated regarding the computation of the annual benefit assessment is as follows: Retail/Restaurants Service Businesses Small 50% of base amount Under 6 FTE*Under 4 FTE Medium 75% of base amount 6 to under 11 FTE 4 to under 7 FTE Large 100% of base amount 11 or more FTE 7 or more FTE * FTE = full time employees Additionally, an exemption was established for “single person professional businesses” that have 25% or less FTE, including the business owner. This covers employees who work less 10 hours a week (based on a 40 hour work week) Since “single person businesses” that have 26% FTE to 1 FTE in the professional business category of the BID benefit the very least from the assessment, their assessments have been tiered by size based (according to benefit) on the new “single person business” criteria. 1 Attachment 2 ATTACHMENT 2 Downtown Palo Alto Business Improvement District Annual BID Assessments ZONE A ZONE B (75% of Zone A amount) Restaurants & Retailers Under 6 FTE (50% of base amount)$225 $170 6 to under 11 FTE (75% of base amount)$340 $260 11 or more FTE (100% of base amount)$450 $340 Service Businesses Under 4 FTE (50% of base amount)$170 $130 4 to under 7 FTE (75% of base amount)$260 $200 Over 7 FTE (100% of base amount)$340 $260 Professional Businesses 25% or fewer FTE, including owner (0% of base amount)Exempt Exempt 26% FTE to under 1 FTE (25% of base amount)$60 $50 2 to 4 FTE (50% of base amount)$110 $90 5 to 9 FTE (75% of base amount)$170 $130 10+ FTE (100% of base amount)$225 $170 Lodging Businesses Up to 20 rooms (50% of base amount)$2258 $170 21 to 40 rooms (75% of base amount)$340 $260 41+ rooms (100% of base amount)$450 $340 Financial Institutions $500 $500 Note 1: For retail, restaurant, service, and professional businesses, size will be determined by number of employees either full-time or equivalent (FTE) made up of multiples of part-time employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be charged by number of rooms available and financial institutions will be charged a flat fee. Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same as similar street-level businesses located within Zone B. Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum assessment will be $50.00. Not Yet Approved 1 110406 jb 0130703 Resolution No. _______ Resolution of the Council of the City of Palo Alto Declaring Its Intention to Levy an Assessment Against Businesses Within the Downtown Palo Alto Business Improvement District for Fiscal Year 2012 and Setting a Time and Place for a Public Hearing on May 2, 2011 at 7:00 PM or Thereafter, in the Council Chambers THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY FIND, DECLARE, AND ORDER AS FOLLOWS: SECTION 1. The Parking and Business Improvement Area Law of 1989 (the “Law”), California Streets and Highways Code Sections 36500 et seq., authorizes the City Council to levy an assessment against businesses within a parking and business improvement area which is in addition to any assessments, fees, charges, or taxes imposed in the City. SECTION 2. Pursuant to the Law, the City Council adopted Ordinance No. 4819 establishing the Downtown Palo Alto Business Improvement District (the “District”) in the City of Palo Alto. SECTION 3. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo Alto Downtown Business & Professional Association, a California nonprofit mutual benefit corporation, to serve as the Advisory Board for the District (the “Advisory Board”). SECTION 4. In accordance with Section 36533 of the law, the Advisory Board prepared and filed with the City Clerk a report entitled “Downtown Palo Alto Business Improvement District, Annual Report 2011-2012” (the “Report). The City Council hereby preliminarily approves the report. SECTION 5. The boundaries of the District are within the City limits of the City of Palo Alto (the “City”) and encompass the greater downtown area of the City, generally extending from El Camino Real to the East, Webster Street to the West, Lytton Avenue to the North and Addison Avenue to the South (east of Emerson Street, the boundaries extend only to Forest Avenue to the South). Reference is hereby made to the map of the District attached hereto as Exhibit “A” and incorporated herein by reference for a complete description of the boundaries of the District. SECTION 6. The City Council hereby declares its intention, in addition to any assessments, fees, charges or taxes imposed by the City, to levy and collect an assessment against businesses within the District for fiscal year 2012 (July 1, 2011 to June 30, 2012). Such assessment is not proposed to increase from the assessment levied and collected for fiscal year Not Yet Approved 2 110406 jb 0130703 2010-2011. The method and basis of levying the assessment is set forth in Exhibit "B" attached hereto, and incorporated herein by reference. SECTION 7. The types of improvements to be funded by the levy of an assessment against businesses within the District are the acquisition, construction, installation or maintenance of any tangible property with an estimated useful life of five years or more. The types of activities to be funded by the levy of an assessment against businesses within the District are the promotion of public events which benefit businesses in the area and which take place on or in public places within the District; the furnishing of music in any public place in the District; and activities which benefit businesses located and operating in the District. SECTION 8. New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, non- profit organizations, newspapers and professional “single-person businesses,” defined as those businesses which have 25% or less full time equivalent employees, including the business owner, shall be exempt from the assessment. SECTION 9. The City Council hereby fixes the time and place for a public hearing on the proposed levy of an assessment against businesses within the District for fiscal year 2012 as follows: TIME: 7:00 PM, or soon thereafter DATE: Monday, May 2, 2011 PLACE: City Council Chambers 250 Hamilton Avenue Palo Alto, California 94301 At the public hearing, the testimony of all interested persons regarding the levy of an assessment against businesses within the District for fiscal year 2012 shall be heard. A protest may be made orally or in writing by any interested person. Any protest pertaining to the regularity or sufficiency of the proceedings must be in writing and shall clearly set forth the irregularity or defect to which the objection is made. Every written protest must be filed with the City Clerk at or before the time fixed for the public hearing. The City Council may waive any irregularity in the form or content of any written protest and at the public hearing may correct minor defects in the proceedings. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest must contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the City as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the Not Yet Approved 3 110406 jb 0130703 business. A written protest which does not comply with the requirements set forth in this paragraph will not be counted in determining a majority protest (as defined below). If, at the conclusion of the public hearing, written protests are received from the owners of businesses in the District which will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent (i.e., there is a majority protest), no further proceedings to levy the proposed assessment, as contained in this resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the City Council. If the majority protest is only against the furnishing of a specified type or types of improvement or activity within the District, those types of improvements or activities shall be eliminated. SECTION 10. For a full and detailed description of the improvements and activities to be provided for fiscal year 2012, the boundaries of the District and the proposed assessments to be levied against the businesses within the District for fiscal year 2012, reference is hereby made to the Report of the Advisory Board. The Report is on file with the City Clerk and open to public inspection. SECTION 11. The City Clerk is hereby authorized and directed to provide notice of the public hearing in accordance with law. // // // // // // // // // // // // Not Yet Approved 4 110406 jb 0130703 SECTION 12. 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 impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ Senior Assistant City Attorney City Manager _____________________________ Director of Administrative Services _____________________________ Director of Planning and Community Environment Not Yet Approved 6 110406 jb 0130703 Exhibit “B” Downtown Palo Alto Business Improvement District Annual BID Assessments ZONE A ZONE B (75% of Zone A amount) Restaurants & Retailers Under 6 FTE (50% of base amount) $225 $170 6 to under 11 FTE (75% of base amount) $340 $260 11 or more FTE (100% of base amount) $450 $340 Service Businesses Under 4 FTE (50% of base amount) $170 $130 4 to under 7 FTE (75% of base amount) $260 $200 Over 7 FTE (100% of base amount) $340 $260 Professional Businesses 25% or fewer FTE, including owner (0% of base amount) Exempt Exempt 26% FTE to under 1 FTE (25% of base amount) $60 $50 2 to 4 FTE (50% of base amount) $110 $90 5 to 9 FTE (75% of base amount) $170 $130 10+ FTE (100% of base amount) $225 $170 Lodging Businesses Up to 20 rooms (50% of base amount) $2258 $170 21 to 40 rooms (75% of base amount) $340 $260 41+ rooms (100% of base amount) $450 $340 Financial Institutions $500 $500 Note 1: For retail, restaurant, service, and professional businesses, size will be determined by number of employees either full-time or equivalent (FTE) made up of multiples of part-time employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be charged by number of rooms available and financial institutions will be charged a flat fee. Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same as similar street-level businesses located within Zone B. Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum assessment will be $50.00. City of Palo Alto (ID # 1549) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 3 (ID # 1549) Summary Title: FY 2011 Q2 Financial Results & Midyear BAO Title: Finance Committee Recommendation Regarding Adoption of: (1) Budget Amendment Ordinance Amending the Budget for Fiscal Year 2011 to Adjust Budgeted Revenues and Expenditures in Accordance with the Recommendations in the Midyear Report and (2) Resolution Amending the FY 2010-2011 Compensation Plan for Classified Personnel (SEIU) Adopted by Resolution No. 9088 to Correct the Compensation for One Existing SEIU Classification and Change the Titles of Two Classifications From:City Manager Lead Department: Administrative Services Recommendation Staff and the Finance Committee recommend that Council: 1.1. Adopt a Budget Amendment Ordinance, (Attachment 1 to CMR 1442) which includes: a.Proposed midyear adjustments to the Fiscal Year 2011 Budget for the General Fund, Enterprise Funds, Special Revenue Funds, Internal Service Funds, and Capital Improvement Fund. b.Fiscal Year 2011 Midyear CIP Adjustments. c.Amendments to the Fiscal Year 2011 Table of Organization. 2.Adopt Resolution amending the FY 2010-2011 Service Employees’ International Union (SEIU) Compensation Plan (Attachment 6 to CMR 1442). 3.Adopt Resolution amending the FY 2010-2011 Management Employee’s Compensation Plan (Attachment 3). Executive Summary The documents attached summarize changes to the City’s financial position and outline changes to the Fiscal Year 2011 adopted budget necessary during the normal course of business. Background On March 15, 2011, the Finance Committee reviewed the Fiscal Year 2011 Adjusted Budget- Second Quarter Financial Results, Midyear Amendments and Capital Improvement Program Status. Staff summarized the recommended changes to the Fiscal Year 2011 Adopted Budget as part of the normal course of business through December 31, 2010. Where possible, budget April 11, 2011 Page 2 of 3 (ID # 1549) changes are held until the midyear report is presented to Council in an effort to consolidate information and streamline the Budget Amendment Ordinance (BAO) process. The mid-year CMR report reviewed by the Finance Committee is attached (Attachment 1). Table 1 below reflects the impacts to the Budget Stabilization Reserve (BSR) resulting from the adjustments to the 2011 Adopted Budget, including corrections made by staff which was part of the recommendations made to the Finance Committee. To date the City Council has approved $0.93 million in BAOs using the General Fund BSR as detailed in Table 1. Staff and the Finance Committee recommend changes to revenue and expenditures that result in a net positive adjustment of $0.45 million for fiscal year 2011. Including the previously Council approved BAOs to date results in a net BSR draw of $.48 million. Year end adjustments for revenues or expenditures could vary and result in further impacts to the BSR which currently amounts to $26.9 million or 19.3 percent of General Fund expenditures. Description Council Action Date 000s Amount Audited beginning BSR Balance, as of 6/30/2010 $27,396 Adopted Budget -Net Surplus 33 Ord 5087 -Election costs for Palo Alto Professional Firefighters' Initiative 07/26/10 (22) Ord 5091 -City Manager Home Loan 08/02/10 (125) Ord 5093 -Firefighters' Charter Amendment and even numbered Council Elections 09/13/10 (275) Ord 5094 -Transfer to Refuse Fund (Loan)- reversed in midyear proposal 09/20/10 (240) Ord 5106 -Airport Fund Loan 12/06/10 (300) Subtotal - Drawdown from BSR (929) Proposed midyear adjustments Revenue 2,063 Department Requests (1,227) Contingency Reimbursements (194) Council Directed Expense (196) Subtotal - midyear adjustments 446 Net BSR Impact (483) Projected Year-End BSRBalance $26,913 BSR as aPercentage of Adopted Expenditures 19.3% Table 1:FY 2011 Budget Stabilization Reserve Impact The Finance Committee’s review included questions regarding General Fund expenditure increases, salary and benefits adjustments and revenue trends. In addition, the Committee raised questions regarding the financial health of the Refuse Fund and the fund’s short-fall in commercial retail revenue. Staff will provide the Finance Committee a more detailed review of the Refuse Fund including commercial retail revenue in April. The Committee voted unanimously to accept staff’s recommendation as set forth in CMR 1442 (Attachment 1). Since Committee review, the City Manager directed staff to include the reclassification of the Chief Information Office. This includes a title change to Director of Information April 11, 2011 Page 3 of 3 (ID # 1549) Technology/Chief Information Officer and a compensation increase of $38,771. The reclassification was to be included in the FY 2012 budget together with the establishment of the new Information Technology Department, however due to pressing technology priorities staff recommends initiating recruitment prior to approval of the FY 2012. In order to initiate recruitment under the new title and salary level the Council must adopted an updated Table of Organization for the Technology Fund (Attachment 2) approve the proposed resolution (Attachment 3). Attachments: ·Attachment 1: FY 2011 Q2 Financial Results & Midyear BAO (CMR #1442)(PDF) ·Attachment 2 -Amendment to the Fiscal Year 2011 Table of Organization (PDF) ·Attachment 3 -Resolution of the Council of the City of Palo Alto Amending the 2010-2011 Compensation Plan for Management and Professional Personnel Adopted by Resolution No. 9156 (PDF) ·Attachment 3, Exhibit A -Midyear Management/Professional Compensation Plan Changes - effective April 30, 2011 (PDF) Prepared By:Christine Paras, Senior Financial Analyst Department Head:Lalo Perez, Director City Manager Approval: James Keene, City Manager City of Palo Alto (ID # 1442) Finance Committee Staff Report Report Type:Meeting Date: 3/15/2011 March 15, 2011 Page 1 of 19 (ID # 1442) Council Priority: City Finances Summary Title: FY 2011 Q2 Financial Results & Midyear BAO Title: Finance Committee Recommendation Regarding Adoption of: (1) Budget Amendment Ordinance Amending the Budget for Fiscal Year 2011 to Adjust Budgeted Revenues and Expenditures in Accordance with the Recommendations in the Midyear Report and (2) Resolution Amending the FY 2010-2011 Compensation Plan for Classified Personnel (SEIU) Adopted by Resolution No. 9088 to Correct the Compensation for One Existing SEIU Classification and Change the Titles of Two Classifications From:City Manager Lead Department: Administrative Services Recommendation Staff recommends that the Finance Committee recommend to the City Council adoption of the attached Budget Amendment Ordinance (BAO) (Attachment 1) which includes: a. Proposed midyear adjustments to the Fiscal Year 2011 Budget for the General Fund, Enterprise Funds, Special Revenue Funds, Internal Service Funds, and Capital Improvement Projects Fund (Exhibit A). b. Fiscal Year 2011 Midyear CIP Adjustments (Exhibit B). c. Amendments to the Fiscal Year 2011 Table of Organization (Exhibit C). d. Amendments to the Fiscal Year 2010-2011 Service Employees’ International Union (SEIU) Compensation Plan (Attachment 6) The following are attached as informational items; no action is required on these items. 1. General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 (Attachment 2) 2. FY 2011 Midyear Capital Improvement Program Projects Status report (Attachment 3) March 15, 2011 Page 2 of 19 (ID # 1442) 3. Continuous Capital Projects Expenditures for Fiscal Years 2007-2011 (Attachment 4) 4. Graph depicting General Fund Transfers to Infrastructure Reserve for Fiscal Years 2007-2016 (Attachment 5) 5. Police and Fire Departments Overtime Analysis for Fiscal Years 2006 through 2010 with Fiscal Year 2011 Data Through January 12, 2011 (Attachment 7) Executive Summary The documents attached summarize and outline changes to the City’s Fiscal Year 2011 budget. As revenues and expenditures may vary significantly from the original budget plan, changes become necessary. These require budget amendments to department budgets which Council must review and deny or approve. Midyear adjustments result in a $0.5 million contribution to the BSR which comprise of a $2.0 increase in revenue and a $1.6 million increase in expense. This addition to the BSR is offset by previously adopted BAOs of $0.9 million and results in a net BSR draw of $0.5 million. The BSR balance as of midyear is $26.9 million, or 19.3 percent of adopted expenditures. Background This report summarizes changes to the Fiscal Year 2011 Adopted Budget resulting from financial activity through December 31, 2010. Where possible, budget changes are held until the midyear report is presented to Council in an effort to consolidate information and streamline the Budget Amendment Ordinance (BAO) process. This report is organized by fund with a primary focus on major changes in the General Fund. Adjustments, as well as all fund summaries, are included in Attachment 1, Exhibit A. The Midyear CIP Program Project Status report (Attachment 3) provides the Finance Committee with information on the status of the City’s CIP projects as of December 31, 2010. An update to the Long Range Financial Forecast (LRFF) was presented to the Finance Committee on February 1st. At this time, the LRFF FY 2011 expected revenue to be $1.5 million higher than the adopted budget. Despite this anticipated improvement in revenue, a $0.9 operating gap was expected at the end of FY 2011. In the LRFF, this operating gap is due to Council approved BAOs (see Table 1) and increased overtime budget for Public Safety departments. In light of this anticipated operating gap, departments were directed to maintain their current level of appropriations and carefully monitor their expense. Discussion General Fund -Midyear Financial Report The second quarter has shown improved General Fund revenues. In addition to the $1.5 million revenue improvement that was reflected in the LRFF (presented to Finance Committee on February 1st), staff has revised its revenue projections to recognize an additional General Fund revenue of $0.5 million. Table 1 summarizes major revenue and expenditure adjustments in the March 15, 2011 Page 3 of 19 (ID # 1442) General Fund (details for these changes are outlined in Attachment 1, Exhibit A) and a draw of $0.48 million from the BSR is expected at year end. The draw results from Council directed BAOs amounting to $0.93 million that are offset by staff proposed midyear contributions to the BSR of $0.45 million. The projected year-end BSR balance, therefore, is $26.9 million, or 19.3 percent of adopted budget expenditures. Description Council Action Date 000s Amount Auditied beginning BSR Balance,asof6/30/2010 $27,396 Adopted Budget - Net Surplus 33 Ord 5087 - Election costs for P alo Alto Professional Firefight ers'Initiative 07/26/10 (22) Ord 5091 - City Manager Home Loan 08/02/10 (125) Ord 5093 - Firefighters' Charter Amendment and even numbered Council Elections 09/13/10 (275) Ord 5094 - Transfer to Refuse Fund (Loan)- reversed in midyear proposal 09/20/10 (240) Ord 5106 - Airport Fund Loan 12/06/10 (300) Subtotal - Dra wdown from BSR (929) Proposedmidyear adjustments Revenue 2,111 Department Requests (1,275) Contingency Reimbursement s (194) Council Directed Expense (196) Subtotal- midyear adjustments 446 Net BSR Impact (483) Projected Year-End BSR Ba lance $26,913 BSR as a Percentage of Adopted Expenditu res 19.3% Table 1: FY 2011 Budget Stab ilizationReserve Impact Sales Tax FY 2011 sales tax revenue is estimated at $19.5 million, a $1.3 million increase above the FY 2011 Adopted Budget. $0.8 million of the increase is due to stronger sales tax performance in the 3rd calendar year quarter and indications of strong retail sales in the 4th quarter. The remaining increase results from the State’s “triple flip” underpayment in FY 2010 which will be remitted in FY 2011. Property Tax The property tax projection for FY 2011 is $25.3 million --$0.6 million below the FY 2011 adopted budget, and $0.7 million or 2.7 percent below FY 2010 receipts. This is due to the sizeable number of commercial property appeals on properties’ assessed values which the County has received. These appeals will be processed over the next 2-3 years, with a corresponding drag on City property tax revenues. Transient Occupancy Tax The FY 2011 estimate for Transient Occupancy Tax (TOT) is now $7.4 million, a $0.4 million March 15, 2011 Page 4 of 19 (ID # 1442) increase from the FY 2011 Adopted Budget amount. In FY 2010, TOT revenues ceased their prior downward trend and began to rise. Occupancy and daily rates increased from 66.2 percent and $145 per day in October 2009 to 80.5 percent and $150 per day in October 2010. These trends, along with the opening of the new Hotel Keen in May 2010, have led staff to forecast higher revenues in FY 2011. Interest Earnings Because of the Federal Open Market Committee’s (FOMC) outlook that the slow pace of the economic recovery requires maintenance of low interest rates for an extended period, projected interest income for FY 2011 must be adjusted downward by $0.3 million. The FOMC is expected to maintain the federal funds rate at historically low levels between zero and one- half percent and this will continue to negatively impact portfolio yields. Documentary Transfer Tax The Documentary Transfer Tax revenue projected for FY 2011 is $4.0 million, nearly $0.4 million above the Adopted Budget. Through the middle of this fiscal year, revenue results have been running nearly equal to those of the prior year. Staff believes, however, that property transaction activity may increase in the second half of this year and lead to slightly higher transfer taxes at year-end. Charges for Services The City is reimbursed for Fire and Communication services provided to Stanford University. Fiscal Year 2010 actual expenses came in significantly higher than what was billed to the University primarily due to Public Safety overtime costs exceeding budget. Reimbursement for this difference was billed to the university in the first quarter of Fiscal Year 2011. This results in a revenue increase of $0.41 million to the General Fund. Permits and Licenses Based on activity through mid-year, Planning and Community Environment Department revenues are expected to exceed Fiscal Year 2011 budget projections by approximately $1 million. The bulk of the revenue increase is due to fees generated at the Development Center for private development and construction activity. At the end of January, Building Division revenues were at 85 percent of budget targets due to a surge in Building Permit activity in the second quarter of FY 2011. Applications for plan checks were up 55 percent (1,161 vs. 749) from the same period last year, while the percentage of completed plan checks rose by more than 32 percent. Likewise, the number of Building Permits issued increased by 42 percent (2,132 vs. 1,501), which was reflected in a more than 62 percent increase in permit valuations ($152.6 million vs. $93.8 million). Overall, Building Division revenues totaled $3.21 million through January, up more than $1.25 million from last year, an increase of nearly 64 percent. The increased Planning & Community Environment Department revenues reflects a stabilizing and gradually improving economy bolstered by increased confidence in the local real estate market along with easing access to credit and financing. The strength of several large local employers (Facebook, VMware, Google, H-P, Apple, Tesla) likely helped fuel investments in March 15, 2011 Page 5 of 19 (ID # 1442) local residential real estate, while several smaller start-up firms located in the downtown area and completed renovations of commercial office space. Additionally, the transition to new Building Codes in January likely resulted in a number of applicants filing their Building Permit applications before the end of the calendar year so their projects could be processed under the prior codes. At midyear, the City has collected $0.62 million, or 40 percent, in parking violation revenues. The number of first and second quarter citations issued is 9 percent lower than the same quarter in the prior year due to staff vacancies (1.5 FTE) and disability or workers’ compensation leaves; the number of vehicles monitored has decreased 9 percent. Additionally, with the passage of Senate Bill 857, the State of California began taking an additional $3 per parking citation, raising the total fee assessment per parking citation by the State to $12.50. Based on historical trends and revenue recognized in the current year, year end parking violation revenue is projected to be $1.3 million, or $0.2 million short of budget. Rental Income Interdepartmental rental income is increased by $60 thousand to reflect payments from the Utilities Department to the General Fund for the use of a portion of the former Los Altos Treatment Plant site as a staging/storage area. Expense Highlights for Fiscal Year 2011 Midyear To align the budget with prior year actual expenditures and anticipated year end costs, budgets in the areas of overtime, health care, and Internal Service Fund departmental charges were increased. Below is a summary of the total General Fund Impact of these adjustments. (in millions) Public Safety Ove rtime ($0.815) Department Charges Current Employee Healthcare &Benefits (0.232) Retiree Benefits (0.118) Interest income decline (0.174) Total Impact ($1.339) General Fund Salaries and Benefits Savings and Overtime Analysis There are 579.5 full-time equivalents (FTEs) budgeted in the General Fund and, as of the beginning of January, 44.85 General Fund FTE were vacant. In combination with salary savings expected from employee retirements, net salary and benefits savings of $1.5 million is expected to be realized if the level of General Fund vacancies is maintained. Most of the General Fund departments are on track with or below their overtime budget, however the City Manager’s Office, Fire Department, and Police Department exceed their budgets for the reasons discussed below. Overtime budgets for the Police and Fire Departments are around $1 million each. These levels have not kept pace with historical March 15, 2011 Page 6 of 19 (ID # 1442) overtime activity and with contractual salary increases over the past several years. Trend and seasonal data analyzed for Fiscal Years 2007 through 2010 shows that the Police and Fire Departments will need an additional $1.6 million ($1.2 million for the Fire Department and $0.4 million for the Police Department) to align the budget with actual costs. Adopted Adjuste d Midyear Midyear % ofCategoriesBudgetBudgetBudgetChangesActualAdj Budget City Attorney - - - - - 0% City Auditor - - - - - 0% City Clerk 7 7 7 - - 0% City Council - - - - - 0% City Manager 3 3 3 - 10 333% Administrative Services 36 45 45 - 15 33% Community Services 105 105 105 - 51 49% Library 58 58 58 - 20 34% Fire 1,018 1,018 1,628 610 1,148 113% Human Resources 4 4 4 - - 0% Planning and Community Environment 67 67 67 - 32 48% Police 968 1,000 1,205 205 754 75% Public Works 113 113 113 - 94 83% Total Overtime 2,379 2,420 3,235 815 2,124 88% CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR FINANCIAL REPORT GENERAL FUND OVERTIME (in thousa nds of dollars) (a s o f 12/3 1/10) Table 2:General Fund Overtim e The City Manager’s Office exceeded its overtime budget by $7 thousand due to additional tasks related to the Emergency Preparedness program. These include: use of the Mobile Emergency Operations Center for Stanford football games and participation in Urban Shield, the largest, regional anti-terrorism exercise in the U.S., sponsored by the Bay Area Urban Security Initiative. Since the $7 thousand in overtime cost was not planned for in the City Manager’s Office, in the third quarter this amount will be transferred to the Police Department and offset with incoming grant funds. The Fire Department exceeded its adjusted budget by $0.13 million or 13 percent. In comparison with Fiscal Year 2010 midyear, the expense has been reduced by 25 percent or $0.3 thousand. At the end of December 2010, the department had zero employees on disability leave while in December 2009, the department had three employees on full disability leave, one employee on modified duty, two employees on light duty, and four employees on other disability leave. Actual overtime figures are a result of Station 8 staffing, Medic 1 staffing, and backfilling for minimum staffing requirements due to vacation, sick and other leaves, special assignments. As part of staff’s plan to align Public Safety overtime cost with contractual salary increases over the past five fiscal years, overtime budget in the Fire Department will be increased $0.6 million. The Police Department has used 75 percent of its annual overtime budget through December March 15, 2011 Page 7 of 19 (ID # 1442) 31st. The main factors contributing to overtime usage this quarter were staffing shortages due to disability leave, vacancies in patrol and the 9-1-1 dispatch center, traffic control services at Stanford football games, providing security during a Presidential visit, and participation in the Urban Shield Exercise. The Department receives partial reimbursement for overtime worked from Stanford, the Utilities Department for dispatch services, and from neighboring cities for animal control and care services. Traffic control services at Stanford football games and other events are partially offset by reimbursements from the University and other organizations. The Department also received reimbursement for it’s participation in the Urban Shield Exercise and for dispatcher training from a State grant. The Police Department’s overtime budget will be increased $0.2 million in midyear to align the department’s budget with contractual salary increases over the past five fiscal years. Department Charges Three months of savings equal $96 thousand citywide ($58 thousand for the General Fund) results from April 1st implementation of employee and future retiree medical premium contributions by miscellaneous employees (excludes sworn safety employees in Police and Fire Departments), also known as the 90/10 healthcare plan for miscellaneous employees. Although the implementation of the 90/10 healthcare plan for miscellaneous employee results in savings, a midyear budgetary increase of $0.22 million is needed in the General Fund to adjust for two assumptions that were made in the adopted budget. First, the adopted budget assumed five months of savings due to miscellaneous employee healthcare contributions. Since implementation of the 90/10 plan was deferred from February 1st to April 1st, an additional $39 thousand in benefit cost is needed in the General Fund. Second, the adopted budget assumed a 10 percent increase in medical costs for calendar year 2011. Actual medical cost increases were received subsequent to budget adoption and ranged from 12-17 percent. The budget impact of these medical cost increases that exceeded staff’s projection is $0.18 million. Projected interest earnings are used to balance department charges in the General Benefits, Workers’ Compensation Insurance Program, and General Liabilities Insurance Program Internal Service Funds. As a result of interest earning decline, these funds must increase department charges to break even at year end. Based on staff’s projections, the net expense increase to General Fund department is $0.2 million. Contingency Accounts The City Council, City Manager, and City Attorney Offices have contingency accounts. The changes and balances in those accounts are discussed below. City Council Contingency At midyear, the City Council contingency account is replenished $35 thousand for expenses related to the continued publication of Council and Standing Committee agenda ads in the newspaper. Council passed a motion in September 27, 2010 to reimburse the contingency account for this expense. The summary of changes to the Council contingency account is shown March 15, 2011 Page 8 of 19 (ID # 1442) below: Date Description Amount 7/1/10 City Council Contingency Beginning Balance $250,000 7/7/10 Balance Carried forward from FY 2010. Motion was approved in June 2010 $55,000 7/7/10 Transfer to the City Manager Office to cover staffing cost of HSR. Motion was approved in June 7, 2010. ($90,000) 8/2/10 Transfer to the PCE Department for Contract Services for on-call engineering services related to HSR. (CMR:310:10) ($120,000) 10/4/10 Transfer to the City Manager Office to reimburse contract services for legislative advocacy service for Capitol Advocates (CMR:357:10) ($15,000) 9/27/10 Transfer to the City Clerk Office to pay for continued publication of City Council and Standing Committees agenda in the newspaper to be reimbursed in midyear. Motion was approved in September 27, 2010. ($35,000) 10/4/10 Transfer to the PCE Department for contract services for additional months (until February 28, 2011) for Capitol Advocates (CMR:357:10) ($38,500) Midyear reimbursement $35,000 Balance after midyear reimbursement $41,500 City Manager Contingency The City Manager contingency account had a beginning balance of $0.25 million in FY 2011. Due to Council’s heavy agenda and rather than delaying the implementation of programs pending a BAO, staff used the City Manager’s contingency to expedite the implementation of certain programs. The proposed midyear changes replenish the City Manager’s contingency by $125,000 for these programs. After the contingency is replenished at midyear, the City Manager contingency account balance is $157,896. a. $80 thousand for the Urban Forest Master Plan through a transfer from the Community Services, Planning and Environment, Public Works and the Utilities Departments. Each department is contributing $20,000 to replenish the City Manager’s Contingency and results in no BSR impact. b. $45 thousand for the development of the City’s ethics development program replenishment from the BSR. City Attorney Contingency The City Attorney contingency account had a balance of $125,000 at the beginning of the fiscal year. The City Attorney determined that the contingency account is not needed for fiscal year 2011; therefore the whole amount is being returned to the BSR. This is a one-time adjustment March 15, 2011 Page 9 of 19 (ID # 1442) to the City Attorney’s budget. Department Budget Adjustments The following are recommended midyear changes to department budgets: City Manager The City Manager’s Office is requesting additional funds for temporary staffing costs associated with the coordination of important projects. The department requests $60 thousand in temporary salary budget at midyear, of which $31 thousand is related to additional work in support of high speed rail (HSR) activities and $29 thousand related support to Emergency Preparedness and the Infrastructure Blue Ribbon Commission. HSR activities include: preparing HSR Committee agendas and materials; working with the City’s legislative advocates on State HSR issues; managing contracts with professional consultants providing technical advice to the City; attending community meetings; writing City Council reports; making presentations to keep community informed about HSR; acting as a liaison to community groups and neighborhood associations; and assisting as needed with the rail corridor study and possible work on Caltrain matters.Staff will propose funds in the 2012 budget that match anticipated work load given changes in the HSR program. The City Manager’s Office has absorbed additional workload related to Council’s Emergency Preparedness priority. These activities include: improving the emergency operations plan and training; implementing the Foothills Fire Management Plan recommendations; conducting major community based exercises; and strengthening the Citizen Corps Council (CCC) role. Planning and Community Environment Planning & Community Environment is requesting an additional $0.3 million at mid-year to cover additional expenses related to: 1) processing an increased number of Planning entitlement and Building Permit applications; and 2) activities in connection with the Development Center restructuring (Blueprint) effort. These requests include: 1. $15 thousand for contract Planners to work on entitlement applications and backfill for regular Planning staff who are assigned to work on the DC Blueprint effort 2. $92 thousand for a limited hourly Management Specialist to serve as Project Manager for the DC Blueprint restructuring effort 3. $22 thousand for a limited hourly Administrative Specialist to support data compilation and development and implementation of new activities, services, and collateral material associated with the Green Building program 4. $50 thousand for contract Plan Check staff to work on Building Permit applications that warrant being reviewed in-house and to backfill for regular staff who are assigned to work on the DC Blueprint effort March 15, 2011 Page 10 of 19 (ID # 1442) 5. $50 thousand for a second contract Plan Checker to work on high priority cost recovery projects that require rapid turn-around and inter-departmental coordination. This position also will support piloting and implementation of recommendations associated with the DC Blueprint effort 6. $12 thousand for acquisition of code books and related materials for staff in connection with the adoption of new Building Codes 7. $8 thousand for miscellaneous supplies and materials needed to support the added hourly and contract staff working at the Development Center and piloting and implementation activities associated with the DC Blueprint effort 8. $42 thousand to cover the increase of bank fees due to the increase in the volume of business activities and credit card payments received at the Development Center Community Services Department (CSD) Expected reimbursement of $48 thousand from the Family Resources Foundation (Foundation) is removed as a revenue source in the CSD budget. The Foundation was to provide the funding for the Program Coordinator (0.5 FTE) that oversees the Family Resources Program. The Foundation has found it extremely challenging to raise funds to fully reimburse the City for the Program Coordinator. Staff is examining options to fund the Program Coordinator position and will be presenting the results of this analysis during the FY 2012 budget process. Vehicle Fund Charges In the General Fund, vehicle replacement funding for the City’s fleet/equipment purchases was reduced by $0.48 million in the FY 2011 Adopted Budget. A review of the City’s fleet is currently in progress to determine the extent to which this reduction will be realized in FY 2011. Printing and Mailing Fund As part of the FY 2011 budget process, staffing levels for printing and mailing services was reduced from 4.5 to 2.5 FTE to address the continued decline in program revenues and increased employee benefit costs. As of February 2011, the fund had a cash shortfall of $0.1 million. Additional costs will have to be allocated to departments by year end in order to bring this into balance. Temporary Salary Usage The Police Department has used temporary salaries to fill vacant, authorized regular positions to implement minimum staffing requirements, legal mandates, or revenue producing activities. The vacant positions include a Code Enforcement Officer, Property and Evidence Tech staff (2.0 FTE), a Police Records Specialist, and Public Safety Dispatchers (4.0 FTE). It is estimated that the department will save $0.17 million in overtime costs through use of temporary Public Safety Dispatch staff in the 9-1-1 Dispatch Center. March 15, 2011 Page 11 of 19 (ID # 1442) The Fire Department has required the use of temporary salaries to fill vacant authorized regular positions due to minimum staffing requirements, legal mandates, revenue producing and workload demands. The vacant positions backfilled with hourly employees include Deputy Chief of Support Services, OES Coordinator, Fire Inspector, and Plan Checker (4.0 FTE). Use of temporary salary is also required to partially replace an eliminated Hazardous Materials Specialist (1.0 FTE) position in order to maintain revenue production and alleviate workload demands. It is estimated that the Department will realize $61 thousand in overtime savings by using hourly employees. Enterprise Funds Discussed below are adjustments to the City’s Enterprise Funds. The Fiscal Year 2011 Midyear Budget Summaries (Attachment 1, Exhibit A) provides a financial report of the Enterprise Funds as of midyear. Electric Fund (Net reserve reduction of $0.334 million) -The Calaveras Reserve within the Electric Fund is reduced by $49 thousand to fund 25% of a feasibility study for a facility that would recover energy from methane from dry anaerobic digestion (approved by Council on August 2, 2010, CMR 333:10). A transfer of $0.117 million to the Electric Fund from the Capital Projects Fund is made to return funds for CIP PE-08005 MSC Resurfacing Project which is now complete. In addition, $0.135 million will be added to the Electric Fund, to cover expenditures for the Electric Vehicle Charging Infrastructure CIP (EL-11016). The purpose of this project is to pilot electric charging stations and to provide a charging location for electric vehicles that may use the Civic Center and businesses in Downtown Palo Alto. A grant of $35 thousand for this project has been received from the Bay Area Air Quality Management District. The Electric Fund Distribution Rate Stabilization Reserve will contribute $0.1 million. The Public Benefits Program Reserve within the Electric Fund is reduced by a transfer of $0.110 million to the Capital Projects Fund for CIP PE-09006 Mitchell Park Library for energy efficiency rebates. Fiber Optics Fund (Net reserve reduction of $11 thousand) -The Fiber Optics Fund reserve is increased by $1 thousand for the return of unused funds from closed CIP projects (EL-06005 Fiber Optic Network System Improvements and EL-06006 Fiber Optic Customer Connections). Gas Fund (Net reserve addition of $96 thousand) -The Gas Fund reserve is increased by $39 thousand for the return of unused funds from closed CIP projects (GS-03010 CNG Seq. Fuel System and GS-00011 Compressed Natural Gas). A transfer of $35 thousand to the Gas Fund from the Capital Projects Fund is made to return funds for CIP PE-08005 MSC Resurfacing Project which is now complete. March 15, 2011 Page 12 of 19 (ID # 1442) Also in the Gas Fund, interdepartmental communications expense is reduced by $47 thousand as a result of Utilities alarm monitoring being transitioned from the Police Department to an outside vendor. Water Fund (Net reserve addition of $23 thousand) -Interdepartmental communications expense is reduced by $19 thousand as a result of Utilities alarm monitoring being transitioned from the Police Department to an outside vendor. A transfer of $57 thousand to the Water Fund from the Capital Projects Fund is made to return funds for CIP PE-08005 MSC Resurfacing Project which is now complete. Wastewater Collection Fund (Net reserve addition of $58 thousand) -Interdepartmental communications expense is reduced by $18 thousand as a result of Utilities alarm monitoring being transitioned from the Police Department to an outside vendor. A transfer of $75 thousand to the Wastewater Collection Fund from the Capital Projects Fund is made to return funds for CIP PE-08005 MSC Resurfacing Project which is now complete. Refuse Fund (Net reserve reduction of $0.111 million) -A transfer of $0.24 million from General Fund is reversed. This transfer was originally approved by Council on September 20, 2010 (CMR 356:10) to ensure that the cash position of the Refuse would meet State landfill requirements. It has been determined that the cash balance is sufficient enough and that the transfer is no longer needed. A transfer of $0.139 million to the Refuse Fund from the Capital Projects Fund is made to return funds for CIP PE-08005 MSC Resurfacing Project which is now complete. For the eight months ended February 28, 2011, the Refuse Fund has a positive net income of $576 thousand. The Refuse Fund also has a positive cash balance of $8 million, which satisfies the state requirement of $6 million for post closure costs. Furthermore, given the positive position in the fund, staff is not recommending an increase to the current available loan from the General Fund to the Refuse Fund at this time. Staff is closely watching the Refuse Fund for indications that it may not finish the fiscal year in a positive position. Certain revenues vary from budget. Chief among these is commercial retail revenue, which is projected to be lower than budget by $1.9 million. With other revenues up and certain expenses down the drop in commercial retail revenue could be absorbed. Staff is still evaluating the causes for the drop in commercial retail revenue and will return to the Finance Committee soon with more details as well as a projection for fiscal year end. Storm Drainage Fund (Net reserve reduction of $0.163 million) -Funds totaling $0.151 million are added to various CIP projects (see Attachment 1, Exhibit B) for salaries and benefits not previously included. March 15, 2011 Page 13 of 19 (ID # 1442) Wastewater Treatment Fund (Net reserve addition of $10.5 million) -The Wastewater Treatment Fund reserve is increased by $0.62 million for the return of unused funds from a closed CIP project (WQ-04010 Replace Existing Reclaimed Water Pipeline). Also, CIP WQ-06014 Disinfection Facility Improvement Program is reduced by $10 million due to savings realized from lower bids. The RSR now negative $2.9 million. Capital Improvement Program Adjustments to the City’s 2011 Capital Plan are noted in Exhibit A, with specific project adjustments described in Exhibit B. All of the CIP changes fall into three basic categories: 1) projects requiring additional appropriations: 2) projects having reductions in appropriations; and 3) projects with other adjustments such as transfer of funding between projects, closing completed projects or creating new projects. Highlights of CIP changes are as follows: General Fund · Street Maintenance -CIP PE-86070 -Increase funding by $0.164 million and increase project cost by the same amount. This adjustment is made to reflect revenue received from the State of California Proposition 42 (Traffic Congestion Relief Fund). · Mitchell Park Library -PE-09006 -Increase funding by $0.11 million and increase project cost by the same amount. The appropriation is increased due to revenues received from the Utilities Department regarding energy efficiency rebates. Another adjustment to this project in midyear is reducing the funding by $1,347,309 in order to adjust the budget to the new, lower cost estimates by the engineers. This project is funded by the Measure N Library Bond. · Main Library New Construction and Improvements -PE-11000 -Increase funding by $0.45 million to accelerate the design phase of the project to take advantage of the low construction bid environment. The design phase was planned for FY 2012 and is now moved to FY 2011. This project is funded by the Measure N Library Bond. · Temporary Facility for Main Library -PE-11012 -This is a new project with initial funding of $0.5 million. This project will renovate the Art Center auditorium to function as a temporary library during the construction of the adjacent Main Library. This project is to be funded by Measure N Library Bond. (Attachment 1, Exhibit B-1) · Downtown Library Improvements -PE-09005 -Increase funding by $1.3 million to adjust the preliminary estimate by the engineers. This project is funded by Measure N Library Bond. · California Avenue-Transit Hub Corridor Project -PL-11002 -This is a new project with initial funding of $0.55 million. This project funds the design and construction of streetscape enhancements along California Avenue between El Camino Real and the Caltrain -Park Blvd Plaza. A $1.18 million, grant was received in FY 2011 from the VTA - March 15, 2011 Page 14 of 19 (ID # 1442) Community Design & Transportation (CDT) program that requires a $0.55 million local match. (Infrastructure Reserve funding of $0.55 million is required). (Attachment 1, Exhibit B-2) · Palo Alto-Traffic Signal Central System Upgrade -CIP PL-11003 -This is a new project with initial funding of $0.4 million. This project funds the replacement of the City’s existing traffic signal central system and up to 35 traffic signal field controllers with associated communications gear. The new central system will improve field monitoring and better coordination between intersections. A $0.4 million federal earmark grant was received by the City to fund this project. (see Attachment 1, Exhibit B-3) · Alma Street -Traffic Signal Improvements -CIP PL-11004 -This is a new project with initial funding of $0.7 million. This project funds traffic signal modifications at the intersections of Alma St & Churchill Rd and Alma St & East Meadow Dr. The City will receive a Federal Section 130 grant for this project. (No reserve funding required). (see Attachment 1, Exhibit B-4) · Civic Center Infrastructure Improvements -PF-01002 -Reduce funding by $1.5 million due to savings realized from lower construction bids. This amount is returned to the Infrastructure Reserve. · JMZ New Bobcat Habitat -AC-10000 -Reduce funding of $0.45 million and close project. The Friends of the Junior Museum and Zoo paid for the cost of this project directly to the contractor; hence, the appropriation set aside for this project was not utilized. The funds from closure of this project will be returned to the Infrastructure Reserve. · Various Projects (See attached Exhibit B excluding projects identified in the preceding sections)-A total balance of $0.225 million of various completed and closed CIP projects will be returned to various funding sources. The amount returned will be made available to other CIP projects needing funding. (No reserve funding required.) Enterprise Funds · Electric Vehicle Charging Infrastructure-CIP EL-11016 -This is a new project with initial funding of $0.135 million. This project will install five new generation electric vehicle charging stations at City Hall level A, Hamilton Ave in front of City Hall, and Bryant Street parking garage. Total grants of $35 thousand were received from the California Energy Commission (CEC) and the Bay Area Air Quality Management District (BAAQMD). The Electric Fund will provide the remaining needed amount of $0.1 million (Electric Fund Distribution RSR: $0.1 million reserve funding.) (Attachment 1, Exhibit B-5) · Replace Existing Reclaimed Water Pipes -WQ-04010 -Reduce funding by $0.824 million and close project. This amount will be returned to the Wastewater Treatment Fund March 15, 2011 Page 15 of 19 (ID # 1442) reserve balance. (No reserve funding required.) · Disinfection Facility Improvement Program -CIP WQ-08014 -Reduce funding by $10 million due to savings realized from lower construction bids received. (No reserve funding required.) Table of Organization Changes The proposed adjustments to the Table of Organization (Exhibit C) include the following: a. Planning and Community Environment: Title change from Arborist to Planning Arborist to more properly reflect the job title with duties performed. b. Police Department: Transfer 0.5 FTE Community Service Officer from the General Fund to the College Terrace Parking Program Special Revenue Fund to monitor parking in the College Terrace District. c. Utilities Department: Drop 1.0 FTE Utilities Installer Repairer and add 1.0 FTE Coordinator Utility Projects to handle regulatory reporting, tracking, and other work necessary to comply with State requirements related to the wastewater collection system. Fiscal Year 2010 Midyear Capital Improvement Program Projects Status Report This report provides the Finance Committee with information on the status of the City’s Capital Improvement Program (CIP) projects as of December 31, 2010. The following graph summarizes all General Fund projects by project category and provides five years of actual expenditures. Information about individual projects within each project category is provided in Attachment 2. March 15, 2011 Page 16 of 19 (ID # 1442) General Fund Capital Improvement Program Expenditures Summarized by Project Category -Fiscal Years 2007-2011 (in thousands) $5,924 $30 $612 $1,387 $2,107 $7,926 $5,797 $2,654 $453 $2,977 $3,630 $5,859 $10,082 $2,503 $110 $440 $1,733 $6,227 $9,312 $2,353 $291 $7 $3,460 $5,855$7,179 $41 $0 $746 $1,143 $3,560 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 FY2007 $5,924 $30 $612 $1,387 $2,107 $7,926 FY2008 $5,797 $2,654 $453 $2,977 $3,630 $5,859 FY2009 $10,082 $2,503 $110 $440 $1,733 $6,227 FY2010 $9,312 $2,353 $291 $7 $3,460 $5,855 FY2011 $7,179 $41 $0 $746 $1,143 $3,560 Totals $38,294 $7,581 $1,466 $5,557 $12,073 $29,427 Buildings & Facilities Land & Land Improvements Miscellaneous Non-Infrastructure Management Plan Parks & Open Space Streets & Sidewalks In the attached matrix (Attachment 3), the City departments have submitted information on their projects and commented on any issues that might cause a change in the scope or timing of the projects.The report is intended to update Council on the progress of all CIP projects opened at the beginning of FY 2010, and on those that were added or completed during the fiscal year. The matrix categorizes CIP projects into minor projects (projects that can be completed within a one-year period) and multi-year projects (projects that have multi-year budgets and/or complex implementation schedules with identifiable phases). The project status portion of the matrix identifies the phase of the project as of December 31, 2010, and illustrates how much progress was made. Three distinct phases are utilized, as follows: Phase Activities Pre-Design Preparation of a feasibility study Development of a master plan Definition of a project scope Preparation of an Environmental Impact Report Design Hiring a design consultant Completion of project design Soliciting bids or proposals Construction Acquisition of major equipment Installation Implementation of a project March 15, 2011 Page 17 of 19 (ID # 1442) In the attached matrix, projects are listed by department for the General Fund and by fund for the Enterprise and Internal Service Funds. The matrix also includes information on the total budget of the project from inception, available budget as of the beginning of the fiscal year, fiscal year expenditures, and fiscal year contingencies, fiscal year encumbrances through December 31, remaining balance in the project budget as of mid-year, and the percentage of completion for the project. The matrix does not include “continuous” projects. These projects,such as water meter replacement, have no definitive beginning or end dates and receive ongoing funding to reflect continuing replacement cycles or commitments. Continuous projects are listed by responsible department and fund and include five years of actual expenditures including the current fiscal year through December 31, 2010 (Attachment 4). General Fund Infrastructure Backlog Update In April 2008, staff provided Council with an initial update of the General Fund infrastructure backlog for the next twenty years (CMR: 167:08). The infrastructure backlog report was subsequently updated in May, 2009 as part of the CIP budget process. In May 2010, staff added the Public Safety Building with an estimated cost of $60 million to the backlog list. The updated report is incorporated in the FY 2011 Adopted Capital Budget document (pages 297-298). The updated report indicated that $302 million (in 2009 dollars) is needed to address infrastructure repairs and renovations in the areas of streets, sidewalks, bridges, parks and open space, City buildings and facilities. Another $208 million (in 2009 dollars), which includes $60 million for the Public Safety Building, is needed to address future infrastructure needs at major City facilities such as building replacements at the Municipal Service Center (MSC), Fire Stations 3 and 4, the Animal Shelter, replacement of the Civic Center plaza deck, and completion of the Charleston Arastradero Corridor and Byxbee Park Phase II projects. Estimated infrastructure costs cited above total $510 million (in 2009 dollars). Of the $510 million, $70 million (Measure N Library Bond not included) has been identified in the City’s FY 2011-2015 Capital Improvement Plan. Funds for the first year of the Plan, FY 2011, have been appropriated by the Council, while funds for the remaining years are approved in concept and will be reviewed each year as part of the CIP budget process. To address the infrastructure backlog, the City Council created a new Infrastructure Blue Ribbon Commission (IBRC). This Commission is tasked by Council to identify and prioritize the City’s infrastructure needs and to determine funding sources and financing mechanisms to address the City’s backlog or new needs.Financing mechanisms could include public/private partnerships, new revenue sources, and various bond structures. At present, there is a significant funding gap between available General Fund resources and those needed to address the $510 million determined thus far. Staff met with the IBRC on November 18, 2010 to begin its work. Since then staff meet with IBRC twice each month. IBRC has a substantial challenge ahead and will likely be reaching out to the City’s Boards and Commissions and the community March 15, 2011 Page 18 of 19 (ID # 1442) in developing its final report or recommendation to Council. Resource Impact Adoption of the attached ordinance will allow for adjustments to the Fiscal Year 2011 budget, along with amendments to the Table of Organization, and General Fund CIP projects.With the approval of this ordinance, the projected ending balance of the General Fund Budget Stabilization Reserve is $26.9 million. There is a increase of $0.45 million to the BSR balance which results in a BSR level of 19.3 percent of adopted expenditures. Staff has made revenue and expense estimates for the remainder of the year but results could vary and have further impacts to the BSR. Workers’ comp, general liability, and overtime costs are areas of continued concern; staff is continually monitoring these costs citywide and in the General Fund. The Capital Fund Infrastructure Reserve is projected to end with a balance of $3.8 million, an increase of $2.0 million. The projected ending Rate Stabilization Reserve total for all Enterprise funds increases by $10.0 million. Policy Implications These recommendations are consistent with existing City policies. Environmental Assessment This is not a project under Section 21065 for purposes of the California Environmental Quality Act (CEQA). Attachments: ·Attachment 1 -Amendment Ordinance (PDF) ·Attachment 1, Exhibit A -Midyear Finanacial Reports and Proposed Budget Adjustments (PDF) ·Attachment 1, Exhibit B -Midyear CIP Adjustments (PDF) ·Attachment 1, Exhibit B1 -Temporary Main Library (PE-11012)(PDF) ·Attachment 1, Exhibit B2 -California Avenue (PL -11002)(PDF) ·Attachment 1, Exhibit B3 -Palo Alto -Traffic Signal Central System Upgrade (PL-11003) (PDF) ·Attachment 1, Exhibit B4 Alma Street -Traffic Signal Improvements (PL-11004)(PDF) ·Attachment 1, Exhibit B5 -Electric Vehicle Charging Infrastructure (EL-11016)(PDF) ·Attachment 1, Exhibit C -Amendments to Table of Organization (PDF) ·Attachment 2 -General Fund Capital Improvement Program Project Expenditures For Fiscal Years 2007-2011 (PDF) ·Attachment 3 -FY 2011 Mid-Year Capital Improvement Program Projects Status (PDF) ·Attachment 4 -Continuous Capital Projects Expenditures for Fiscal Years 2007-2011 (PDF) March 15, 2011 Page 19 of 19 (ID # 1442) ·Attachment 5 -General Fund Transfers To Infrastructure Reserve For Fiscal Years 2007-2016 (PDF) ·Attachment 6 -Resolution of the Council of the City of Palo Alto Amending the FY 2010- 2011 Compensation Plan for Classified Personnel (SEIU) Adopted by Resolution No. 9088 (PDF) ·Attachment 6, Exhibit A -Midyear SEIU Compensation Plan Changes -effective April 1, 2011 (PDF) ·Attachment 7 -Police and Fire Overtime Analysis for Fiscal Years 2009 through 2010 with Fiscal Year 2011 Data Through January 12, 2011(PDF) Prepared By:Christine Paras, Senior Financial Analyst Department Head:Lalo Perez, Director City Manager Approval: James Keene, City Manager Page 1 of 3 Attachment 1 ORDINANCE NO. _____ ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 2011 TO ADJUST BUDGETED REVENUES AND EXPENDITURES IN ACCORDANCE WITH THE RECOMMENDATIONS IN THE MIDYEAR REPORT The City Council of the City of Palo Alto does ordain as follows: SECTION 1. The City Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 28, 2010 did adopt a budget for fiscal year 2011, including a Table of Organization describing the staffing for each department; and B. After reviewing the current budgeted revenues and expenditures for fiscal year 2011, adjustments to the budget are recommended to more accurately reflect year-end projections; and C. Various staffing adjustments require an amendment to the Table of Organization including one classification title change as reflected in Exhibit “C”; the reclassification of 1.0 Full Time Equivalent (FTE) Utilities Installer Repairer to Coordinator, Utility Projects in the Utilities Department; the addition of 0.5 FTE Senior Financial Analyst and drop of 1.0 FTE Manager, Energy Risk in the Utilities Department; the addition of 0.1 FTE Senior Financial Analyst in the Administrative Services Department; and the addition of 0.125 FTE Senior Financial Analyst in the Administrative Services Department. D. City Council authorization is needed to amend the fiscal year 2011 budget as hereinafter set forth. SECTION 2. The General Fund Budget Stabilization Reserve is hereby increased by the sum of Four Hundred Forty Five Thousand Six Hundred Eighty Six Dollars ($445,686), as described in Exhibit “A.” As a result of this change, the Budget Stabilization Reserve will increase to $26,913,000. SECTION 3. The Capital Fund Infrastructure Reserve is hereby increased by the sum of One Million Nine Hundred Thousand Sixty Two Three Hundred Seventy Three Dollars ($1,962,373), as described in Exhibit “A.” As a result of this change, the Infrastructure Reserve will increase from $1,845,909 to $3,808,282. SECTION 4. The Supply Rate Stabilization Reserve in the Electric Fund is hereby decreased by the sum of Forty-Two Page 2 of 3 Thousand Eight Hundred Thirty Dollars ($42,830) as described in Exhibit A. SECTION 5. The Distribution Rate Stabilization Reserve in the Electric Fund is hereby decreased by the sum of One Hundred Ninety-Two Thousand Two Hundred Seventy-Two Dollars ($192,272) as described in Exhibit A. SECTION 6. The Public Benefits Reserve in the Electric Fund is hereby decreased by the sum of One Hundred Nine Thousand Seven Hundred Fifty-Two Dollars ($109,752) as described in Exhibit A. SECTION 7. The Calaveras Reserve in the Electric Fund is hereby decreased by the sum of Forty-Nine Thousand Four Hundred Forty Dollars ($49,440) as described in Exhibit A. SECTION 8. The Rate Stabilization Reserve in the Fiber Optics Fund is hereby decreased by the sum of Thirteen Thousand Four Hundred Fifty-Eight Dollars ($13,458) as described in Exhibit A. SECTION 9. The Supply Rate Stabilization Reserve in the Gas Fund is hereby increased by the sum of Sixteen Thousand Three Hundred Ninety-One Dollars ($16,391) as described in Exhibit A. SECTION 10. The Distribution Rate Stabilization Reserve in the Gas Fund is hereby increased by the sum of Forty-Four Thousand Five Hundred Seventy-Seven Dollars ($44,577) as described in Exhibit A. SECTION 11. The Rate Stabilization Reserve in the Water Fund is hereby increased by the sum of Three Thousand Forty-Four Dollars ($3,044) as described in Exhibit A. SECTION 12. The Rate Stabilization Reserve in the Wastewater Collection Fund is hereby increased by the sum of Forty-Five Thousand Seven Hundred Dollars ($45,700) as described in Exhibit A. SECTION 13. The Rate Stabilization Reserve in the Refuse Fund is hereby decreased by the sum of One Hundred Eleven Thousand Three Hundred Eight-Four Dollars ($111,384) as described in Exhibit A. SECTION 14. The Rate Stabilization Reserve in the Storm Drainage Fund is hereby decreased by the sum of One Hundred Sixty-Three Thousand Two Hundred Five Dollars ($163,205) as described in Exhibit A. SECTION 15. The Rate Stabilization Reserve in the Wastewater Treatment Fund is hereby increased by the sum of Ten Million Five Hundred Thirty-Nine Thousand Seven Hundred Six Dollars ($10,539,706) as described in Exhibit A. Page 3 of 3 SECTION 16. Adjustments to other funds are made as shown in Exhibit A. These changes impact Special Revenue, Internal Service, and other Funds Reserves as indicated in Exhibit A. SECTION 17. Adjustments to decrease or increase amounts allocated to various Capital Improvement Projects are made as shown in Exhibit B. These changes impact the General Fund Budget Stabilization Reserve and the Infrastructure Reserve and are reflected in the adjustments as shown in Exhibit A. SECTION 18. The Table of Organization is hereby amended to reflect the changes shown in Exhibit C, which is attached hereto and incorporated herein by reference. These changes impact Reserves and are accounted for in the changes shown in Exhibit A. SECTION 19. As specified in Section 2.28.080 of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 20. The Council of the City of Palo Alto hereby finds that this midyear adjustment is not a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. Capital improvement projects described in this ordinance will be assessed individually as appropriate. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Sr. Asst. City Attorney City Manager ____________________________ Director of Admin. Services Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre % of Categories Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Revenues & Other Sources Sales Tax 18,218 18,218 19,507 1,289 - - 10,056 52% Property Tax 25,907 25,907 25,323 (584) - - 13,566 54% Transient Occupancy Tax 7,021 7,021 7,400 379 - - 3,361 45% Utility Users Tax 11,429 11,429 10,824 (605) - - 5,420 50% Other Taxes and Fines 5,943 5,943 6,139 196 - - 2,402 39% Charges for Services 20,008 20,008 20,924 916 - - 10,960 52% Permits & Licenses 4,593 4,593 5,102 509 - - 2,207 43% Return on Investment 1,646 1,646 1,337 (309) - - 599 45% Rental Income 13,716 13,716 13,776 60 - - 6,996 51% From Other Agencies 155 155 221 66 - - 120 54% Charges To Other Funds 10,622 10,622 10,681 59 - - 5,458 51% Other Revenues 1,490 1,490 1,584 94 - - 715 45% Total Revenues 120,748 120,748 122,818 2,070 - - 61,860 50% Operating Transfers-In 18,684 18,684 18,677 (7) - - 9,301 50% Encumbrances and Reappropriation 3,963 3,963 - - - From Infrastructure Reserve - - Total Sources of Funds 139,432 143,395 145,458 2,063 - - 71,161 50% Expenditures & Other Uses City Attorney 2,369 3,002 3,024 22 50 494 1,120 55% City Auditor 982 1,081 1,089 8 - 102 519 57% City Clerk 1,093 1,446 1,355 (91) - 21 569 44% City Council 142 173 174 1 - 19 81 57% City Manager 2,178 2,370 2,451 81 6 55 1,107 48% Administrative Services 6,293 6,593 6,643 50 59 126 2,888 46% Community Services 20,032 20,371 20,486 115 206 2,314 9,789 60% Fire 27,007 27,454 28,259 805 71 433 13,513 50% Human Resources 2,817 2,888 2,919 31 21 120 1,301 49% Library 6,609 6,845 6,910 65 - 380 3,172 51% Planning and Community Environment 9,320 10,361 10,689 328 68 1,103 4,601 54% Police 30,579 30,810 31,174 364 48 568 15,098 50% Public Works 13,084 13,956 13,999 43 47 1,088 5,957 51% Non-Departmental 5,970 5,510 5,545 35 - - 3,560 64% Total Expenditures 128,475 132,860 134,717 1,857 576 6,823 63,275 52% Operating Transfers-Out 10,924 11,464 11,224 (240) - - 5,861 52% Total Uses of Funds 139,399 144,324 145,941 1,617 576 6,823 69,136 52% Net Surplus (Deficit) 33 (929) (483) 446 Adjust intra-fund reserve transfer - - - - Transfer to Public Safety Building Reserve - - - - Year end savings from hiring freeze - - Net To (From) Reserves 33 (929) (483) 446 Beginning Reserves 27,396 27,396 27,396 - Projected Ending Reserves 27,429 26,467 26,913 446 BSR % of Total Use of Funds 19.7% 19.0% 19.3% - BUDGET (as of 12-31-10) CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR FINANCIAL REPORT GENERAL FUND (in thousands of dollars) Page 1 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 112,561 112,561 112,561 - - - 59,790 53% Interest Income 4,299 4,299 4,299 - - - 2,095 49% Other Income 11,719 11,719 11,871 152 - - 3,079 26% Reapprop/Encumbrances - 13,393 13,393 - - - 0% Total Sources 128,579 141,972 142,124 152 - - 64,964 50%** Uses of Funds Utility Purchases 74,078 74,130 74,130 - - 395 32,361 44% Salaries & Benefits 10,453 10,486 10,658 172 - - 4,948 46% Contract Services 4,283 7,321 7,350 29 33 2,210 1,077 45% Supplies and Materials 815 835 835 - 11 41 322 45% Facility and Equipment Purchases 84 84 84 - - - 3 3% General Expenses 3,174 4,163 4,163 - 60 439 677 28% Rent and Leases 3,755 3,801 3,846 45 - - 1,829 48% Allocated Charges 7,877 7,877 7,912 35 - - 2,741 35% Debt Service 8,949 8,949 8,949 - - - 3,710 41% Subtotal 113,468 117,646 117,927 281 104 3,085 47,669 43% Equity Transfer 11,195 11,195 11,195 - - - 5,598 50% Operating Transfers Out 866 866 996 130 - - 433 43% Capital Improvement Program 10,085 19,283 19,418 135 674 1,415 4,552 34% Total Uses 135,614 148,990 149,536 546 778 4,500 58,251 42% Net To (From) Reserves (7,035) (7,018) (7,412) (394) Beginning Reserves 108,923 119,991 119,991 - Projected Ending Reserves 101,888 112,973 112,579 (394) ** Excludes encumbrances and reappropriation BUDGET (in thousands of dollars) CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY ELECTRIC FUND (as of 12-31-10) Page 2 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 3,044 2,734 2,734 - - - 1,403 51% Interest Income 268 256 256 - - - 166 65% Other Income - - Reapprop/Encumbrances 920 920 - Total Sources 3,312 3,910 3,910 - - - 1,569 52%** Uses of Funds Salaries & Benefits 971 971 983 12 - - 460 47% Contract Services 165 165 165 - - 131 79 128% Supplies and Materials 18 18 18 - - - - 0% General Expenses 19 19 19 - - - - 0% Rent and Leases 15 16 16 - - - 7 45% Allocated Charges 568 567 570 3 - - 244 43% Subtotal 1,756 1,756 1,771 15 - 131 790 52% Operating Transfers Out 8 8 8 - - - 4 52% Capital Improvement Program 400 1,127 1,126 (1) - - 421 37% Total Uses 2,164 2,891 2,905 14 - 131 1,215 46% Net To (From) Reserves 1,148 1,019 1,005 (14) Beginning Reserves 8,831 9,270 9,270 - Projected Ending Reserves 9,979 10,289 10,275 (14) ** Excludes encumbrances and reappropriation CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY FIBER OPTICS FUND (as of 12-31-10)BUDGET (in thousands of dollars) Page 3 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 43,993 43,993 43,993 - - - 16,949 39% Interest Income 847 847 847 - - - 478 56% Other Income 811 811 846 35 - - 311 37% Reapprop/Encumbrances 10,039 10,039 - - - - - Total Sources 45,651 55,690 55,725 35 - - 17,738 39%** Uses of Funds Utility Purchases 24,595 24,619 24,619 - - 12,398 6,545 77% Salaries & Benefits 4,638 4,638 4,672 34 - - 2,128 46% Contract Services 1,021 1,510 1,510 - 19 697 214 62% Supplies and Materials 521 514 514 - 5 181 112 58% Facility and Equipment Purchases 63 63 63 - - - 4 6% General Expenses 658 826 826 - - 274 179 55% Rent and Leases 326 333 340 7 - 26 150 52% Allocated Charges 3,977 3,977 3,949 (28) - - 1,490 38% Debt Service 947 947 947 - - - 244 26% Subtotal 36,746 37,427 37,440 13 24 13,577 11,065 66% Equity Transfer 5,304 5,304 5,304 - - - 2,652 50% Operating Transfers Out 614 614 614 - - - 424 69% Capital Improvement Program 8,325 17,680 17,641 (39) 53 52 1,584 10% Total Uses 50,989 61,025 60,999 (26) 77 13,630 15,726 48% Net To (From) Reserves (5,338) (5,335) (5,274) 61 Beginning Reserves 15,925 20,571 20,571 - Projected Ending Reserves 10,587 15,236 15,297 61 CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY GAS FUND (in thousands of dollars) (as of 12-31-10)BUDGET ** Excludes encumbrances and reappropriation Page 4 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 28,803 28,803 28,803 - - - 15,768 55% Interest Income 1,050 1,050 1,050 - - - 633 60% Other Income 1,463 1,463 1,520 57 - - 1,207 79% Reapprop/Encumbrances 10,637 10,637 - - Total Sources 31,316 41,953 42,010 57 - - 17,608 56%** Uses of Funds Utility Purchases 12,043 12,043 12,043 - - 5,506 5,121 88% Salaries & Benefits 5,206 5,206 5,254 48 - - 2,379 46% Contract Services 754 1,009 1,009 - 79 355 175 60% Supplies and Materials 491 503 503 - 35 247 244 104% Facility and Equipment Purchases 6 6 6 - - 3 2 83% General Expense 359 381 381 - - - 165 43% Rents and Leases 2,207 2,215 2,223 8 - - 1,095 49% Allocated Charges 3,365 3,365 3,363 (2) - - 1,291 38% Debt Service 2,981 2,981 2,981 - - - 1,071 36% Subtotal 27,412 27,709 27,763 54 114 6,111 11,542 64% Equity Transfer - - - - - - - - Operating Transfers Out 441 441 441 - - - 321 73% Capital Improvement Program 8,848 47,913 47,913 - 54 5,001 4,373 20% Total Uses 36,701 76,063 76,117 54 168 11,112 16,236 36% Net To (From) Reserves (5,385) (34,110) (34,107) 3 Beginning Reserves 21,845 49,247 49,247 - Projected Ending Reserves 16,460 15,137 15,140 3 ** Excludes encumbrances and reappropriation CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY WATER FUND (in thousands of dollars) BUDGET (as of 12-31-10) Page 5 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 14,477 14,477 14,477 - - - 7,303 50% Interest Income 445 445 445 - - - 260 58% Other Income 1,002 1,002 1,076 74 - - 848 79% Reapprop/Encumbrances 8,789 8,789 - - - - Total Sources 15,924 24,713 24,787 74 - - 8,411 53%** Uses of Funds Utility Purchases 7,499 7,499 7,499 - - - 3,750 50% Salaries & Benefits 1,901 1,901 1,938 37 - - 879 45% Contract Services 208 252 252 - 25 12 51 35% Supplies and Materials 231 237 237 - 9 170 82 110% Facility and Equipment Purchases 1 1 1 - - - - 0% General Expenses 65 65 65 - - 1 22 36% Rent and Leases 210 210 210 - - - 76 36% Allocated Charges 1,970 1,970 1,962 (8) - - 647 33% Debt Service 129 129 129 - - - 32 25% Subtotal 12,214 12,264 12,293 29 34 183 5,538 47% Operating Transfers Out 567 567 567 - - - 300 53% Capital Improvement Program 4,130 12,831 12,831 - 56 2,202 1,295 28% Total Uses 16,911 25,662 25,691 29 90 2,385 7,134 37% Net To (From) Reserves (987) (949) (904) 45 Beginning Reserves 6,554 7,772 7,772 - Projected Ending Reserves 5,567 6,823 6,868 45 (as of 12-31-10) ** Excludes encumbrances and reappropriation BUDGET CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY WASTEWATER COLLECTION FUND (in thousands of dollars) Page 6 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 26,137 28,368 28,368 - - - 12,941 46% Interest Income 301 301 301 - - - 53 18% Other Income 3,458 5,129 5,027 (102) - - 2,831 56% Reapprop/Encumbrances 2,837 2,837 - Total Sources 29,896 36,635 36,533 (102) - - 15,825 47%** Uses of Funds GreenWaste Hauling Contract 14,797 13,205 13,205 - - 6 4,933 37% Salaries and Benefits 4,376 4,254 4,281 27 - - 1,955 46% Contract Services 6,547 6,608 6,608 - 13 1,174 2,740 59% Supplies and Materials 311 236 236 - - 13 50 27% Facility and Equipment Purchases 16 25 25 - - - 10 40% General Expenses 276 281 281 - - - 579 206% Rents and Leases 4,308 4,448 4,448 - - 6 2,152 49% Allocated Charges 3,674 3,675 3,668 (7) - - 1,779 49% Debt Service 608 608 608 - 0% Subtotal 34,913 33,340 33,360 20 13 1,199 14,199 46% Operating Transfers Out 338 338 327 (11) - - 169 52% Capital Improvement Program 1,650 3,669 3,669 - 44 205 152 11% Total Uses 36,901 37,347 37,356 9 57 1,404 14,520 43% Net (From) Landfill Closure Liab (475) (475) (566) (91) Net To (From) Reserves (6,530) (237) (257) (111) Beginning Reserves (2,911) (4,277) (4,277) - Projected Ending Reserves (9,441) (4,514) (4,534) (111) CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY REFUSE FUND (in thousands of dollars) BUDGET ** Excludes encumbrances and reappropriation (as of 12-31-10) Page 7 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 5,506 5,506 5,506 - - - 2,870 52% Interest Income 159 159 159 - - - 72 45% Other Income 68 68 68 - - - 3 4% Reapprop/Encumbrances 2,409 2,409 - - Total Sources 5,733 8,142 8,142 - - - 2,945 51%** Uses of Funds Salaries and Benefits 1,000 1,000 1,016 16 - - 432 43% Contract Services 379 440 440 - - 78 241 72% Supplies and Materials 99 111 111 - - 19 40 53% Facility and Equipment Purchases 12 12 12 - - - 12 97% General Expenses 151 782 782 - - - 4 1% Rents and Leases 6 6 6 - - - - 0% Allocated Charges 617 617 616 (1) - - 275 45% Debt Service 950 950 950 - - - 260 27% Subtotal 3,214 3,918 3,933 15 - 97 1,264 35% Operating Transfers Out 609 609 607 (2) - - 304 50% Capital Improvement Program 1,788 3,493 3,643 150 1,500 35 304 50% Total Uses 5,611 8,020 8,183 163 1,500 132 1,873 43% Net Surplus (Deficit) 122 122 (41) (163) Loan repayment to the General Fund - - Beginning Reserves 300 286 286 - Projected Ending Reserves 422 408 245 (163) ** Excludes encumbrances and reappropriation CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY STORM DRAINAGE FUND (in thousands of dollars) BUDGET (as of 12-31-10) Page 8 of 24 3/9/2011 Exhibit A ACTUALS Adopted Adjusted Midyear Midyear Pre- % of Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget Sources of Funds Net Sales 20,095 20,095 20,095 - - - 9,974 50% Interest Income 422 422 422 - - - 290 69% Other Income 73 73 73 - - - 1,637 2242% Reapprop/Encumbrances 22,043 22,043 - Total Sources 20,590 42,633 42,633 - - - 11,901 58%** Uses of Funds Salaries and Benefits 9,213 9,213 9,309 96 - - 4,282 46% Contract Services 1,884 3,058 3,058 - 193 970 636 59% Supplies and Materials 1,838 2,016 2,016 - 92 675 651 70% Facility and Equipment Purchases 10 10 10 - - - - 0% General Expenses 404 405 405 - - - 379 93% Rents and Leases - - - - - - - 0% Allocated Charges 4,660 5,010 4,998 (12) - - 2,535 51% Debt Service 815 815 815 - - - - 0% Subtotal 18,824 20,527 20,611 84 284 1,644 8,484 51% Operating Transfers Out 9 9 9 - - - 4 49% Capital Improvement Program 2,500 23,191 12,567 (10,624) 9 3,298 1,371 37% Total Uses 21,333 43,727 33,187 (10,540) 293 4,943 9,859 45% Net To (From) Reserves (743) (1,094) 9,446 10,540 Beginning Reserves (12,003) (10,226) (10,226) - Projected Ending Reserves (12,746) (11,320) (780) 10,540 ** Excludes encumbrances and reappropriation CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY WASTEWATER TREATMENT FUND (in thousands of dollars) BUDGET (as of 12-31-10) Page 9 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description NON-DEPARTMENTAL 10200000 20520 (20,000) Transfer from Electric Fund to cover its share in the cost of the Urban Forest Management Plan 10200000 20250/60 (21,029) Increase to correct interfund transfers 10200000 118XX (1,289,000) Improvement in sales tax 10200000 11XXX 584,000 Property tax decline 10200000 11850 (379,000) Improvement transient occupancy tax 10300000 118XX 605,000 Utility users' tax decline 10200000 11800 (389,000) Improvement in documentary transfer tax 10200000 19780 (60,000) To record interdepartmental rental income from to the Utilities Department for use of a portion of the former Los Altos Treatment Plant site Various Various 309,000 Return on investment decline General Fund Revenue Changes (660,029) 10200000 37010 80,000 To reimburse City Manager's contingency account for the Urban Forest Management Plan 10200000 37010 45,000 To reimburse City Manager's contingency account for the development of City's ethics program 10200000 37020 35,000 To reimburse Council contingency account for the cost of continued publication of agenda and standing committees in the newspaper 10200000 37040 (125,000) To remove City Attorney's contingency (one-time) 80191004 40410 55,000 To transfer from Fund 191 – Public Donation Fund to Capital Project Fund. Donations from Friends of JMZ to contribute to the cost of the CIP project per CMR: 193:10 10200000 40550 (240,000) Reverse transfer to Refuse Fund; originally approved by Council on September 20, 2010 (CMR 356:10) to meet landfill cash requirements; transfer is no longer needed. Non-Departmental Other Expenses (150,000) Net Changes To (From) Reserves 810,029 CITY ATTORNEY various 30140 (328) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 14,455 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 5,602 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 2,853 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 22,582 18010001 39160 (961) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (961) Net Changes To (From) Reserves (21,621) CITY AUDITOR 16020002 30990 4,996 Increase in General Benefits charges due to Internal Service Fund interest allocation 16020002 30990 1,937 Increase in General Benefits charges due to deferral of employee healthcare contribution plan 16020002 30372 986 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 7,919 16020002 39160 (422) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (422) Net Changes To (From) Reserves (7,497) CITY CLERK various 30990 6,242 Increase in General Benefits charges due to Internal Service Fund interest allocation GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET Page 10 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET various 30990 2,420 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 1,232 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 9,894 12010001 39160 (728) Reduction in General Liability charges due to Internal Service Fund interest allocation 12040003 33490 (100,000) Reduction in inter-agency expense due to the savings realized. The costs for the November 2010 election measures have come in less than what was estimated by the Registrar of Voters. Other Revenue and Expense (100,728) Net Changes To (From) Reserves 90,834 CITY COUNCIL 14020002 30990 734 Increase in General Benefits charges due to Internal Service Fund interest allocation 14020002 30990 285 Increase in General Benefits charges due to deferral of employee healthcare contribution plan 14020002 30372 145 Transfer allocated retiree medical reimbursement expense to department Other Revenue and Expense 1,164 Net Changes To (From) Reserves (1,164) CITY MANAGER 11010001 30030 60,000 Increase in temporary salaries 11010001 30140 (798) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 14,387 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 5,576 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 2,840 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 82,005 11010001 39160 (874) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (874) Net Changes To (From) Reserves (81,131) ADMINISTRATIVE SERVICES various 30140 (4,929) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 37,913 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 14,694 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 7,484 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 55,162 40010001 39160 (5,067) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (5,067) Net Changes To (From) Reserves (50,095) COMMUNITY SERVICES 80020210 18010 (44,908) To accept donations from Friends of Children’s Theatre. This is a one-time donation to cover the cost of contract services for summer productions. This is separate from the money received in-lieu of a participation fee. 80020210 31990 44,908 Expenditure associated with Friends of Children’s Theatre one-time donation to cover the cost of contract services for summer productions. This is separate from the money received in-lieu of a participation fee. Page 11 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET 80020210 15990 (12,013) To recognize revenues for the Children's Theatre. The Children’s Theatre has partnered with PAUSD and the Stevenson school to provide in-school dance and theatre classes. 80020210 31080 12,013 Expenditure associated with Children’s Theatre partnering with PAUSD and the Stevenson school to provide in-school dance and theatre classes. 80020211 15990 (2,925) To recognize revenues. Children’s Music & Dance has partnered Stevenson school to provide lunch time dance classes. 80020211 31990 2,925 Expenditure associated with Children’s Music & Dance partnering with Stevenson school to provide lunch time dance classes. 80060123 15990 (5,238) Grant received from the State Coastal Conservancy 80060123 31990 5,238 Expenditure associated grant received from the State of Coastal Conservancy Grant/Reimbursement Revenue and Expense - various 30140 (25,894) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 61,830 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 23,964 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 12,205 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 72,105 80040005 20650 47,941 Reduce revenue due to insufficient funding for the Family Resources Program from the Family Resources Foundation 80060312 31990 (10,000) To reimburse City Manager's contingency account for the Urban Forest Management Plan 80060120 31990 (10,000) To reimburse City Manager's contingency account for the Urban Forest Management Plan 80040003 31990 9,000 Transfer ADA budget from PCE to CSD 80010001 39160 (11,095) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense 25,846 Net Changes To (From) Reserves (97,951) FIRE Various 30040 610,000 Increase in overtime expense to align current budget with historical trends Various 30140 (176,753) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Various 30990 148,852 Increase in General Benefits charges due to Internal Service Fund interest allocation Various 30990 57,692 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Various 30372 29,383 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 669,174 75010001 12520 (365,000) Increase in revenue for Stanford Fire budget to actual billing 75030008 13370 (100,000) Revenue improvement due to increased activity at the Development Center 75010001 31990 80,000 Standards of coverage study 75010001 31990 22,500 OES study 75010001 31990 50,000 Fire Chief recruitment costs 75010001 39160 (16,424) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (328,924) Net Changes To (From) Reserves (340,250) HUMAN RESOURCES various 30140 (3,517) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 16,508 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 6,396 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Page 12 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET various 30372 3,258 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 22,645 various 30010 10,191 Reimbursement of salary appropriations that were used to cover purchase orders that were not correctly carried forward. 13010001 39160 (1,441) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense 8,750 Net Changes To (From) Reserves (31,395) LIBRARY 84010001 15300 (22,373) To accept receipt of Public Library Fund grant from the State 84010001 31990 3,000 To expend Other Contract Services funded by PLF grant 84030001 32230 14,373 To expend Book Purchases funded by PLF grant 84030001 32280 1,300 To expend Electronic Resources funded by PLF grant 84070002 35030 1,850 To expend Non-Capital Office Machinery funded by PLF grant 84070004 35030 1,850 To expend Non-Capital Office Machinery funded by PLF grant Grant/Reimbursement Revenue and Expense - various 30140 (5,217) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 33,405 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 12,947 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 6,594 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 47,729 84010001 39160 (4,747) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (4,747) Net Changes To (From) Reserves (42,982) PLANNING AND COMMUNITY ENVIRONMENT various 30140 (96) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 44,682 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 17,318 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 8,820 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 70,724 60020101 18990 (11,665) Increase in planning and transportation other miscellaneous revenue. 60020204 14890 (17,120) Increase in comprehensive plan fee revenue. 60020402 14670 (3,722) Increase in current planning-general use permit revenue. 60020403 12490 (7,000) Increase in code enforcement-fines, forfeitures, and penalties revenue. 60020404 13230 (76,500) Increase in zone change fee revenue. 60020405 14890 (20,000) Increase in current planning-individual review fee revenue. 60020406 14700 (17,750) Increase in green building fee revenue. 60020501 15990 (10,775) Increase in transportation revenue for VTA-Project Readiness Initiative. 60030001 13190 (11,500) Increase in special service fee revenue. 60030001 13370 (340,000) Increase in plan checking fee revenue due to increase in development activities 60030001 14570 (390,000) Increase in building permit revenue due to increase in development activities 60030001 19170 (143,557) Increase in interdepartmental revenue from various CIP projects. 60030002 31990 50,000 This request is for a Contract Plan Technician to pilot Blueprint recommendations at the DC front counter aimed at improving customer service and reducing applicant wait and permit processing times. 60030003 31070 50,000 This request is for a Contract Plan Checker to work at the Development Center on primarily high priority/cost-recovery projects that require rapid turnaround and limited inter-departmental coordination. The position will also support implementation of DC Blueprint piloting recommendations. Page 13 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET 60030001 32080 20,000 To cover the acquisition of a sufficient number of sets of the newly adopted 2010 Building Codes and related reference materials for plan check and inspection staff. 60020402 31990 15,000 This is for the Development Center Blueprinting/Restructuring Efforts project. The Planners are an integral part of this effort and consultants are being utilized to backfill on some of their projects. 60030002 30030 21,720 This temporary salary request is to fund a Limited Hourly Administrative Specialist to work at the Development Center front counter reception station. This is a critical front line customer service position that is being reviewed as part of the DC Blueprint/Restructuring effort. 60030002 30030 91,513 This temporary salary request is to fund a Management Specialist position that is working under the direction of the City Manager's Office in the capacity of System Improvement Manager for the DC Blueprinting/Restructuring effort. 60030005 31990 (9,000) Transfer ADA budget from PCE to CSD 60030001 33220 42,000 To increase bank fees due to the increase in the volume of business activities in the Development Center 60020201 31990 (20,000) To reimburse City Manager's contingency account for the Urban Forest Management Plan 60010001 39160 (5,329) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (793,686) Net Changes To (From) Reserves 722,962 Page 14 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET POLICE 70020002 15370 (20,899) 70020002 30040 20,899 70060004 15370 (470) 70060004 30040 470 70040002 15990 (7,310) 70040002 30040 7,310 70030003 15370 (22,770) 70030003 30040 22,770 Grant/Reimbursement Revenue and Expense - 70080002 30010 (44,629) Transfer 0.5 FTE CSU from General Fund to Special Revenue Fund - College Terrace Various 30040 205,000 Increase in overtime expense to align current budget with historical trends Various 30140 (121,746) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Various 30990 164,502 Increase in General Benefits charges due to Internal Service Fund interest allocation Various 30990 63,758 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Various 30372 32,472 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 299,357 70030003 19090 87,500 Decrease in interdepartmental communications revenue; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor 70080002 12030 200,000 Parking violation revenue decline 70030004 12520 (42,000) Increase in revenue for Stanford Communications budget to actual billing 70020001 30010 33,000 Reimbursement of salary appropriations used to cover extension of the Track Watch program 70010001 39160 (21,301) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense 257,199 Net Changes To (From) Reserves (556,556) PUBLIC WORKS various 30140 (8,597) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 51,266 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 19,870 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 30372 10,120 Transfer allocated retiree medical reimbursement expense to department Salary Related Revenue and Expense 72,659 50040006 13750 (33,750) Improvement in external street cut fee revenue due to increase in development activities 50040007 13370 (15,000) Improvement in plan checking fee revenue due to increase in development activities 50040007 14570 (4,000) Improvement in building- new construction permit revenue due to increase in development activities 50040007 14590 (6,000) Improvement in encroachment permit revenue due to increase in development activities 50040007 14660 (16,000) Improvement in street opening permit revenue due to increase in development activities 50020301 13370 34,300 Revenue reduction for Tree Inspection. PAD is working with Planning to ensure fees are being collected appropriately. 50020305 31270 (20,000) To reimburse City Manager's contingency account for the Urban Forest Management Plan 50010001 39160 (9,712) Reduction in General Liability charges due to Internal Service Fund interest allocation Other Revenue and Expense (70,162) Reimbursable expense related to Alameda County Sheriff's Office and Urban Shield Exercise conducted Fall 2010 Reimbursement from the FBI for overtime associated with the department's participation in the Silicon Valley Regional Computer Forensic Laboratory (SERF) Reimbursement from the State of California for overtime salaries for training and backfilling for dispatchers while training. Page 15 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description GENERAL FUND CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET Net Changes To (From) Reserves (2,497) 10200000 38220 445,686 Budget Stabilization Reserve 19100000 38220 (55,000) Public Donations fund balance Total General Fund 390,686 Fund Balancing Entries Page 16 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description Revenue Technology Fund 40070603 20560 2,445 To reverse operating transfer from Refuse Fund for CIP Project TE-11005 (Implementation of New Utility Rates). Refuse Fund does not share in the cost of this project. Technology Fund 40070603 20550 11,439 To reverse operating transfer from Storm Drainage Fund for CIP Project TE- 11005(Implementation of New Utility Rates). Storm Drainage Fund does not share in the cost of this project. General Benefits 68700000 16010 1,013,200 Revenue adjustment (decrease) to allocate interest income to this fund General Benefits 68700000 18910 (1,013,200) Corresponding department charge increase related to interest income adjustment Workers' Comp Insurance Program 68800000 16010 (459,700) Revenue adjustment (increase) to allocate interest income to this fund Workers' Comp Insurance Program 68800000 18920 459,700 Corresponding department charge decrease related to interest income adjustment General Liabilities Insurance Program 68900000 16010 (145,600) Revenue adjustment (increase) to allocate interest income to this fund General Liabilities Insurance Program 68900000 19160 145,600 Corresponding department charge decrease related to interest income adjustment Retiree Health Benefit 69400000 18910 200,000 Transfer allocated retiree medical reimbursement expense to department 213,884 Expenditures Vehicle Replacement Fund 50080401 38790 (21,762) To close project and return balance to reserve Vehicle Replacement Fund 50080401 38790 25,000 To provide for the environmental testing for Foothills Park Fuel Station Vehicle Replacement Fund 50080402 38790 (367) To close project and return balance to reserve Vehicle Replacement Fund 50080310 39160 (2,082) Reduction in General Liability charges due to Internal Service Fund interest allocation Vehicle Replacement Fund 50080302 30140 (17,416) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Vehicle Replacement Fund various 30990 13,130 Increase in General Benefits charges due to Internal Service Fund interest allocation Vehicle Replacement Fund various 30990 5,089 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Vehicle Replacement Fund various 3037X 3,397 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Technology Fund 40070003 39160 (5,329) Reduction in General Liability charges due to Internal Service Fund interest allocation Technology Fund various 30140 (2,876) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Technology Fund various 30990 36,669 Increase in General Benefits charges due to Internal Service Fund interest allocation Technology Fund various 30990 14,213 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Technology Fund various 3037X 9,485 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Printing & Mailing Services 40030201 39160 (757) Reduction in General Liability charges due to Internal Service Fund interest allocation Printing & Mailing Services 40030202 30140 (231) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Printing & Mailing Services various 30990 906 Increase in General Benefits charges due to Internal Service Fund interest allocation Printing & Mailing Services various 30990 351 Increase in General Benefits charges due to deferral of employee healthcare contribution plan Printing & Mailing Services various 3037X 235 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Retiree Health Benefit 69400000 30372 (200,000) Transfer allocated retiree medical reimbursement expense to department (142,345) Net Internal Service Fund Adjustments (71,539) Fund Balancing Entries Technology Fund 40070001 38300 (66,046) Technology Fund Balance Printing & Mailing Services 40030001 38011 (504) Print & Mailing Services Fund Balance Vehicle Replacement Fund 50080001 38090 (4,989) Vehicle Replacement Fund Balance General Benefits 68700000 38011 0 General Benefits Fund Balance Workers' Comp Insurance Program 68800000 38XXX 0 Workers' Comp Insurance Program Fund Balance General Liabilities Insurance Program 68900000 38011 0 General Liabilities Insurance Program Fund Balance Retiree Health Benefit 69400000 38XXX 0 Retiree Health Benefit Fund Balance Revenue Law Enforcement Services 70248003 15370 (125,000) Revenue associated with COPS funds to be budgeted in the City's SLESF (125,000) Expenditures University Ave Parking Permits 23600000 30030 20,800 Increase in temporary salaries for Management Specialist (Parking Manager) to help analyze our existing parking strategies including permit distribution methods, time-limit allocations, and signage programs to help identify ways to better manager our parking inventory. 23600000 31990 20,111 Downtown Street Team Program outreach services and peer to peer counseling SPECIAL REVENUE FUNDS AND AGENCY FUNDS Net Special Revenue And Agency Revenue Adjustments Net ISF Expenditure Adjustments Net ISF Revenue Adjustments CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET INTERNAL SERVICE FUNDS Page 17 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET Law Enforcement Services 70248003 35070 125,000 Expense associated with COPS funds to be budgeted in the City's SLESF Residential Parking Permit Program 60020506 30010 44,629 Transfer 0.5 FTE CSO from General Fund to Special Revenue Fund - College Terrace Family Resources Program 801850001 40110 (47,941) Reduce transfer to General Fund due to insufficient funding for the Family Resources Program from the Family Resources Foundation 162,599 Net Special Revenue and Agency Fund Adjustments (37,599) University Ave Parking Permits 23600000 38500 (40,911)University Ave Parking Permits Fund Balance Law Enforcement Services 70248003 38500 0 Law Enforcement Services Fund Balance Residential Parking Permit Program 60020506 38500 (44,629)Residential Parking Permit Program Fund Balance Family Resources Program 801850001 38500 47,941 Family Resources Program Fund Balance Revenue 50471010 20520 (109,752) Revenues from UTL Department regarding energy efficiency rebates 50471011 15370 (163,802) Allocation from the State of California (Proposition 42) - Traffic Congestion Relief 50471010 25010 (903,486) Measure N Library Bond 80471002 20150 (55,000) Transfer from Fund 191 – Public Donation Fund. Donations from Friends of JMZ to contribute to the cost of the project refer to CMR: 193:10 60471006 15010 (1,099,000) Federal grants for CIP Projects PL-11003 (Palo Alto-Traffic Signal Central System Upgrade) and PL-11004 (Alma Street-Traffic Signal Improvements) (2,331,040) Expenditures 50471010 38790 109,752 To increase appropriation due to revenues from UTL Department regarding energy efficiency rebates 50471011 38790 163,802 To increase appropriation due to allocation from the State of California (Proposition 42) - Traffic Congestion Relief 50471010 38790 2,250,944 Additional appropriation to cover library costs: (1) for temporary facility for the Main Library, (2) accelerate the design phase of the Main Library to take advantage of lower construction cost climate and (3) to revise preliminary cost estimate of the Downtown Library. 50471020 38790 125,000 Transfer to San Antonio Road CIP project for conduit work on San Antonio Road Phase 11 60471006 38790 550,000 This project funds the design and construction of streetscape enhancements along California Avenue between El Camino Real and the Caltrain – Park Blvd Plaza. A $1,175,200, grant was received in FY 2011 from the VTA – Community Design & Transportation (CDT) program that requires a $550,000 local match. 60471006 38790 400,000 This project funds the replacement of the City’s existing traffic signal central system and up to 35 traffic signal field controllers with associated communications gear. This is 100% reimbursable by federal earmark grant. 60471006 38790 699,000 This project funds traffic signal modifications at the intersections of Alma St & Churchill Rd and Alma St & East Meadow Dr. Federal grant provides fudning for this project. 80471002 38790 56,300 Transfer of 1%of the San Antonio Road project appropriation to Art in Public Places and to transfer the appropriation for the purchase of fountain for the California Avenue to Art in Public Places 60471005 38790 (45,816) This project funds the design and construction of streetscape enhancements along California Avenue between El Camino Real and the Caltrain – Park Blvd Plaza. A $1,175,200, grant was received in FY 2011 from the VTA – Community Design & Transportation (CDT) program that requires a $550,000 local match. 50471004 38790 (125,000) Transfer to San Antonio Road CIP project for conduit work on San Antonio Road Phase 11 80471002 38790 (481,763) To close project and return balance to reserve 50471005 38790 (1,500,000) To reduce appropriation due to savings realized from lower bids 80471006 38790 (2,788) To close project and return balance to reserve 50471010 38790 (1,347,458) To reduce budget to due to revised estimates by engineers 50471010 38790 (173,880) To close project and return balance to reserve 50471011 38790 (567,762) To close project and return balance to reserve 50471020 38790 (200,764) To close project and return balance to reserve 50471010 39170 143,557 To reallocate to cover inter-departmental charges 50471010 38790 (143,557) To reallocate to cover inter-departmental charges various 30140 (753) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 22,816 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 8,854 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 5,910 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution GENERAL FUND CIP Net CIP Revenue Adjustments Net Special Revenue and Agency Expenditure Adjustments Page 18 of 24 3/9/2011 Exhibit A Cost Comm FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET 50471011 40520 117,101 Return to Electric Fund due to closing and completion of CIP Project PE-08005 ( MSC Resurfacing ) 50471011 40530 35,485 Return to Gas Fund due to closing and completion of CIP Project PE-08005 ( MSC Resurfacing ) 50471011 40510 56,776 Return to Water Fund due to closing and completion of CIP Project PE-08005 ( MSC Resurfacing ) 50471011 40540 74,519 Return to Wastewater Collection Fund due to closing and completion of CIP Project PE- 08005 ( MSC Resurfacing ) 50471011 40550 138,392 Return to Refuse Fund due to closing and completion of CIP Project PE-08005 ( MSC Resurfacing ) 368,667 1,962,373Net CIP Adjustments To (From) Reserves Net CIP Expenditure Adjustments Page 19 of 24 3/9/2011 Exhibit A Cost Comm. FY 2011 Center Item Midyear Adj Description Electric Fund 20020202 15990 (35,083) Increase in grant revenue from Bay Area Air Quality Management District for CIP EL- 11016 Electric Vehicle Charging Infrastructure 20000020 20410 (117,101) Transfer from Capital Project Fund to return funding for CIP Project PE-08005 (MSC Resurfacing Project) due to the completion of the project Source Changes (152,184) 20020103 31990 (10,000) To reallocate to cover costs of Urban Forest Management Plan 20020102 31990 (5,000) To reallocate to cover costs of Urban Forest Management Plan 20000020 40110 15,000 Transfer to General Fund to cover the share in the cost of the Urban Forest Management Plan 20040102 31990 (5,000) To reallocate to cover costs of Urban Forest Management Plan 20000030 40110 5,000 Transfer to General Fund to cover the share in the cost of the Urban Forest Management Plan 20000031 39090 (228) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor 20000021 39090 (2,362) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor 20040102 31070 49,440 Increase in program and project consulting to fund 25% of feasibility study for anaerobic digestion facility approved by Council on August 2, 2010; CMR 333:10; funding from Calaveras reserve 20040102 30010 27,924 Increase in salaries to reallocate 1.0 FTE Resource Planner from Gas Fund 20020202 38790 135,083 Increase to establish CIP EL-11016 Electric Vehicle Charging Infrastructure 20000020 40410 109,752 Increase in transfer from Electric Public Benefits Reserve to Capital Projects Fund for CIP PE-09006 Mitchell Park Library for energy efficiency rebates various 39100 54,472 Increase in utilities administration charges for midyear adjustments to the Utilities Administration Fund 20020103 39780 45,000 To record interdepartmental rental payment to the General Fund for use of a portion of the former Los Altos Treatment Plant site 20000031 39160 (16,918) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (23,997) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 102,239 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 39,625 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 26,448 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution 546,478 (394,294) 20000020 38040 (192,272) Electric Distribution Rate Stabilization Reserve 20000020 38160 (109,752) Electric Public Benefits Reserve 20000030 38080 (49,440) Electric Supply Calaveras Reserve 20000030 38170 (42,830) Electric Supply Rate Stabilization Reserve (394,294) Fiber Optics Fund 20020611 38790 (1,422) To close CIP projects and return balance to reserve 20000081 39100 3,507 Increase in utilities administration charges for midyear adjustments to the Utilities Administration Fund 20000081 39160 (510) Reduction in General Liability charges due to Internal Service Fund interest allocation 20020611 30140 (68) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 7,260 Increase in General Benefits charges due to Internal Service Fund interest allocation Fund Balancing Entries CITY OF PALO ALTO ENTERPRISE FUNDS FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET Total Electric Fund Net Changes To (From) Reserves Use Changes Page 20 of 24 3/9/2011 Exhibit A Cost Comm. FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO ENTERPRISE FUNDS FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET various 30990 2,813 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 1,878 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution 13,458 (13,458) 20000080 38040 (13,458) Fiber Optics Rate Stabilization Reserve (13,458) Gas Fund 20000040 20410 (35,485) Transfer from Capital Project Fund to return funding for CIP Project PE-08005 (MSC Resurfacing Project) due to the completion of the project Source Changes (35,485) 20000051 39090 (473) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor 20000041 39090 (46,812) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor various 30010 (2,998) Decrease in salaries to reclassify Utilities Installer Repairer to Coordinator Utility Project; reallocate 0.65 FTE to Wastewater Collection Fund 20040202 30010 (27,924) Decrease in salaries to reallocate 1.0 FTE Resource Planner to Electric Fund 20020703 30010 (894) Decrease in salaries to correct compensation for 0.43 FTE Restoration Lead 20020802 38790 (38,661) To close projects and return balance to reserve various 39100 27,435 Increase in utilities administration charges for midyear adjustments to the Utilities Administration Fund 20020702 39780 7,500 To record interdepartmental rental payment to the General Fund for use of a portion of the former Los Altos Treatment Plant site 20000051 39160 (8,474) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (8,171) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 44,944 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 17,419 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 11,626 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution (25,483) 60,968 20000050 38170 16,391 Gas Supply Rate Stabilization Reserve 20000040 38040 44,577 Gas Distribution Rate Stabilization Reserve 60,968 Water Fund 20000060 20410 (56,776) Transfer from Capital Project Fund to return funding for CIP Project PE-08005 (MSC Resurfacing Project) due to the completion of the project Source Changes (56,776) 20000061 39090 (19,250) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor various 30010 (1,614) Decrease in salaries to reclassify Utilities Installer Repairer to Coordinator Utility Project; reallocate 0.35 FTE to Wastewater Collection Fund 20020904 30010 (645) Decrease in salaries to correct compensation for 0.31 FTE Restoration Lead Fund Balancing Entries Use Changes Net Changes To (From) Reserves Fund Balancing Entries Total Fiber Optics Fund Net Changes To (From) Reserves Use Changes Total Gas Fund Page 21 of 24 3/9/2011 Exhibit A Cost Comm. FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO ENTERPRISE FUNDS FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET 20000061 39100 24,789 Increase in utilities administration charges for midyear adjustments to the Utilities Administration Fund 20020902 39780 7,500 To record interdepartmental rental payment to the General Fund for use of a portion of the former Los Altos Treatment Plant site 20000061 39160 (7,382) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (17,025) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 40,916 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 15,858 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 10,585 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution 53,732 3,044 20000060 38040 3,044 Water Rate Stabilization Reserve 3,044 Wastewater Collection Fund 52 20000070 20410 (74,519) Transfer from Capital Project Fund to return funding for CIP Project PE-08005 (MSC Resurfacing Project) due to the completion of the project Source Changes (74,519) 20000071 39090 (18,375) Decrease in interdepartmental communications expense; Utilities alarm monitoring is being transitioned from Police Dept. to outside vendor 20021103 30010 4,612 Increase in salaries to reclassify Utilities Installer Repairer to Coordinator Utility Project; reallocate 1.0 FTE from Gas and Water Funds 20021103 30010 (541) Decrease in salaries to correct compensation for 0.26 FTE Restoration Lead 20000071 39100 14,833 Increase in utilities administration charges for midyear adjustments to the Utilities Administration Fund 20000071 39160 (4,980) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (6,436) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 24,119 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 9,348 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 6,239 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Use Changes 28,819 Net Changes To (From) Reserves 45,700 Fund Balancing Entries 20000070 38040 45,700 Wastewater Collection Rate Stabilization Reserve Total Wastewater Collection Fund 45,700 Refuse Fund 50050001 20410 (138,392) Transfer from Capital Project Fund to return funding for CIP Project PE-08005 (MSC Resurfacing Project) due to the completion of the project 50050001 20110 240,000 Reverse transfer from General Fund; originally approved by Council on September 20, 2010 (CMR 356:10) to meet landfill cash requirements; transfer is no longer needed. Use Changes Total Water Fund Net Changes To (From) Reserves Fund Balancing Entries Page 22 of 24 3/9/2011 Exhibit A Cost Comm. FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO ENTERPRISE FUNDS FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET Source Changes 101,608 50050001 40600 (11,439) Reverse transfer to Technology Fund to correct error for CIP TE-11005 Implementation of Restructured Tiered Rates on Bills 50050002 39160 (6,581) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (22,786) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 30,725 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 11,909 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 7,948 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Use Changes 9,776 Net Changes To (From) Reserves (111,384) Fund Balancing Entries 50050001 38040 (111,384) Refuse Fund Rate Stabilization Reserve Total Refuse Fund (111,384) Storm Drainage Fund 50070001 40600 (2,445) Reverse transfer to Technology Fund to correct error for CIP TE-11005 Implementation of Restructured Tiered Rates on Bills 50070201 38790 150,563 Correction to restore appropriation related to staff salaries and benefits in 2010 50070002 39160 (1,194) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (230) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 10,029 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 3,887 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 2,595 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution 163,205 (163,205) 50070001 38040 (163,205) Storm Drainage Fund Reserve (163,205) Wastewater Treatment Fund 50060201 38790 (623,849) To close completed project and return balance to reserve 50060201 38790 (10,000,000) To reduce appropriation for CIP project due to savings realized from lower construction bids 50060002 39160 (11,692) Reduction in General Liability charges due to Internal Service Fund interest allocation various 30140 (11,858) Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation various 30990 65,416 Increase in General Benefits charges due to Internal Service Fund interest allocation various 30990 25,355 Increase in General Benefits charges due to deferral of employee healthcare contribution plan various 3037X 16,922 Transfer allocated retiree medical reimbursement expense to department and to fully budget for retiree medical ARC contribution Fund Balancing Entries Total Storm Drainage Fund Use Changes Net Changes To (From) Reserves Page 23 of 24 3/9/2011 Exhibit A Cost Comm. FY 2011 Center Item Midyear Adj Description CITY OF PALO ALTO ENTERPRISE FUNDS FISCAL YEAR 2011 MIDYEAR BUDGET SUMMARY DETAIL CHANGES TO THE ADJUSTED BUDGET (10,539,706) 10,539,706 50060001 38040 10,539,706 Wastewater Treatment Fund Reserve 10,539,706 Utilities Operating Administrative Fund 20010002 19100 (125,036) Increase in reimbursements from the Utilities Funds for midyear adjustments to the Utilities Administration Fund (125,036) Various 30990 14,230 Increase in General Benefits charges due to Internal Service Fund interest allocation Various 30990 5,515 Increase in General Benefits charges due to deferral of employee healthcare contribution plan 20010001 30140 8 Reduction in Workers' Compensation charges due to Internal Service Fund interest allocation Various 3037X 3,681 Transfer allocated retiree medical reimbursement expense to department 20000002 39160 1,602 Reduction in General Liability charges due to Internal Service Fund interest allocation 20010001 31990 100,000 Increase in contract services for organizational assessment of the Utilities Dept. 125,036 - Use Changes Net Changes To (From) Total Wastewater Treatment Fund Use Changes Net Changes To (From) Reserves Fund Balancing Entries Source Changes Page 24 of 24 3/9/2011 Exhibit B Project Funding Title Number Revenue Expense Source Comments ADDITIONAL APPROPRIATIONS Mitchell Park Library PE-09006 $ 109,752 $ 109,752 Utilities Public Benefits Program Revenues from UTL Department regarding energy efficiency rebates Main Library New Construction and Improvements PE-11000 $ 450,000 $ 450,000 Measure N Library Bond The design phase of the project was on the accelerated schedule to take advantage of the low construction bid trend due to the economy. Temporary Facility for Main Library (New Project) ( Exhibit B-1) PE-11012 $ 500,000 $ 500,000 Measure N Library Bond Temporary Facility for the Main Library while construction is in progress Downtown Library Improvements PE-09005 $ 1,300,944 $ 1,300,944 Measure N Library Bond To adjust Library projects to the revised engineers estimates; original budget was preliminary. Street Maintenance PE-86070 $ 163,802 $ 163,802 Proposition 42 Allocation from the State of California (Proposition 42) - Traffic Congestion Relief San Antonio Road Median Improvements PE-00104 125,000$ Infrastructure Reserve Transfer to San Antonio Road CIP project for conduit work on San Antonio Road Phase 11 Art in Public Places AC-86017 56,300$ Infrastructure Reserve Transfer of 1%of the San Antonio Road project appropriation to Art in Public Places California Avenue - Transit Hub Corridor Project (New Project) (Exhibit B-2) PL-11002 550,000$ Infrastructure Reserve This project funds the design and construction of streetscape enhancements along California Avenue between El Camino Real and the Caltrain – Park Blvd Plaza. A $1,175,200, grant was received in FY 2011 from the VTA – Community Design & Transportation (CDT) program that requires a $550,000 local match. Palo Alto-Traffic Signal Central System Upgrade (New Project) (Exhibit B-3) PL-11003 $ 400,000 400,000$ Federal Earmark Grant This project funds the replacement of the City’s existing traffic signal central system and up to 35 traffic signal field controllers with associated communications gear. This is 100% reimbursable by federal earmark grant. Alma Street - Traffic Signal Improvements (New Project) (Exhibit B-4) PL-11004 $ 699,000 699,000$ Federal Section 130 Grant This project funds traffic signal modifications at the intersections of Alma St & Churchill Rd and Alma St & East Meadow Dr. The project will be designed by Caltrain and constructed by the City as part of a coordination project to help improve operations at the project intersections. Total 3,623,498$ 4,354,798$ REDUCTION IN APPROPRIATIONS/TO CLOSE PROJECTS Street Lights Improvements PO-05054 $ (125,000) Infrastructure Reserve Transfer to San Antonio Road CIP project for conduit work on San Antonio Road Phase 11 Civic Center Infrastructure Improvements PF-01002 $ (1,500,000) Infrastructure Reserve To reduce appropriation due to savings realized from lower bids Community Center and Library Temporary Facilities PE-09010 $ (149) $ (149) Measure N Library Bond To adjust Library projects to the revised engineers estimates; original budget was preliminary. Mitchell Park Library and Community Center PE-09006 $ (1,347,309) $ (1,347,309) Measure N Library Bond To adjust Library projects to the revised engineers estimates; original budget was preliminary. Children's Library Improvements PE-04010 $ (170) Infrastructure Reserve To close project and return balance to reserve Animal Shelter Expansion PE-04014 $ (20,640) Infrastructure Reserve To close project and return balance to reserve Bridge Rail Repair, Abutment, and Deck Repairs PE-10006 $ (153,070) Infrastructure Reserve To close project and return balance to reserve Municipal Service Center Resurfacing Project PE-08005 $ (567,762) Infrastructure Reserve and various Enterprise Funds To close project and return balance to funding sources Cubberley Turf Renovation PE-07007 $ (144,464) Infrastructure Reserve To close project and return balance to reserve. FY 2011 CIP Mid-Year Adjustments CAPITAL PROJECT FUND 1 3/8/2011 Exhibit B Project Funding Title Number Revenue Expense Source Comments FY 2011 CIP Mid-Year Adjustments San Antonio Road Median Improvements PE-00104 $ (6,300) Infrastructure Reserve Transfer of 1%of the San Antonio Road project appropriation to Art in Public Places California Avenue Improvements PE-07005 $ (50,000) Infrastructure Reserve To transfer the appropriation pertaining to the purchase of a fountain to Art in Public Places Adobe Creek Bike Bridge Replacement PL-06001 $ (45,816) Infrastructure Reserve To close project and return balance to reserve JMZ New Bobcat Habitat AC-10000 $ (450,000) Infrastructure Reserve To close project and return balance to reserve Replacement of Gym B Bleachers CC-10000 $ (20,116) Infrastructure Reserve To close project and return balance to reserve Cubberley Gym Activity Room CC-11000 $ (11,647) Infrastructure Reserve To close project and return balance to reserve School Playing Field Irrigation PG-98001 $ (2,788) Infrastructure Reserve To close project and return balance to reserve Total $ (1,347,458) $ (4,445,231) TOTAL GENERAL FUND CIP MID-YEAR ADJUSTMENTS $ 2,276,040 $ (90,433) ADDITIONAL APPROPRIATIONS Electric Vehicle Charging Infrastructure (New) (Exhibit B-5) EL-11016 $ 35,083 $ 135,083 Electric Fund RSR/Grant This project will install five new generation electric vehicle charging stations at City Hall level A, Hamilton Ave in front of City Hall, and Bryant Street parking garage. TOTAL ELECTRIC FUND CIP MID-YEAR ADJUSTMENTS $ 35,083 $ 135,083 REDUCTION IN APPROPRIATIONS/TO CLOSE PROJECTS Fiber Optic Network EL-06005 (581)$ Fiber Optics Fund Distribution RSR To close project and return balance to reserve Fiber Optic Customer EL-06006 (841)$ Fiber Optics Fund Distribution RSR To close project and return balance to reserve TOTAL FIBER OPTICS FUND CIP MID-YEAR ADJUSTMENTS (1,422)$ REDUCTION IN APPROPRIATIONS/TO CLOSE PROJECTS CNG Seq Fuel System GS-03010 (35,715)$ Gas Fund Distribution RSR To close project and return balance to reserve Compressed Natural Gas GS-00011 (2,946)$ Gas Fund Distribution RSR To close project and return balance to reserve TOTAL GAS FUND CIP MID-YEAR ADJUSTMENTS (38,661)$ FIBER OPTICS FUND GAS FUND ELECTRIC FUND 2 3/8/2011 Exhibit B Project Funding Title Number Revenue Expense Source Comments FY 2011 CIP Mid-Year Adjustments ADDITIONAL APPROPRIATIONS Fuel Storage Tanks Upgrade VR-92006 20,499$ Vehicle Replacement Fund Correction to restore appropriation related to staff salaries and benefits in 2010 MSC Fuel Storage Tank Replacement VR-00001 (8,586)$ Vehicle Replacement Fund To close project and return balance to reserve MSC Equipment Maintenance Facility Mezzanine Storage Area VR-01000 (9,640)$ Vehicle Replacement Fund To close project and return balance to reserve New Vehicles for Utility Operations VR-08001 (24,035)$ Vehicle Replacement Fund To close project and return balance to reserve Fuel Storage Tanks Upgrade VR-92006 25,000$ Vehicle Replacement Fund For environmental testing for Foothills Park Fuel Station Field Service Truck VR-05001 (367)$ Vehicle Replacement Fund To close project and return balance to reserve Scheduled Vehicle and Equipment Replacements ( FY 2007) VR-07800 -$ Vehicle Replacement Fund To close completed project. There is no remaining balance. Vehicle Replacement VR-08000 -$ Vehicle Replacement Fund To close completed project. There is no remaining balance. TOTAL VEHICLE REPLACEMENT FUND CIP MID- YEAR ADJUSTMENTS 2,871$ REDUCTION IN APPROPRIATIONS Replace Existing Reclaimed Water Pipe WQ-04010 (623,849)$ Wastewater Treatment Fund RSR To close completed project and return balance to reserve Disinfection Facility Improvement Program WQ-06014 (10,000,000)$ Wastewater Treatment Fund RSR To reduce appropriation due to savings realized from lower bids TOTAL WASTEWATER TREATMENT FUND CIP MID-YEAR ADJUSTMENTS -$ (10,623,849)$ ADDITIONAL APPROPRIATIONS Alma Street Storm Drainage Improvement SD-08101 54,903$ Storm Drainage Fund RSR Correction to restore appropriation related to staff salaries and benefits in 2010 Storm Drain System Replacement SD-06101 58,214$ Storm Drainage Fund RSR Correction to restore appropriation related to staff salaries and benefits in 2010 San Francisquito Creek Storm Water Pump Station SD-06102 9,775$ Storm Drainage Fund RSR Correction to restore appropriation related to staff salaries and benefits in 2010 Channing Avenue/Lincoln Avenue Storm Drain Improvements SD-11101 27,671$ Storm Drainage Fund RSR Correction to restore appropriation related to staff salaries and benefits in 2010 Total 150,563$ TOTAL STORM DRAINAGE FUND CIP MID-YEAR ADJUSTMENTS $ - (150,563)$ STORM DRAINAGE FUND WASTEWATER TREATMENT FUND VEHICLE REPLACEMENT FUND 3 3/8/2011 Draft Revision: 174 User: ajavelo Timestamp: March 8, 2011 8:22 am Capital Budget FY 2011 City of Palo Alto 1 CIP FACTS: • New • Timeline: FY 2011 through FY 2012 • Overall Project Completion: 0% • Percent Spent: 0.00% • Managing Department: Public Works • Comprehensive Plan: Policy C-22, Program C- 20 • Potential Board/Commission Review: LAC, ARB(exterior signage) IMPACT ANALYSIS: • Environmental: None • Design Elements: Improved lighting, electrical and mechanical work • Operating: None • Telecommunications: Additional phone and data lines will be needed NEW TEMPORARY MAIN LIBRARY PROJECTS - (PE-11012) Description: This project will renovate the Art Center auditorium to function as a temporary library during the construction of the adjacent Main Library. Improvements will be made to lighting, storage areas, shelving, accessibility, ect., This will serve as a small library space for staff and patrons during the construction of the Main Library. Justification: The Main Library houses 130,000 items, including a historic collection. The new Mitchell Park branch will house a good portion of these items but a large percentage will be put into storage for the year- long construction phase on the Main Library. A temporary Main Library will allow current Main Library users to have access to a small, well-chosen variety of materials as well as a convenient place to pick up their holds. This will save automobile trips , reduce parking and use demands at the new MPL. Supplemental Information: Conceptual design was completed in December 2010 as part of the effort to identify a potential location for and cost of, a temporary library. The design will be completed in the spring of 2011. Due to limited staff availability, the services of a construction management firm will be needed. In order to reduce construction disruptions and allow for better pricing, the temporary Main Library will be included as part of the Art Center Electrical & Mechanical Improvements project (PF-07000). The historical collection may be moved into a future Palo Alto Historical Association at the Roth Building. Costs associated with this move are not included in this project. FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs Construction Costs 450,000 450,000 Other $ $ $ Total Budget Request $450,000 $$$450,000 Revenues: $450,000 $ $ $450,000 Source of Funds:Measure N Library Bond EXHBIT B1 Draft Revision: 174 User: ajavelo Timestamp: March 8, 2011 3:25 pm Capital Budget FY 2011 City of Palo Alto 1 CIP FACTS: • New • Timeline: FY 2010 - FY 2011 • Overall Project Completion: 0% • Percent Spent: 0% • Managing Department: Planning and Community Environment • Comprehensive Plan: Policies T-6, T-10, T-14, T-19, T-22, T-23, T-30, T-31, T-34 • Potential Board/Commission Review: IMPACT ANALYSIS: • Environmental: Negative Declaration approved on February 14, 2011. • Design Elements: This project may be subject to review by the ARB and PTC. • Operating: This project may have operations cost increases for landscape and street maintenance. • Telecommunications: None NEW CALIFORNIA AVENUE - TRANSIT HUB CORRIDOR PROJECT - (PL-11002) Description: This project funds the design and construction of streetscape enhancements along California Avenue between El Camino Real and the Caltrain - Park Blvd Plaza. Improvements include the installation of community identity markers; traffic calming treatments such as bulbs-outs and a 4-lane to 2-lane roadway reduction; enhanced mid-block pedestrian crosswalks; bicycle and pedestrian streetscape elements; and community- focused elements at the Park Blvd Plaza. Justification: The California Avenue - Transit Hub Corridor Project implements the City’s Comprehensive Plan vision for the corridor and is consistent with the Draft California Avenue District Specific Plan. Supplemental Information: Consultant and contract services will be used to implement this project including consultant services for the design and construction management of the project. A $1,175,200 grant was received in 2011 from the VTA - Community Design & Transportation (CDT) program that requires a $550,000 local match. FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs $550,000 $ Construction Costs $1,175,200 Other $ $ $ Total Budget Request $550,000 $1,175,200 $ Revenues: $0 $1,175,200 $ Source of Funds:VTA CDT Grant in the amount of $1,175,200 will be available beginning FY2011-12 for the construction phase of the project. EXHIBIT B2 Draft Revision: 174 User: ajavelo Timestamp: March 8, 2011 8:28 am Capital Budget FY 2011 City of Palo Alto 1 CIP FACTS: • New • Timeline: FY 2010 - FY 2011 • Overall Project Completion: 0% • Percent Spent: 0% • Managing Department: Planning and Community Environment • Comprehensive Plan: Policy T-38 • Potential Board/Commission Review: IMPACT ANALYSIS: • Environmental: This project is categorically exempt from CEQA under 15301. • Design Elements: None • Operating: None • Telecommunications: None NEW PALO ALTO - TRAFFIC SIGNAL CENTRAL SYSTEM UPGRADE - (PL-11003) Description: This project funds the replacement of the City’s existing traffic signal central system and up to 35 traffic signal field controllers with associated communications gear. The new central system will allow for improved field monitoring and better field coordination with between intersections. Justification: The existing central system and traffic signal field controllers were deployed prior to the development of current National Transportation Communications for ITS Protocol (NTCIP) and do not meet this standard. The new central system will comply with NTCIP standards and allow for the implementation of more modern traffic signal timing strategies that are not offered by the current system. Supplemental Information: Consultant and contract services will be used to identify a traffic signal controller vendor and central system integrator to help deploy the new system. A $400,000 federal earmark grant was recieved by the City to help the fund project. The grant is 100% reimbursable and no local match is required. FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs Construction Costs $400,000 $400,000 Other $ $ $ Total Budget Request $400,000 $$$400,000 Revenues: $400,000 $ $ $400,000 Source of Funds:100% reimbursable federal earmark grant. EXHIBIT B3 Draft Revision: 174 User: ajavelo Timestamp: March 8, 2011 8:30 am Capital Budget FY 2011 City of Palo Alto 1 CIP FACTS: • New • Timeline: FY 2010 - FY 2011 • Overall Project Completion: 0% • Percent Spent: 0% • Managing Department: Planning and Community Environment • Comprehensive Plan: Policies T-24, T-27, T-38 • Potential Board/Commission Review: IMPACT ANALYSIS: • Environmental: This project is categorically exempt from CEQA under 15301. • Design Elements: None • Operating: None • Telecommunications: None NEW ALMA STREET - TRAFFIC SIGNAL IMPROVEMENTS (PL-11004) Description: This project funds traffic signal modifications at the intersections of Alma Street and Churchill Road and Alma Street and East Meadow Drive. The project will be designed by Caltrain and constructed by the City as part of a coordination project to help improve operations at the project intersections. The project will provide improved railroad preemption through new traffic signal controllers and train detection, extinguishable railroad warning message signs, battery back-up equipment to operate the intersections in the event of a power failure, and new traffic signal poles standards for improved driver visibility. Justification: The project will help to provide more efficient traffic signal operations during railroad preemption activities and improve signal visibility for motorists and pedestrians. Supplemental Information: The City will be recieving a Federal Section 130 grant for this project in the amount of $1,109,644 of the grant will be used by Cal-Train for consultant design services and administration charges related to the track way improvements and the remaining $699,000 will be used by the City for construction services to implement the project FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs $50,000 $ $50,000 Construction Costs $550,000 $550,000 Other $99,000 $ $ $99,000 Total Budget Request $699,000 $$$699,000 Revenues: $699,000 $ $ $699,000 Source of Funds:Federal Section 130 Grant in the amount of $699,000 will be available beginning of Spring 2011 to do design and construction. EXHIBIT B4 Draft Revision: 174 User: ajavelo Timestamp: March 8, 2011 8:32 am Capital Budget FY 2011 City of Palo Alto 1 CIP FACTS: • New • Timeline: FY 2011 through FY 2012 • Overall Project Completion: 0% • Percent Spent: 0.00% • Managing Department: Utilities • Comprehensive Plan: Policies T-3, N-44 • Potential Board/Commission Review: IMPACT ANALYSIS: • Environmental: This project may have possible exemption from environmental review. • Design Elements: This project may have possi- ble exemption from Design review. • Operating: This project will improve operating efficiency. • Telecommunications: None NEW ELECTRIC VEHICLE CHARGING INFRASTRUCTURE - (EL-11016) Description: Install five (5) new generation electric vehicle charging stations at City Hall level A, Hamilton Ave in front of City Hall, and Bryant Street parking garage. Justification: As part of the City’s sustainability program the City applied for and received two matching grants from the Bay Area Air Quality Management District (BAAQMD) for the installation of electric vehicle charging stations. The purpose of this project is to pilot electric charging stations and to provide a charging location for electric vehicles that may use the Civic Center and businesses in Downtown Palo Alto. The grant requires that City match the $35,083 that was provided by BAAQMD Supplemental Information: Widespread adoption of EVs and greening of the City's electric supply will assist the community to achieve its green house gas (GHG) reduction goals for reducing 2020 emissions by 15% below 2005 levels. In 2005, the automobile based commute to, from, and within town is estimated to have generated 266 thousand metric tons of CO2 emissions, making up 32% of the community wide GHG emissions. Every fossil fueled car switches to 100% renewable electricity based EV charging will reduce GHG emissions by up to 5 tons/year. FUTURE FINANCIAL REQUIREMENTS FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Funding Pre-Design Costs Design Costs Construction Costs $135,083 $135,083 Other $ $ $ Total Budget Request $135,083 $$$135,083 Revenues: $135,083 $ $ $135,083 Source of Funds:Electric Fund with reimburment from a grant of $35,083 from BAAQMD EXHIBIT B5 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget GENERAL FUND Planning and Community Environment Department Administrative Assistant 1.00 1.00 1.00 - 1.00 Administrative Associate I 2.00 2.00 1.00 - 1.00 Administrative Associate II 4.80 3.80 3.80 - 3.80 Administrative Associate III 1.00 1.00 1.00 - 1.00 Administrator, Planning & Comm Envir 1.00 1.00 1.00 - 1.00 Assistant Building Official 1.00 1.00 1.00 - 1.00 Assistant Director, Planning & Comm Envir 1.00 - - - - Assistant Engineer - - - - - Assistant to City Manager - - 0.05 - 0.05 Associate Engineer 1.00 1.00 1.00 - 1.00 Building Inspector 4.00 4.00 4.00 - 4.00 Building Inspector Specialist 3.00 2.00 1.00 - 1.00 Building/Planning Technician 3.00 3.00 2.00 - 2.00 Chief Building Official 1.00 1.00 1.00 - 1.00 Chief Planning and Transportation Official 1.00 1.00 1.00 - 1.00 Chief Transportation Officer - - - - - Chief Transportation Official - - 1.00 - 1.00 City Traffic Engineer - - - - - Code Enforcement Officer 2.00 2.00 2.00 - 2.00 Coordinator, Transp Sys Mgmt 0.50 0.50 0.50 - 0.50 Deputy City Manager - 0.50 0.50 - 0.50 Director, Planning and Comm Envir 1.00 1.00 1.00 - 1.00 Engineer 1.00 1.00 1.00 - 1.00 Engineering Technician II 1.00 1.00 1.00 - 1.00 Manager, Economic Resources - - - - - Manager, Economic Devlpmt & Redevlpmt 1.00 1.00 1.00 - 1.00 Manager, Planning 2.00 2.00 2.00 - 2.00 Managing Arborist - - - - - Permit Specialist 1.00 - - - - Planner 6.00 6.05 5.75 - 5.75 Planning Arborist (1)1.00 1.00 1.00 - 1.00 Plan Checking Engineer 3.00 2.00 2.00 - 2.00 Project Engineer 1.00 1.00 1.00 - 1.00 Senior Planner 6.00 6.00 5.00 - 5.00 Supervisor, Building Inspection 1.00 1.00 1.00 - 1.00 Transportation Manager 1.00 1.00 - - - Transportation Project Manager - - - - - Total Planning & Community Environment 53.30 48.85 44.60 0.00 44.60 Footnotes: (1) Title change from Arborist to Planning Arborist 3/8/2011 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget GENERAL FUND Police Department Administrative Assistant 1.00 1.00 1.00 - 1.00 Administrative Associate II 3.00 3.00 3.00 - 3.00 Animal Attendant - - - - - Animal Control Officer 4.50 4.50 4.50 - 4.50 Animal Services Specialist 1.00 1.00 1.00 - 1.00 Animal Services Specialist II 1.00 1.00 1.00 - 1.00 Assistant Chief of Police 1.00 1.00 1.00 - 1.00 Business Analyst 1.00 1.00 1.00 - 1.00 Chief Communications Technician - - - - - Code Enforcement Officer 1.50 1.50 1.00 - 1.00 Communication Technician 1.00 1.00 1.00 - 1.00 Community Service Officer (1)9.00 9.00 9.00 (0.50) 8.50 Community Service Officer - Lead - - - - - Court Liaison Officer 1.00 1.00 1.00 - 1.00 Crime Analyst 1.00 2.00 1.00 - 1.00 Deputy Director Technical Services 1.00 1.00 1.00 - 1.00 Parking Enforcement Officer - - - - - Parking Enforcement Officer - Lead - - - - - Police Agent 19.00 19.00 19.00 - 19.00 Police Captain 2.00 2.00 2.00 - 2.00 Police Chief 1.00 1.00 1.00 - 1.00 Police Lieutenant 5.00 5.00 5.00 - 5.00 Police Officer 51.00 50.00 49.00 - 49.00 Police Officer Training - - - - - Police Records Specialist I - - - - - Police Records Specialist II 9.00 7.00 6.00 - 6.00 Police Records Specialist - Lead 1.00 1.00 1.00 - 1.00 Police Sergeant 14.00 14.00 14.00 - 14.00 Police Trainee - - - - - Program Assistant I 1.00 - - - - Program Assistant II 1.00 1.00 1.00 - 1.00 Program Coordinator - 1.00 - - - Property and Evidence Technician 2.00 2.00 2.00 - 2.00 Public Safety Dispatcher I 2.00 2.00 2.00 - 2.00 Public Safety Dispatcher II 14.00 14.00 14.00 - 14.00 Public Safety Dispatcher - Lead 5.00 5.00 5.00 - 5.00 Safety Officer - - - - - Senior Management Analyst 1.00 1.00 1.00 - 1.00 Superintendent, Animal Services 1.00 1.00 1.00 - 1.00 Supervisor, Animal Services 1.00 1.00 1.00 - 1.00 Supervisor, Police Services 3.00 3.00 3.00 - 3.00 Veterinarian 1.00 1.00 1.00 - 1.00 Veterinarian Technician 2.00 2.00 2.00 - 2.00 Volunteer Coordinator 1.00 0.50 0.50 - 0.50 Total Police Department 164.00 161.50 157.00 (0.50) 156.50 Footnotes: (1) Reallocate 0.5 FTE Community Service Officer to the College Terrace Parking Program Fund 3/8/2011 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget ENTERPRISE FUNDS Utilities Department Administration, Electric, Gas, Wastewater Collection and Water Account Representatives 3.00 3.00 3.00 - 3.00 Accountant - 0.75 0.75 - 0.75 Accounting Specialist 1.00 2.50 2.50 - 2.50 Administrative Assistant 1.00 1.00 1.00 - 1.00 Administrative Associate I 2.00 2.00 2.00 - 2.00 Administrative Associate II 7.00 7.00 7.00 - 7.00 Assistant Power Engineer - - - - - Assistant Resource Planner - - - - - Associate Power Engineer - - - - - Associate Resource Planner 1.00 1.00 - - - Assistant Director Customer Support Services 1.00 1.00 1.00 - 1.00 Assistant Director Utilities/Admin Svc - - - - - Assistant Director Utilities/Engineering 1.00 1.00 1.00 - 1.00 Assistant Director Utilities/Operations 1.00 1.00 1.00 - 1.00 Assistant Director Utilities/Res Mgmt 1.00 1.00 1.00 - 1.00 Assistant to City Manager - - 0.35 - 0.35 Business Analyst 2.87 2.87 2.87 - 2.87 Cathodic Technician 1.00 1.00 1.00 - 1.00 Cathodic Protection Technician/Assistant - 1.00 1.00 - 1.00 Cement Finisher 1.00 1.00 1.00 - 1.00 Chief Electric Underground Inspector - - - - - Chief Inspector Water, Gas, Wastewater - - - - - Communications Manager - - 1.00 - 1.00 Contracts Administrator 1.00 1.00 1.00 - 1.00 Coordinator, Utility Safety & Security 1.00 1.00 1.00 - 1.00 Coordinator, Utility Projects (1)4.00 4.00 4.00 1.00 5.00 Customer Service Representative 5.00 5.00 5.00 - 5.00 Customer Service Specialist 2.00 2.00 2.00 - 2.00 Customer Service Specialist - Lead 1.00 2.00 2.00 - 2.00 Deputy Director, Administrative Services 0.20 0.20 0.20 - 0.20 Deputy Fire Chief/Fire Marshal 0.08 0.08 0.08 - 0.08 Director, Administrative Services 0.15 0.15 0.15 - 0.15 Director, Utilities 1.00 1.00 1.00 - 1.00 Electric Project Engineer 1.00 1.00 2.00 - 2.00 Electric Underground Inspector 2.00 2.00 2.00 - 2.00 Electric Underground Inspector Lead 1.00 1.00 1.00 - 1.00 Electrical Assistant I 5.00 5.00 5.00 - 5.00 Electrician 14.00 14.00 14.00 - 14.00 Electrician - Apprentice - - - - - Electrician - Lead 6.00 6.00 6.00 - 6.00 Engineer 4.00 4.00 4.00 - 4.00 Engineering Manager, Electric 1.00 1.00 1.00 - 1.00 Engineering Mgr, Water, Gas, Wastewater 1.00 1.00 1.00 - 1.00 Engineering Technician III 3.00 3.00 3.00 - 3.00 Equipment Operator 2.00 1.00 1.00 1.00 Equipment Operator - Lead - - - - - Field Service Person Water, Gas, Wastewater - - - - - Gas System Technician 2.00 1.00 2.00 - 2.00 3/8/2011 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget ENTERPRISE FUNDS Utilities Department Administration, Electric, Gas, Wastewater Collection and Water Gas System Technician II - 1.00 1.00 - 1.00 Hazardous Materials Inspector 0.06 0.06 0.06 - 0.06 Hazardous Materials Specialist 0.03 0.03 - - - Heavy Equipment Operator 10.00 10.00 9.00 - 9.00 Inspector, Field Services 4.00 4.00 4.00 - 4.00 Lineperson/Cable Splicer 11.00 11.00 11.00 - 11.00 Lineperson/Cable Splicer - Apprentice - - - - - Lineperson/Cable Splicer - Lead 4.00 4.00 4.00 - 4.00 Lineperson/Cable Splicer - Lead Trainee - - - - - Lineperson/Cable Splicer - Trainee - - - - - Maintenance Mechanic 1.00 1.00 1.00 - 1.00 Maintenance Mechanic - Welding 1.00 1.00 1.00 - 1.00 Manager Utilities Telecommunication 1.00 1.00 1.00 - 1.00 Manager, Electric Operations 1.00 1.00 1.00 - 1.00 Manager, Energy Risk 1.00 1.00 1.00 - 1.00 Manager, Field and Customer Service 1.00 - - - - Mgr, Customer Svc and Meter Reading - 1.00 1.00 - 1.00 Manager, Utilities Marketing Services 1.00 1.00 1.00 - 1.00 Mgr, Util Operations Water, Gas, Wastewater 1.00 1.00 1.00 - 1.00 Manager, Utilities Rates - - - - - Marketing Engineer 1.00 1.00 1.00 - 1.00 Meter Reader 6.00 6.00 6.00 - 6.00 Meter Reader - Lead 1.00 1.00 1.00 - 1.00 Meter Shops Lead - 1.00 - - - Offset Equipment Operator - - 0.48 - 0.48 Planner - - 0.30 - 0.30 Power Engineer 2.00 2.00 3.00 - 3.00 Program Assistant I 3.00 3.00 3.00 - 3.00 Project Engineer 6.00 6.00 5.00 - 5.00 Project Manager 0.75 0.75 0.75 - 0.75 Resource Planner 4.00 4.00 5.00 - 5.00 Restoration Lead - 1.00 1.00 - 1.00 Senior Accountant - 0.75 0.75 - 0.75 Senior Business Analyst 1.00 1.00 2.00 - 2.00 Senior Deputy City Attorney - - 1.00 - 1.00 Senior Electrical Engineer 4.00 4.00 4.00 - 4.00 Senior Financial Analyst - 0.60 1.10 - 1.10 Senior Instrument Electrician - - - - - Senior Management Analyst 1.00 1.00 1.00 - 1.00 Senior Market Analyst 1.00 1.00 1.00 - 1.00 Senior Mechanic 1.00 1.00 1.00 - 1.00 Senior Performance Auditor - - 1.00 - 1.00 Senior Project Engineer 4.00 4.00 4.00 - 4.00 Senior Resource Originator 1.00 1.00 - - Senior Resource Planner 6.00 6.00 7.00 - 7.00 Senior Technologist 0.87 0.87 0.87 - 0.87 Senior Utilities Field Services Representative 1.00 1.00 1.00 - 1.00 Senior Utility System Technician - - - - - 3/8/2011 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget ENTERPRISE FUNDS Utilities Department Administration, Electric, Gas, Wastewater Collection and Water Senior Water System Operator 2.00 2.00 2.00 - 2.00 Storekeeper 2.00 2.00 2.00 - 2.00 Supervising Electric Operations & Programs - - - - - Supervising Electric Project Engineer 2.00 2.00 1.00 - 1.00 Supervising Project Engineer - - 1.00 - 1.00 Supervisor, Utility Construction Inspector - - - - - Supervisor, Util Meter Readers & Field Service - - - - - Supervisor, Water, Gas, Wastewater 5.00 5.00 5.00 - 5.00 Supervisor, Water Transmission 1.00 1.00 1.00 - 1.00 System Operator Scheduler - - - - - Technologist - - - - - Tree Maintenance Specialist 1.00 1.00 1.00 - 1.00 Utilities Accounting Technician - - - - - Utilities Compliance Manager - - 1.00 - 1.00 Utilities Credit/Collection Specialist 1.00 1.00 1.00 - 1.00 Utilities Engineer Estimator 5.00 5.00 5.00 - 5.00 Utilities Engineer Estimator - Lead 1.00 1.00 - - - Utilities Field Service Representative 7.00 5.00 5.00 - 5.00 Utilities Installer/Repairer (1)11.00 11.00 13.00 (1.00) 12.00 Utilities Installer/Repairer Assistant 1.00 1.00 1.00 - 1.00 Utilities Installer/Repairer - Welding 3.00 3.00 3.00 - 3.00 Utilities Installer/Repairer - Lead 5.00 5.00 5.00 - 5.00 Utilities Installer/Repairer - Lead Welding 2.00 2.00 2.00 - 2.00 Utilities Key Account Representative 3.00 3.00 3.00 - 3.00 Utilities Locator 3.00 3.00 3.00 - 3.00 Utilities Rate Analyst - - - - - Utilities Supervisor 5.00 5.00 5.00 - 5.00 Utilities System Operator 5.00 5.00 5.00 - 5.00 Utility Compliance Technician 2.00 2.00 2.00 - 2.00 Utility Compliance Technician - Lead 1.00 1.00 1.00 - 1.00 Utility Market Analyst - - - - - Utility System Technician - - - - - Warehouse Supervisor - - 0.50 - 0.50 Water Meter/Cross Connection Technician 2.00 2.00 3.00 - 3.00 Water Meter Representative Assistant - - - - - Water Meter Repairer - - - - - Water System Operator I - - - - - Water System Operator II 5.00 4.00 4.00 - 4.00 Total Utilities 238.01 241.61 250.71 0.00 250.71 Footnotes: (1) Drop 1.0 FTE Utility Installer/Repairer and add Coordinator Utility Projects 3/8/2011 Exhibit C FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget Special Revenue Accounting Specialist - - 0.50 - 0.50 Administrative Associate II 0.20 0.20 0.20 - 0.20 CDBG Coordinator - - - - - Community Service Officer (1)- - - 0.50 0.50 Planner 1.00 0.95 0.95 - 0.95 Total Special Revenue 1.20 1.15 1.65 0.50 2.15 Footnotes: (1) Reallocate 0.5 FTE Community Service Officer from the General Fund 3/8/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category AC-02024 Children's Theatre Light & Sound Systems Upgrade Buildings and Facilities $4,978 AC-09001 Children's Theatre Replacement and Expansion Buildings and Facilities AC-09002 Community Theatre Sound System Replacement Buildings and Facilities CA-01014 Community Services Facilities Lighting Enhancements Buildings and Facilities 37,474 $30,760 $3,663 CC-09001 Dimmer Replacement and Lighting System Buildings and Facilities $995 $1,015 CC-10000 Replacement of Cubberley Gym B Bleachers Buildings and Facilities 6,739 29,495 CC-11000 Cubberley Gym Activity Room Buildings and Facilities 53,353 General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 Page 1 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 FD-08001 Fire Station #6 Improvements Buildings and Facilities 8,061 29,252 OS-07003 Foothills Park Maintenance Building Rehabilitation Buildings and Facilities 56,535 30,442 249,933 PE-03004 Roth Building Wings Demolition Buildings and Facilities 86,745 PE-04010 Children's Library Improvements & Expansion Buildings and Facilities 2,369,589 813,189 58,561 PE-04011 Cambridge Parking Structure Improvements Buildings and Facilities 59,105 287,034 PE-04012 Mitchell Park Library & Community Center Improvements Buildings and Facilities 15,018 1,162,429 179,071 123 PE-04014 Animal Shelter Expansion & Renovation Buildings and Facilities 96,231 144,610 762,057 61,539 Page 2 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-05002 Main Library Space Reconfiguration Buildings and Facilities 433,031 34,838 PE-05010 College Terrace Library Improvements Buildings and Facilities 39,277 273,077 337,154 1,545,763 635,779 PE-06001 San Antonio Bridge Structural Repairs & Maintenance Buildings and Facilities 2,702 2,338 494 82,782 PE-08005 Municipal Service Center Resurfacing Buildings and Facilities 11,323 752,021 326,898 PE-09003 City Facility Parking Lot Maintenance Buildings and Facilities PE-09005 Downtown Library Improvements Buildings and Facilities 78,162 562,707 814,523 PE-09006 Mitchell Park Library & Community Center (New Construction) Buildings and Facilities 509,024 3,278,486 3,533,868 Page 3 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-09010 Library & Community Center Temporary Facilities Buildings and Facilities 28,866 518,623 76,401 PE-10002 Ventura Community Center and Park Buildings and Facilities 13,283 PE-11000 Main Library New Construction and Improvements Buildings and Facilities 307,886 PE-89004 Yacht Harbor Improvements Buildings and Facilities 11,949 7,080 21,584 PE-98020 Public Safety Building Buildings and Facilities 623,270 1,093,208 1,000,414 175,289 28,882 PE-99006 MSC Feasibility Study Buildings and Facilities 542 PF-00006 Roofing Replacement Buildings and Facilities 76,769 256,831 21,073 251,344 25,029 Page 4 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PF-00020 Office Space Renovation and Reallocation Buildings and Facilities 19,647 PF-01002 Civic Center Infrastructure Improvements Buildings and Facilities 438,192 106,643 4,915,782 1,344,006 1,338,869 PF-01003 Building Systems Improvements Buildings and Facilities 64,312 34,304 114,152 36,098 55,558 PF-01004 Fire Station Improvements Buildings and Facilities 50,514 232,168 575,700 237,018 394 PF-01005 Lucie Stern Community Center Improvements Buildings and Facilities 1,010 980 PF-02022 Facility Interior Finishes Buildings and Facilities 10,579 65,797 47,116 11,076 560 PF-04000 Security System Improvements Buildings and Facilities 618 5,983 8,903 Page 5 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PF-04001 General Building Study Buildings and Facilities 4,825 170,312 PF-04010 Cubberley Mechanical & Electrical Upgrades Buildings and Facilities 960,596 165,456 5,218 9,369 PF-05002 Municipal Service Center Renovation Buildings and Facilities 115,025 18,316 12,057 3,530 8,243 PF-05003 Foothills Park Interpretive Center Improvements Buildings and Facilities 82,626 1,290 3,154 PF-06001 Ted Thompson Garage Improvements Buildings and Facilities PF-06002 Ventura Buildings' Improvements Buildings and Facilities PF-06003 Cubberley Community Center Fire Alarm System Buildings and Facilities 25,054 648,988 70,949 Page 6 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PF-06004 Cubberley Restroom Renovation Buildings and Facilities 895 PF-07000 Art Center Electrical & Mechanical Upgrades Buildings and Facilities 52,063 132,737 234,143 42,560 PF-07001 ADA Compliance - Cubberley Community Center Buildings and Facilities 37,815 13,512 205,388 PF-07003 Children's Theatre Fire/Life Safety Upgrade Buildings and Facilities 247 32,980 7,592 2,205 PF-07011 Roth Building Maintenance Buildings and Facilities 141,046 17,909 1,931 3,729 PF-08000 Art Center Kiln Hood Replacement Buildings and Facilities 10,076 60,654 14,570 PF-09000 Children's Theatre Improvements Buildings and Facilities Page 7 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PF-09002 Lucie Stern Community Center and Theatre Exterior Paint Buildings and Facilities 4,510 105,808 PF-10000 Civic Center Chiller Drive Replacement Buildings and Facilities 72,380 PF-10001 Rinconada Pool Plaster Buildings and Facilities 117,756 PF-10002 Lot "J" Cowper/Webster Structural Repairs Buildings and Facilities 23,682 596 PF-93009 ADA Compliance Buildings and Facilities 96,587 49,955 121,617 235,410 2,150 Total Buildings and Facilities $5,924,093 $5,796,904 $10,081,911 $9,311,891 $7,179,257 Page 8 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 AC-86017 Art in Public Places Land and Land Improvements $29,545 $64,410 $21,556 $17,256 $36,531 AS-08000 Acquisition of Los Altos Treatment Plant Land and Land Improvements 2,590,061 2,306,958 2,252,250 AS-09000 City of Palo Alto Municipal Airport Transition Project Land and Land Improvements 39,075 67,775 4,050 PE-09004 Los Altos Treatment Plant Master Plan Study Land and Land Improvements 135,905 15,468 Total Land and Land Improvements $29,545 $2,654,471 $2,503,494 $2,352,749 $40,581 Page 9 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 AS-10001 Sustainability Contingency Miscellaneous FD-09001 Fire Apparatus Equipment Replacement Miscellaneous $48,352 $261,283 FD-09002 Jaws of Life Hurst Tool Replacement Miscellaneous 60,905 LB-11000 Furniture & Technology for Measure N Project Miscellaneous LB-94018 Library Automation Service Miscellaneous $5,026 732 PD-04010 Fire Portable Radio Replacement Miscellaneous $1,695 112,526 PD-05010 Police Vehicle - Mounted Video Recording Miscellaneous 194,462 Page 10 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PD-07001 SWAT Van Replacement Miscellaneous 203,193 PD-08000 Crime Scene Evidence Collection Vehicle Miscellaneous PD-93012 Fire Communications Computer Systems Miscellaneous 2,705 6,812 PD-99013 Police Records Management System Miscellaneous 31,307 PE-95030 Downtown Parking Structure Industrial Cost Pool Miscellaneous 405,213 91,576 155 PL-02023 Master Schematic Design Miscellaneous 8,270 2,090 PO-10002 Downtown Tree Grates Miscellaneous 29,879 Total Miscellaneous $612,345 $452,530 $110,144 $291,162 $0 Page 11 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 FD-05000 Sixteen (16) ALS Monitors Non-Infrastructure Management Plan $214,734 $62,650 $434 PD-07000 Mobile Command Vehicle Non-Infrastructure Management Plan 695,337 PE-05001 Photovoltaic Design and Installations Non-Infrastructure Management Plan $578,740 2,184,597 325,978 $6,448 PE-07011 Library Service Model Analysis Non-Infrastructure Management Plan 266,912 1,478 PG-08001 Golf Course Driving Range Turf & Netting Non-Infrastructure Management Plan 511,921 PL-05002 Charleston/Arastradero Corridor Plan Non-Infrastructure Management Plan 529,889 32,076 50,094 Page 12 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PL-06001 Adobe Creek Bicycle Bridge Replacement Non-Infrastructure Management Plan 4,184 PL-06002 Comprehensive Parking Signage Plan Non-Infrastructure Management Plan 4,000 43,470 PL-06005 Installation of Ticket Machines Non-Infrastructure Management Plan 7,416 33,994 2,250 Total Non-Infrastructure Management Plan $1,386,957 $2,977,322 $440,010 $6,448 $745,865 AC-10000 Junior Museum & Zoo New Bobcat Habitat Parks and Open Space $101,790 $23,210 OS-00001 Open Space Trails and Amenities Parks and Open Space $184,333 $257,594 $123,193 97,766 26,946 Page 13 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 OS-00002 Open Space Lakes & Ponds Maintenance Parks and Open Space 42,399 41,462 35,909 63,263 6,940 OS-00003 Bayland Parking and Site Improvements Parks and Open Space 83,605 OS-07000 Foothills Park Road Improvements Parks and Open Space 225,000 25,000 OS-07002 Foothills Park Interpretive Center & Open Space Maintenance Yard Parking Parks and Open Space 26,120 258,253 2,302 OS-09001 Off-Road Pathway Resurfacing and Repair Parks and Open Space 25,463 24,719 OS-09002 Baylands Emergency Access Levee Repair Parks and Open Space PE-00101 Foothills Park - Vista Hill Parks and Open Space 18,720 Page 14 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-00107 Briones Park Improvements Parks and Open Space 760 PE-00110 College Terrace Park Improvements Parks and Open Space 32,914 97,998 154,927 522 PE-05300 Arastradero Preserve Gateway Parks and Open Space 89,118 1,519 9,156 PE-06004 Bowden Park Improvements Parks and Open Space 161,395 876 PE-06005 University Avenue Gateway Landscaping Improvements Parks and Open Space 16,624 27,324 166,612 6,709 PE-06007 Park Restroom Installation Parks and Open Space 13,042 41,134 100,096 41,654 PE-06008 Johnson Park Improvements Parks and Open Space 73,681 8,648 Page 15 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-07002 Hoover Park Improvements Parks and Open Space 20,020 696,240 67,053 PE-07003 Ramos Park Improvements Parks and Open Space 37,554 458,628 PE-07005 California Avenue Improvements Parks and Open Space 64,985 49,900 465,324 26,671 PE-07006 Boulware Park Improvements Parks and Open Space 25,520 298,717 3,799 PE-07007 Cubberley Turf Renovation Parks and Open Space 190,950 969,963 PE-07009 Baylands Athletic Center Fencing, Dugout & Trailhead Parking Parks and Open Space 241,891 46,164 PE-08002 Peers Park Improvements Parks and Open Space 250,622 301,383 Page 16 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-08004 Lytton Plaza Renovation Parks and Open Space 23,530 725,733 2,545 PE-09002 Greer Park Phase IV Parks and Open Space 1,134 168,231 515,091 813,609 PE-98003 Mitchell Park Facilities Parks and Open Space 214,148 196,655 24,962 PG-00010 Park Facilities Improvements Parks and Open Space 1,361 PG-04010 Stanford/Palo Alto Community Playing Field Parks and Open Space 843,591 2,050 869 PG-06001 Tennis and Basketball Court Resurfacing Parks and Open Space 130,069 46,881 107,117 100,159 57,210 PG-06003 Benches, Signage, Fencing, Walkways, and Perimeter Landscaping Parks and Open Space 106,156 76,788 85,766 73,480 30,090 Page 17 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PG-07000 Heritage Park Playground Parks and Open Space 243,546 PG-07700 Golf Course Irrigation Pump, Motors & Control Panel Replacement Parks and Open Space 63,315 PG-09002 Park and Open Space Emergency Repairs Parks and Open Space 73,190 50,883 77,700 PG-09003 Park Maintenance Shop Remodel Parks and Open Space 402 2,858 36,123 PG-11001 Cogswell Plaza Improvements Parks and Open Space PG-11002 Monroe Park Improvements Parks and Open Space Page 18 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PG-98001 School Site Irrigation Parks and Open Space 154 57,268 4,596 161,399 Total Parks and Open Space $2,106,881 $3,630,436 $1,732,969 $3,459,755 $1,142,698 PE-00103 Lucie Evans Center parking Lot Improvements Streets and Sidewalks $217 PE-00104 San Antonio Road Median Improvements Streets and Sidewalks 146,212 $153,112 $743,106 $239,404 $78,819 PE-00105 Embarcadero Road Median Improvements Streets and Sidewalks 178 1,191 PE-01013 El Camino Median Landscape Streets and Sidewalks 53,826 73,655 4,525 Page 19 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PE-01021 Homer Avenue Undercrossing Streets and Sidewalks 125,963 PE-06006 Alma Street Landscape Improvements Streets and Sidewalks 17,992 16,576 40,901 26,371 PE-10006 Bridge Rail, Abutment, and Deck Repair Streets and Sidewalks 167,062 PE-11011 Highway 101 Pedestrian / Bicycle Overcrossing Streets and Sidewalks 36,385 71,377 PE-86070 Street Improvements (Street Improvement Fund) Streets and Sidewalks 4,987,364 3,368,496 3,702,381 3,658,566 2,687,557 PL-00026 Safe Routes to School Streets and Sidewalks 4,472 105,802 30,000 20,750 PL-02005 El Camino Real/ Ventura Avenue Traffic Signal Streets and Sidewalks 110,000 Page 20 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PL-04010 Bicycle Transportation Plan Implementation Project Streets and Sidewalks 5,480 44,483 30,000 3,378 PL-05003 College Terrace Traffic Calming Streets and Sidewalks 125,372 17,088 545 PL-05030 Traffic Signal Upgrades Streets and Sidewalks 30,524 35,908 39,983 279,590 35,624 PL-07002 El Camino Real/ Stanford Intersection Streets and Sidewalks 2,490 4,790 31,984 PL-11001 Dinah SummerHill Pedestrian/Bicycle Path Streets and Sidewalks PL-98013 School Commute Safety Improvements (SIF) Streets and Sidewalks 2,490 PL-99023 Page Mill/Hanover Streets and Sidewalks 200 Page 21 of 22 2/17/2011 Attachment 2 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures Number Title Category General Fund Capital Improvement Program Project Expenditures for Fiscal Years 2007-2011 PO-05054 Street lights Improvements Streets and Sidewalks 19,077 11,814 15,970 40,430 96,676 PO-11000 Sign Reflectivity Upgrade Streets and Sidewalks PO-11001 Thermoplastic Lane Marking and Striping Streets and Sidewalks 23,139 PO-89003 Sidewalk Improvements Streets and Sidewalks 2,299,543 2,030,796 1,675,527 1,341,916 510,886 Total Streets and Sidewalks $7,926,420 $5,858,921 $6,227,373 $5,855,059 $3,560,190 Page 22 of 22 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments AS-09000 City of Palo Alto Municipal Airport Transition Project Land and Land Improvements $130,000 $23,150 $4,050 $0 $0 $5,885 $13,215 90% Design Mar 11 This CIP will be moved to the Airport Fund once these funds have been used. AS-08000 Acquisition of Los Altos Treatment Plant Land and Land Improvements $7,223,394 $74,124 $0 $0 $0 $0 $74,124 100% Complete Remaining balance to be returned to Infrastructure Reserve. AS-10001 Sustainability Contingency Miscellaneous $400,000 $400,000 $0 $0 $0 $0 $400,000 0% Pre-Design TBD No projects have been identified to date that require contingency funds. The funds are available for capital projects where additional funds would allow the effort to be completed in a more sustainable fashion. Of the $400,000 remaining balance, $300,000 will be returned to Infrastructure Reserve. 2/17/2011 Main Body Font Size = 12 MULTI-YEAR PROJECTS FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND ADMINISTRATIVE SERVICES DEPARTMENT MINOR PROJECTS Page 1 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments AC-09001 Children's Theatre Replacement and Expansion Buildings and Facilities $100,000 $100,000 $0 $0 $0 $0 $100,000 0% Pre-Design Dec 11 Staff in initial planning and development of scope of contract. AC-09002 Community Theater Sound System Replacement Buildings and Facilities $200,000 $200,000 $0 $0 $0 $0 $200,000 0% Pre-Design Dec 11 Staff in initial planning and development of scope of contract. AC-10000 Junior Museum & Zoo New Bobcat Habitat Parks and Open Space $575,000 $473,210 $23,210 $0 $0 $0 $450,000 100% Complete Project is complete but cannot be officially closed until Building Inspector signs off on occupancy permit. No more expenditures are anticipated, and remaining balance will be returned to Infrastructure Reserve. CC-09001 Dimmer Replacement and Lighting System Buildings and Facilities $145,995 $145,000 $1,015 $0 $0 $10,600 $133,385 9% Design Jun 11 Scope of contract being developed, after which project will be out for Bid. CC-10000 Replacement of Cubberley Gym B Bleachers Buildings and Facilities $56,350 $49,611 $29,495 $0 $0 $0 $20,116 100% Complete Project completed and to be closed. Remaining balance to be returned to Infrastructure Reserve. CC-11000 Cubberley Gym Activity Room Buildings and Facilities $65,000 $65,000 $53,353 $0 $0 $0 $11,647 100% Complete Project completed and to be closed. Remaining balance to be returned to Infrastructure Reserve. PG-09003 Park Maintenance Shop Remodel Parks and Open Space $153,234 $149,974 $36,123 $0 $0 $20,642 $93,209 39% Design Dec 11 Since there is common shared space, this project will now be designed and constructed in- house by Public Works Facilities Management in conjunction with the Tree Division. PG-11001 Cogswell Plaza Improvements Parks and Open Space $150,000 $150,000 $0 $0 $0 $0 $150,000 0% Pre-Design TBD Staff in initial planning and development of scope of contract. PG-11002 Monroe Park Improvements Parks and Open Space $250,000 $250,000 $0 $0 $0 $0 $250,000 0% Pre-Design TBD Staff in initial planning and development of scope of contract. COMMUNITY SERVICES DEPARTMENT GENERAL FUND FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS MINOR PROJECTS Page 2 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments COMMUNITY SERVICES DEPARTMENT GENERAL FUND FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS OS-09002 Baylands Emergency Access Levee Repair Parks and Open Space $175,000 $175,000 $0 $0 $0 $0 $175,000 0% Pre-Design Jun 11 Survey work for levee done by Public Works Engineering. Tentative construction in 2012 in conjunction with JPA project. OS-00001 Open Space Trails & Amenities Parks and Open Space $1,862,343 $217,110 $26,946 $0 $0 $1,012 $189,152 90% Ongoing Various trail improvements at Arastradero, Foothills Park, and Baylands. Request for Bids currently out for three-year contract for trails. OS-00002 Open Space Lakes & Ponds Maintenance Parks and Open Space $364,471 $12,079 $6,940 $0 $0 $26,251 (21,112)$ 106% Ongoing Year three of three complete in Oct 10. Request for Bids for next three-year contract will be conducted Jul 11. Excess expenditures resulting in negative remaining balance will be transferred to OS-00001 Open Space Trails and Amenities. OS-07000 Foothills Park Road Improvements Parks and Open Space $375,000 $125,000 $0 $0 $0 $0 $125,000 67% Ongoing Phase 1 of road resurfacing from entrance to Foothills Interpretive Center completed. OS-09001 Off-Road Pathway Resurfacing and Repair Parks and Open Space $180,668 $130,486 $0 $0 $0 $0 $130,486 28% Ongoing Staff in initial planning and development of scope of contract. PG-06001 Tennis & Basketball Court Resurfacing Parks and Open Space $469,367 $76,375 $57,210 $0 $0 $0 $19,165 96% Ongoing Rinconada courts 1-6 completed. Request for Bids for Hopkins courts 1-3 and Terman Park tennis courts. PG-06003 Benches, Signage, Fencing, Walkways, and Perimeter Landscaping Parks and Open Space $498,544 $156,354 $30,090 $0 $0 $747 $125,517 75% Ongoing Projects completed in FY 2010: Site Amenities: Benches at Mitchell Park. Refinished benches/softball benches at Greer Park. Replacement bike rack at Greer Park. Signage: Hopkins Creekside Park, El Palo Alto Park. MULTI-YEAR PROJECTS Page 3 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments COMMUNITY SERVICES DEPARTMENT GENERAL FUND FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS PG-09002 Park and Open Space Emergency Repairs Parks and Open Space $225,000 $100,927 $77,700 $0 $0 $13,408 $9,819 96% Ongoing Projects completed in FY 2011: Hoover Park fire damage repairs: demolition, new play structure, new surfacing, age appropriate signs, playground safety inspection. Eleanor Park trees: Landscape design. Mitchell Park: playground equipment replacement. Heritage Park: Playground safety inspection. Johnson Park: Tire swing removal and reinstallation. Foothills Park: Irrigation system check. PG-98001 School Site Irrigation Parks and Open Space $960,137 $2,788 $0 $0 $0 $1 $2,787 100% Complete Agreement with PAUSD (Palo Alto Unified School District) has changed where City is no longer in a cost share for School Site Irrigation CIP PG- 98001. MULTI-YEAR PROJECTS Page 4 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FD-08001 Fire Station #6 Improvements Buildings and Facilities $60,000 $51,939 $29,252 $0 $0 $2 $22,685 62% Ongoing Mar 11 All construction work, painting and refinishing work has been completed. In process of replacing broken vertical window blinds. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND FIRE DEPARTMENT MINOR PROJECTS Page 5 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments LB-11000 Furniture & Technology for Library Measure N Project Miscellaneous $275,000 $275,000 $0 $0 $0 $0 $275,000 0% Ongoing Dec 13 Council approved this project in Dec 10. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND LIBRARY SERVICES DEPARTMENT MULTI-YEAR PROJECTS Page 6 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments PL-05002 Charleston/ Arastradero Corridor Plan Non- Infrastructure Management Plan $1,209,545 $428,761 $50,094 $0 $0 $80,571 $298,096 95% Construction Dec 10 Installation of Arastradero Road Trial Project Improvements between El Camino Real and Gunn High School was completed in Sep 10. Active improvements include traffic signal modification at Coulombe Drive, installation of enhanced pedestrian crosswalk at Clemo Drive, installation of speed signs at Hubbart Street, and a minor restriping correction near Alta Mesa-McKellar Lane. Staff is monitoring these improvements through the remainder of the trial project in the Summer 2011. PL-05003 College Terrace Traffic Calming Streets and Sidewalks $217,484 $74,055 $0 $0 $0 $1 $74,054 95% Construction Jun 11 A second phase traffic calming project on and along College Avenue, including median island chokers and traffic circles at Yale Street, have received positive support from the community. The City is currently soliciting a survey to determine whether the community wants to permanently retain these improvements. Traffic data shows a successful traffic calming project. PL-06001 Adobe Creek Bicycle Bridge Replacement Non- Infrastructure Management Plan $50,000 $45,816 $0 $0 $0 $0 $45,816 100% Complete City of Los Altos is lead agency for this inter-jurisdictional project. Construction was completed in summer 2009. City awaiting final accounting and invoicing from Los Altos for City's local match. PL-06005 Installation of Ticket Machines Non- Infrastructure Management Plan $94,900 $38,578 $0 $0 $0 $0 $38,578 100% Design Aug 11 Installation of the initial ticket machines is complete and revenues from the machine show active use by the community. Additional ticket machines were requested by the Chamber and will be installed in Summer 2011. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT MINOR PROJECTS Page 7 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT PL-07002 El Camino Real/ Stanford Intersection Streets and Sidewalks $1,800,030 $1,810,720 $31,984 $0 $0 $676 $1,778,060 1% Construction Aug 11 Design of this project is complete and a construction contract has been awarded. Construction will begin in the Spring 2011 and continue into the Summer. PL-11001 Dinah SummerHill Pedestrian Bicycle Path Streets and Sidewalks $300,000 $300,000 $0 $0 $0 $0 $300,000 0% Design Mar 12 This project is funded by the Summerhill Homes project and the City is responsible for the design and construction of a trail path to connect Wilkie Way with their development. Design will begin in the Spring 2011. PL-00026 Local and Neighborhood Collector Street Traffic Calming Program (SIF) Streets and Sidewalks $870,000 $351,502 $20,750 $0 $0 $0 $330,752 62% Ongoing This CIP will be closed at the end of the FY and funds transferred to a new CIP entitled Safe Routes to School that is partially grant-funded. PL-04010 Bicycle Boulevards Implementation Project Streets and Sidewalks $289,497 $201,014 $3,378 $0 $0 $20,159 $177,477 39% Ongoing This ongoing CIP implements project recommendations from the City's Bike Transportation Plan. Active projects include an update of the Bike Transportation Plan and include a new Pedestrian section. Other active projects include bike rack deployments, bike route signage deployment, and the design of bike boulevard facilities along Maybell and Park Boulevards. PL-06002 Comprehensive Parking Signage Plan Non- Infrastructure Management Plan $475,000 $427,530 $0 $0 $0 $0 $427,530 100% Ongoing The installation of color zone signage was completed in 2008. Current projects include hiring of a new Parking Manager to identify parking improvement strategies. At the end of FY 2011, the CIP will be closed and remaining funds transferred to a new CIP entitled Transportation and Parking Improvements. PL-98013 School Commute Safety Improvements (SIF) Streets and Sidewalks $150,000 $108,659 $0 $0 $0 $0 $108,659 100% Complete Dec 10 This CIP will be closed at the end of the FY and funds transferred to a new CIP entitled Safe Routes to School that is partially grant-funded. MINOR PROJECTS MULTI-YEAR PROJECTS Page 8 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments PD-07000 Mobile Command Vehicle Miscellaneous $700,000 $700,000 $695,337 $0 $0 $2 $4,661 99% Construction Jun 11 Vehicle construction completed and vehicle is now in service. Minor technology installations remain. PD-08000 Crime Scene Evidence Collection Vehicle Miscellaneous $180,000 $180,000 $0 $0 $0 $171,419 $8,581 95% Construction Jun 11 Vehicle has been ordered with expected delivery in June. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND POLICE DEPARTMENT MINOR PROJECTS Page 9 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments PE-00110 College Terrace Park Improvements Parks and Open Space $394,707 $5,341 $0 $0 $0 $0 $5,341 100% Complete Keep balance in the project until the warranty period ends in Fall of 2011 PE-06001 San Antonio Bridge Structural Repairs & Maintenance Buildings and Facilities $96,962 $91,429 $82,782 $0 $0 $0 $8,647 100% Complete Remaining balance to be returned to infrastructure reserve. PE-06005 University Avenue Gateway Landscaping Improvements Parks and Open Space $239,001 $4,212 $0 $0 $0 $1 $4,211 100% Complete Remaining balance to be returned to infrastructure reserve. PE-07005 California Avenue Improvements Parks and Open Space $803,477 $223,267 $25,259 $0 $1,412 $53,420 $143,176 82% Design Jun 11 Phase I: Tree replanting plan completed. Phase II: Planning is the lead division in the designing phase. PE-08004 Lytton Plaza Renovation Parks and Open Space $793,142 $43,879 $2,545 $0 $0 $25,606 $15,728 98% Complete Jul 11 CSD is still working with the Friends of Lytton Plaza on open items. PE-08005 Municipal Service Center Resurfacing Buildings and Facilities $1,658,003 $567,762 $0 $0 $0 $2 $567,760 100% Complete Project completed. Return funding to Infrastructure Reserve and Utilities. PE-09002 Greer Park Phase IV Parks and Open Space $1,966,114 $1,281,657 $813,609 $0 $0 $224,907 $243,141 88% Construction Jun 11 Pump and irrigation are underway. PE-09004 Los Altos Treatment Plant Master Plan Study Land and Land $175,750 $24,377 $0 $0 $0 $24,377 $0 100% Design TBD Consultant under contract. Preliminary design in progress. PE-10002 Ventura Community Center and Park Buildings and Facilities $346,913 $333,630 $0 $0 $0 $0 $333,630 4% Pre-Design TBD Project is in the pre-design phase. PE-10006 Bridge Rail, Abutment, and Deck Repair Streets and Sidewalks $320,132 $153,070 $0 $0 $0 $0 $153,070 52% Construction TBD Bridge guardrail has been completed by Public Works Operations. PE-11011 Highway 101 Pedestrian/Bicycle Overcrossing Streets and Sidewalks $412,366 $375,981 $71,377 $0 $0 $68,057 $236,547 43% Pre-Design May 11 Staff is meeting with Boards and Commissions and Community to gather feedback. FY 2011 YEAR-END CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PUBLIC WORKS DEPARTMENT MINOR PROJECTS Page 10 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FY 2011 YEAR-END CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PUBLIC WORKS DEPARTMENT PF-04000 Security System Improvements Buildings and Facilities $275,000 $63,349 $0 $0 $0 $1 $63,348 77% Construction Jun 11 Work will be completed in FY 2011 pending staff resources. PF-06001 Ted Thompson Garage Improvements Buildings and Facilities $67,000 $67,000 $0 $0 $0 $0 $67,000 0% Pre-Design Jun 11 Work to be completed in FY 2011. PF-06004 Cubberley Restroom Renovation Buildings and Facilities $300,000 $300,000 $895 $0 $0 $0 $299,105 0% Pre-Design Dec 11 Preliminary design in progress. PF-07003 Children's Theatre Fire/Life Safety Upgrade Buildings and Facilities $273,648 $232,830 $2,205 $0 $0 $0 $230,625 16% Design Dec 11 Project will be completed in FY 2012. PF-07011 Roth Building Maintenance Buildings and Facilities $424,395 $259,781 $0 $0 $0 $0 $259,781 39% Ongoing All initial work completed. Ongoing work to include roof and window repair to maintain integrity of structure. PF-09002 Lucie Stern Community Center and Theatre Exterior Paint Buildings and Facilities $84,510 $80,000 $76,550 $0 $3,450 $0 $0 100% Complete PF-10000 Civic Center Chiller Drive Replacement Buildings and Facilities $127,423 $55,043 $0 $0 $0 $0 $55,043 100% Complete Remaining balance to be returned to Infrastructure Reserve. PF-10001 Rinconada Pool Plaster Buildings and Facilities $206,126 $88,370 $0 $0 $0 $0 $88,370 100% Complete Remaining balance to be returned to Infrastructure Reserve. PF-10002 Lot "J" Cowper/Webster Structural Repairs Buildings and Facilities $81,182 $57,500 $596 $0 $0 $57,500 ($596)60% Design Dec 11 Consultant under contract. Preliminary design in progress. Negative balance is attributable to salaries and will be taken care of at fiscal year end when Budget makes its usual labor allocation adjustment. PO-10002 Downtown Tree Grates Miscellaneous $300,000 $270,121 $0 $0 $0 $8,136 $261,985 13% Construction Dec 15 Project is being done in conjunction with PO-89003 and tree replacement schedule. MINOR PROJECTS Page 11 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FY 2011 YEAR-END CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PUBLIC WORKS DEPARTMENT PE-00104 San Antonio Road Median Improvements Streets and Sidewalks $1,991,854 $669,794 $78,819 $0 $0 $13,511 $577,464 71% Design Sep 11 Phase II: Tree removal/replacement, landscaping improvements, contaminated soil removal, street lights conduit replacement. Page 12 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FY 2011 YEAR-END CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PUBLIC WORKS DEPARTMENT PE-04014 Animal Shelter Expansion & Renovation Buildings and Facilities $1,662,470 $20,640 $0 $0 $0 $1 $20,639 100% Complete Remaining balance to be returned to Infrastructure Reserve. PE-05010 College Terrace Library Improvements Buildings and Facilities $3,654,602 $1,447,253 $542,929 $0 $92,850 $358,827 $452,647 88% Construction May 11 Construction began FY 2010. PWE staff is still working with Library staff on open items. PE-06006 Alma Street Landscape Improvements Streets and Sidewalks $131,934 $18,841 $0 $0 $0 $1 $18,840 86% Construction Jun 11 Replanting of plants in progress. PE-06007 Park Restroom Installation Parks and Open Space $871,382 $717,111 $41,654 $0 $0 $171,363 $504,094 42% Construction Jun 11 Seal Park Restroom construction will commence in late FY 2011. PE-07007 Cubberley Turf Renovation Parks and Open Space $1,305,377 $144,464 $0 $0 $0 $0 $144,464 89% Construction Mar 11 Final phase of the project is expected to be completed in Mar 11. PE-09003 City Facility Parking Lot Maintenance Buildings and Facilities $330,000 $330,000 $0 $0 $0 $300,000 $30,000 91% Ongoing This is an annual project. Funding will be used for repaving the Cubberley Parking lot. PE-09005 Downtown Library Improvements Buildings and Facilities $5,368,515 $4,727,646 $807,293 $0 $7,230 $2,931,784 $981,339 65% Construction Jul 11 Construction started Apr 10. PE-09006 Mitchell Park Library & Community Center (New Construction) Buildings and Facilities $50,832,619 $47,045,109 $3,495,407 $0 $38,461 $28,448,575 $15,062,666 50% Construction Jul 12 Construction began Jun 10. PE-09010 Library & Community Center Temporary Facilities Buildings and Facilities $1,278,349 $730,861 $51,487 $0 $24,914 $52,569 $601,891 53% Construction Aug 11 After final invoices are received, project should remain open until warranty period is over. PE-11000 Main Library New Construction and Improvements Buildings and Facilities $1,850,000 $1,850,000 $307,886 $0 $0 $1,511,450 $30,664 10% Design Dec 12 Currently in design phase. Construction expected to begin Dec 12. PE-98020 Public Safety Building Buildings and Facilities $4,287,492 $428,267 $28,882 $0 $0 $2 $399,383 91% Design TBD Project currently on hold. MULTI-YEAR PROJECTS Page 13 of 31 2/17/2011 Attachment 3 Total Budget FY 2011 FY 2011 FY 2011 FY 2011 FY 2011 Estimated Project Project Project From Available Expenditures Labor Contingencies Encumbrances Remaining Percent Project Completion Number Title Category Inception Budget Adjustments Balance Complete Status Date Comments FY 2011 YEAR-END CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS GENERAL FUND PUBLIC WORKS DEPARTMENT PF-01002 Civic Center Infrastructure Improvements Buildings and Facilities $17,305,563 $7,997,902 $1,338,869 $0 $0 $3,753,358 $2,905,675 83% Construction Jun 11 Phase I of the major renovations completed in Aug 09. Phase II construction to be completed in Jun 11. PF-01004 Fire Station Improvements Buildings and Facilities $2,580,317 $46,308 $394 $0 $0 $1 $45,913 100% Complete Remaining balance to be returned to infrastructure reserve. PF-04010 Cubberley Mechanical & Electrical Upgrades Buildings and Facilities $1,614,695 $36,562 $0 $0 $0 $0 $36,562 98% Design TBD Project on hold due to staff vacancy and lack of capital funds. Construction phase to be rescheduled for a later fiscal year. PF-05002 Municipal Service Center Renovation Buildings and Facilities $864,838 $685,514 $8,243 $0 $0 $0 $677,271 22% Design Dec 11 Consultant has been selected for the design phase and contract is waiting for Council approval. PF-05003 Foothills Park Interpretive Center Improvements Buildings and Facilities $330,781 $210,000 $3,154 $0 $0 $0 $206,846 37% Construction Nov 11 Roof replacement contract to be bid and awarded in Jan 11. Design for electrical improvements has begun. PF-06002 Ventura Buildings Improvements Buildings and Facilities $90,000 $90,000 $0 $0 $0 $0 $90,000 0% Pre-Design TBD Developing scope of work. PF-07000 Art Center Electrical & Mechanical Upgrades Buildings and Facilities $4,400,267 $3,981,324 $40,571 $0 $1,989 $171,701 $3,767,063 14% Design Mar 12 Foundation's architect completing construction documents phase. Construction scheduled for FY 2012. PF-09000 Children's Theater Improvements Buildings and Facilities $100,000 $100,000 $0 $0 $0 $0 $100,000 0% Pre-Design TBD Developing scope of work. PO-11000 Sign Reflectivity Upgrade Streets and Sidewalks $100,000 $100,000 $0 $0 $0 $0 $100,000 0% Pre-Design Dec 17 Developing scope of work from notes left by retired personnel. State-mandated deadline is 2018. PO-11001 Thermoplastic Lane Marking & Striping Streets and Sidewalks $300,000 $300,000 $23,139 $0 $0 $165,861 $111,000 63% Ongoing Initial backlog and ongoing maintenance project is being done in conjunction with PE-86070. MULTI-YEAR PROJECTS Page 14 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS TECHNOLOGY FUND Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2010 Expenditures Adjustments Contingencies Encumbrances Balance Complete Status Date Comments TE-01006 Enterprise Backup Solution Minor $139,512 $68,627 $0 $0 $0 $1 $68,626 51% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-01012 IT Disaster Recovery Plan Minor $840,000 $509,711 $0 $0 $0 $1 $509,710 39% Construction Jun 11 A draft disaster recovery plan has been completed. Planning SAP Windows server backup strategy. TE-05003 Internet Site Upgrade Minor $240,000 $42,262 $0 $0 $0 $0 $42,262 82% Construction Jun 11 Implementation of the internet is complete. The portion of the contract dealing with the intranet is 50% complete. TE-06002 9-1-1 Emergency Phone System Upgrade Minor $324,000 $27,274 $0 $0 $0 $0 $27,274 92% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-07002 Police Auto- Citation System Minor $125,000 $67,191 $0 $0 $0 $0 $67,191 46% Pre-design Dec 11 A second RFP will be issued. TE-08000 Library Technology Plan Minor $75,000 $18,766 $0 $0 $0 $0 $18,766 75% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-08003 Fire Radio Communication s Equipment Minor $102,000 $7,179 $0 $0 $0 $0 $7,179 93% Complete Jun 11 Work is being finalized and CIP will be closed. TE-08004 Fire Mobile Data Computer Minor $250,000 $69,294 $95 $0 $0 $1 $69,198 72% Construction May 11 Work is being finalized and CIP will be closed. TE-09000 Public Safety Computer-Aided Dispatch Replacement Minor $1,300,000 $1,300,000 $0 $0 $0 $0 $1,300,000 0% Pre-design Dec 12 Vendor is selected and contract is being negotiated. MINOR PROJECTS INTERNAL SERVICE FUND ADMINISTRATIVE SERVICES DEPARTMENT Page 14 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS TECHNOLOGY FUND Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion INTERNAL SERVICE FUND ADMINISTRATIVE SERVICES DEPARTMENT TE-11002 Police Mobile In- Car Video System Replacement Minor $310,000 $310,000 $0 $0 $0 $0 $310,000 0% Pre-design Jun 11 Currently developing requirements. TE-11003 Recurring Credit Card Payment Minor $150,000 $150,000 $0 $0 $0 $0 $150,000 0% Pre-design Jun 11 Currently developing requirements. TE-95016 Permit Information Tracking System Multi-Year $980,050 $210,376 $22,616 $0 $0 $41,755 $146,005 85% Construction Jun 13 Performed upgrade to application 12/31/10. Next phase will include Accela Customer Access and possibly additional module implementation. TE-02013 Institutional Network (I-Net) Multi-Year $1,000,000 $724,311 $65,570 $0 $0 $99,845 $558,896 44% Construction Jun 12 All major facilities in the City have been connected via fiber optic cable. TE-02016 Enterprise Resource Planning Multi-Year $5,018,476 $102,526 $0 $0 $0 $0 $102,526 98% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-07006 SAP Continuous Improvement Project Multi-Year $7,000,000 $95,694 $6,686 $0 $0 $31,226 $57,782 99% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-99010 Acquisition of New Computers Multi-Year $362,350 $142,599 $0 $0 $0 $0 $142,599 61% Construction Jun 13 This is an ongoing project for the acquisition of new computers. TE-00010 / TE-00021 Telephone System Replacement Multi-Year $1,230,000 $1,213,152 $8,421 $0 $0 $85,916 $1,118,815 9% Pre-design Jun 12 The telecommunications consultant collected inventory information and interviewed representatives of each department. A vendor will be selected to provide Project Management for system selection and implementation. MINOR PROJECTS MULTI-YEAR PROJECTS Page 15 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS TECHNOLOGY FUND Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion INTERNAL SERVICE FUND ADMINISTRATIVE SERVICES DEPARTMENT TE-02015 Citywide GIS Data, Infrastructure and Applications Multi-Year $2,228,954 $615,229 $138,271 $0 $0 $103,094 $373,864 83% Construction May 11 Work is being finalized. TE-05000 Radio Infrastructure Replacement Multi-Year $2,430,980 $1,971,265 $45,749 $0 $0 $1 $1,925,515 21% Pre-design TBD This is a County-wide project. Awaiting project initiation from County. TE-06001 Library Radio Frequency Identification (RFID) Implementation Multi-Year $445,000 $427,414 $0 $0 $0 $400,001 $27,413 94% Construction Jun 13 The intent is to carry this funding over to FY 2012, add funding, and utilize for implementation per the upcoming Library Technology Plan. RFID implementation is being coordinated with the Library Construction/Remodeling Projects. TE-07000 Enterprise Application Infrastructure Upgrade Multi-Year $1,862,000 $755,859 $201,141 $0 $0 $2,126 $552,592 70% Construction 250K of this project is identified as a possible additional funding source for the Telephone System Replacement Project. Remaining dollars to be transferred to Application Maintenance Fund at FY2012 for support contract. TE-07003 Bill and Payment Processing Multi-Year $220,000 $23,450 $23,450 $0 $0 $0 $0 100% Complete Project will be closed. TE-08002 Electric Patient Care Report Multi-Year $65,000 $35,057 $0 $0 $0 $2 $35,055 46% Complete This project is identified as a possible additional funding source for the Telephone System Replacement Project. TE-10000 Collections Software Multi-Year $111,800 $111,800 $0 $0 $0 $100,000 $11,800 89% Pre-design Dec 11 Vendor is selected and contract is being negotiated. TE-10001 Utility Customer Billing System Multi-Year $350,000 $350,000 $0 $0 $0 $0 $350,000 0% Pre-design Jul 12 In planning stage. MULTI-YEAR PROJECTS Page 16 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS TECHNOLOGY FUND Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion INTERNAL SERVICE FUND ADMINISTRATIVE SERVICES DEPARTMENT TE-11004 Utility Bill Information Echancements Multi-Year $750,000 $750,000 $0 $0 $0 $0 $750,000 0% Pre-design Jul 12 In planning stage. TE-11005 Implementation of Restructured Tiered Rates on Bills Multi-Year $100,000 $100,000 $0 $0 $0 $0 $100,000 0% Pre-design Jul 12 In planning stage. MULTI-YEAR PROJECTS Page 17 of 31 2/17/2011 Attachment 3 Total Budget Available FY 2011 Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Adjustments* Contingencies Encumbrances Balance Complete Status Date Comments VR-00001 MSC Fuel Storage Tank Replacement Minor $225,000 $8,586 $0 $0 $0 $0 $8,586 96% Complete Project will be closed and remaining balance will be returned to reserves. VR-01000 MSC Equipment Maintenance Facility Mezzanine Storage Area Minor $275,000 $9,641 $0 $0 $0 $0 $9,641 96% Complete Project will be closed and remaining balance will be returned to reserves. VR-01001 MSC Fuel Storage Tank /Svc Island Replacement Minor $1,616,860 $127,500 $7,235 $0 $0 $39,185 $81,080 95% Construction Apr 11 Liquid and Compressed Natural Gas (CNG) facilities are complete and in service. Public CNG dispenser is complete, but compressor needs repairs, and a new retail CNG rate needs to be developed. VR-01002 MSC Equipment Washing Facility Upgrade Minor $681,394 $0 $0 $0 $0 $0 $0 100% On Hold TBD On hold pending funding. VR-05001 Field Service Truck Minor $125,000 $367 $0 $0 $0 $0 $367 100% Complete Project will be closed and remaining balance will be returned to reserves. VR-06801 Replace City-Wide Fuel Transaction and Inventory Management System Minor $285,000 $148,043 $11,981 $0 $0 $35,658 $100,404 65% Ongoing Apr 11 System has been installed at one site; site preparation in progress at remaining two sites. VR-07001 Automated Motor Pool Reservation and Vehicle Key Management System Minor $125,000 $98,398 $0 $0 $0 $1 $98,397 21% Ongoing Jun 11 System has been implemented at Municipal Service Center (MSC). Second phase will include Civic Center. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS INTERNAL SERVICE FUND VEHICLE REPLACEMENT AND MAINTENANCE FUND PUBLIC WORKS DEPARTMENT MINOR PROJECTS Page 18 of 31 2/17/2011 Attachment 3 Total Budget Available FY 2011 Budget Estimated Project Project Project From Budget FY 2011 Labor FY 2011 FY 2011 Remaining Percent Project Completion FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS INTERNAL SERVICE FUND VEHICLE REPLACEMENT AND MAINTENANCE FUND PUBLIC WORKS DEPARTMENT VR-08001 New Vehicles (2) For Utility Operations Minor $70,000 $24,035 $0 $0 $0 $0 $24,035 100% Complete Project will be closed and remaining balance will be returned to reserves. VR-09000 Vehicle Replacement Minor $2,545,000 $1,410,642 $754,939 $0 $0 $599,834 $55,869 98% Ongoing Jun 11 Awaiting purchase and delivery of several vehicles. VR-11000 Vehicle Replacement Minor $222,205 $222,205 $0 $0 $0 $152,030 $70,175 68% Ongoing Dec 11 Awaiting purchase and delivery of several vehicles. VR-04010 Vehicle Maintenance Facility Upgrades Multi-Year $610,000 $266,393 $3,533 $0 $0 $4 $262,856 57% Ongoing Jun 11 Ongoing, specifications need to be written for next phase of upgrades. VR-07002 Diesel Truck Engine Emissions Retrofits Multi-Year $685,000 $197,147 $42,619 $0 $0 $27,506 $127,022 81% Ongoing Dec 11 Ongoing. Several vehicles remain to be retrofitted. VR-92006 Fuel Tank Storage/Upgrade Multi-Year $341,000 $65,502 $3,953 $24,452 $0 $85,000 $1,001 100% Design Oct 11 Project scope reduced due to inadequate funding. Estimated Bid date Jan 11. MINOR PROJECTS MULTI-YEAR PROJECTS Page 19 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments EL-04010 Foothills System Rebuild Minor $850,050 $102,946 $79 $0 $0 $102,867 88% Pre-design Dec 11 Some preliminary design and scoping work has been done. No additional work at this time due to understaffing. EL-09004 W. Charleston/Wilkie Way to South City Limit 4/12 kV Conversion Minor $505,515 $127,210 $10,475 $0 $0 $116,735 77% Design Aug 11 Scope defined and preliminary design completed. Detailed design in progress. Bid package to be completed by Apr 11, followed by Request For Proposal (RFP). EL-10008 Advanced Metering Infrastructure System Minor $310,243 $307,567 $39,096 $0 $120,457 $148,014 52% Design Nov 11 Task 1: Smart Grid Assessment report by EnerNex Corporation to be completed Feb 11. Presentation to UAC planned for Mar 11, subsequently followed with presentation of recommendations to Council. Task 2: Implementation of recommendations that have been approved by Council will occur after the Council meeting and will involve assistance from EnerNex, already in the signed agreement. EL-11001 Torreya Court Rebuild Minor $100,000 $100,000 $0 $0 $0 $100,000 0% Dec 12 No work started due to staff vacancies. EL-11004 Hewlett Subdivision Rebuild Los Trancos Minor $400,000 $400,000 $0 $0 $0 $400,000 0% Mar 12 No work started due to staff vacancies. EL-11006 Rebuild UG District 18 Minor $350,000 $350,000 $0 $0 $0 $350,000 0% Dec 12 No work started due to staff vacancies. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND MINOR PROJECTS ELECTRIC FUND UTILITIES DEPARTMENT Page 20 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND ELECTRIC FUND UTILITIES DEPARTMENT MULTI-YEAR PROJECTS EL-02010 SCADA System Upgrades Multi-Year $711,144 $81,515 $11,056 $0 $18,554 $51,905 93% Construction Ongoing Purchase requisition to has been forwarded to Purchasing. This project involves upgrading the Supervisory Control & Data Acquisitions (SCADA) Portal and Master computer software and operating systems this year. EL-04012 Utility Site Security Improvements Multi-Year $908,854 $582,084 $60,830 $0 $13,150 $508,104 25% Design Jun 11 Construction completed at Colorado Substation and Boranda Reservoir. Design in progress for Corte Madera Booster/Reservoir, Quarry Booster, and Boronda Booster. EL-04014 Automated Meter Reading System Multi-Year $1,334,099 $296,157 $0 $0 $2 $296,155 78% Complete Pilot is completed, except for ongoing maintenance of installed system. Staff is analyzing installation and will use information during Smart Grid Feasibility Study (EL-10008). EL-05000 El Camino Underground Rebuild Multi-Year $1,609,376 $393,737 $152,039 $0 $2 $241,696 85% Design and Construction Jun 11 Portions of this project have been completed in conjunction with new business in the area of El Camino Real between Charleston and San Antonio roads. Construction Estimate package in progress. EL-11008 Rebuild UG District 19 Multi-Year $560,918 $509,963 $2,497 $0 $0 $507,466 10% Construction Mar 11 Substructure installation completed. Cable design and estimate pending crew availability. EL-06000 Park Blvd. 4/12kV Conversion Multi-Year $385,211 $48,556 $0 $0 $0 $48,556 87% Construction Mar 11 Final stages of construction in progress. Page 21 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND ELECTRIC FUND UTILITIES DEPARTMENT EL-06001 230 KV Electric Intertie Multi-Year $500,000 $134,813 $0 $0 $0 $134,813 73% Engineering feasibility study Ongoing Stanford Utilities has expressed interest in Stanford Linear Accelerator Center (SLAC) - Quarry Road Substation 60kV tie. Preliminary power flow and feasibility study complete. Interconnection at Quarry Substation appears feasible. Working with Stanford and DOE to encourage SLAC participation in this project. Page 22 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND ELECTRIC FUND UTILITIES DEPARTMENT EL-06002 Underground District 45 Multi-Year $3,580,726 $1,456,209 $982,862 $0 $0 $473,347 60% Construction Jan 12 Substructure complete. Line construction begins. EL-06003 Utility Control Center Upgrades Multi-Year $500,000 $53,374 $5,885 $39,500 $0 $7,989 98% Pre-design Ongoing Ergonomic and visual improvements for performance to operator environment. EL-08000 E. Charleston 4/12kV Conversion Multi-Year $651,907 $629,404 $1,505 $0 $0 $627,899 4% Design Jun 11 Preliminary design work started and is expected to be completed by Dec 10. EL-08002 E. Meadow/Alma/Loma 4/12kV Conversion Multi-Year $1,170,449 $991,303 $466,362 $0 $155,294 $369,647 68% Complete Awaiting final invoice to be paid. EL-09000 Middlefield Underground Rebuild Multi-Year $625,613 $75,613 $0 $0 $0 $75,613 88% Design Dec 11 Engineering design completed. Estimating in progress. EL-09002 Middlefield/Colorado 4/12 kV Conversion Multi-Year $170,830 $161,704 $11,321 $0 $0 $150,383 12% Design Jun 11 Engineering complete. Construction to be contracted. Bid package by Mar 11. Then Request for Proposal (RFP) for construction. EL-09003 Rebuild UG District 17 (Downtown) Multi-Year $1,216,153 $933,185 $110,852 $0 $38,861 $783,472 60% Construction Dec 11 Substructure complete. Line construction begins Jun 11. EL-10006 Rebuild UG District 24 Multi-Year $1,340,874 $1,131,403 $76,200 $0 $347,553 $707,650 47% Design Jun 11 Substructure installation complete. Electrical design work in progress. EL-10009 Street Light System Conversion Project Multi-Year $1,366,398 $1,314,128 $7,194 $639,033 $5 $667,896 51% Ongoing Jun 11 Evaluating various LED street light fixtures and developing specification for ordering street light fixtures to use in Palo Alto. MULTI-YEAR PROJECTS Page 23 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND ELECTRIC FUND UTILITIES DEPARTMENT EL-11000 Seale/Waverley 4/12 kV Conversion Multi-Year $40,000 $40,000 $0 $0 $0 $40,000 0% Jun 12 No work started due to staff vacancies. EL-11002 St. Francis/Oregon/Amarillo /Louis 4/12 kV Conversion Multi-Year $50,000 $50,000 $0 $0 $0 $50,000 0% Dec 12 No work started due to staff vacancies. EL-11003 Rebuild UG District 15 Multi-Year $80,000 $80,000 $0 $0 $0 $80,000 0% Dec 11 No work started due to staff vacancies. EL-11005 California Ave. Business District Rebuild (District 22) Multi-Year $2,332,099 $70,299 $0 $0 $0 $70,299 97% Complete Project to be closed and balance returned to reserves. EL-11007 Rebuild Greenhouse Condo Area Multi-Year $150,000 $150,000 $0 $0 $0 $150,000 0% Pre-design Dec 11 Design to start prior to end of fiscal year. Construction to be completed by end of calendar year. EL-11010 UG District 47 - Middlefield, Homer Avenue, Webster Street and Addison Avenue Multi-Year $150,000 $150,000 $3,864 $0 $0 $146,136 3% Design Aug 12 Preliminary design work started . EL-11014 Smart Grid Technology Installation Multi-Year $500,000 $500,000 $0 $0 $0 $500,000 0% Pre-design Jan 17 Pending results of Smart Grid Assessment and approval by Council. EL-11015 Reconductor 60kV Overhead Transmission System with ACCR conductor Multi-Year $450,000 $450,000 $1,473 $0 $0 $448,527 0% Design Jun 11 Engineering and estimating in progress. Project specs and Request for Proposal (RFP) for materials/construction by Mar 11. MULTI-YEAR PROJECTS Page 24 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments GS-03010 CNG Sequential Fuel System Minor $75,000 $35,715 $0 $0 $0 $35,715 52% Complete Project will be closed and balance returned to reserves. GS-08000 Gas Station 2 Rebuild Minor $207,000 $203,584 $0 $0 $1 $203,583 10% Design Oct 11 Repackaging Request for Proposal (RFP) out to Bid Feb 11. Construction to start in FY 2011. GS-09000 Gas Station 1 Rebuild Minor $201,052 $200,485 $0 $0 $0 $200,485 10% Design Oct 11 Repackaging Request for Proposal (RFP) out to Bid Feb 11. Construction to start in FY 2011. GS-10000 Gas Station 3 Rebuild Minor $207,007 $206,931 $0 $0 $0 $206,931 10% Design Oct 11 Repackaging Request for Proposal (RFP) out to Bid Feb 11. Construction to start in FY 2011. GS-10002 General Shop Tooling Minor $64,007 $63,931 $50,736 $0 $0 $13,195 79% Design Mar 11 Equipment purchased and installed. Awaiting final electric power wiring. GS-10003 Cathodic Current Interrupters Minor $300,007 $299,931 $0 $0 $0 $299,931 5% Design Jun 11 Drafting specifications. Out for Bid in Apr 11. GS-10004 Automating Test Station Minor $100,000 $100,000 $0 $0 $0 $100,000 5% Design Jun 11 Drafting specifications. Out for Bid in Apr 11. GS-11001 Gas Station 4 Rebuild Minor $337,000 $337,000 $0 $0 $0 $337,000 10% Design Oct 11 Repackaging Request for Proposal (RFP) out to Bid Feb 11. Construction to start in FY 2011. ENTERPRISE FUND MINOR PROJECTS GAS FUND UTILITIES DEPARTMENT Page 24 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments ENTERPRISE FUND GAS FUND UTILITIES DEPARTMENT GS-00011 Compress Natural Gas Station Multi-Year $440,000 $2,946 $0 $0 $0 $2,946 99% Complete Project will be closed and balance returned to reserves. GS-01019 Global Positioning System Multi-Year $381,000 $118,863 $0 $0 $0 $118,863 69% Construction Jun 11 Integrating field data into mapping system. Defining additional equipment needs. GS-08011 GMR - Project 18 Multi-Year $5,967,660 $4,975,097 $65,664 $0 $63,288 $4,846,145 19% Design Jul 11 Project is in design review stage. Out to Bid in Feb 11 with construction to start Apr 11. GS-09002 GMR - Project 19 Multi-Year $6,236,582 $6,186,117 $108,605 $0 $0 $6,077,512 3% Pre-design Jul 12 Portion of the project included in GMR 18 construction package. Remaining portion of GMR 19 to be combined with GMR 20. Combined project will be in design phase in Fall 2011. GS-10001 GMR - Project 20 Multi-Year $644,014 $643,863 $0 $0 $0 $643,863 0% Pre-design Jul 13 Design phase will start Jun 11 and include portions of GMR 19 to create a combined project GMR 19 and 20. Project out for Bid May 12. GS-11000 GMR - Project 21 Multi-Year $457,000 $457,000 $0 $0 $0 $457,000 0% Pre-design May 14 Design phase to start Jan 12 and construction to start Aug 13. GS-11002 Gas System Improvements Multi-Year $195,000 $195,000 $0 $0 $33,000 $162,000 17% Ongoing This project addresses ongoing capital system improvements. MULTI-YEAR PROJECTS Page 25 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments WS-09000 Seismic Water Tank Valve Minor $800,000 $799,858 $9,105 $0 $20,033 $770,720 4% Design Nov 11 Final report completed in Nov 10. Construction to start May 11. WS-11001 Vacuum Excavation Equipment Minor $275,000 $275,000 $0 $0 $0 $275,000 0% Pre-Design Jul 11 Working with fleet to create specification. WS-07000 Water Regulation Station Improvements Multi-Year $1,070,000 $1,050,438 $39,126 $0 $86,088 $925,224 14% Design Nov 11 Final report completed in Nov 10. Construction to start May 11. WS-07001 Water Recycling Facilities Multi-Year $1,100,122 $767,860 $62,979 $0 $309,021 $395,860 64% Pre-Design Jun 11 Recertifying Environmental Impact Report (EIR) to address water quality issues. WS-07004 Water System Portable Emergency Generators Multi-Year $466,000 $208,833 $0 $0 $1 $208,832 55% Construction Jul 11 Considering lease agreement. Remaining funds may be returned to reserves. WS-08001 Water Reservoir Coating Improvements Multi-Year $2,050,491 $2,044,809 $74,807 $0 $164,595 $1,805,407 12% Design Nov 11 Final report completed in Nov 10. Construction to start May 11. WS-08002 Emergency Water Supply Project Multi-Year $40,422,647 $32,519,443 $1,755,293 $0 $3,934,842 $26,829,308 34% Design Dec 12 90% of design submitted. Construction to start Jun 11. WS-08017 WMR - Project 22 Multi-Year $3,163,000 $1,554,159 $1,247,908 $148,476 $102,160 $55,615 98% Complete Notice of completion filed Dec 10. WATER FUND UTILITIES DEPARTMENT FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS MULTI-YEAR PROJECTS ENTERPRISE FUND MINOR PROJECTS Page 26 of 31 2/17/2011 Attachment 3 Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments WATER FUND UTILITIES DEPARTMENT FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS ENTERPRISE FUND WS-09001 WMR - Project 23 Multi-Year $3,100,826 $2,390,147 $71,041 $0 $59,814 $2,259,292 27% Design Apr 12 Design phase to begin during integration of WGW Mapping and GIS systems with estimated completion date of May 11. Construction to start Jul 11. Project combined with WMR 24. WS-10001 WMR - Project 24 Multi-Year $3,247,024 $3,191,765 $10,769 $0 $0 $3,180,996 2% Design Apr 12 Design phase to begin during integration of WGW Mapping and GIS systems with estimated completion date of May 11. Construction to start Jul 11. Project combined with WMR 24. WS-11000 WMR - Project 25 Multi-Year $292,000 $292,000 $0 $0 $0 $292,000 0% Pre-Design Nov 11 Project design to start Oct 11. WS-11003 Water Distribution System Improvements Multi-Year $200,000 $200,000 $16,216 $0 $68,183 $115,601 42% Ongoing TBD This project addresses ongoing capital distribution system improvements WS-11004 Water System Supply Improvements Multi-Year $200,000 $200,000 $6,113 $0 $1 $193,886 3% Ongoing TBD This project addresses ongoing capital supply system improvements MULTI-YEAR PROJECTS Page 27 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments WC-09002 Root Treatment, Sediment and Dewatering Container Minor $60,000 $60,000 $0 $0 $0 $60,000 0% Pre-design N/A Changing conditions no longer allow for this container, and this project should be cancelled. WC-11000 WC Reh/Aug. Prj 24 Multi-Year $290,000 $290,000 $0 $0 $0 $290,000 0% Pre-design Sep 13 This project will also include the WC Reh/Aug Prj 25, and the design effort will start May 12 with construction complete by Sep 13. WC-15002 Wastewater System Improvements Multi-Year $200,000 $200,000 $0 $0 $8,000 $192,000 4% Ongoing TBD This project addresses ongoing capital system improvements. ENTERPRISE FUND WASTEWATER COLLECTION FUND UTILITIES DEPARTMENT MULTI-YEAR PROJECTS MINOR PROJECTS Page 28 of 31 2/17/2011 Attachment 3 ENTERPRISE FUND REFUSE FUND PUBLIC WORKS DEPARTMENT Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments RF-09003 Recycling in Business District Minor $325,000 $325,000 $0 $0 $0 $325,000 5% Design Mar 11 A new Palo Alto-branded container design has been developed and is being routed through the design review process. RF-09004 LATP Site Development Preparation Minor $200,000 $47,900 $18,850 $0 $24,840 $4,210 98% Design TBD Consultant is performing environmental risk assessment for cleanup of site. Waiting for regulatory approvals for Areas A and B. Approval has been obtained for Area C. RF-10002 Flare Relocation Project Minor $700,000 $642,628 $11,718 $0 $50,002 $580,908 17% Design Mar 11 A consultant is currently working on the design and permitting of the new flare. Design is 95% complete. RF-07001 Relocation of Landfill Facilities Multi-Year $1,500,000 $1,217,962 $8,842 $0 $116,014 $1,093,106 27% Design Sep 11 The relocation of the Recycling Center and a permanent Household Hazardous Waste (HHW) facility will be placed at the end of Embarcadero Way on the wastewater treatment plant property. Final design and California Environmental Quality Act (CEQA) review for the project is now in progress. RF-10003 Drying Beds, Material Storage and Transfer Area Multi-Year $875,000 $835,913 $0 $0 $29,111 $806,802 8% Pre-Design Nov 11 These facilities are included in the Feasibility Study for the former Los Altos Treatment Plant (LATP) site. The results of the feasibility study for this site are to be presented to Council in early 2011. Funds for construction are budgeted for FY 2012. FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS MULTI-YEAR PROJECTS MINOR PROJECTS Page 29 of 31 2/17/2011 Attachment 3 ENTERPRISE FUND REFUSE FUND PUBLIC WORKS DEPARTMENT Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS RF-11001 Landfill Closure Multi-Year $600,000 $600,000 $28,967 $0 $28,351 $542,682 80% Design Feb 11 Consultant is finishing the design for the undergrounding of environmental control systems in the closed sections of the landfill and installing the remaining gas and leachate wells required by permit at the time of closure (expected late 2011). Page 30 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments SD-08101 Alma Street Storm Drain Improvements Minor $830,081 $121,349 $39,772 $0 $1 $81,576 100% Complete Remaining balance to be transferred to CIP SD-11101 in Jan 11 via Budget Amendment Ordinance. SD-06102 San Francisquito Creek Storm Water Pump Station Multi-Year $6,373,312 $108,207 $8,543 $15,986 $34,743 $48,935 99% Complete Jun 19 Required mitigation monitoring for 10 years (through FY 2019) is the only remaining task. SD-06104 Connect Clara Drive Storm Drains to Matadero Pump Station Multi-Year $953,480 $1 $0 $0 $0 $1 0% Pre-Design TBD On hold until project funding is identified. SD-11101 Channing Avenue/Lincoln Avenue Storm Drain Improvements Multi-Year $1,715,000 $1,686,098 $62,533 $0 $1,500,000 $123,565 100% Design Jun 11 Construction expected to begin Mar 11. MINOR PROJECTS ENTERPRISE FUND STORM DRAINAGE FUND PUBLIC WORKS DEPARTMENT MULTI-YEAR PROJECTS Page 30 of 31 2/17/2011 Attachment 3 FY 2011 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS Total Budget Available Budget Estimated Project Project Project From Budget FY 2011 FY 2011 FY 2011 Remaining Percent Project Completion Number Title Category Inception FY 2011 Expenditures Contingencies Encumbrances Balance Complete Status Date Comments WQ-10001 Plant Master Plan Minor $981,266 $981,266 $69,594 $0 $911,672 $0 100% Pre-Design Jun 12 Project on schedule. Stakeholder meetings commenced. Alternatives being developed. WQ-04010 Replacement of Existing Reclaimed Water Pipes Multi-Year $16,800,000 $623,849 $0 $0 $0 $623,849 100% Complete Project completed. All grant and loan funds received except final payment from Bay Area Clean Water Agencies (BACWA) of $6,941.87. WQ-04011 Facility Condition Assessment and Retrofit Multi-Year $4,300,000 $2,730,777 $69,871 $0 $319,845 $2,341,061 0% Design Jun 11 Ongoing retrofit projects. WQ-06014 Disinfection Facility Improvement Program Multi-Year $21,468,987 $15,136,607 $1,673,209 $0 $1,901,410 $11,561,988 80% Construction Mar 11 Closeout stage of construction. MINOR PROJECTS ENTERPRISE FUND WASTEWATER TREATMENT FUND PUBLIC WORKS DEPARTMENT MULTI-YEAR PROJECTS Page 31 of 31 2/17/2011 Attachment 4 Project Category Department/Fund Project Title FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Community Services : Land & Land Improvements AC-86017 Art in Public Places $29,545 $64,410 $21,556 $17,256 $36,531 Planning & Community Environment : Streets & Sidewalks PL-05030 Traffic Signal Upgrades 30,524 35,908 39,983 278,187 35,624 Public Works - General Fund : Streets & Sidewalks PE-86070 Street Improvements (Street Improvement Fund)4,987,364 3,368,496 3,702,381 3,323,063 2,687,557 Building & Facilities PF-00006 Roofing Replacement 76,769 256,831 21,073 227,495 25,029 Building & Facilities PF-01003 Building Systems Improvements 64,312 34,304 114,152 36,053 55,558 Building & Facilities PF-02022 Facility Interior Finishes 10,579 65,797 47,116 11,076 560 Building & Facilities PF-93009 ADA Compliance 96,587 49,955 121,617 216,133 2,150 Streets & Sidewalks PO-05054 Street lights Improvements 19,077 11,814 15,970 32,976 96,676 Streets & Sidewalks PO-89003 Sidewalk Improvements 2,299,543 2,030,796 1,675,527 952,503 510,886 Public Works - Storm Drainage Fund : SD-06101 Storm Drain System Replacement 202,652 675,832 445,582 81,878 426,861 Public Works - Wastewater Treatment Fund : WQ-80021 RWQCP Plant Equipment Replacement 238,280 1,156,156 2,544,261 403,293 15,430 WQ-80022 RWQCP System Flow Metering 180,000 0 56,245 0 16,060 Electric Fund : EL-02011 Electric Utility GIS 0 83,546 39,414 188,231 188,696 EL-06005 Fiber Optics Ring System Improvements 36,145 112,435 58,124 5,531 0 EL-06006 Fiber Optics Customer Design and Connection Services 131,930 134,498 195,808 17,203 0 EL-89028 Electric Customer Connections 3,402,213 1,982,607 1,467,233 1,702,232 445,157 EL-89031 Communications System Improvements $2,670 $50,458 $21,784 $0 $3,501 EL-89038 Substation Protection Improvements 46,187 423,904 94,411 133,185 36,546 EL-89044 Substation Facility Improvements 73,730 7,147 93,735 3,133 35,059 EL-98003 Electric Distribution System Reconstruction and Improvements 2,761,605 2,260,973 1,265,486 1,330,082 783,321 Fiber Optics Fund : FO-10000 Fiber Optic Customer Connections 0 0 0 68,373 37,399 FO-10001 Fiber Optic Network System Improvements 0 0 0 34,614 320,934 Continuous Capital Projects Expenditures for Fiscal Years 2007-2011 Page 1 of 2 2/17/2011 Attachment 4 Project Category Department/Fund Project Title FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Continuous Capital Projects Expenditures for Fiscal Years 2007-2011 Gas Fund : GS-02013 GS-03007 Directional Boring Equipment 0 63 59,410 0 0 GS-03002 GS-04003 GS-05002 Gas Main Replacements 1,858,052 433,894 38,121 87,706 11,681 GS-03008 Polyethylene Fusion Equipment Replacement 9,153 0 35,650 0 0 GS-03009 System Extensions-Unreimbursed 82,515 115 12,000 4,005 1,725 GS-06001 Gas Main Replacements, GMR-Project 16 344,176 2,256,296 2,423,677 89,180 104,444 GS-07002 Gas Main Replacements, GMR-Project 17 143,767 614,485 912,018 3,681,252 184,059 GS-80019 Gas Meters and Regulators 253,784 272,386 244,129 313,598 71,972 GS-80017 Gas System Extensions 675,874 609,566 356,666 347,412 159,999 Wastewater Collection Fund: WC-02002 WC-03003 WC-04002 Sewer System Rehabilitation and Augmentation, Project 15,16 and 17 3,374,976 1,394,506 8,840 27,141 31,882 WC-05003 WC-06003 WC-07004 Sewer System Rehabilitation and Augmentation, Project 18,19 and 20 3,048,500 1,378,862 2,154,931 1,761,725 26,903 WC-08012 WC-09001 WC-10002 Sewer System Rehabilitation and Augmentation, Project 21,22 and 23 0 126 285,858 543,313 248,658 WC-80020 Sewer System Extensions 493,863 561,620 370,253 251,152 50,551 WC-99013 Sewer Manhole Rehabilitation 441,705 116,173 48,227 168,722 203,839 Water Fund : WS-02003 Water Main Replacements, Project 16 81,310 4,629 19,695 0 0 WS-02014 Water-Gas Wastewater utilities GIS Data 216 0 33 204,583 224,408 WS-06002 Water Main Replacements, Project 20 595,117 1,830,359 93,554 349 10,092 WS-07003 Water Main Replacements, Project 21 3,328 57,923 226,559 1,383,427 1,428,937 WS-80014 Service and Hydrant Replacements 39,079 58,212 104,951 43,538 34,425 WS-80015 Water Meters 140,891 127,109 14,712 2,298 0 WS-80013 Water System Extensions 178,680 400,152 295,194 285,945 70,600 Page 2 of 2 2/17/2011 Attachment 5 Amount Transferred to Infrastructure Amount Returned to General Fund Net Amount Fiscal Year $(000) $(000) $(000) 2007 $8,736 $75 a $8,661 2008 $11,807 $117 $11,690 2009 $14,648 b $14,648 2010 $9,900 $3,243 $6,657 2011 $9,802 $9,802 2012 $10,438 $10,438 2013 $10,852 $10,852 2014 $11,294 $11,294 2015 $11,747 $11,747 2016 $12,217 $12,217 Total $111,441 $3,435 $108,006 Notes: a. Funds transferred to cover GF engineering costs for structures and grounds. b. Includes funding for the Public Safety Building $3,437K Sources: FY 2007 through 2010 are actual amounts FY 2011 based on projections FY 2012 through 2016 based on Long Range Financial Forecast General Fund Transfers to Infrastructure Reserve for Fiscal Years 2007-2016 $8,661 $14,648 $6,657 $11,690 $12,217 $11,747$11,294$10,852$10,438 $9,802 $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fiscal Year $0 0 0 Page 1 of 1 2/17/2011 ** NOT YET APPROVED ** 100218 sh 8261536 Resolution No. ________ Resolution of the Council of the City of Palo Alto Amending the 2010-2011 Compensation Plan for Classified Personnel (SEIU) Adopted by Resolution No. 9088 to Correct the Compensation for One Existing SEIU Classification and Change the Titles of Two Classifications The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Compensation Plan for Classified Personnel (SEIU), adopted by Resolution No. 9088, is hereby amended to correct the compensation for one existing SEIU classification and change the title of two classifications as set forth in Exhibit A, attached hereto and incorporated herein by reference, effective with the pay period including July 1, 2010. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Director of Human Resources EXHIBIT A Midyear SEIU Compensation Plan Changes - effective April 1, 2011 Job Code Classification Title Step Top Step Monthly Approx. Annual Hourly 366 Restoration Lead (to correct hrly rate typo error) 5 6,186 74,235 35.69 3470 Planning Arborist - S (title change from Arborist – S) 5 7,921 95,056 45.70 347 Planning Arborist (title change from Arborist) 5 7,921 95,056 45.70 Attachment 7 Police and Fire Departments' Overtime Analysis for Fiscal Years 2006 through 2010 With Fiscal Year 2011 Data Through January 12, 2011 thru 1/12 2006 2007 2008 2009 2010 2011 POLICE DEPARTMENT Overtime Expense Original Budget $981,862 $1,015,620 $1,036,815 $999,900 $999,900 $967,900 Current Budget 1,009,705 1,074,399 1,071,005 1,016,900 1,071,662 967,900 Net Overtime Cost - see below 780,647 1,025,718 1,096,894 886,568 932,960 66,789 Remaining Budget $229,058 $48,681 ($25,889) $130,332 $138,702 $901,111 Overtime Net Cost Actual Expense $1,405,155 $1,785,657 $2,009,542 $1,665,842 $1,466,226 $754,653 Less Reimbursements Stanford Communications 30,937 39,342 65,079 42,160 58,070 32,702 Utilities Communications Reimbursement 17,402 22,130 36,607 23,715 33,242 20,439 Local Agencies (A)34,565 36,457 41,770 37,413 33,930 16,706 State Grants (B)65,835 63,344 4,672 10,998 22,306 70,816 Police Service Fees 49,185 43,218 67,390 53,812 42,085 62,374 Other 12,447 18,157 15,982 3,830 27,998 Total Reimbursements 197,924 216,938 233,675 184,080 193,463 231,034 Less Department Vacancies 426,584 543,001 678,973 595,194 339,803 456,830 Net Overtime Cost $780,647 $1,025,718 $1,096,894 $886,568 $932,960 $66,789 Department Vacancies (number of days)1,733 2,280 2,766 2,402 1,368 1,702 FIRE DEPARTMENT Overtime Expense Original Budget $959,389 $1,032,674 $892,674 $1,017,674 $1,017,674 $1,017,674 Current Budget 959,389 1,032,674 996,674 1,353,058 1,017,674 1,017,674 Net Overtime Cost - see below 637,310 737,768 863,442 651,148 1,334,452 379,842 Remaining Budget $322,079 $294,906 $133,232 $701,910 ($316,778) $637,832 Overtime Net Cost Actual Expense $1,582,858 $1,860,757 $1,744,076 $1,591,261 $2,675,515 $1,151,439 Less Reimbursements Stanford Fire Services (D)479,606 563,809 528,455 482,152 810,681 348,886 Cal-Fire/FEMA (Strike Teams) 66,269 85,531 140,224 453,619 64,760 State Homeland Security Grant Program (SHSGP) (C)72,254 40,897 10,164 4,342 10,647 3,745 Urban Area Security Initiative (UASI) 26,782 1,150 Fire Service Fees 39,585 Other 2,100 Total Reimbursements 644,911 690,237 679,993 940,113 886,088 394,316 Less Department Vacancies 300,637 432,752 200,641 454,975 377,281 Net Overtime Cost $637,310 $737,768 $863,442 $651,148 $1,334,452 $379,842 Department Vacancies (number of days)1,230 1,740 810 780 1,455 1,186 NOTES: (A)Includes Animal Services contract with Los Altos, Mountain View and Los Altos Hills. (B)State Office of Traffic Safety and ABC grants. (C) Included in the SHSGP and UASI reimbursements is a small amount of per diem reimbursement. Reimbursement from U.S. Department of Homeland Security for HazMat Continuing Challenge Training Conference (Sep 2009) (D)Stanford reimburses 30.3% of Fire expenditures. 2/23/2011 Attachment 2 FY 2011 Table of Organization FY 2009 Adjusted Budget FY 2010 Adjusted Budget FY 2011 Adopted Budget FY 2011 Mid-Year Budget Change FY 2011 Adjusted Budget Technology Administrative Assistant 0.07 0.07 0.07 - 0.07 Administrative Associate II 1.00 1.00 1.00 - 1.00 Administrative Associate III 0.04 0.04 - - - Management Analyst - - 0.50 - 0.50 Assistant Director, Administrative Services 0.40 0.40 0.40 - 0.40 Business Analyst 0.90 0.90 1.00 - 1.00 Director of Information Technology/Chief Information Officer (1)1.00 1.00 1.00 - 1.00 Desktop Technician 5.00 5.00 5.00 - 5.00 Director, Administrative Services 0.35 0.35 0.35 - 0.35 Manager, Information Technology 3.00 3.00 3.00 - 3.00 Senior Business Analyst 1.80 1.80 2.00 - 2.00 Senior Technologist 13.00 13.00 13.00 - 13.00 Senior Financial Analyst 0.09 0.09 0.09 - 0.09 Technologist 4.00 4.00 3.00 - 3.00 Total Special Revenue 30.65 30.65 30.41 0.00 30.41 Footnotes: (1) Title change from Chief Information Officer to Director of Information Technology/Chief Information Officer 4/4/2011 ** NOT YET APPROVED ** 100218 sh 8261563 Resolution No. ________ Resolution of the Council of the City of Palo Alto Amending the 2010-2011 Compensation Plan for Management and Professional Personnel Adopted by Resolution No. 9156 to Change the Title and Compensation for One Existing Classification The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the 2010-2011 Compensation Plan for Management and Professional Personnel, adopted by Resolution No.____, is hereby amended to change the title and compensation of one existing classification as set forth in Exhibit A, attached hereto and incorporated herein by reference, effective with the pay period including July 1, 2010. SECTION 2. The Director of Administrative Services is authorized to implement the amended Compensation Plan as set forth in Section 1. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ______________________________ Sr. Deputy City Attorney City Manager _____________________________ Director of Administrative Services ____________________________ Director of Human Resources EXHIBIT A Midyear Management/Professional Compensation Plan Changes - effective April 30, 2011 Job Code Classification Title Grade Code Control Point Approx. Annual Hourly 128 Director, Information Technology/Chief Information Officer (Title and salary grade change from Chief Information Officer) 16 14,519 174,221 83.76 City of Palo Alto (ID # 1481) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 4 (ID # 1481) Council Priority: {ResProject:ClearLine} Summary Title: Award of Purchase Order for Ambulances Title: Adoption of a Budget Amendment Ordinance in the Amount of $403,267 to Fund the Purchase of Two Ambulances; and Approval of a Purchase Order with Leader Industries in an Amount Not to Exceed $393,267 for the Purchase of Two Ambulances (Scheduled Vehicle and Equipment Replacement Capital Improvement Program Project VR-11000) From:City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Adopt the attached Budget Amendment Ordinance (BAO) in the amount of $403,267 (Attachment A) to provide an appropriation for the purchase of two ambulances; 2.Approve and authorize the City Manager to execute a purchase order with Leader Industries in the amount of $393,267 for the purchase of two ambulances; and 3.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the purchase order with Leader Industries for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $10,000. Background The vehicle and equipment replacement policy described in City Policy and Procedures 4-1 (Vehicle and Equipment Use, Maintenance, and Replacement), provides for the on- going replacement of City fleet vehicles and equipment. Replacements are scheduled using guidelines based on age, mileage accumulation, and obsolescence. April 11, 2011 Page 2 of 4 (ID # 1481) The City’s fleet currently includes four ambulances. Policy 4-1 prescribes a replacement interval for ambulances of four (4) years or 85,000 miles. The existing replacement guidelines are outdated and will be extended in the next revision to the Policy. Newer ambulances are more reliable and should last in excess of 100,000 miles. However, the two ambulances that will be replaced through this purchase (#6040 and #6041) are more than 13 years old, with 111,000 and 128,000 miles respectively. In addition to exceeding the criteria for age and mileage, the ambulances to be replaced were built on medium-duty truck chassis. While the medium-duty truck platform has increased reliability and performance substantially, it has also resulted in less than optimum ride quality characteristics that have generated numerous complaints from the public. The replacement ambulances will be constructed on a light-duty chassis which will eliminate the ride quality issues. Much time and effort was invested in the existing ambulances in order to improve the ride quality and improvements were made but staff has not been able to completely resolve the issue. Discussion This purchase is being conducted with full consideration of the recent Audit of Vehicle Utilization and Replacement. The audit did not include a review of the City’s inventory of emergency vehicles, and emergency vehicles are generally exempt from minimum utilization requirements. The vehicles being replaced through this purchase have, on average, greatly exceeded the minimum mileage accumulation of 2,500 miles annually. Regardless of utilization; the City will not be able to meet its obligation for emergency response without these vehicles. The Fleet Review Committee (FRC) approved the replacement of these vehicles on October 20, 2010, in accordance with the audit recommendations. The approval was based on: ·An examination of each vehicle’s current usage; ·An analysis of each vehicle’s operating and replacement costs; ·A comparison of the age, mileage, operating cost and performance of each vehicle with others in the class; and ·An analysis of alternatives to ownership, such as mileage reimbursement; pooling/sharing; the reassignment of another underutilized vehicle, or renting. The FRC determined that there are no alternatives to outright replacement. Ambulances are used for specialized tasks, and are equipped with a considerable amount of medical and emergency equipment that renders them unsuitable for any purpose other than emergency medical response. This precludes their assignment to a motor pool, and rules out the use of a private vehicle with mileage reimbursement. They are each used by a single shift on a continuous daily basis, so there are no opportunities for sharing. There are no similar, underutilized vehicles available to use April 11, 2011 Page 3 of 4 (ID # 1481) as replacements for these vehicles. Renting these vehicles would not be a cost- effective option because they are used continuously throughout the year. Bidding and Selection Process A Request for Quotation (RFQ) for ambulances was sent to 4 vendors on February 7, 2011. Bids were received from two qualified vendors on March 16, 2011, as listed on the attached bid summary (Attachment B). Bids ranged from a high of to $810,872 to a low bid of $798,483. The total bid price is for four ambulances (two to be purchased immediately, and two in Fiscal Year 2012). That purchase will be the subject of a separate staff report. The total bid price also includes a trade-in credit for two existing ambulances. Staff will not exercise the trade-in option because the trade-in credit is less than the market value for these vehicles. Staff has reviewed all bids submitted and recommends that the bid submitted by Leader Industries be accepted and that Leader Industries be declared the lowest responsible bidder. Staff has checked references supplied by the vendor for previous contracts and has found no significant complaints. Resource Impact The attached Budget Amendment Ordinance will provide for the transfer of funding from the Vehicle Replacement Fund Reserve into the current year’s Scheduled Vehicle and Equipment Replacement CIP (VR-11000). Policy Implications Authorization of the contract does not represent any change to the existing policy. Environmental Review The vehicles being supplied are in conformance with all applicable emissions laws and regulations. Accordingly, this purchase is exempt from the California Environmental Quality Act under the CEQA guidelines (Section 15061). ATTACHMENTS: ·A: BAO -VR11000 Vehicle Replacement Ambulance (DOC) ·Bid Summary -Ambulances (PDF) Prepared By:Keith LaHaie, Fleet Manager Department Head:J. Michael Sartor, Interim Director City Manager Approval: James Keene, City Manager April 11, 2011 Page 4 of 4 (ID # 1481) Attachment A ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 2011 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $403,267 TO CAPITAL IMPROVEMENT PROGRAM PROJECT NUMBER VR-11000, SCHEDULED VEHICLE AND EQUIPMENT REPLACEMENT The Council of the City of Palo Alto does ordain as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 28, 2010 did adopt a budget for fiscal year 2011; and B.City policy on vehicle and equipment replacement provides for the on-going replacement of City fleet vehicles and equipment. Specifically, Policy 4-1 prescribes a replacement interval for ambulances of four (4) years or 85,000 miles. The two ambulances that needs be replaced (#6040 and #6041) are more than 13 years old, with 111,000 and 128,000 miles respectively; and C.The Fleet Review Committee (FRC) approved the replacement of these vehicles on October 20, 2010, in accordance with the audit recommendations; and D.A Request for Quotation (RFQ) for ambulances was sent to four vendors on February 7, 2011. Bids were received from two qualified vendors on March 16, 2011 and Leader Industries was declared the lowest responsible bidder. The purchase price of two ambulances is $393,267. An additional amount of $10,000 is needed to cover contingency on possible change order; and E. City Council authorization is needed to amend the 2011 budget as hereinafter set forth. SECTION 2.The sum of Four Hundred Three Thousand Two Hundred Sixty Seven Dollars ($403,267) is hereby appropriated to CIP Project Number VR-11000. SECTION 3.The Vehicle Replacement Fund Reserve is hereby reduced by Four Hundred Three Thousand Two Hundred Sixty Seven Dollars ($403,267) to Five Million Eight Hundred Fifty Five Thousand Seven Hundred Thirty Three Dollars ($5,855,733). SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 5. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 6.The vehicles being purchased are in compliance with all applicable emissions laws and regulations. Accordingly, this purchase is exempt from the California Environmental Quality Act under the CEQA guidelines (Section 15061). INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Director of Public Works Director of Administrative Services Attachment B BID SUMMARY Type III Ambulance RFQ140129 Leader Industries Bid Total $798,483.00 Golden State Fire Apparatus Bid Total $810,872.42 City of Palo Alto (ID # 1530) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 4 (ID # 1530) Council Priority: Environmental Sustainability Summary Title: Western GeoPower Renewable Energy Purchase Title: Adoption of a Resolution Approving Agreement to Terminate the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement and Adoption of a Resolution Approving Third Phase Agreement for Western GeoPower, Inc. Geothermal Project Renewable Energy Power Purchase Agreement From:City Manager Lead Department: Utilities Recommendation Staff, the Utilities Advisory Commission (UAC) and the Finance Committee recommend that the City Council: 1)Adopt a resolution, authorizing the City Manager or his designee to execute the Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement; and 2)Adopt a resolution, authorizing the City Manager or his designee to execute the Third Phase Agreement for Western GeoPower, Inc. Geothermal Project Renewable Energy Power Purchase Agreement. Additionally, for this agreement, staff recommends the Council waive the investment-grade credit rating requirement under Section 2.30.340(d) of the Palo Alto Municipal Code, which is otherwise required for these energy contracts. Executive Summary Approval of the recommended agreements would terminate a defunct 2008 contract and replace it with a new contract for the purchase of geothermal renewable energy for a term of 25 years at a price of $113 per megawatt-hour (MWh). The new project would allow Palo Alto to receive energy to meet about 3% of electric loads and bring the City closer to the 33% renewable portfolio target within the approved rate impact limit. Background In 2008, the Council approved entering into the Northern California Power Agency (NCPA) Third Phase Agreement for Western GeoPower renewable energy power purchase at a price of $98/MWh (CMR 141:08). However, the financial crisis of 2008 undermined project financing April 11, 2011 Page 2 of 4 (ID # 1530) and the project was delayed. Western GeoPower was later taken over by, and became a subsidiary of, another company named Ram Power. NCPA recently completed negotiations with Western GeoPower for a new power purchase agreement for a 25-year term at a steady, non-escalating price of $113/MWh made available to Palo Alto and other members through a new Third Phase Agreement. Discussion On February 2, 2011, staff presented a recommendation to the UAC to execute the Termination Agreement and to wait before deciding whether to agree to the new $113/MWh price for the Western GeoPower project. The UAC agreed with staff’s recommendation to execute the Termination Agreement, but voted unanimously to recommend the City immediately execute a new Third Phase Agreement for the Western GeoPower project at the $113/WMh price rather than wait to join the project at a later date. Staff initially recommended that the City wait to execute the new Third Phase Agreement until additional analysis could be performed and for other planning work to be completed. However, with the Council’s recent approval of the Long term Electricity Acquisition Plan (LEAP) on March 7, 2011 (Staff Report 1317), staff is now comfortable with the status of planning work and has changed its recommendation to that of the UAC and Finance Committee in recommending approval to participate in the Western GeoPower Third Phase Agreement for a 15% share of the project’s output. At its March 1, 2011 meeting, the Finance Committee members praised geothermal as a low greenhouse gas (GHG) emitting generation source. Staff has done some research since the meeting that estimates the GHG emissions expected from the project are significantly lower than from fossil fueled generation. Preliminary estimates show that the geothermal project will emit approximately 200 pounds of carbon dioxide equivalent (CO2e) per MWh, or about 80% lower than an average natural gas fired generator. The emissions come from the release of naturally occurring CO2 and methane in the underground steam that would power the plant. The California Air Resources Board is adopting GHG cap-and-trade rules that deem that GHG emissions from geothermal and landfill power plants are not counted and, therefore, are not burdened with a GHG compliance obligation (meaning they would not have to buy allowances for the emissions). However, the GHG emissions would be reported for record keeping purposes. Committee Review and Recommendation On March 1, 2011, staff presented a recommendation to the Finance Committee to execute the Termination Agreement and to wait before deciding whether to agree to the new $113/MWh price for the Western GeoPower project. Staff also advised the Finance Committee of the UAC’s recommendation to execute the Termination Agreement and enter into the new Third Phase Agreement at the $113/MWh price at a participation level of up to 15% of the project. April 11, 2011 Page 3 of 4 (ID # 1530) The Finance Committee members generally expressed a preference for geothermal energy projects over landfill-gas-to-energy projects. They also favored the contract’s flat price with no built-in escalation rate and found the UAC arguments for moving forward now to be compelling. Committee Chair Scharff saw the project as an exceptional opportunity and said the flat price of $113/MWh should look good in years to come. The Finance Committee voted unanimously (4-0) to recommend that Council approve execution of both the Termination Agreement and the new Third Phase Agreement for up to a 15% share of the Western GeoPower project. Notes from the Finance Committee meeting of March 1, 2011 are provided as Attachment G. Timeline NCPA plans to collect executed Third Phase Agreements from all participants by April 30, 2011 when final participation levels will be determined. Western GeoPower expects to complete construction of the plant in 2013 and to be delivering power in late 2013 to start the 25-year delivery period. Resource Impact Executing the Termination Agreement has no resource impact. Executing the Third Phase Agreement would provide renewable electric energy with an expected cost of up to $95 Million over 25 years. Without the Western GeoPower project, the committed renewable resources have an upward rate impact of 0.23 cents/kWh. The Western GeoPower purchase adds another 0.13 cents/kWh for a combined retail rate impact of 0.36 cents/kWh, still well within the 0.5 cents/kWh rate impact limit. Policy Implications Adoption of this resolution is consistent with Council policy. Environmental Review Execution of these agreements does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). However, the City intends to receive output from projects that will constitute a project for the purposes of CEQA. Project developers will be responsible for acquiring necessary environmental reviews and permits on projects to be developed. Attachments: ·Attachment A: Resolution Terminating Third Phase Agreement for Western GeoPower Incorporated Renewable energy Power Purchase Agreement (PDF) ·Attachment B: Resolution Approving Third Phase Agreement for Western GeoPower Inc. Renewable Energy Power Purchase Agreement (PDF) ·Attachment C: Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (DOC) April 11, 2011 Page 4 of 4 (ID # 1530) ·Attachment D: Third Phase Agreement for Western GeoPower Inc. Renewable Energy Power Purchase Agreement (DOC) ·Attachment E: Finance Committee Staff Report ID 1441 Agreements for Western GeoPower Renewable Energy (PDF) ·Attachment F: Amended and Restated Renewable Energy Power Purchase Agreement between NCPA and WGI 3_7_11 (DOC) ·Attachment G_Excerpted Finance Committee Minutes of March 1 2011 (PDF) Prepared By:Tom Kabat, Manager Department Head:Valerie Fong, Director City Manager Approval: James Keene, City Manager Not Yet Approved 1 110328 jb 0073505 Resolution No ____ Resolution of the Council of the City of Palo Alto Approving Agreement Terminating the Third Phase Agreement for Western GeoPower, Inc. Renewable Energy Power Purchase Agreement WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered city and a member of the Northern California Power Agency (“NCPA”), and other NCPA members entered into (a) a Power Purchase Agreement (the “PPA”) with Western GeoPower, Inc. (“WGI”), for a term of twenty (20) years and at a price of $98.00 per megawatt-hour (“$98/MWh”) and (b) a Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “TPA”), under which all costs and benefits of the PPA are allocated to participating NCPA members; and WHEREAS, WGI has subsequently been acquired by Ram Power Corp. (“Ram”) and WGI is now a wholly owned subsidiary of Ram; and WHEREAS, the geothermal power project contemplated by the PPA and the TPA was not built due to the financial crisis of 2009’s impact on WGI’s ability to finance the project at the cash flow provided by the $98/MWh PPA; and WHEREAS, NCPA required the consent of participating members, including the City, in order to terminate the PPA and the TPA and finance the geothermal project at the higher rate of $113/MWh for interested participating NCPA members; WHEREAS, the NCPA commission, on February 24, 2011, approved the termination of the TPA as a condition precedent to the execution of a new power purchase agreement and a new third phase agreement; and WHEREAS, on March 24, 2011, the NCPA commission approved (a) the Renewable Energy Power Purchase Agreement between NCPA and WGI (the “New PPA”) for a term of twenty-five (25) years and a $113/MWh price and (b) the Third Phase Agreement for the WGI Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “New TPA”), under which all costs and benefits of the New PPA will be allocated to participating NCPA members; and NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the agreement which terminates the Third Phase Agreement for Western GeoPower, Inc. Renewable Energy Power Purchase Agreement and delegates to the City Manager the authority to sign the contract on behalf of the City. Not Yet Approved 2 110331 jb 0073505 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 Not Yet Approved 1 110323 jb 0073504 Resolution No ____ Resolution of the Council of the City of Palo Alto Approving the Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement for the Acquisition of Up To Fifteen Percent of the Project Output (Up To 5 Average Megawatts) over Twenty-Five Years At An Estimated Cost Not To Exceed $95 Million WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered city, is a member of the Northern California Power Agency (“NCPA”), and WHEREAS, on March 7, 2011, the City approved eight electric portfolio planning and management guidelines to guide the development and management of the City’s long-term electricity acquisition plan; one of the strategies is to pursue target levels of renewable resource energy purchases equal to thirty-three percent (33%) of the City’s expected energy load by 2015; and WHEREAS, the City and other NCPA members desire to collectively enter into a Power Purchase Agreement (the “PPA”) with Western GeoPower, Inc. (“WGI”) for a term of twenty-five (25) years; and WHEREAS, NCPA is authorized to execute a power purchase agreement with WGI to purchase the entire expected Project output from the new WGI geothermal project (the “Project”) located in the Geysers Geothermal Field, located in the Mayacamas mountains of Sonoma County and Lake County in the State of California; and WHEREAS, NCPA will purchase the Project output for $113.00 per megawatt-hour (“$113/MWh”) on behalf of its members in accordance with the PPA; and WHEREAS, NCPA’S Energy Risk and Counterparty Risk Management Regulations require that, for power purchases and sales effected for delivery more than one week from the date of execution of the purchase, competitive bids must be obtained; and WHEREAS, the NCPA Commission granted an exception to standard procurement policy, because the PPA is an eligible renewable resource at long-term competitive rates, and it also has advantages due to its physical location adjacent to the NCPA Geothermal project site, thereby giving it competitive, operational and economic advantages other than price; and WHEREAS, the NCPA Commission, on March 24, 2011, approved the new PPA and the Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “new TPA”), which the new TPA allocates all costs and benefits of the PPA to participating NCPA members; and WHEREAS, the NCPA Commission authorized the General Manager to execute the new PPA with WGI; and Not Yet Approved 2 110331 jb 0073504 WHEREAS, the City desires to enter into the new TPA with NCPA in order to achieve a portion its renewable energy goals, reduce reliance on fossil fuels and their associated fuel price volatilities, and assist the State of California in meeting its renewable energy goals; and WHEREAS, the City, desires to participate with a participation share percentage in the new TPA of up to and not exceeding 15% with respect to the costs and benefits of the new PPA; NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement and delegates to the City Manager the authority to sign the contract on behalf of the City. The Council further approves the City’s participation in the Third Phase Agreement for the purchase of renewable energy of up to up to fifteen percent (15%) of the project output equaling approximately five (5) average megawatts of energy, within an average procurement price cap of $113 per megawatt-hour. The total cost of renewable energy purchases to be made in accordance with the Third Phase Agreement will not exceed $95 million over the twenty-five year term. SECTION 2. With respect to the Third Phase Agreement, the Council hereby waives the application of the creditworthiness terms and conditions requirements of Palo Alto Municipal Code section 2.30.340(c), which otherwise applies to the City’s purchases of energy, directly or indirectly, through NCPA. / / / / / / / / / / / / / / / / / / / / / / Not Yet Approved 3 110331 jb 0073504 SECTION 3. 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. The County of Sonoma will be the lead agency for purposes of compliance with the California Environmental Quality Act. 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 ATTACHMENT C AGREEMENT TERMINATING THE THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER INCORPORATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT THIS TERMINATION AGREEMENT (the “Agreement”) is entered into this ___ day of _______, 2011 by and between the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of its Members who entered into the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement on May 6, 2008 (“Participants”)(collectively, the “Parties”). RECITALS: WHEREAS, on or about May 6, 2008, NCPA and the Participants executed the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (“Third Phase Agreement”); WHEREAS, on May 16, 2008, NCPA executed a power purchase agreement (“PPA”) with Western GeoPower Incorporated (“Western Geo”) to purchase the entire expected electric output from a new Western Geo geothermal project (“Project”) located in the Geysers Geothermal Field located in Sonoma and Lake Counties in the State of California; WHEREAS, the purpose of the Third Phase Agreement was to provide the means necessary for NCPA to be able to enter into the PPA on behalf of the Participants and to enable and obligate the Participants to take delivery of and pay for such electricity as might be generated by the Project; WHEREAS, the price in the PPA for energy generated by the Project was $98 per megawatt hour (“Project Price”); WHEREAS, due to financial pressures, Western Geo was never able to build the Project, and has stated that it is unable to provide energy to NCPA at the Project Price; WHEREAS, Western Geo has proposed revising the PPA to reflect a change in the Project Price to $113 per megawatt hour (“Amended Price”), and not all Participants wish to participate in the Project for the Amended Price; and WHEREAS, NCPA and the Participants have agreed to terminate the Third Phase Agreement, and those Participants desiring that NCPA enter into an amended and restated PPA (“Amended and Restated PPA”)with Western Geo for energy at the Amended Price will enter into a new third phase agreement (“North Geysers Third Phase Agreement”)to cover any costs and obligations associated with the Amended and Restated PPA on an ongoing basis. 1564960.4 2 NOW, THEREFORE, the Parties hereby agree as follows: 1.Termination of the Third Phase Agreement. The Third Phase Agreement, and all rights and obligations of the Parties pursuant to the Third Phase Agreement, except such matters as survive its termination, including without limitation Section 10.5 thereof (“Surviving Obligations”), are hereby terminated effective as of the Effective Date.The Effective Date shall be the Effective Date of the North Geysers Third Phase Agreement. 2.Mutual Release.Except as to the Surviving Obligations, which are not waived or relinquished by the Parties, the Parties hereby release and discharge one another and their successors and assigns, agents, employees and representatives from any and all obligations, claims, actions and liabilities, whether past, present or future, of whatever character, known or unknown, by reason of or existing in connection with the Third Phase Agreement (the “Settled Obligations”). The Parties acknowledge that they have read and understand the terms of Section 1542 of the California Civil Code, which 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 executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties hereby waive and relinquish all rights and benefits they, and each of them, may have under Civil Code Section 1542 with respect to the Settled Obligations, and acknowledge that the consequence of such waiver and relinquishment is that no Party may make a claim against another Party for damages that may be discovered in the future with respect to the Settled Obligations. Initials:_________________ Participant Agency 4. Payment of Outstanding Costs by Participants. The Participants each agree to pay or reimburse NCPA for any and all costs and expenses incurred to date under the Third Phase Agreement, pursuant to each Participant’s Participation Percentages, as that term is defined in the Third Phase Agreement. 5. Other Documents. Each Party shall cooperate fully in the execution of any and all other documents and in the completion of any additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of this Agreement. 6.Amendment. This Agreement constitutes the entire agreement between the Parties as to the subject matter hereof and may only be amended by a writing signed by all Parties. 3 7.Invalidity. If any term, provision or application of this Agreement is held invalid or unenforceable, the remainder of this Agreement and any application of the terms and provisions shall not be affected thereby, but shall remain valid and enforceable. 8.Non-waiver.The waiver of any breach of any of the provisions of this Agreement by either Party shall not constitute a continuing waiver or a waiver of any subsequent breach by the other Party either of the same or of another provision of this Agreement. 9.Attorneys’Fees.Should any litigation, including arbitration proceedings, be commenced between the Parties concerning this Agreement or the rights and duties of either of the Parties in relation thereto, the party prevailing in such litigation or arbitration, in addition to such other relief as may be granted in such proceeding, shall receive from the losing party a reasonable sum as and for his attorney fees in the litigation or arbitration, the amount of which shall be determined by the Court or the arbitrator. 10.Notices.Any notice required to be given pursuant to this Agreement, or desired to be given in connection with this Agreement, shall be given in writing as provided in the Third Phase Agreement. 11.Counterparts. This Agreement may be signed in counterparts and shall be governed by and construed in accordance with the laws of the State of California. 12. Warranty of Authority. The Parties each hereby represent and warrant that he/she/it has the authority to enter into this Agreement. Each signatory to this Agreement hereby warrants that he/she is duly authorized to execute this Agreement on behalf of and as the lawful act and deed of the entity for which he or she signs. 13.Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of Placer County, California or in the Federal District Court for the Eastern District of California. 1564960.4 4 Executed at Placer County, California, on day and year first above set forth. NORTHERN CALIFORNIA POWER AGENCY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ALAMEDA By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LOMPOC By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF PALO ALTO By: Title Date: Approved as to Legal Form By: Its: Attorney Date: PORT OF OAKLAND By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 5 BAY AREA RAPID TRANSIT AUTHORITY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: TRUCKEE DONNER REPUBLIC UTILITY DISTRICT By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LODI By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ROSEVILLE By: Title Date: Approved as to Legal Form By: Its: Attorney Date: SILICON VALLEY POWER By: Title Date: Approved as to Legal Form By: Its: Attorney Date: ATTACHMENT D 1 EXECUTION COPY THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER, INC. GEOTHERMAL PROJECT RENEWABLE ENERGY POWER PURCHASE AGREEMENT DRAFT THIRD PHASE AGREEMENT 1563911.7 i EXECUTION COPY TABLE OF CONTENTS Section………………………………………………………………………….…….Page RECITALS..…......…………..……………………………………………1 1.Definitions…………………..……………………………………………2 2.Effectiveness of Agreement…………………………………………...8 3.Delivery of Electricity / Allocation of Resource Adequacy………….. Capacity and Environmental Attributes…….…….………………….8 4.Cooperation and Further Assurances………….……………..….…….8 5.Payment Obligations, Security Account, Invoicing……….…….........9 6.Administration of Agreement………………………………………...13 7.Admission of New Participants………….…………………...……….14 8.Withdrawal of Participants……………………………………………15 9.Term and Termination………….……………………………………..15 10.Default and Remedies…...…………………………………………….16 11.Miscellaneous…………………………………………………………..20 EXHIBIT A RENEWABLE ENERGY POWER PURCHASE AGREEMENT between NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER INCORPORATED EXHIBIT B PARTICIPATION PERCENTAGES 1563911.7 2 EXECUTION COPY This Third Phase Agreement for the the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (this “Agreement”) is between the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of its Members who execute this Agreement (“Participants”). NCPA and the Participants are referred to herein individually as a “Party” and collectively as the “Parties.” RECITALS A.WHEREAS, NCPA and the Participants are interested in purchasing additional renewable electric capacity and energy for the benefit of the Participants’ customers;and B.WHEREAS, on or about May 6, 2008, NCPA and certain of its members executed the “Third Phase Agreement for Western Geopower Incorporated Renewable Energy Power Purchase Agreement”("the Previous Third Phase Agreement"), by which which NCPA agreed, on behalf of those members executing the Previous Third Phase Agreement, to enter into a power purchase agreement (“PPA”) with Western GeoPower, Inc. (“Western GeoPower”)to purchase the entire expected Project Output from a new WesternGeoPower geothermal project located in the Geysers Geothermal Field in the Mayacamas Mountains of Sonoma and Lake Counties in the State of California (“the Project”); and C.WHEREAS, on May 16, 2008, in conformance with the Previous Third Phase Agreement, NCPA executed a PPA with Western GeoPower to purchase the entire expected Project Output at a price of $98 per megawatt hour; and D.WHEREAS, due to certain financial conditions, WesternGeoPower was unable to build the Project and has proposed that the price for energy be increased, which proposal is acceptable to NCPA and to the Participants, who desire that NCPA enter into a revised PPA with Western GeoPower; and E.WHEREAS, the Previous Third Phase Agreement has been terminated by an Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, dated _____________, 2011; and 1563911.7 3 EXECUTION COPY F.WHEREAS, on _____,2011 NCPA and Western GeoPower propose to enter into an Amended and Restated Renewable Energy Power Purchase Agreement (“Amended PPA”)by which NCPA would agree to purchase the entire expected Project Output of the Project from Western GeoPower at a price of $113 per megawatt hour;and G.WHEREAS, NCPA and the Participants wish to enter into this Agreement to provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the Amended PPA and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing activities; H.WHEREAS, NCPA and its members have (or will have) entered into the Facilities Agreement, dated September 22,1993, which provides for services which NCPA shall perform for its members, and for the provisions to be contained in third phase agreements such as this Agreement; I.WHEREAS, NCPA and its members have (or will have) entered into the Scheduling Coordination Program Agreement (“SCPA”), dated August 28, 2002, which provides for CAISO scheduling services and cost allocations which NCPA shall perform for its members; NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound, as follows: Section 1.Definitions. 1.1 Definitions.Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings: 1563911.7 4 EXECUTION COPY 1.1.1 “Agreement” means this Third Phase Agreement for North Geysers Geothermal Project, including all Exhibits attached hereto, as the same may be amended from time to time in accordance with the terms and conditions hereof. 1.1.2 “Amended PPA” means the Amended and Restated Renewable Energy Power Purchase Agreement between NCPA and Western GeoPower, Inc., dated as of ______, attached hereto as Exhibit A. 1.1.3 “Annual Budget” means the budget for the ensuing Budget Year adopted by the Commission, as it may be amended from time to time. 1.1.4 “Associate Member” means an associate member of NCPA admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement. 1.1.5 “Budget Year” means the NCPA fiscal year; currently the twelve month period beginning July 1 and ending on the next following June 30. 1.1.6 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time. 1.1.7 “Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Project, intended to value any aspect of the capacity of the Project to produce Energy or ancillary services, including, but not limited to, any accounting construct so that the full capacity of the Project may be counted toward a resource adequacy requirement or any other measure by the CPUC, the CAISO, the FERC, or any other entity invested with the authority under federal or state law, to require NCPA to procure, or to procure at NCPA’s expense, Resource Adequacy Capacity or other such products. 1.1.8 “Claims” has the meaning set forth in Section 11.2. 1.1.9 “Commission”means the NCPA Commission. 1563911.7 5 EXECUTION COPY 1.1.10 “Constitutive Documents” means, with respect to NCPA, the Amended and Restated Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to each Participant, the California Government Code and Public Utilities Code,and other statutory provisions applicable to such Participant, any applicable agreements, charters, contracts or other documents concerning the formation, operation or decision making of such Participant, including, if applicable, its City Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s governing body. 1.1.11 “Defaulting Party” has the meaning set forth in Section 10.1. 1.1.12 “Effective Date” has the meaning set forth in the Section 9 of this Agreement. 1.1.13 “Electric System” means, with respect to each Participant, all properties and assets, real and personal, tangible and intangible, of the Participant now or hereafter existing, used or pertaining to the generation, transmission, transformation, distribution or sale of electric capacity and energy, or the utilization of such, including all additions, extensions, expansions, improvements and betterments thereto and equipment thereof; provided, however, that to the extent the Participant is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above described purposes, only the Participant’s ownership interest in such asset or property or only the part of the asset or property used for electric purposes shall be considered to be part of its Electric System. 1.1.14 “Energy” means the electricity generated by the Generating Facility pursuant to this Agreement, as expressed in units of KWh or MWh as measured at the meter(s), as that term is defined in the PPA. 1.1.15 “Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the power purchase. Environmental Attributes include,but are not limited to: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), 1563911.7 6 EXECUTION COPY methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights. Environmental Attributes do not include: (1) any Energy, capacity, reliability or other power attributes; (2) production tax credits associated with the construction or operation of the energy Projects and other financial incentives in the form of credits, reductions, or allowances associated with the Project that are applicable to a state or federal income taxation obligation;(3) fuel-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits; or (4) emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or federal operating and/or air quality permits. 1.1.16 “Event of Default” has the meaning set forth in Section 5.5.3 and Section 10.1. 1.1.17 “Generating Facility” means Western GeoPowers, Inc.’s electricity generating facility as more particularly described in Exhibit 2 [Description of Generating Facility] of the Amended PPA, together with all materials, equipment systems, structures, features and improvements necessary to produce electricity at such facility, specifically including the site, land rights, mineral rights and interests in land. 1.1.18 “Joint Powers Agreement” means the Amended and Restated Northern California Power Agency Joint Power Agreement dated January 1, 2008, establishing NCPA, as the same may be amended from time to time. 1.1.19 “Member” means any Member of NCPA or Associate Member of NCPA. 1.1.20 “MW” means megawatt. 1.1.21 “MWh” means megawatt hour. 1563911.7 7 EXECUTION COPY 1.1.22 “NCPA” has the meaning set forth in the preamble hereto. 1.1.23 “Participation Percentage” has the meaning, with respect to each Participant, the percentage of the total capacity of the Project, and the Energy associated with such capacity, to which such Participant is entitled pursuant to the terms of this Agreement. The Project Participation Percentage for each Participant shall be in the percentage set forth in Exhibit B, attached hereto and incorporated herein. Exhibit B shall be amended from time to time in accordance with this Agreement. 1.1.24 “Project” refers to the Western Geopower project to develop, finance, operate and maintain the Generating Facility which is the subject of the Amended PPA. 1.1.25 “Project Cost Allocation” means the Project Costs allocated to the Participants in the Annual Budget. 1.1.26 “Project Costs” means any and all costs, directly or indirectly, incurred by NCPA as a result of entering into the Amended PPA. Project costs include, but are not limited to related legal fees and associated staff time, administrative and general overhead costs, scheduling coordination costs, charges for transmission, transmission related costs and costs associated with the Amended PPA or other NCPA associated Agreements, including the Facilities Agreement and the SCPA or a successor agreement. 1.1.27 “Project Output” means all Energy generated pursuant to the Amended PPA from the geothermal Project currently being developed by Western GeoPower in conjunction with this Project,and related Environmental Attributes and Capacity Attributes; 1.1.28 “Participant” has the meaning set forth in the preamble hereto. 1.1.29 “Party” or “Parties” has the meaning set forth in the preamble hereto; provided that “third parties” are entities that are not party to this Agreement. 1.1.30 “Resource Adequacy Capacity” is that capacity in MWs that has been approved by each Participant as capacity available to ensure that adequate resources are 1563911.7 8 EXECUTION COPY available to meet peak demand and operating and planning reserves for the purposes of local area and system reliability. 1.1.31 “Revenues” means, with respect to each Participant, all income, rents, rates, fees, charges, and other moneys derived by the Participant from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and Energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System;(b) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System;and (c) the proceeds derived by the Participant, directly or indirectly, from the sale, lease or other disposition of all or a part of the Electric System. The term “Revenues” shall not include:(i) customers’ deposits or any other deposits subject to refund until such deposits have become the property of the Participant or (ii) contributions from customers for the payment of costs of construction of facilities to serve them. 1.1.32 “Scheduling Protocols” means the applicable provisions of the SCPA, or successor document and any other contractual or other arrangements between NCPA and the relevant Participant concerning the scheduling, delivery and metering of the Amended PPA. 1.1.33 “Security Account” means the account established by NCPA and funded by the Participants in accordance with Section 5.3, the funds of which are available for use by NCPA in accordance with the terms and conditions hereof. 1.1.34 “Term” has the meaning set forth in Section 9. 1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,” “herewith” and “hereof” are references to this Agreement taken as a whole and not to any particular provision; the term “include,” “includes” or “including” shall mean “including, for 1563911.7 9 EXECUTION COPY example and without limitation;” and references to a “Section,” “subsection,” “clause,” or “Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may be. All references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof. A reference to a “person” includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. The singular shall include the plural and the masculine shall include the feminine, and vice versa. Section 2.Effectiveness of Agreement.This Agreement shall be effective as to each Participant as of the Effective Date upon execution by the Participant, as described in Section 9 below. Section 3.Delivery of Electricity/Allocation of Resource Adequacy Capacity and Environmental Attributes. By executing this Agreement, each Participant acknowledges and agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity delivered to NCPA under the PPA shall be delivered to each Participant in proportion to such Participant’s Participation Percentage and each Participant shall accept and pay for its relevant percentage of such Energy. To the extent Participant is unable to accept such deliveries in full, NCPA shall dispose of such surplus in its discretion, in such a manner as to attempt to maximize Participant value. Notwithstanding the above, NCPA may allocate capacity and Energy procured through the Amended PPA among the Participants in such percentages as NCPA may, in its reasonable discretion, determine are necessary, desirable, or appropriate, in order to accommodate Participant Transfer Rights pursuant to Section 7, herein. Such Energy shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of performance under this Agreement shall likewise be allocated to each Participant by its Participation Percentage. 1563911.7 10 EXECUTION COPY 3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder using operating funds or Security Account funds, paid to NCPA in accordance with Section 5, or such other sources as may be agreed upon in writing by the Parties from time to time. Section 4.Cooperation and Further Assurances.Each of the Parties agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by any other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumption of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. Section 5.Payment Obligations, Security Account, Invoicing. 5.1 Participant Payment Obligations.Each Participant agrees to pay to NCPA each month its respective portion of the Project Costs. In addition, each Participant shall maintain working capital in accordance with NCPA’s Annual Budget, and maintain its Security Account as provided in this Agreement. 5.2 Calculation of and True-Up for Project Costs. NCPA will calculate interim true-ups of monthly Project Costs periodically as appropriate and practicable throughout the year, and upon Upon the conclusion of a Budget Year,NCPA shall compare each Participant’s payment of estimated Project Costs with the actual Project Costs incurred on behalf of each Participant such that overpayments will be credited to, and underpayments will debited to,the Participant’s account in accordance with NCPA’s Annual Budget settlements. 5.3 Security Account. 5.3.1 Initial Amounts. NCPA shall notify each Participant three (3) months prior to the expected initial delivery of Energy of the initial security amounts which Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure that sufficient funds are on deposit in the Security Account equal to the highest (3) months of the immediately following (12) months of estimated Project Costs; provided, however, that such 1563911.7 11 EXECUTION COPY deposit may be satisfied, in whole or in part, either in cash,by posting an irrevocable standby letter of credit or furnishing any other negotiable instrument satisfactory to NCPA’s General Manager, exercising his or her reasonable discretion. Such Security Account will be separate and apart from any other security account held by NCPA on behalf of a Participant. 5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA shall review and revise its estimate of all costs for which each Participant shall be obligated to pay for under this Agreement for the succeeding twelve (12) months. Following such review, NCPA shall determine whether each Participant has a sufficient balance in the Security Account. To the extent that any Participant’s balance in the Security Account is greater than one hundred and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon as practicable to the Participant’s next following invoice. To the extent that any Participant’s balance in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA shall add such amount as soon as practicable to such Participant’s next invoice. Credits or additions shall not be made to Participants who satisfy these Security Account requirements in whole, through the use of a letter of credit, provided that the amount of the letter of credit shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of estimated Project Costs. 5.3.3 Use of Security Account Funds.NCPA may use any and all funds deposited into the Security Account to pay any costs it incurs hereunder, including making payments to the counterparty under the Amended PPA. NCPA may use any and all funds without regard to any individual Participant’s balance in the Security Account or proportionate share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the Participants or whether a Participant has made timely payments of invoices. Should a Participant have satisfied its Security Account requirements, in whole or in part, by posting a letter of credit, NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder. 5.3.4 Emergency Additions.In the event that the funds are withdrawn pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment of an invoice, demand, request for further assurances by third parties, or Claims,NCPA shall notify all 1563911.7 12 EXECUTION COPY Participants and then prepare and send a special or emergency assessment to the Participants. Each Participant shall pay to NCPA such assessment when and if assessed by NCPA within two (2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on any existing letter of credit Participant has established for such purposes. 5.3.5 Accounting and Interest.NCPA shall maintain a detailed accounting of each Participant’s deposits into and shares of withdrawals from the Security Account. Interest earned on the Security Account shall be proportionately credited to the Participants in accordance with their Security Account balances. Any losses in the Security Account caused by early termination of investments shall be allocated among the Participants in accordance with their proportionate Participation Percentages. 5.3.6 Return of Funds. On the termination of this Agreement with respect to a Participant in accordance with this Agreement, the affected Participant or Participants may apply to NCPA for the return of their share of Security Account funds ninety (90) days after the effective date of such termination or withdrawal. NCPA shall, in its sole discretion, as determined by the General Manager, estimate the then outstanding liabilities of the Participant(s), including any estimated contingent liabilities and shall retain all such funds until all such liabilities have been fully paid or otherwise satisfied in full. The balance of the Participant’s share of the Security Account will be refunded to the Participant. 5.3.7 Default Relating to Security Account.In addition to any other remedy available in this Agreement or at law or in equity, in the event of an Event of Default relating to the Security Account, NCPA shall have those rights provided in Section 10.4.4 and the Participant agrees to take the actions specified in that section to cure such Event of Default. 1563911.7 13 EXECUTION COPY 5.4 Invoicing. 5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each Participant for its proportionate share of the Project Costs due (or any adjustments thereto) based on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement and meter data. Each invoice shall include: (i) the total Project Costs attributable to the activities under this Agreement for such month and the relevant Participant’s share thereof; (ii) the quantity of Energy, Resource Adequacy Capacity and Environmental Attributes delivered to such Participant (or an estimate thereof) and the unit price for such Energy; (iii) appropriate settlement and meter data (or an estimate thereof); and (iv)any adjustments to prior invoices required based on actual data received that was estimated in a previous invoice. NCPA may also invoice an amount, if any, that NCPA has paid or reasonably expects to pay using funds available in the Security Account; and amounts due from (or credited to) such Participant under Section 5.3.2. 5.4.2 Payment of Invoices.All invoices delivered by NCPA hereunder are due and payable on the date indicated on such invoice;provided, however, that any amount due on a day other than a Business Day may be paid on the following Business Day. NCPA may apply a Participant’s share of the Security Account to the payment of all or any portion of an invoice issued to such Participant, provided that application of such funds from the Security Account shall not relieve the Participant from any late payment charges pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to pay an amount due under an invoice, following receipt of payment of such invoice by the relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security Account and credit such deposit to such Participant. 5.4.3 Late Payments.Any amount due and not paid by a Participant in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law. 1563911.7 14 EXECUTION COPY 5.5 Settlement Data and Examination of Books and Records. 5.5.1 Settlement Data.NCPA will make metering and settlement data available to the Participants. Procedures and formats for the provision of such data will be as established by the Participants and NCPA from time to time. 5.5.2 Examination of Books and Records.Any Participant to this Agreement shall have the right to examine the books and records created and maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time. 5.5.3 Revenue Covenant. Any failure of a Participant to meet its obligations hereunder or to cure such failure in a timely manner shall constitute an Event of Default and the Defaulting Party shall be subject to such remedies of NCPA as provided for herein. Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric department revenues only, its percentage share of the costs authorized by Participants in accordance with this Agreement in connection with its participation in the Project. Each Participant further agrees that it will fix the rates and charges for services provided by its electric department, so that it will at all times have sufficient money in its department revenue funds to meet this obligation; (ii) to make payments under this Agreement from the Revenues of, and as an operating expense of, its Electric System; (iii) to make payments under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of services provided under this Agreement; such payments not being subject to any reduction, whether by offset or otherwise, and regardless of whether any dispute exists provided such interruption, interference or reduction in services is caused by forces constituting a force majeure1 and not reasonably contemplated by the Parties; and (iv) to operate its Electric System in an efficient manner and to maintain its facilities in good repair, condition and working order so that: (a) the Participant’s obligations to make payments under this Agreement are not adversely affected or threatened; and 1 For the purposes of Section 5.5.3, a force majeure shall be defined as any natural disaster or uncontrollable force not preventable by any human agency, such as, but not limited to, any storm, flood, or violent or destructive natural force. 1563911.7 15 EXECUTION COPY (b) NCPA’s bond rating and ability to negotiate and enter into a PPA are not adversely affected or threatened. Section 6.Administration of Agreement 6.1 General.The NCPA Commission has sole overall responsibility and authority for the administration of this Agreement. Any acts, decisions or approvals taken, made or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in accordance with NCPA’s Constitutive Documents and Section 6.2. 6.2 Action by Participating Members. (a)Forum. Whenever any action anticipated by this Agreement is required to be taken by the Participants, such actions shall be taken at a regular or special meeting of the NCPA Commission but shall be participated in only by those Commissioners, or their designated alternates, who are Participants. (b) Quorum. A quorum at NCPA Commission meetings for purposes of acting upon matters relating to this Agreement shall consist of Commissioners, or their designated alternates,representing at least two Participants having a combined majority interest based upon Participation Percentages. (c) Voting. Each Participant shall have the right to cast one vote with respect to matters pertaining to this Agreement, including with respect to actions taken by NCPA relating to the Amended PPA, with a majority vote of the Participating Members required for action subject to the following exceptions: (i)Upon request of any Participant representative, the voting on an issue related to this Agreement shall be by Participation Percentage with a 65% or more favorable vote necessary to carry the action. The 65% required by the preceding sentence shall be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced below a majority interest. (ii)After any decision related to this Agreement is taken by the affirmative vote of less than 65% of the Participation Percentage, the action may be reviewed and 1563911.7 16 EXECUTION COPY revised if a Participant gives notice of intention to seek such review and revision to NCPA and each of the other Participants within ten (10) days following the date on which such action was taken. Upon receipt of such a request for reconsideration, NCPA shall agendize the matter for reconsideration at the next regular meeting of the Commission or at a special meeting if the circumstances so warrant. The action shall be upheld upon the affirmative vote by Participation Percentage of not less than 65%. Any action taken upon reconsideration shall be final.The vote of 65% of the Participation Percentage required by the previous sentence may be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced below a majority interest. (iii) Participants agree to abide by the terms and conditions of NCPA’s Facilities Agreement,as it may be amended from time-to-time. Any Participants who are not currently signatories to the Facilities Agreement agree to become signatories within thirty (30) days of the date of this Agreement. Section 7.Admission of New Participants. Following the Effective Date of this Agreement, no Member (“Additional Member”) may execute this Amended Agreement and become a Participant unless one or more of the Participants (“Allocating Participants”) elect to allocate a portion of its Participant Percentage to such Member. Upon agreement of the Allocating Participant and the Additional Member, the Additional Member shall deliver to NCPA and each other Participant the written agreement between the Additional Member and the Allocating Participant(s) indicating the agreed upon change in Participation Percentage(s), a counterpart of this Agreement executed by the Additional Member, evidence that such agreements have been approved in accordance with its applicable Constitutive Documents and payment of such Member’s share of the Security Account. Any reduction in any Allocating Participant’s share of the Security Account shall be credited to the Allocating Participants in accordance with Section 5.3. Upon receipt of all required documents, NCPA shall provide to all Participants an updated Exhibit B reflecting the revised Participation Percentages. Section 8.Withdrawal of Participants. No Participant may withdraw from this Agreement after the Effective Date. 1563911.7 17 EXECUTION COPY Section 9.Term and Termination. 9.1 This Agreement shall become effective on the Effective Date when it has been executed and delivered to NCPA by Participants, the Participation Percentages of which, in the aggregate, equal at least 65% participation in the Project. NCPA shall provide written notices to all Participants,establishing the Effective Date. The remaining Participants listed in Exhibit B shall have forty-five (45)days, following the notice of the Effective Date to execute and deliver counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fail to execute and deliver this Agreement or the Facilities Agreement within such forty-five (45)days, unless otherwise agreed to by the Participants who have executed the Agreement, the Participating Percentages of such member or members shall be allocated to those Participants in proportion to, but not exceeding, their Participation Percentages. 9.2 This Agreement shall be coterminous with the Amended PPA contained in Exhibit A. 9.3 This Agreement may be terminated by the Parties if NCPA successfully exercises its right of first refusal to purchase the entire Western GeoPower Project as set forth in Section 3.5(a)of the Amended PPA. In the event of termination pursuant to this Section 9.2, the Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date of such termination. Following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants,in proportion to their respective Participation Percentages the costs and benefits of the Amended PPA and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the Amended PPA, including, but not limited to,re-subscribing the Project capacity with additional NCPA Members or non-Member participants. NCPA shall reasonably cooperate with the Participants and other NCPA Members in connection with implementing the foregoing,and the Participants shall indemnify NCPA for any costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants and other reasonable and necessary costs. 1563911.7 18 EXECUTION COPY Section 10.Default and Remedies 10.1 Events of Default.An Event of Default under this Agreement shall exist with respect to a Party (the “Defaulting Party”) upon the occurrence of any one or more of the following: (i) if any Party fails to make any payment or to provide assurances as required of NCPA under this Agreement when due hereunder two (2) Business Days after receipt of notice given by NCPA of such non-payment; or (ii) the failure of the Defaulting Party to perform any other covenant or obligation under this Agreement where such failure is not cured within ten (10) calendar days following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any failure to make payments (which is covered by Section 10.1 (i)); or (iii)if any representation or warranty of the Defaulting Party material to the transactions contemplated hereby is or shall prove to have been incorrect in any material respect when made and the Defaulting Party does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or (iv)if a Participant is in default or in breach of any of its covenants under any other agreement with NCPA and such default or breach is not cured within the time period(s)specified in such agreement or, if not specified, within ten (10) calendar days of the date of receipt of notice; or (v) the failure of NCPA to perform any covenant or obligation under this Agreement within ten (10) calendar days following the delivery of a notice to cure by any non- defaulting Member. 10.2 Cure of an Event of Default.An Event of Default shall be deemed cured only if such default shall be remedied within the time period specified in Section 10.1, above, as may be applicable after written notice has been sent to the Defaulting Party from NCPA specifying the default and demanding that the same be remedied;provided,that failure of a Party to provide such notice shall not be deemed a waiver of such default. 1563911.7 19 EXECUTION COPY 10.3 Participation Rights Of Defaulting Party.Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default and until such Event of Default is cured, a Participant that is the Defaulting Party shall not have the right to participate under Section 6.2 on any matters with respect to this Agreement. 10.4 Remedies in the Event of Default. 10.4.1 Upon the occurrence of an Event of Default where a Participant is the Defaulting Party, without limiting its other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any right, action or cause of action NCPA or a non-defaulting Participant may have against the Participant, NCPA may: (i) suspend the provision of goods and/or services under this Agreement to such Defaulting Party, including the delivery of Energy and other attributes of the Amended PPA until the Event of Default is cured; and (ii) demand that the Defaulting Party provide further assurances to compel the correction of the default, including mandating the collection of a surcharge to produce Revenues to secure the cure of the Event of Default; and (iii) terminate this Agreement as to the Defaulting Party on ten (10) days prior written notice to the Defaulting Party and following approval of the non-defaulting Participants. 10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any default of a Participant caused by the failure of such Participant to pay any sums due, and provided that such default is not cured in a timely manner, then NCPA shall use its best efforts to sell and transfer for the Defaulting Party’s account all or a portion of the Participant’s capacity and/or Energy and/or Environmental Attributes for the remainder of the term of this Agreement. Notwithstanding that all or any portion of the Participant’s capacity, energy or environmental attributes may be so sold or transferred, the Participant shall remain liable for all of its obligations hereunder. 1563911.7 20 EXECUTION COPY 10.4.3 Remedies of Participants.Upon the occurrence of an Event of Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the Participant may, without limiting their other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, action or cause of action the Participants may have against NCPA, bring such action as may be applicable to compel performance by NCPA. 10.4.4 Special Covenants Regarding Security Account.In the event that a Participant’s balance of the Security Account is insufficient to cover all invoices for costs incurred under this Agreement sent to such Participant, then, without limiting NCPA’s other rights or remedies available under this Agreement, at law or in equity, such Participant shall cooperate in good faith with NCPA and shall cure said default within thirty (30) days, on an emergency basis, taking all such action as is necessary, including, but not limited to, raising rates and charges to its customers to increase its Revenues to replenish its share of the Security Account as provided herein, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of credit support and letters of credit, and taking all such other action as will cure the default. 10.5 Effect of Termination or Suspension. 10.5.1 The suspension or termination of this Agreement will not terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or obligations arising from this Agreement until such obligations are satisfied in full, and all of the costs incurred by NCPA in connection with such suspension or termination, including reasonable attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable and necessary costs associated with any and all of the remedies, are paid in full. 10.5.2 Suspension by NCPA.If performance of all or any portion of this Agreement is suspended by NCPA with respect to a Participant in accordance with Section 10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such suspension, including reasonable attorneys' fees, the fees and expenses of other experts, 1563911.7 21 EXECUTION COPY including auditors and accountants, other reasonable and necessary costs associated with such suspension and any portion of the Project Costs that were not recovered from such Participant as a result of such suspension. 10.5.3 Termination by NCPA.If this Agreement is terminated by NCPA with respect to a Participant in accordance with Section 10.4.1 (iii),such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such termination including reasonable attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such termination and any portion of the Project Costs that were not, or will not be, recovered from such Participant as a result of such termination; provided, however, if NCPA terminates this Agreement with respect to the last Participant, then this Agreement shall terminate. 10.5.4 Termination by Participants. This Agreement may be terminated by unanimous consent of all of the Parties hereto. In that event,the Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date of such termination,and following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants in proportion to their respective Participation Percentages the costs and benefits of the Amended PPA and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the Amended PPA. NCPA shall reasonably cooperate with the Participants in connection with implementing the foregoing and the Participants shall indemnify NCPA for any costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants and other reasonable and necessary costs. If the Parties are unable to reach agreement as to the foregoing, then the Parties agree to submit the matter to mediation with a mutually agreed upon mediator. If the Parties are still unable to reach agreement following mediation, then the matter shall be submitted to binding arbitration subject to the rules of the American Arbitration Association, the costs of such arbitration being borne proportionally among the Participants. Section 11.Miscellaneous. 1563911.7 22 EXECUTION COPY 11.1 Confidentiality.The Participants and NCPA will keep confidential all confidential or trade secret information made available to them in connection with this Agreement, to the extent possible, consistent with applicable laws, including the California Public Records Act. It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at its expense against any request that such information be disclosed. Confidential or trade secret information shall be marked or expressly identified as such. 11.2 Indemnification and Hold Harmless.Subject to the provisions of Section 11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”), to the extent caused by any acts, omissions,breach of contract, negligence (active or passive), gross negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers, employees, subcontractors or agents, to the maximum extent permitted by law. 11.3 Several Liabilities.No Participant shall be liable under this Agreement for the obligations of any other Participant, and each Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein, and the obligation of each Participant under this Agreement is a several obligation and not a joint obligation with those of the other Participants.Notwithstanding the foregoing, the Participants acknowledge that any debts or obligations incurred under this Agreement shall be borne solely by such Participants, and not by non-Participant Members of NCPA, pursuant to Article IV, Section 3(b) of the Joint Powers Agreement. It is intended that notwithstanding the provisions of the Joint Powers Agreement and the general nature of the severability of liabilities in this Agreement, the Participants acknowledge and agree that if there is a default by NCPA under the Amended PPA, the Participants will be severally liable for their proportionate share of such default until NCPA is able to fully recover from the defaulting Participant. 11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS 1563911.7 23 EXECUTION COPY PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS,OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY. The Parties acknowledge that California Civil Code section 1542 provides that: “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 executing 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 section 1542, or other similar provisions of law, and intend that the waiver and release provided by this section of this Agreement shall be fully enforceable despite its reference to future or unknown claims. 11.5 Amendments.Except where this Agreement specifically provides otherwise, this Agreement may be amended only by written instrument executed by the Parties with the same formality as this Agreement. 11.6 Severability.In the event that any of the terms, covenants or conditions of this Agreement or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court having jurisdiction, all other terms, covenants or conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless the court holds that such provisions are not severable from all other provisions of this Agreement. 1563911.7 24 EXECUTION COPY 11.7 Governing Law.This Agreement shall be interpreted, governed by, and construed under the laws of the State of California. 11.8 Headings.All indices, titles, subject headings, section titles and similar items are provided for the purpose of convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof. 11.9 Notices.Any notice, demand or request required or authorized by this Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a Participant and the Secretary of the Commission or transmitted to the Participant and the Secretary of the Commission at the address shown on the signature pages hereof. The designation of such address may be changed at any time by written notice given to the Secretary of the Commission who shall thereupon give written notice of such change to each Participant. 11.10 Warranty of Authority.Each Participant, and NCPA, represents and warrants that it has been duly authorized by all requisite approval and action to execute and deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such Participant, evidencing approval of and authority to enter into this Agreement, that such authority was duly exercised in accordance with such Participant’s Constitutive Documents. 11.11 Counterparts.This Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all of the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages. 11.12 Assignment.Except as provided by Section 7,no Participant may assign or otherwise transfer its interest in its Participation Percentage or any other rights and obligations 1563911.7 25 EXECUTION COPY under this Agreement without the express written consent of NCPA, which shall not be unreasonably withheld. 11.13 Participation Options. 11.13.1 Exercise of the Right of First Refusal. The Parties contemplate that NCPA may exercise an option to purchase the underlying assets of the Amended PPA as per the voting procedures of this Agreement outlined in Section 6. Participation in any such purchase shall be in accordance with the then existing Participation Percentages, unless such Participation Percentages are otherwise agreed upon by the Participants. At such time as NCPA exercises its right of first refusal, this Agreement shall be amended to reflect the purchase of the underlying assets and the Project. If any Participant elects not to participate in the purchase of the Project, then this Agreement shall terminate as to such Participant, subject to the Participant not being a Defaulting Party under any of its obligations of this Agreement. 11.13.2 Expansion Plant Output. If Participants elect to purchase Expansion Plant Output, as that term is defined in the Amended PPA, pursuant to Section 3.5(b) of the Amended PPA, each Participant shall deliver a notice to NCPA of its intent to participate in the purchase of any Expansion Plant Output. Participation shall be in accordance with the then existing Participation Percentages, unless such Participation Percentages are otherwise agreed upon by the Participants. Notwithstanding the foregoing, Participants may elect not to participate in the purchase of any Expansion Plant Output, in which case the Participation Percentages in Exhibit B shall be revised to reflect the desired Participation Percentages in any Expansion Plant Output. If the Participation Percentages cannot be revised to fully subscribe the Expansion Plant Output, then NCPA shall reject the purchase of the Expansion Plant Output. 11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as follows: Exhibit A -AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN THE NORTHERN CALIFORNIA POWER AGENCY AND WESTERN GEOPOWER INCORPORATED Exhibit B -PARTICIPATION PERCENTAGES 1563911.7 EXECUTION PAGE 1563911.7 EXECUTION PAGE IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its governing body, and NCPA has authorized this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA POWER AGENCY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LOMPOC By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF PALO ALTO By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ROSEVILLE By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF SANTA CLARA By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 1563911.7 EXECUTION PAGE PORT OF OAKLAND By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 1563911.7 EXECUTION PAGE EXHIBIT A RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER INCORPORATED [See attached] 1563911.7 EXECUTION PAGE EXHIBIT B PARTICIPATION PERCENTAGES Participant Participation Percentage*Equivalent MW Santa Clara 0.505 13.13 Roseville 0.269 6.99 Palo Alto 0.150 3.90 Lompoc 0.038 0.99 Port of Oakland 0.038**0.99 Total 1.000 26 *Participation Percentage is based on the project’s expected, long term capacity of 26 mw net.Based on preliminary geothermal reservoir forecasts and operation plans, it is possible the project’s output will exceed the expected long term net capacity for the first three years of the contract period by as much as 2 mw (28 mw maximum capacity). ** Port of Oakland does not want their project share to exceed 15,000 mwhrs in any given year over the contract term. To the degree that the annual average project capacity exceeds 45.0 mw net (45.0 mw x 0.038 participation percentage x 8760 hrs/yr = 14,980 mwhrs), any Port of Oakland share above 15,000 mwhrs will be allocated to the other project participants based on their original project participation percentage. City of Palo Alto (ID # 1441) Finance Committee Staff Report Report Type:Meeting Date: 3/1/2011 March 01, 2011 Page 1 of 6 (ID # 1441) Council Priority: Environmental Sustainability Title: Agreements for Western GeoPower Renewable Energy Subject: Utilities Advisory Commission Recommendation to City Council to Adopt Two Resolutions: (1) Approving An Agreement Terminating the Third Phase Agreement For Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, and (2) Approving a new Third Phase Agreement For Western GeoPower Inc Renewable Energy Power Purchase Agreement for the Acquisition of Up to 15 Percent of Project Energy over 25 Years at a Cost Not to Exceed $95 Million From:City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee recommend that the City Council approve the Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (Termination Agreement). Additionally, the UAC recommends that the Finance Committee recommend that the City Council approve a new Third Phase Agreement for Western GeoPower Inc. Renewable Energy Power Purchase Agreement. Executive Summary The City signed an agreement in 2008 to receive renewable power from Western GeoPower, a geothermal project in northern California, at a price of $98 per megawatt-hour (MWh). The project would have provided enough renewable energy for up to 3% of the City’s energy supply needs. However, at that price the project could not secure financing and staff and the UAC recommend terminating this agreement. The project has been proposed again, but with a $113/MWh price. The City could commit to this price now for the same amount of energy in the original agreement as recommended by the UAC. Staff recommends that the City wait until it has conducted a more thorough review of alternatives and can make a studied recommendation on pursuing the project. Staff understands it could get a share of the project at the $113/MWh price before the end of 2011 from the City of Santa Clara, which has said that March 01, 2011 Page 2 of 6 (ID # 1441) it would commit to more of the project now to move the project forward. However, at this time, Santa Clara has not made any written commitment to offer the City a share of the project in the future at the same price. Background On February 19, 2008, the Council adopted Resolution 8798, approving the Northern California Power Agency (NCPA) Third Phase Agreement for Western GeoPower renewable energy power purchase and the City’s participation in the agreement for the purchase of up to 5 average megawatts of energy within an average procurement price cap of $98 per megawatt-hour (MWh)(CMR 141:08). The original Third Phase Agreement was executed on May 28, 2008 by NCPA. NCPA also executed an agreement with Western GeoPower, to purchase the energy from Western GeoPower’s proposed geothermal project at a price of $98/MWh (equivalent to 9.8 cents per kilowatt-hour). This power would be passed through to participating members, including Palo Alto, at NCPA’s cost. The financial crisis of 2008 undermined project financing that Western GeoPower was seeking. New financing available to Western GeoPower required a larger cash flow leading to their request for a contract price of $117/MWh. Council approved an amended Third Phase Agreement with the higher delivery price of $117/MWh on August 3, 2009 (CMR 347:09), but it was not fully executed as Western GeoPower was shortly thereafter taken over by, and became a subsidiary of, another company named Ram Power. Since August 2009, NCPA attempted various negotiated solutions with the developer. Based on information NCPA provided, staff considered the project an unsuccessful contracting effort and moved on to meet the 33% Renewable Portfolio Standard (RPS) target by issuing a Request For Proposals (RFP) in the fall of 2009 that ultimately resulted in two Power Purchase Agreements (PPAs) with landfill-gas-to-energy projects (San Joaquin and Crazy Horse Canyon) approved by Council in May 2010 (CMR: 226:10). Currently, qualifying renewable resources comprise about 19 percent of the City’s electric power needs. With three power projects under construction, contracted qualifying renewable supplies are expected to supply about 27% of the City’s electric power needs in 2013 if energy efficiency goals are achieved. Discussion In late 2010 and early 2011, NCPA negotiated again with Western GeoPower (in its new form as a subsidiary of Ram Power) and is positioned to replace the original agreements that were to provide renewable energy output from the project at $98/MWh with new agreements providing the energy at $113/MWh. Ram Power stated that this price increase is required to get the project financed and built. To replace the original $98/MWh contracts NCPA requests participants of the original Third Phase Agreement to execute the attached Termination Agreement and, if interested, execute a new Third Phase Agreement for $113/MWh power. Executing the Termination Agreement clears the way for interested members to move ahead with the new $113/MWh-priced agreements. March 01, 2011 Page 3 of 6 (ID # 1441) The City of Santa Clara’s municipal utility, Silicon Valley Power (SVP), plans to initially subscribe to all unsubscribed shares of the new $113/MWh Third Phase Agreement and later amend the agreement to allow Palo Alto, in particular, or others, to later participate in the project. SVP has indicated its willingness to hold this option open until the end of calendar year 2011, however there is no written agreement memorializing this understanding. The City has the following options regarding the Western GeoPower project: 1.The City declines to execute the Termination Agreement.In this case, the City would not be able to enter into the new Third Phase Agreement at the $113/MWh price.In addition, the other participants may have difficulty executing the new Third Phase Agreement replacing the one Palo Alto declined to terminate. 2.The City executes the Termination Agreement and: a.declines to enter into the new Third Phase Agreement at the $113/MWh price at this time. In this case, SVP has indicated that it would take up as much of the project share as required for the project to go forward. SVP has verbally indicated that it would offer Palo Alto a share of the project later in 2011 at the $113/MWh price; or b.enter into the new Third Phase Agreement at the $113/MWh price. In the new Third Phase Agreement, the City may specify an upper limit on its participation share. The final participation level would be determined once all participants execute the new Third Phase Agreement. For example, the City may define its participation as: (1)“up to 15%” of the project output, which amounts to about 3.8 average megawatts (MW), which is enough to meet about 3.3% of the City’s annual electric needs. This is the maximum share of project output that the City agreed to in the original $98/MWh agreement; (2)“up to 10%” of the project output, which amounts to about 2.5 average megawatts (MW), or enough to meet about 2.2% of the City’s annual electric needs; or (3)“up to 30%” of the project output, which amounts to about 7.5 average megawatts (MW), or enough to meet about 6.6% of the City’s annual electric needs. The Termination Agreement has been reviewed by staff and the City Attorney’s office. The new draft Third Phase Agreement has been reviewed by staff, but it has not yet been finalized by NCPA. Staff recommends option 2.a.: executing the Termination Agreement and deferring a final decision to participate again until later in 2011. Taking this option will result in the termination of the original $98/MWh-priced Third Phase Agreement in order to facilitate contracting efforts between NCPA and its other interested members. Staff will work with SVP to be allowed to opt in to the project sometime before the end of 2011. Later in 2011, after Council approval of the Long-term Electric Acquisition Plan (LEAP) and further evaluation of this project, staff may March 01, 2011 Page 4 of 6 (ID # 1441) recommend that the Council participate in a share of the $113/MWh-priced Third Phase Agreement for GeoPower output. At its meeting in February 2011, the UAC reviewed staff’s recommendation and agreed that the Council should execute the Termination Agreement. The UAC also voted unanimously to recommend option 2.b.(1): immediately entering into the new Third Phase Agreement at the $113/MWh price for a maximum share of up to 15% of the project. Preliminary Evaluation of the Western GeoPower Project at a Flat $113/MWh price Staff has not had time to thoroughly evaluate the attributes of the agreement and the new price of $113/MWh. A preliminary evaluation of how a 15% share of the Western GeoPower project would impact Palo Alto’s resource mix, renewable resource portfolio, rates and RPS targets can be found in Attachment F. Staff’s Recommendation Since it has been about 16 months since the City tested the renewable market independently with an RFP, staff cannot say with certainty that the price offered for the Western GeoPower project is the best available. In addition, although the UAC and the Finance Committee recommend the Council approve the proposed updated Long-term Electric Acquisition Plan (LEAP), the Council has not yet considered LEAP so approving the project is not consistent with Council direction from May 2010 to re-examine the policies and goals used in the alternate energy program, including energy efficiency plans and resource acquisition policies and plans prior to making any further recommendations on the acquisition of new renewable resources. Staff has a verbal agreement with Silicon Valley Power (SVP) to allow City to participate in the Western GeoPower project if the participation commitment is made by the end of 2011. This will permit an in depth analysis by staff and time to complete a thorough review and recommendation. Commission Review and Recommendation On February 2, 2011, staff presented a recommendation to the UAC to execute the Termination Agreement and to wait before deciding whether to agree to the new $113/MWh price for the Western GeoPower project. The UAC agreed with staff’s recommendation to execute the Termination Agreement as a necessary step to allow the project to go forward. In addition, the UAC was in favor of immediately executing a new Third Phase Agreement for the Western GeoPower project at the $113/WMh price rather than wait to join the project at a later date, after a more thorough evaluation and completion of outstanding planning activities, specifically the LEAP and Utilities Strategic Plan updates. The reasons commissioners provided for recommending moving forward now with the new Third Phase Agreement included the following: the $113/MWh price appears to be very competitive as it is essentially the same price as the landfill gas contracts Council approved last March 01, 2011 Page 5 of 6 (ID # 1441) year, the Western GeoPower project does not have the environmental issues regarding landfill operation that were raised when those landfill gas contracts were approved, the Western GeoPower project would add diversity to the renewable resource portfolio, which now contains only wind and landfill gas projects, the project was previously approved by Council and the price change is reasonable given what we know about the prices of renewable energy projects, the project would move the City closer to achieving its RPS goals, adding the project to the portfolio still leaves room for additional energy efficiency or local project that may occur as a result of a future feed-in tariff program, there is no need to take more time to evaluate the merits of this project or to issue another request for proposals to determine if the price is competitive. After discussion, the commission voted unanimously (6-0) to recommend that the Council execute the Termination Agreement and enter into the new Third Phase Agreement at the $113/MWh price at a participation level of up to 15% of the project. The draft notes from the UAC’s February 2, 2011 meeting are available as Attachment F. Resource Impact Executing the Termination Agreement has no resource impact. Policy Implications Adoption of the Resolution authorizing the Termination Agreement has no policy implications. Environmental Review Execution of these agreements does not meet the definition of a project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). However, the City intends to receive output from projects that will constitute a project for the purposes of CEQA. Project developers will be responsible for acquiring necessary environmental reviews and permits on projects to be developed. Attachments: ·Attachment A: Resolution Terminating Third Phase Agreement for Western GeoPower Inc Renewable Energy Power Purchase Agreement (DOC) ·Attachment B: Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (DOC) ·Attachment C: Draft 2011 Third Phase Agreement for Western GeoPower Inc. Renewable Energy Power Purchase Agreement (DOC) ·Attachment D: 2008 Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (DOC) ·Attachment E: Excerpted draft notes from the UAC's February 2, 2011 meeting (DOC) ·Attachment F: Preliminary Evaluation of the new Western GeoPower Project (DOC) March 01, 2011 Page 6 of 6 (ID # 1441) Prepared By:Tom Kabat, Manager Department Head:Valerie Fong, Director City Manager Approval: James Keene, City Manager Not Yet Approved 1 110223 jb 0073505 Resolution No ____ Resolution of the Council of the City of Palo Alto Approving Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement WHEREAS, the City of Palo Alto (the “City”), a municipal utility and a chartered city, is a member of the Northern California Power Agency (“NCPA”), and the City and other NCPA members have collectively entered into a both a Power Purchase Agreement (the “PPA”) with Western GeoPower Incorporated (“WGI”) A fully owned subsidiary of Ram Power Corp for a term of twenty (20) years and at a price of $98.00 per megawatt-hour (“$98/MWh”)and a Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “TPA”), which TPA allocates all costs and benefits of the PPA to participating NCPA members;and WHEREAS, the underlying project has not been built since the financial crisis of 2009 interfered with WGI’s ability to finance the project at the cash flow provided by the $98/MWh PPA; and WHEREAS, WGI has subsequently been taken over by Ram Power Corp and is now a fully owned subsidiary of Ram Power Corp; and WHEREAS, WGI and NCPA have negotiated a new replacement PPA with a 25 year term and a $113/MWh price that is attractive to several NCPA members and would be financeable to build the eligible renewable resource; and WHEREAS, the City desires to complete certain electric resource planning work prior to making new PPA commitments; and WHEREAS, The City of Santa Clara’s electric utility has offered to initially subscribe to all available shares and to subsequently amend their participation if requested before December 31, 2011 to allow Palo Alto to subscribe to an up to 15% share of the project at that time if the City then desires; and WHEREAS, The City of Santa Clara’s electric utility does not require the City to subscribe to a share of the project at any time; and WHEREAS, The NCPA Commission, on January xx, 2011, approved the Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase; and WHEREAS, The NCPA Commission, on February xx, 2011, approved the Renewable Energy Power Purchase Agreement between Northern California Power Agency and Western GeoPower Incorporated; and Not Yet Approved 2 110223 jb 0073505 WHEREAS, The NCPA Commission, on March xx, 2011, approved the Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (the “new TPA”), which new TPA allocates all costs and benefits of the PPA to participating NCPA members; and WHEREAS, The City’s cooperation in terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement is needed to facilitate the replacement of the prior un-financeable $98/MWh PPA with a new financeable $113/MWh PPA for participating members not including Palo Alto at this time; NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement and delegates to the City Manager the authority to sign the contract on behalf of the City. 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 AGREEMENT TERMINATING THE THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER INCORPORATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT THIS TERMINATION AGREEMENT (the “Agreement”) is entered into this ___ day of _______, 2011 by and between the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of its Members who entered into the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement on May 6, 2008 (“Participants”)(collectively, the “Parties”). RECITALS: WHEREAS, on or about May 6, 2008, NCPA and the Participants executed the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement (“Third Phase Agreement”); WHEREAS, on May 16, 2008, NCPA executed a power purchase agreement (“PPA”) with Western GeoPower Incorporated (“Western Geo”) to purchase the entire expected electric output from a new Western Geo geothermal project (“Project”) located in the Geysers Geothermal Field located in Sonoma and Lake Counties in the State of California; WHEREAS, the purpose of the Third Phase Agreement was to provide the means necessary for NCPA to be able to enter into the PPA on behalf of the Participants and to enable and obligate the Participants to take delivery of and pay for such electricity as might be generated by the Project; WHEREAS, the price in the PPA for energy generated by the Project was $98 per megawatt hour (“Project Price”); WHEREAS, due to financial pressures, Western Geo was never able to build the Project, and has stated that it is unable to provide energy to NCPA at the Project Price; WHEREAS, Western Geo has proposed revising the PPA to reflect a change in the Project Price to $113 per megawatt hour (“Amended Price”), and not all Participants wish to participate in the Project for the Amended Price; and WHEREAS, NCPA and the Participants have agreed to terminate the Third Phase Agreement, and those Participants desiring that NCPA enter into an amended and restated PPA (“Amended and Restated PPA”)with Western Geo for energy at the Amended Price will enter into a new third phase agreement (“North Geysers Third Phase Agreement”)to cover any costs and obligations associated with the Amended and Restated PPA on an ongoing basis. NOW, THEREFORE, the Parties hereby agree as follows: 1564960.4 2 1.Termination of the Third Phase Agreement. The Third Phase Agreement, and all rights and obligations of the Parties pursuant to the Third Phase Agreement, except such matters as survive its termination, including without limitation Section 10.5 thereof (“Surviving Obligations”), are hereby terminated effective as of the Effective Date.The Effective Date shall be the Effective Date of the North Geysers Third Phase Agreement. 2.Mutual Release.Except as to the Surviving Obligations, which are not waived or relinquished by the Parties, the Parties hereby release and discharge one another and their successors and assigns, agents, employees and representatives from any and all obligations, claims, actions and liabilities, whether past, present or future, of whatever character, known or unknown, by reason of or existing in connection with the Third Phase Agreement (the “Settled Obligations”). The Parties acknowledge that they have read and understand the terms of Section 1542 of the California Civil Code, which 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 executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties hereby waive and relinquish all rights and benefits they, and each of them, may have under Civil Code Section 1542 with respect to the Settled Obligations, and acknowledge that the consequence of such waiver and relinquishment is that no Party may make a claim against another Party for damages that may be discovered in the future with respect to the Settled Obligations. Initials:_________________ Participant Agency 4. Payment of Outstanding Costs by Participants. The Participants each agree to pay or reimburse NCPA for any and all costs and expenses incurred to date under the Third Phase Agreement, pursuant to each Participant’s Participation Percentages, as that term is defined in the Third Phase Agreement. 5. Other Documents. Each Party shall cooperate fully in the execution of any and all other documents and in the completion of any additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of this Agreement. 6.Amendment. This Agreement constitutes the entire agreement between the Parties as to the subject matter hereof and may only be amended by a writing signed by all Parties. 7.Invalidity. If any term, provision or application of this Agreement is held invalid 3 or unenforceable, the remainder of this Agreement and any application of the terms and provisions shall not be affected thereby, but shall remain valid and enforceable. 8.Non-waiver.The waiver of any breach of any of the provisions of this Agreement by either Party shall not constitute a continuing waiver or a waiver of any subsequent breach by the other Party either of the same or of another provision of this Agreement. 9.Attorneys’Fees.Should any litigation, including arbitration proceedings, be commenced between the Parties concerning this Agreement or the rights and duties of either of the Parties in relation thereto, the party prevailing in such litigation or arbitration, in addition to such other relief as may be granted in such proceeding, shall receive from the losing party a reasonable sum as and for his attorney fees in the litigation or arbitration, the amount of which shall be determined by the Court or the arbitrator. 10.Notices.Any notice required to be given pursuant to this Agreement, or desired to be given in connection with this Agreement, shall be given in writing as provided in the Third Phase Agreement. 11.Counterparts. This Agreement may be signed in counterparts and shall be governed by and construed in accordance with the laws of the State of California. 12. Warranty of Authority. The Parties each hereby represent and warrant that he/she/it has the authority to enter into this Agreement. Each signatory to this Agreement hereby warrants that he/she is duly authorized to execute this Agreement on behalf of and as the lawful act and deed of the entity for which he or she signs. 13.Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of Placer County, California or in the Federal District Court for the Eastern District of California. 1564960.4 4 Executed at Placer County, California, on day and year first above set forth. NORTHERN CALIFORNIA POWER AGENCY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ALAMEDA By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LOMPOC By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF PALO ALTO By: Title Date: Approved as to Legal Form By: Its: Attorney Date: PORT OF OAKLAND By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 5 BAY AREA RAPID TRANSIT AUTHORITY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: TRUCKEE DONNER REPUBLIC UTILITY DISTRICT By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LODI By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ROSEVILLE By: Title Date: Approved as to Legal Form By: Its: Attorney Date: SILICON VALLEY POWER By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 1 THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER, INC. GEOTHERMAL PROJECT RENEWABLE ENERGY POWER PURCHASE AGREEMENT DRAFT THIRD PHASE AGREEMENT 1563911.2 i TABLE OF CONTENTS Section………………………………………………………………………….…….Page RECITALS..…......…………..……………………………………………1 1.Definitions…………………..……………………………………………2 2.Effectiveness of Agreement…………………………………………...8 3.Delivery of Electricity / Allocation of Resource Adequacy………….. Capacity and Environmental Attributes…….…….………………….8 4.Cooperation and Further Assurances………….……………..….…….8 5.Payment Obligations, Security Account, Invoicing……….…….........9 6.Administration of Agreement………………………………………...13 7.Admission of New Participants………….…………………...……….14 8.Withdrawal of Participants……………………………………………15 9.Term and Termination………….……………………………………..15 10.Default and Remedies…...…………………………………………….16 11.Miscellaneous…………………………………………………………..20 EXHIBIT A RENEWABLE ENERGY POWER PURCHASE AGREEMENT between NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER INCORPORATED EXHIBIT B PARTICIPATION PERCENTAGES DRAFT THIRD PHASE AGREEMENT 1563911.2 i This Third Phase Agreement for the Western GeoPower, Inc. Geysers Geothermal Project Renewable Energy Power Purchase Agreement (this “Agreement”) is between the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of its Members who execute this Agreement (“Participants”). NCPA and the Participants are referred to herein individually as a “Party” and collectively as the “Parties.” RECITALS A.WHEREAS, NCPA and the Participants are interested in purchasing additional renewable electric capacity and energy for the benefit of the Participants’ customers;and B.WHEREAS, on or about May 6, 2008, NCPA and certain of its members executed the “Third Phase Agreement for Western Geopower Incorporated Renewable Energy Power Purchase Agreement”("the Previous Third Phase Agreement"), by which which NCPA agreed, on behalf of those members executing the Previous Third Phase Agreement, to enter into a power purchase agreement (“PPA”) with Western GeoPower, Inc. (“Western GeoPower”)to purchase the entire expected Project Output from a new WesternGeoPower geothermal project located in the Geysers Geothermal Field in the Mayacamas Mountains of Sonoma and Lake Counties in the State of California (“the Project”); and C.WHEREAS, on May 16, 2008, in conformance with the Previous Third Phase Agreement, NCPA executed a PPA with Western GeoPower to purchase the entire expected Project Output at a price of $98 per megawatt hour; and D.WHEREAS, due to certain financial conditions, WesternGeoPower was unable to build the Project and has proposed that the price for energy be increased, which proposal is acceptable to NCPA and to the Participants, who desire that NCPA enter into a revised PPA with Western GeoPower; and 1563911.2 2 E.WHEREAS, the Previous Third Phase Agreement has been terminated by an Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, dated _____________, 2011; and F.WHEREAS, on _____,2011 NCPA and Western GeoPower propose to entere into an Amended and Restated Renewable Energy Power Purchase Agreement (“Amended PPA”)by which NCPA would agree to purchase the entire expected Project Output of the Project from Western GeoPower at a price of $113 per megawatt hour;and G.WHEREAS, NCPA and the Participants wish to enter into this Agreement to provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the Amended PPA and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing activities; H.WHEREAS, NCPA and its members have (or will have) entered into the Facilities Agreement, dated September 22, 1993, which provides for services which NCPA shall perform for its members, and for the provisions to be contained in third phase agreements such as this Agreement; I.WHEREAS, NCPA and its members have (or will have) entered into the Scheduling Coordination Program Agreement (“SCPA”), dated August 28, 2002, which provides for CAISO scheduling services and cost allocations which NCPA shall perform for its members; NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound, as follows: Section 1.Definitions. 1.1 Definitions.Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings: 1563911.2 3 1.1.1 “Agreement” means this Third Phase Agreement for Western GeoPower, Inc. Geothermal Project, including all Exhibits attached hereto, as the same may be amended from time to time in accordance with the terms and conditions hereof. 1.1.2 “Amended PPA” means the Amended and Restated Renewable Energy Power Purchase Agreement between NCPA and Western GeoPower, Inc., dated as of ______, attached hereto as Exhibit A. 1.1.3 “Annual Budget” means the budget for the ensuing Budget Year adopted by the Commission, as it may be amended from time to time. 1.1.4 “Associate Member” means an associate member of NCPA admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement. 1.1.5 “Budget Year” means the NCPA fiscal year; currently the twelve month period beginning July 1 and ending on the next following June 30. 1.1.6 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time. 1.1.7 “Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Project, intended to value any aspect of the capacity of the Project to produce Energy or ancillary services, including, but not limited to, any accounting construct so that the full capacity of the Project may be counted toward a resource adequacy requirement or any other measure by the CPUC, the CAISO, the FERC, or any other entity invested with the authority under federal or state law, to require NCPA to procure, or to procure at NCPA’s expense, Resource Adequacy Capacity or other such products. 1.1.8 “Claims” has the meaning set forth in Section 11.2. 1.1.9 “Commission”means the NCPA Commission. 1563911.2 4 1.1.10 “Constitutive Documents” means, with respect to NCPA, the Amended and Restated Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to each Participant, the California Government Code and Public Utilities Code,and other statutory provisions applicable to such Participant, any applicable agreements, charters, contracts or other documents concerning the formation, operation or decision making of such Participant, including, if applicable, its City Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s governing body. 1.1.11 “Defaulting Party” has the meaning set forth in Section 10.1. 1.1.12 “Effective Date” has the meaning set forth in the Section 9 of this Agreement. 1.1.13 “Electric System” means, with respect to each Participant, all properties and assets, real and personal, tangible and intangible, of the Participant now or hereafter existing, used or pertaining to the generation, transmission, transformation, distribution or sale of electric capacity and energy, or the utilization of such, including all additions, extensions, expansions, improvements and betterments thereto and equipment thereof; provided, however, that to the extent the Participant is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above described purposes, only the Participant’s ownership interest in such asset or property or only the part of the asset or property used for electric purposes shall be considered to be part of its Electric System. 1.1.14 “Energy” means the electricity generated by the Generating Facility pursuant to this Agreement, as expressed in units of KWh or MWh as measured at the meter(s), as that term is defined the PPA. 1.1.15 “Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the power purchase. Environmental Attributes include, but are not limited to: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), 1563911.2 5 methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights. Environmental Attributes do not include: (1) any Energy, capacity, reliability or other power attributes; (2) production tax credits associated with the construction or operation of the energy Projects and other financial incentives in the form of credits, reductions, or allowances associated with the Project that are applicable to a state or federal income taxation obligation;(3) fuel-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits; or (4) emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or federal operating and/or air quality permits. 1.1.16 “Event of Default” has the meaning set forth in Section 5.5.3 and Section 10.1. 1.1.17 “Generating Facility” means Western GeoPowers, Inc.’s electricity generating facility as more particularly described in Exhibit 2 [Description of Generating Facility] of the Amended PPA, together with all materials, equipment systems, structures, features and improvements necessary to produce electricity at such facility, specifically including the site, land rights, mineral rights and interests in land. 1.1.18 “Joint Powers Agreement” means the Amended and Restated Northern California Power Agency Joint Power Agreement dated January 1, 2008, establishing NCPA, as the same may be amended from time to time. 1.1.19 “Member” means any Member of NCPA or Associate Member of NCPA. 1.1.20 “MW” means megawatt. 1.1.21 “MWh” means megawatt hour. 1563911.2 6 1.1.22 “NCPA” has the meaning set forth in the preamble hereto. 1.1.23 “Participation Percentage” has the meaning, with respect to each Participant,the percentage of the total capacity of the Project, and the Energy associated with such capacity, to which such Participant is entitled pursuant to the terms of this Agreement. The Project Participation Percentage for each Participant shall be in the percentage set forth in Exhibit B, attached hereto and incorporated herein. Exhibit B shall be amended from time to time in accordance with this Agreement. 1.1.24 “Project” refers to the Western Geopower project to develop, finance, operate and maintain the Generating Facility which is the subject of the Amended PPA. 1.1.25 “Project Cost Allocation” means the Project Costs allocated to the Participants in the Annual Budget. 1.1.26 “Project Costs” means any and all costs, directly or indirectly, incurred by NCPA as a result of entering into the Amended PPA. Project costs include, but are not limited to related legal fees and associated staff time, administrative and general overhead costs, scheduling coordination costs, charges for transmission, transmission related costs and costs associated with the Amended PPA or other NCPA associated Agreements, including the Facilities Agreement and the SCPA or a successor agreement. 1.1.27 “Project Output” means all Energy generated pursuant to the Amended PPA from the geothermal Project currently being developed by Western GeoPower in conjunction with this Project,and related Environmental Attributes and Capacity Attributes; 1.1.28 “Participant” has the meaning set forth in the preamble hereto. 1.1.29 “Party” or “Parties” has the meaning set forth in the preamble hereto; provided that “third parties” are entities that are not party to this Agreement. 1.1.30 “Resource Adequacy Capacity” is that capacity in MWs that has been approved by each Participant as capacity available to ensure that adequate resources are 1563911.2 7 available to meet peak demand and operating and planning reserves for the purposes of local area and system reliability. 1.1.31 “Revenues” means, with respect to each Participant, all income, rents, rates, fees, charges, and other moneys derived by the Participant from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and Energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System;(b) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System;and (c) the proceeds derived by the Participant, directly or indirectly, from the sale, lease or other disposition of all or a part of the Electric System. The term “Revenues” shall not include:(i) customers’ deposits or any other deposits subject to refund until such deposits have become the property of the Participant or (ii) contributions from customers for the payment of costs of construction of facilities to serve them. 1.1.32 “Scheduling Protocols” means the applicable provisions of the SCPA, or successor document and any other contractual or other arrangements between NCPA and the relevant Participant concerning the scheduling, delivery and metering of the Amended PPA. 1.1.33 “Security Account” means the account established by NCPA and funded by the Participants in accordance with Section 5.3, the funds of which are available for use by NCPA in accordance with the terms and conditions hereof. 1.1.34 “Term” has the meaning set forth in Section 9. 1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,” “herewith” and “hereof” are references to this Agreement taken as a whole and not to any particular provision; the term “include,” “includes” or “including” shall mean “including, for 1563911.2 8 example and without limitation;” and references to a “Section,” “subsection,” “clause,” or “Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may be. All references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof. A reference to a “person” includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. The singular shall include the plural and the masculine shall include the feminine, and vice versa. Section 2.Effectiveness of Agreement.This Agreement shall be effective as to each Participant as of the Effective Date upon execution by the Participant, as described in Section 9 below. Section 3.Delivery of Electricity/Allocation of Resource Adequacy Capacity and Environmental Attributes. By executing this Agreement, each Participant acknowledges and agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity delivered to NCPA under the PPA shall be delivered to each Participant in proportion to such Participant’s Participation Percentage and each Participant shall accept and pay for its relevant percentage of such Energy. To the extent Participant is unable to accept such deliveries in full, NCPA shall dispose of such surplus in its discretion, in such a manner as to attempt to maximize Participant value. Notwithstanding the above, NCPA may allocate capacity and Energy procured through the Amended PPA among the Participants in such percentages as NCPA may, in its reasonable discretion,determine are necessary, desirable, or appropriate, in order to accommodate Participant Transfer Rights pursuant to Section 7, herein. Such Energy shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of performance under this Agreement shall likewise be allocated to each Participant by its Participation Percentage. 1563911.2 9 3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder using operating funds or Security Account funds, paid to NCPA in accordance with Section 5, or such other sources as may be agreed upon in writing by the Parties from time to time. Section 4.Cooperation and Further Assurances.Each of the Parties agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by any other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumption of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. Section 5.Payment Obligations, Security Account, Invoicing. 5.1 Participant Payment Obligations.Each Participant agrees to pay to NCPA each month its respective portion of the Project Costs. In addition, each Participant shall maintain working capital in accordance with NCPA’s Annual Budget, and maintain its Security Account as provided in this Agreement. 5.2 Calculation of and True-Up for Project Costs.Upon the conclusion of a Budget Year,NCPA shall compare each Participant’s payment of estimated Project Costs with the actual Project Costs incurred on behalf of each Participant such that overpayments will be credited to, and underpayments will debited to,the Participant’s account in accordance with NCPA’s Annual Budget settlements. 5.3 Security Account. 5.3.1 Initial Amounts. NCPA shall notify each Participant three (3) months prior to the expected initial delivery of Energy of the initial security amounts which Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure that sufficient funds are on deposit in the Security Account equal to the highest (3) months of the immediately following (12) months of estimated Project Costs; provided, however, that such deposit may be satisfied, in whole or in part, either in cash,by posting an irrevocable standby letter of credit or furnishing any other negotiable instrument satisfactory to NCPA’s General Manager, 1563911.2 10 exercising his or her reasonable discretion. Such Security Account will be seaprate and apart from any other security account held by NCPA on behalf of a Participant. 5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA shall review and revise its estimate of all costs for which each Participant shall be obligated to pay for under this Agreement for the succeeding twelve (12) months. Following such review, NCPA shall determine whether each Participant has a sufficient balance in the Security Account. To the extent that any Participant’s balance in the Security Account is greater than one hundred and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon as practicable to the Participant’s next following invoice. To the extent that any Participant’s balance in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA shall add such amount as soon as practicable to such Participant’s next invoice. Credits or additions shall not be made to Participants who satisfy these Security Account requirements in whole, through the use of a letter of credit, provided that the amount of the letter of credit shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of estimated Project Costs. 5.3.3 Use of Security Account Funds.NCPA may use any and all funds deposited into the Security Account to pay any costs it incurs hereunder, including making payments to the counterparty under the Amended PPA. NCPA may use any and all funds without regard to any individual Participant’s balance in the Security Account or proportionate share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the Participants or whether a Participant has made timely payments of invoices. Should a Participant have satisfied its Security Account requirements, in whole or in part, by posting a letter of credit, NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder. 5.3.4 Emergency Additions.In the event that the funds are withdrawn pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment of an invoice, demand, request for further assurances by third parties, or Claims,NCPA shall notify all Participants and then prepare and send a special or emergency assessment to the Participants. Each Participant shall pay to NCPA such assessment when and if assessed by NCPA within two 1563911.2 11 (2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on any existing letter of credit Participant has established for such purposes. 5.3.5 Accounting and Interest.NCPA shall maintain a detailed accounting of each Participant’s deposits into and shares of withdrawals from the Security Account. Interest earned on the Security Account shall be proportionately credited to the Participants in accordance with their Security Account balances. Any losses in the Security Account caused by early termination of investments shall be allocated among the Participants in accordance with their proportionate Participation Percentages. 5.3.6 Return of Funds. On the termination of this Agreement with respect to a Participant in accordance with this Agreement, the affected Participant or Participants may apply to NCPA for the return of their share of Security Account funds ninety (90) days after the effective date of such termination or withdrawal. NCPA shall, in its sole discretion, as determined by the General Manager, estimate the then outstanding liabilities of the Participant(s), including any estimated contingent liabilities and shall retain all such funds until all such liabilities have been fully paid or otherwise satisfied in full. The balance of the Participant’s share of the Security Account will be refunded to the Participant. 5.3.7 Default Relating to Security Account.In addition to any other remedy available in this Agreementor in law or equity, in the event of an Event of Default relating to the Security Account, NCPA shall have those rights provided in Section 10.4.4 and the Participant agrees to take the actions specified in that section to cause such Event of Default. 5.4 Invoicing. 1563911.2 12 5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each Participant for its proportionate share of the Project Costs due (or any adjustments thereto) based on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement and meter data. Each invoice shall include: (i) the total Project Costs attributable to the activities under this Agreement for such month and the relevant Participant’s share thereof; (ii) the quantity of Energy, Resource Adequacy Capacity and Environmental Attributes delivered to such Participant (or an estimate thereof) and the unit price for such Energy; (iii) appropriate settlement and meter data (or an estimate thereof);and (iv)any adjustments to prior invoices required based on actual data received that was estimated in a previous invoice. NCPA may also invoice an amount, if any, that NCPA has paid or reasonably expects to pay using funds available in the Security Account; and amounts due from (or credited to) such Participant under Section 5.3.2. 5.4.2 Payment of Invoices.All invoices delivered by NCPA hereunder are due and payable on the date indicated on such invoice;provided, however, that any amount due on a day other than a Business Day may be paid on the following Business Day. NCPA may apply a Participant’s share of the Security Account to the payment of all or any portion of an invoice issued to such Participant, provided that application of such funds from the Security Account shall not relieve the Participant from any late payment charges pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to pay an amount due under an invoice, following receipt of payment of such invoice by the relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security Account and credit such deposit to such Participant. 5.4.3 Late Payments.Any amount due and not paid by a Participant in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law. 5.5 Settlement Data and Examination of Books and Records. 1563911.2 13 5.5.1 Settlement Data.NCPA will make metering and settlement data available to the Participants. Procedures and formats for the provision of such data will be as established by the Participants and NCPA from time to time. 5.5.2 Examination of Books and Records.Any Participant to this Agreement shall have the right to examine the books and records created and maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time. 5.5.3 Revenue Covenant. Any failure of a Participant to meet its obligations hereunder or to cure such failure in a timely manner shall constitute an Event of Default and the Defaulting Party shall be subject to such remedies of NCPA as provided for herein. Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric department revenues only, its percentage share of the costs authorized by Participants in accordance with this Agreement in connection with its participation in the Project. Each Participant further agrees that it will fix the rates and charges for services provided by its electric department, so that it will at all times have sufficient money in its department revenue funds to meet this obligation; (ii) to make payments under this Agreement from the Revenues of, and as an operating expense of, its Electric System; (iii) to make payments under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of services provided under this Agreement; such payments not being subject to any reduction, whether by offset or otherwise, and regardless of whether any dispute exists provided such interruption, interference or reduction in services is caused by forces constituting a force majeure1 and not reasonably contemplated by the Parties; and (iv) to operate its Electric System in an efficient manner and to maintain its facilities in good repair, condition and working order so that: (a) the Participant’s obligations to make payments under this Agreement are not adversely affected or threatened; and (b) NCPA’s bond rating and ability to negotiate and enter into a PPA are not adversely affected or threatened. Section 6.Administration of Agreement 1 For the purposes of Section 5.5.3, a force majeure shall be defined as any natural disaster or uncontrollable force not preventable by any human agency, such as, but not limited to, any storm, flood, or violent or destructive natural force. 1563911.2 14 6.1 General.The NCPA Commission has sole overall responsibility and authority for the administration of this Agreement. Any acts, decisions or approvals taken, made or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in accordance with NCPA’s Constitutive Documents and Section 6.2. 6.2 Action by Participating Members. (a)Forum. Whenever any action anticipated by this Agreement is required to be taken by the Participants, such actions shall be taken at a regular or special meeting of the NCPA Commission but shall be participated in only by those Commissioners, or their designated alternates, who are Participants. (b) Quorum. A quorum at NCPA Commission meetings for purposes of acting upon matters relating to this Agreement shall consist of Commissioners, or their designated alternates,representing at least two Participants having a combined majority interest based upon Participation Percentages. (c) Voting. Each Participant shall have the right to cast one vote with respect to matters pertaining to this Agreement, with a majority vote of the Participating Members required for action subject to the following exceptions: (i)Upon request of any Participant representative, the voting on an issue related to this Agreement shall be by Participation Percentage with a 65% or more favorable vote necessary to carry the action. The 65% required by the preceding sentence shall be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced below a majority interest. (ii)After any decision related to this Agreement is taken by the affirmative vote of less than 65% of the Participation Percentage, the action may be reviewed and revised if a Participant gives notice of intention to seek such review and revision to NCPA and each of the other Participants within ten (10) days following the date on which such action was taken. Upon receipt of such a request for reconsideration, NCPA shall agendize the matter for reconsideration at the next regular meeting of the Commission or at a special meeting if the circumstances so warrant. The action shall be upheld upon the affirmative vote by Participation Percentage of not less than 65%. Any action taken upon reconsideration shall be final.The vote of 1563911.2 15 65% of the Participation Percentage required by the previous sentence may be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced below a majority interest. (iii) Participants agree to abide by the terms and conditions of NCPA’s Facilities Agreement,as it may be amended from time-to-time. Any Participants who are not currently signatories to the Facilities Agreement agree to become signatories within thirty (30) days of the date of this Agreement. Section 7.Admission of New Participants. Following the Effective Date of this Agreement, no Member (“Additional Member”) may execute this Amended Agreement and become a Participant unless one or more of the Participants (“Allocating Participants”) elect to allocate a portion of its Participant Percentage to such Member. Upon agreement of the Allocating Participant and the Additional Member, the Additional Member shall deliver to NCPA and each other Participant the written agreement between the Additional Member and the Allocating Participant(s) indicating the agreed upon change in Participation Percentage(s), a counterpart of this Agreement executed by the Additional Member, evidence that such agreements have been approved in accordance with its applicable Constitutive Documents and payment of such Member’s share of the Security Account. Any reduction in any Allocating Participant’s share of the Security Account shall be credited to the Allocating Participants in accordance with Section 5.3. Upon receipt of all required documents, NCPA shall provide to all Participants an updated Exhibit B reflecting the revised Participation Percentages. Section 8.Withdrawal of Participants. No Participant may withdraw from this Agreement after the Effective Date. Section 9.Term and Termination. 9.1 This Agreement shall become effective on the Effective Date when it has been executed and delivered to NCPA by Participants, the Participation Percentages of which, in the aggregate, equal at least 65% participation in the Project. NCPA shall provide written notices to all Participants,establishing the Effective Date. The remaining Participants listed in Exhibit B shall have forty-five (45)days, following the notice of the Effective Date to execute and deliver 1563911.2 16 counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fails to execute and deliver this Agreement or the Facilities Agreement within such forty-five (45)days, unless otherwise agreed to by the Participants who have executed the Agreement, the Participating Percentages of such member or members shall be allocated to those Participants in proportion to, but not exceeding, their Participation Percentages. 9.2 This Agreement shall be coterminous with the Amended PPA contained in Exhibit A. 9.3 This Agreement may be terminated by the Parties if NCPA successfully exercises its right of first refusal to purchase the entire Western GeoPower Project as set forth in Section 3.5(a)of the Amended PPA. In the event of termination pursuant to this Section 9.2, the Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date of such termination. Following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants,in proportion to their respective Participation Percentages the costs and benefits of the Amended PPA and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the Amended PPA, including, but not limited to,re-subscribing the Project capacity with additional NCPA Members or non-Member participants. NCPA shall reasonably cooperate with the Participants and other NCPA Members in connection with implementing the foregoing,and the Participants shall indemnify NCPA for any costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants and other reasonable and necessary costs. Section 10.Default and Remedies 10.1 Events of Default.An Event of Default under this Agreement shall exist with respect to a Party (the “Defaulting Party”) upon the occurrence of any one or more of the following: 1563911.2 17 (i) if any Party fails to make any payment or to provide assurances as required of NCPA under this Agreement when due hereunder two (2) Business Days after receipt of notice given by NCPA of such non-payment; or (ii) the failure of the Defaulting Party to perform any other covenant or obligation under this Agreement where such failure is not cured within ten (10) calendar days following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any failure to make payments (which is covered by Section 10.1 (i)); or (iii)if any representation or warranty of the Defaulting Party material to the transactions contemplated hereby is or shall prove to have been incorrect in any material respect when made and the Defaulting Party does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or (iv)if a Participant is in default or in breach of any of its covenants under any other agreement with NCPA and such default or breach is not cured within the time period(s)specified in such agreement or, if not specified, within ten (10) calendar days of the date of receipt of notice; or (v) the failure of NCPA to perform any covenant or obligation under this Agreement within ten (10) calendar days following the delivery of a notice to cure by any non- defaulting Member. 10.2 Cure of an Event of Default.An Event of Default shall be deemed cured only if such default shall be remedied within the time period specified in Section 10.1, above, as may be applicable after written notice has been sent to the Defaulting Party from NCPA specifying the default and demanding that the same be remedied;provided,that failure of a Party to provide such notice shall not be deemed a waiver of such default. 10.3 Participation Rights Of Defaulting Party.Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default and until such Event of Default is cured, a Participant that is the Defaulting Party shall not have the right to participate under Section 6.2 on any matters with respect to this Agreement. 10.4 Remedies in the Event of Default. 1563911.2 18 10.4.1 Upon the occurrence of an Event of Default where a Participant is the Defaulting Party, without limiting its other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any right, action or cause of action NCPA or a non-defaulting Participant may have against the Participant, NCPA may: (i) suspend the provision of goods and/or services under this Agreement to such Defaulting Party, including the delivery of Energy and other attributes of the Amended PPA until the Event of Default is cured; and (ii) demand that the Defaulting Party provide further assurances to compel the correction of the default, including mandating the collection of a surcharge to produce Revenues to secure the cure of the Event of Default; and (iii)terminate this Agreement as to the Defaulting Party on ten (10) days prior written notice to the Defaulting Party and following approval of the non-defaulting Participants. 10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any default of a Participant caused by the failure of such Participant to pay any sums due, and provided that such default is not cured in a timely manner, then NCPA shall use its best efforts to sell and transfer for the Defaulting Party’s account all or a portion of the Participant’s capacity and/or Energy and/or Environmental Attributes for the remainder of the term of this Agreement. Notwithstanding that all or any portion of the Participant’s capacity, energy or environmental attributes may be so sold or transferred, the Participant shall remain liable for all of its obligations hereunder. 10.4.3 Remedies of Participants.Upon the occurrence of an Event of Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the Participant may, without limiting their other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, 1563911.2 19 action or cause of action the Participants may have against NCPA, bring such action as may be applicable to compel performance by NCPA. 10.4.4 Special Covenants Regarding Security Account.In the event that a Participant’s balance of the Security Account is insufficient to cover all invoices for costs incurred under this Agreement sent to such Participant, then, without limiting NCPA’s other rights or remedies available under this Agreement, at law or in equity, such Participant shall cooperate in good faith with NCPA and shall cure said default within thirty (30) days, on an emergency basis, taking all such action as is necessary, including, but not limited to, raising rates and charges to its customers to increase its Revenues to replenish its share of the Security Account as provided herein, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of credit support and letters of credit, and taking all such other action as will cure the default. 10.5 Effect of Termination or Suspension. 10.5.1 The suspension or termination of this Agreement will not terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or obligations arising from this Agreement until such obligations are satisfied in full, and all of the costs incurred by NCPA in connection with such suspension or termination, including reasonable attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable and necessary costs associated with any and all of the remedies, are paid in full. 10.5.2 Suspension by NCPA.If performance of all or any portion of this Agreement is suspended by NCPA with respect to a Participant in accordance with Section 10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such suspension, including reasonable attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such suspension and any portion of the Project Costs that were not recovered from such Participant as a result of such suspension. 1563911.2 20 10.5.3 Termination by NCPA.If this Agreement is terminated by NCPA with respect to a Participant in accordance with Section 10.4.1 (iii),such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such termination including reasonable attorneys' fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such termination and any portion of the Project Costs that were not, or will not be, recovered from such Participant as a result of such termination; provided, however, if NCPA terminates this Agreement with respect to the last Participant, then this Agreement shall terminate. 10.5.4 Termination by Participants. This Agreement may be terminated by unanimous consent of all of the Parties hereto. In that event,the Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date of such termination,and following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants in proportion to their respective Participation Percentages the costs and benefits of the Amended PPA and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the Amended PPA. NCPA shall reasonably cooperate with the Participants in connection with implementing the foregoing and the Participants shall indemnify NCPA for any costs and obligations incurred in connection therewith, including reasonable attorneys' fees, fees and expenses of other experts, including auditors and accountants and other reasonable and necessary costs. If the Parties are unable to reach agreement as to the foregoing, then the Parties agree to submit the matter to mediation with a mutually agreed upon mediator. If the Parties are still unable to reach agreement following mediation, then the matter shall be submitted to binding arbitration subject to the rules of the American Arbitration Association, the costs of such arbitration being borne proportionally among the Participants. Section 11.Miscellaneous. 11.1 Confidentiality.The Participants and NCPA will keep confidential all confidential or trade secret information made available to them in connection with this Agreement, to the extent possible, consistent with applicable laws, including the California Public Records Act. 1563911.2 21 It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at its expense against any request that such information be disclosed. Confidential or trade secret information shall be marked or expressly identified as such. 11.2 Indemnification and Hold Harmless.Subject to the provisions of Section 11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”),to the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers, employees, subcontractors or agents, to the maximum extent permitted by law. 11.3 Several Liabilities.No Participant shall be liable under this Agreement for the obligations of any other Participant, and each Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein, and the obligation of each Participant under this Agreement is a several obligation and not a joint obligation with those of the other Participants. 11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS,OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS 1563911.2 22 BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY. The Parties acknowledge that California Civil Code section 1542 provides that: “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 executing 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 section 1542, or other similar provisions of law, and intend that the waiver and release provided by this section of this Agreement shall be fully enforceable despite its reference to future or unknown claims. 11.5 Amendments.Except where this Agreement specifically provides otherwise, this Agreement may be amended only by written instrument executed by the Parties with the same formality as this Agreement. 11.6 Severability.In the event that any of the terms, covenants or conditions of this Agreement or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court having jurisdiction, all other terms, covenants or conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless the court holds that such provisions are not severable from all other provisions of this Agreement. 11.7 Governing Law.This Agreement shall be interpreted, governed by, and construed under the laws of the State of California. 11.8 Headings.All indices, titles, subject headings, section titles and similar items are provided for the purpose of convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof. 11.9 Notices.Any notice, demand or request required or authorized by this Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a Participant and the Secretary of the Commission or transmitted to the Participant and the Secretary of the Commission at the address shown on the signature pages hereof. The designation of such 1563911.2 23 address may be changed at any time by written notice given to the Secretary of the Commission who shall thereupon give written notice of such change to each Participant. 11.10 Warranty of Authority.Each Participant, and NCPA, represents and warrants that it has been duly authorized by all requisite approval and action to execute and deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such Participant, evidencing approval of and authority to enter into this Agreement, that such authority was duly exercised in accordance with such Participant’s Constitutive Documents. 11.11 Counterparts.This Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all of the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages. 11.12 Assignment.Except as provided by Section 7,no Participant may assign or otherwise transfer its interest in its Participation Percentage or any other rights and obligations under this Agreement without the express written consent of NCPA, which shall not be unreasonably withheld. 11.13 Exercise of the Right of First Refusal. The Parties contemplate that NCPA may exercise an option to purchase the underlying assets of the Amended PPA as per the voting procedures of this Agreement outlined in Section 6. Participation in any such purchase shall be in accordance with the then existing Participation Percentages, unless such Participation Percentages are otherwise agreed upon by the Participants. At such time as NCPA exercises its right of first refusal, this Agreement shall be amended to reflect the purchase of the underlying assets and the Project. 11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as follows: 1563911.2 24 Exhibit A -AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT BETWEEN THE NORTHERN CALIFORNIA POWER AGENCY AND WESTERN GEOPOWER INCORPORATED Exhibit B -PARTICIPATION PERCENTAGES 1563911.2 IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its governing body, and NCPA has authorized this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA POWER AGENCY By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF LOMPOC By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF ROSEVILLE By: Title Date: Approved as to Legal Form By: Its: Attorney Date: CITY OF SANTA CLARA By: Title Date: Approved as to Legal Form By: Its: Attorney Date: 1 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE THIRD PHASE AGREEMENT FOR WESTERN GEOPOWER INCORPORATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT 2 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE TABLE OF CONTENTS Section………………………………………………………………………….…….Page RECITALS..…......…………..……………………………………………3 1.Definitions…………………..……………………………………………4 2.Effectiveness of Agreement…………………………………………...10 3.Delivery of Electricity / Allocation of Resource Adequacy………….. Capacity and Environmental Attributes…….……………………….11 4.Cooperation and Further Assurances……………………….……….11 5.Payment Obligations, Security Account, Invoicing……..…….........12 6.Administration of Agreement………………………………………...16 7.Transfer of Rights by Participants…………………………...……….18 8.Withdrawal of Participants……………………………………………18 9.Term and Termination………….……………………………………..18 10.Default and Remedies…...…………………………………………….19 11.Miscellaneous…………………………………………………………..23 EXHIBIT A EXHIBIT B 3 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE This Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement is between the Northern California Power Agency, a joint powers agency of the State of California (“NCPA”) and those of its Members who execute this Agreement (“Participants”). NCPA and the Participants are referred to herein individually as a “Party” and collectively as the “Parties”. RECITALS A.WHEREAS, NCPA and the Participants are interested in purchasing additional renewable electric capacity and energy for the benefit of the Participants’ customers: B.WHEREAS, The Participants desire that NCPA negotiate and enter into a renewable energy power purchase agreement (PPA) with the Western GeoPower Incorporated ("Western GeoPower") for twenty (20) years;and C.WHEREAS, NCPA has executed a .PPA with Western GeoPower to purchase the entire expected Project Output from a new Western GeoPower geothermal project (“Project”) located in the Geysers Geothermal Field located in Mayacamas Mountains of Sonoma and Lake Counties in the State of California; and D.WHEREAS, NCPA, on behalf of the Participants, will purchase the Project output of for at a fixed price not to exceed ninety-eight dollars ($98.00) per megawatt hour for the initial term of twenty (20) years; and E.WHEREAS, NCPA and the Participants wish to enter into this Agreement to provide all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the PPA and to enable and obligate the Participants to take delivery of and pay for such electricity and to pay NCPA for the costs of undertaking the foregoing activities; and 4 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE F.WHEREAS, NCPA and its members have (or will have) entered into the Facilities Agreement,dated September 22, 1993,which provides for services which NCPA shall perform for its members, and for the provisions to be contained in third phase agreements such as this Agreement. G.WHEREAS, NCPA and its members have (or will have) entered into the Scheduling Coordination Program Agreement (“SCPA”),dated August 28, 2002, which provides for CAISO scheduling services and cost allocations which NCPA shall perform for its members. NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree and intend to be legally bound, as follows: Section 1.Definitions 1.1 Definitions.Whenever used in this Agreement (including the Recitals hereto), the following terms shall have the following respective meanings: 1.1.1 “Agreement” means this NCPA Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, including all Exhibits attached hereto, as the same may be amended from time to time in accordance with the terms and conditions hereof. 1.1.2 “Annual Budget” means the budget for the ensuing Budget Year adopted by the Commission, as it may be amended from time to time. 1.1.3 “Associate Member” means an associate member of NCPA admitted to NCPA in accordance with Article IV, Section 7 of the Joint Powers Agreement. 5 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 1.1.4 “Budget Year” means the NCPA fiscal year; currently the twelve month period beginning July 1 and ending on the next following June 30. 1.1.5 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time. 1.1.6 "Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Project, intended to value any aspect of the capacity of the Project to produce Energy or ancillary services, including, but not limited to, any accounting construct so that the full Contract Capacity of the Project may be counted toward a Resource Adequacy Requirement or any other measure by the CPUC, the CAISO, the FERC, or any other entity invested with the authority under federal or state law, to require Buyer to procure, or to procure at Buyer’s expense, Resource Adequacy or other such products. 1.1.7 “Claims” has the meaning set forth in Section 11.2. 1.1.8 "Commission” means the NCPA Commission. 1.1.9 Not Applicable under this Agreement. 1.1.10 “Constitutive Documents” means, with respect to NCPA, the Joint Powers Agreement and any resolutions or bylaws adopted thereunder, and with respect to each Participant, the California Government Code and other statutory provisions applicable to such Participant, any applicable agreements, charters, contracts or other documents concerning the formation, operation or decision making of such Participant, including, if applicable, its City Charter, and any codes, ordinances, bylaws, and resolutions adopted by such Participant’s governing body. 1.1.11 Not applicable under this Agreement. 6 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 1.1.12 “Defaulting Party” has the meaning set forth in Section 9.1. 1.1.13 “Not applicable under this Agreement” 1.1.14 “Effective Date” has the meaning set forth in the Section 9 of this Agreement. 1.1.15 “Electric System” means, with respect to each Participant except the San Francisco Bay Area Rapid Transit District (“BART”), all properties and assets, real and personal, tangible and intangible, of the Participant now or hereafter existing, used or pertaining to the generation, transmission, transformation, distribution or sale of electric capacity and energy, or the utilization of such, including all additions, extensions, expansions, improvements and betterments thereto and equipment thereof; provided, however, that to the extent the Participant is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above described purposes, only the Participant’s ownership interest in such asset or property or only the part of the asset or property used for electric purposes shall be considered to be part of its Electric System. 1.1.16 “Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, directly attributable to the power purchase. Environmental Attributes include,but are not limited to: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights. Environmental Attributes do not include: (1) any energy, capacity, reliability or other power attributes; (2) production tax credits associated with the construction or operation of the energy 7 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE Projects and other financial incentives in the form of credits, reductions, or allowances associated with the Project that are applicable to a state or federal income taxation obligation: (3) fuel-related subsidies or "tipping fees" that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits; or (4) emission reduction credits encumbered or used by the Unit(s) for compliance with local, state, or federal operating and/or air quality permits. 1.1.17 “Event of Default” has the meaning set forth in Section 5.5.3 and Section 10.1. 1.1.18 “Joint Powers Agreement” means that certain Northern California Power Agency Joint Power Agreement first made July 19, 1968 and revised as of April 1, 1973, establishing NCPA, as the same may be amended from time to time. 1.1.19 “Member” means any Member of NCPA or Associate Member of NCPA. 1.1.20 “MW” means megawatt. 1.1.21 “MWh” means megawatt hour. 1.1.22 “NCPA” has the meaning set forth in the preamble hereto. 1.1.23 “Participation Percentage.” has the meaning, with respect to each Project Participant, the percentage of the total capacity of the Project, and the energy associated with such capacity, to which such Participant is entitled pursuant to the terms of this Agreement. The Project Participation Percentage for each Project participant shall be in the percentage set forth in Exhibit B,attached hereto and incorporated herein. Exhibit B,shall be amended from time to time in accordance with this Agreement. 8 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 1.1.24 “Project Cost Allocation” means the Project Costs allocated to the Participants in the Annual Budget. 1.1.25 “Project Costs” means any and all costs, directly or indirectly, incurred by NCPA as a result of entering into the PPA. NCPA costs include, but are not limited to related legal fees and associated staff time, administrative and general overhead costs, charges for transmission, transmission related costs and costs associated with the .PPA or other NCPA associated Agreements, including the Facilities Agreement and the SCPA. 1.1.26 “Project Output” means all energy generated from the geothermal Project currently being developed by Western GeoPower in conjunction with this Project, related Environmental Attributes and Capacity Attributes; 1.1.27 “Participant” has the meaning set forth in the preamble hereto. (i)“Party” or “Parties” has the meaning set forth in the preamble hereto; provided that “Third Parties” are entities that are not party to this Agreement. 1.1.28 “PPA” means the Renewable Energy Power Purchase Agreement attached hereto as Exhibit A. 1.1.29 Not applicable under this Agreement. 1.1.30 “Resource Adequacy Capacity” is that capacity in megawatts that has been approved by each Participant.as capacity available to ensure that adequate resources are available to meet peak demand and operating and planning reserves for the purposes of local area and system reliability. 1.1.31 “Revenues” means, with respect to each Participant with the exception of BART, all income, rents, rates, fees, charges, and other moneys derived by the 9 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE Participant from the ownership or operation of its Electric System, including, without limiting the generality of the foregoing, (a) all income, rents, rates, fees, charges or other moneys derived from the sale, furnishing and supplying of electric capacity and energy and other services, facilities, and commodities sold, furnished, or supplied through the facilities of its Electric System, (b) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or pursuant to law to its Electric System,and (c) the proceeds derived by the Participant,directly or indirectly,from the sale, lease or other disposition of all or a part of the Electric System, but the term “Revenues”shall not include (i) customers’ deposits or any other deposits subject to refund until such deposits have become the property of the Participant or (ii) contributions from customers for the payment of costs of construction of facilities to serve them. In regards to BART, “Revenues”means, all income, rents, rates, fees, charges, grants, fares or tariffs, subventions and other moneys derived by the Participant from its operation,including, without limiting the generality of the foregoing, (i) the earnings on and income derived from the investment of such income, rents, rates, fees, charges grants, fares or tariffs, subventions or other moneys and (ii) the proceeds derived by the Participant,directly or indirectly,from the sale, lease or other disposition of all or a part of its assets, but the term “Revenues”shall not include any moneys derived from sources,the use of which is limited by law to expenditures other than operating expenses. 1.1.32 “Scheduling Protocols” means the applicable provisions of the .SCPA and any other contractual or other arrangements between NCPA and the relevant Participant concerning the scheduling, delivery and metering of the PPA. 1.1.33 “Security Account” means the account established by NCPA and funded by the Participants in accordance with Section 5.3, the funds of which are available for use by NCPA in accordance with the terms and conditions hereof. 1.1.34 Not applicable under this Agreement. 10 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 1.1.35 “Term” has the meaning set forth in Section 9. 1.1.36 Not applicable under this Agreement. 1.1.37 Not applicable under this Agreement. 1.2 Rules of Interpretation. As used in this Agreement (including the Recitals hereto), unless in any such case the context requires otherwise: the terms “herein,” “hereto,” “herewith” and “hereof” are references to this Agreement taken as a whole and not to any particular provision; the term “include,” “includes” or “including” shall mean “including, for example and without limitation;” and references to a “Section,” “subsection,” “clause,” or “Exhibit” shall mean a Section, subsection, clause or Exhibit of this Agreement, as the case may be. All references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof. A reference to a “person” includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having a separate legal personality and includes its successors and permitted assigns. The singular shall include the plural and the masculine shall include the feminine, and vice versa. Section 2.Effectiveness of Agreement This Agreement shall be effective as to each Participant as of the Effective Date upon execution by the Participant, as described in Section 9 below. Section 3.Delivery of Electricity / Allocation of Resource Adequacy Capacity and Environmental Attributes.By executing this Agreement, each Participant acknowledges and agrees to be bound by the take-or-pay process contained in or referenced herein. Any electricity delivered to NCPA under the PPA .shall be delivered to each Participant in proportion to such Participant’s Participation Percentage and each Participant shall accept and pay for its relevant 11 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE percentage of such electricity. To the extent Participant is unable to accept such deliveries in full, NCPA shall dispose of such surplus in its discretion, in such a manner to maximize Participant value. Notwithstanding the above, NCPA may allocate and pool capacity and energy procured through the PPA among the Participants in such percentages as NCPA may, in its reasonable discretion, determine are necessary, desirable, or appropriate. Such electricity shall be scheduled for the Participants in accordance with the Scheduling Protocols. Resource Adequacy Capacity and Environmental Attributes obtained by NCPA as a result of performance under this Agreement shall likewise be allocated to each Participant by its Participation Percentage. 3.1 Payments to Counterparty.NCPA shall pay all costs incurred hereunder using operating funds or Security Account funds, paid to NCPA in accordance with Section 5, or such other sources as may be agreed upon in writing by the Parties from time to time. Section 4.Cooperation and Further Assurances Each of the Parties agrees to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by any other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumption of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. Further, the Parties agree to cooperate and act in good faith in connection with obtaining any credit support required in order to procure electricity from an Eligible Contract Purchase, including,with respect to negotiating and executing,any agreements to implement any credit support arrangements. Section 5.Payment Obligations, Security Account, Invoicing 5.1 Participant Payment Obligations.Each Participant agrees to pay to NCPA each month its respective portion of the Project Costs. In addition, each Participant shall maintain working capital in accordance with NCPA’s Annual Budget, and maintain its Security Account as provided in this Agreement. 12 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 5.2 Calculation of and True-Up for Project Costs.Upon the conclusion of a Budget Year NCPA shall compare each Participant’s payment of estimated Project Costs with the actual Project Costs incurred on behalf of each Participant such that overpayments will be credited to, and underpayments will debited to the Participant’s account in accordance with NCPA’s Annual Budget settlements. 5.3 Security Account. 5.3.1 Initial Amounts. NCPA shall notify each Participant three months prior to the expected initial delivery of power of the initial security amounts which Participant shall be obligated to pay for under this Agreement. Each Participant shall ensure that sufficient funds are on deposit in the Security Account equal to the highest (3) months of the immediately following (12) months of estimated Project Costs ; provided,however,that such deposit may be satisfied,in whole or part,either in cash or through a letter of credit satisfactory to NCPA’s General Manager. 5.3.2 Subsequent Deposits.Periodically, and at least quarterly, NCPA shall review and revise its estimate of all costs for which Participant shall be obligated to pay for under this Agreement for the succeeding twelve (12)months. Following such review, NCPA shall determine whether each Participant has a sufficient balance in the Security Account. To the extent that any Participant’s balance in the Security Account is greater than one hundred and ten percent (110%) of the amount required herein, NCPA shall credit such amount as soon as practicable to the Participant’s next following invoice. To the extent that any Participant’s balance in the Security Account is less than ninety percent (90%) of the amount required herein, NCPA shall add such amount as soon as practicable to such Participant’s next invoice. Credits or additions shall not be made to Participants who satisfy these Security Account requirements in whole,through the use of a letter of credit, provided that the amount of the letter of credit shall be adjusted in a like manner to assure an amount equal to the highest three (3) months of estimated Project Costs. 13 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 5.3.3 Use of Security Account Funds.NCPA may use any and all funds deposited into the Security Account to pay any costs it incurs hereunder, including making payments to the counterparty under the PPA.NCPA may use any and all funds without regard to any individual Participant’s balance in the Security Account or proportionate share of Project Costs and irrespective of whether NCPA has issued an invoice for such costs to the Participants or whether a Participant has made timely payments of invoices. Should Participant have satisfied its Security Account requirements,in whole or in part,through a letter of credit, NCPA may draw on such letter of credit to satisfy Participant’s obligations hereunder. 5.3.4 Emergency Additions.In the event that the funds are withdrawn pursuant to section 5.3.3, or if the Security Account is insufficient to allow payment of an invoice, demand, request for further assurances by Third Parties, or Claims, NCPA shall notify all Participants and then prepare and send a special or emergency assessment to the Participants. Each Participant shall pay to NCPA such assessment when and if assessed by NCPA within two (2) Business Days of the invoice date of the assessment or consent to and direct NCPA to draw on any existing letter of credit Participant has established for such purposes. 5.3.5 Accounting and Interest.NCPA shall maintain a detailed accounting of each Participant’s deposits into and shares of withdrawals from the Security Account. Interest earned on the Security Account shall be proportionately credited to the Participants in accordance with their Security Account balances. Any losses in the Security Account caused by early termination of investments shall be allocated among the Participants in accordance with their proportionate Participation Percentages. 5.3.6 Return of Funds. On the termination of this Agreement with respect to a Participant or a permitted withdrawal of a Participant in accordance with this Agreement, the affected Participant or Participants may apply to NCPA for the return of their 14 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE share of Security Account funds ninety (90) days after the effective date of such termination or withdrawal. NCPA shall, in its sole discretion, as determined by the General Manager, estimate the then outstanding liabilities of the Participant(s), including any estimated contingent liabilities and shall retain all such funds until all such liabilities have been fully paid or otherwise satisfied in full. The balance of the Participant’s share of the Security Account will be refunded to the Participant. 5.4 Invoicing. 5.4.1 Invoices.As part of NCPA’s regular, monthly, advance billing or by separate special invoice, as required in the circumstances, NCPA will issue an invoice to each Participant for its proportionate share of the Project Costs due (or any adjustments thereto) based on Sections 5.1 and 5.2 above. Such invoices may include estimated costs and estimated settlement and meter data. Each invoice shall include: (i) the total Project Costs attributable to the activities under this Agreement for such month and the relevant Participant’s share thereof; (ii) the quantity of electricity, Resource Adequacy Capacity and Environmental Attributes. delivered to such Participant (or an estimate thereof) and the unit price for such electricity; (iii) appropriate settlement and meter data (or an estimate thereof); (iv) including any adjustments to prior invoices required based on actual data received that was estimated in a previous invoice. In addition NCPA may invoice an amount, if any, that NCPA has paid or reasonably expects to pay using funds available in the Security Account; and amounts due from (or credited to) such Participant under Section 5.3.2. 5.4.2 Payment of Invoices.All invoices delivered by NCPA hereunder are due and payable on the date indicated on such invoice, provided, however, that any amount due on a day other than a Business Day may be paid on the following Business Day. NCPA may apply a Participant’s share of the Security Account to the payment of all or any portion of an invoice issued to such Participant, provided that application of such funds from the Security Account shall not relieve the Participant from any late payment charges 15 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE pursuant to Section 5.4.3. To the extent that NCPA applies funds from the Security Account to pay an amount due under an invoice, following receipt of payment of such invoice by the relevant Participant, NCPA shall deposit the relevant portion of the payment into the Security Account and credit such deposit to such Participant. 5.4.3 Late Payments.Any amount due and not paid by a Participant in accordance with Section 5.4.2 shall bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT&SA then in effect, plus two percent (2%) or (ii) the maximum rate permitted by law. 5.5 Settlement Data and Examination of Books and Records. 5.5.1 Settlement Data.NCPA will make metering and settlement data available to the Participants. Procedures and formats for the provision of such data will be as established by the Participants and NCPA from time to time. 5.5.2 Examination of Books and Records.Any Participant to this Agreement shall have the right to examine the books and records created and maintained by NCPA pursuant to this Agreement at any reasonable, mutually agreed upon time. 5.5.3 Revenue Covenant. Any failure of a Participant to meet its obligations hereunder or to cure such failure in a timely manner shall constitute a Default and the Defaulting Party shall be subject to such remedies of NCPA as provided for herein. Each Participant covenants and agrees (i) to continue to pay or advance to NCPA, from its electric department revenues only or, in the case of BART, its tariffs, fees or other sources of revenue, provided that such sources shall not include any sums derived from sources,the use of which is limited by law to expenditures other than operating expenses, its percentage share of the costs authorized by Participants in accordance with this Agreement in connection with its participation in the Project. Each Participant further agrees that it will fix the rates and charges for services provided by its electric department, or in the case of BART, its general revenues, so 16 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE that it will at all times have sufficient money in its department revenue funds to meet this obligation; (ii) to make payments under this Agreement from the Revenues of, and as an operating expense of,its Electric System, or in the case of BART, its general revenues; (iii) to make payments under this Agreement whether or not there is an interruption in, interference with, or reduction or suspension of services provided under this Agreement; such payments not being subject to any reduction, whether by offset or otherwise, and regardless of whether any dispute exists provided such interruption, interference or reduction in services is caused by forces constituting an Act of God and not reasonably contemplated by the Parties; and (iv) to operate its Electric System., or in the case of BART, its transit system, in an efficient manner and to maintain its facilities in good repair, condition and working order so that: (a) the Participant’s obligations to make payments under this Agreement are not adversely affected or threatened; and (b) NCPA’s bond rating and ability to negotiate and enter into a .PPA are not adversely affected or threatened. Section 6. Administration of Agreement 6.1 General.The NCPA Commission has sole overall responsibility and authority for the administration of this Agreement. Any acts, decisions or approvals taken, made or sought by NCPA under this Agreement shall be taken, made or sought, as applicable, in accordance with NCPA’s Constitutive Documents and Section 6.2. 6.2 Action by Participating Members. (a)Forum: Whenever any action anticipated by this Agreement is required to be taken by the Participating Members, such actions shall be taken at a regular or special meeting of the NCPA Commission but shall be participated in only by those Commissioners, or their designated alternates, who are Participants. (b) Quorum:A quorum at NCPA Commission meetings for purposes of acting upon matters relating to this Agreement shall consist of Commissioners, or 17 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE their designated alternates representing at least two Participants having a combined majority interest based upon Participation Percentages. (c) Voting:Each Participant shall have the right to cast one vote with respect to matters pertaining to this Agreement, with a majority vote of the Participating Members required for action subject to the following exceptions: (i)Upon request of any Participant representative, the voting on an issue related to this Agreement shall be by Participation Percentage with a 65% or more favorable vote necessary to carry the action. The 65% required by the preceding sentence shall be reduced by the amount that the Participation Percentage of any Participant exceeds 35%, but shall not be reduced below a majority interest. (ii)After any decision related to this Agreement is taken by the affirmative vote of less than 65% of the Program Participants, the action can be reviewed and revised if a Participant gives notice of intention to seek such review and revision to NCPA and each of the other Participants within ten (10) days following the date on which such action was taken. Upon receipt of such a request for reconsideration, the Chair Person of the Commission shall agendize the matter for reconsideration at the next regular meeting of the Commission or at a special meeting if the circumstances so warrant. The action shall be upheld upon the affirmative vote of authorized representatives the Participants. Any action taken upon reconsideration shall be final. Section 7.Transfer of Rights by Participants 7.1 A Participant has the right to make transfers, sales, assignments and exchanges (collectively “transfers(s)”) its Participation Percentage and rights thereto. If a Participant desires to transfer a portion or its entire share of the Project for a specific time interval, or permanently, NPCA will,if requested by such Participant, use its best efforts to transfer that portion of the Participant’s share of the Project. 18 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 7.2 Before NCPA may transfer an excess Project share pursuant to section 7.1 to any person or entity other than a Participant, it shall give all Participants the right to purchase the share on the same terms and conditions. Before NCPA may transfer an excess Project share pursuant to section 7.1 to any person or entity other than an NCPA member, it shall give all NCPA members the right to purchase the share on the same terms and conditions. Such right shall be exercised within thirty (30) days of receipt of notice of said right. 7.3 No transfer shall relieve a Participant of any of its obligations under this Agreement except to the extent that NCPA receives payment of these obligations from a transferee. Section 8.Withdrawal of Participants. No Participant may withdraw from this Agreement except as provided herein Refer Section 7 above for discussion. However, NCPA will use its best efforts to assist any Participant that wishes to transfer all or any portion of its rights pursuant to Section 7 above. Section 9.Term and Termination. This Agreement shall become effective when it has been executed and delivered to NCPA by Participants, the Participation Percentages of which, in the aggregate, equal at least 65% participation in the Project. NCPA shall provide written notices to all Participants establishing the “effective date”. The remaining Participants listed in Exhibit B shall have 45 days, following the notice of the effective date to execute and deliver counterparts of this Agreement to NCPA. If any Participants listed on Exhibit B fails to execute and deliver this Agreement within such 45 days, unless otherwise agreed to by the Participants who have executed the Agreement, the Participating Percentages of such member or members shall be spread among those Participants in proportion to their Participation Percentages. This Agreement shall be coterminous with the PPA contained in Exhibit A. 19 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE Section 10.Default and Remedies 10.1 Events of Default.An Event of Default under this Agreement shall exist with respect to a Party (“Defaulting Party”) upon the occurrence of any one or more of the following: (i) if any Party fails to make any payment or to provide assurances as required of NCPA under this Agreement when due hereunder two (2) Business Days after receipt of notice given by NCPA of such non-payment; or (ii) the failure of the Defaulting Party to perform any other covenant or obligation under this Agreement where such failure is not cured within ten (10)days following receipt of a notice from NCPA demanding cure (provided that this shall not apply to any failure to make payments (which is covered by Section 10.1 (i)); or (iii)if any representation or warranty of the Defaulting Party material to the transactions contemplated hereby shall prove to have been incorrect in any material respect when made and the Defaulting Party does not cure the facts underlying such incorrect representation or warranty so that the representation or warranty becomes true and correct within ten (10) calendar days of the date of receipt of notice from any other Party demanding cure; or (iv)if a Participant is in default or in breach of any of its covenants under any other agreement with NCPA and such default or breach is not cured within the time periods specified in such agreement; or (v) the failure of NCPA to perform any covenant or obligation under this Agreement following a ten (10) day notice to cure by any non-defaulting Member. 10.2 Cure of an Event of Default.An Event of Default shall be deemed cured only if such default shall be remedied within the time period specified in Section 10.1, above, as may be applicable after written notice has been sent to the Defaulting Party from NCPA 20 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE specifying the default and demanding that the same be remedied provided that failure of a Party to provide such notice shall not be deemed a waiver of such default. 10.3 Participation Rights Of Defaulting Party.Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default and until such Event of Default is cured, the Participant that is the Defaulting Party shall not have the right to participate under Section 6.2 on any matters with respect to this Agreement. 10.4 Remedies in the Event of Default. 10.4.1 Remedies of NCPA. Upon the occurrence of an Event of Default where a Participant is the Defaulting Party, without limiting its other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppels of any right, action or cause of action NCPA may have against the Participant, NCPA may: (i) suspend the provision of services under this Agreement to such Defaulting Party, including the delivery of electricity and other attributes of the PPA until the Event of Default is cured; and (ii) demand that the Defaulting Party provide further assurances to compel the correction of the default, including mandating the collection of a surcharge to produce Revenues to secure the cure of the Event of Default; and (iii) terminate this Agreement as to the Defaulting Party on ten (10) days prior written notice to the Defaulting Party and following approval of the non-defaulting Participants. 10.4.2 Sale/Transfer of Participants Account Upon Default.Upon any default of a Participant caused by the failure of such Participant to pay any sums due, and provided that such default is not cured in a timely manner,then NCPA shall use its best efforts 21 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE to sell and transfer for the defaulting Participant’s account all or a portion of the Participant’s capacity and/or energy and/or Environmental Attributes for the remainder of the term of this Agreement. Notwithstanding that all or any portion of the Participant’s capacity is so sold or transferred, the Participant shall remain liable for all of its obligations hereunder unless released therefrom by NCPA upon assumption by a transferee or assignee. 10.4.3 Remedies of Participants.Upon the occurrence of an Event of Default, and following the applicable cure periods, where NCPA is the Defaulting Party, the Participant may, without limiting their other rights or remedies available under this Agreement, at law or in equity, and without constituting or resulting in a waiver, release or estoppel of any right, action or cause of action the Participants may have against NCPA, terminate this Agreement in whole, subject to the provisions of Section10.5.4. 10.4.4 Special Covenants Regarding Security Account.In the event that a Participant’s balance of the Security Account is insufficient to cover all invoices for costs incurred under this Agreement sent to such Participant, then, without limiting NCPA’s other rights or remedies available under this Agreement, at law or in equity, such Participant shall cooperate in good faith with NCPA and shall cure the default within thirty (30) days, on an emergency basis, taking all such action as is necessary, including, but not limited to, raising rates and charges to its customers to increase its Revenues to replenish its share of the Security Account as provided herein, drawing on its cash-on-hand and lines of credit, obtaining further assurances by way of credit support and letters of credit, and taking all such other action as will cure the default. 10.5 Effect of Termination or Suspension. 10.5.1 The suspension or termination of this Agreement will not terminate, waive, or otherwise discharge any ongoing or undischarged contingent liabilities or obligations arising from this Agreement until such obligations are satisfied in full, and all of the 22 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE costs incurred by NCPA in connection with such suspension or termination, including reasonable attorneys'fees, the fees and expenses of other experts, including auditors and accountants, other costs and expenses that NCPA is entitled to recover under this Agreement, and other reasonable and necessary costs associated with any and all of the remedies, are paid in full. 10.5.2 Suspension by NCPA.If performance of all or any portion of this Agreement is suspended by NCPA with respect to a Participant in accordance with Section 10.4.1(i), such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such suspension,including reasonable attorneys'fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such suspension and any portion of the Project Costs that were not recovered from such Participant as a result of such suspension. 10.5.3 Termination by NCPA.If this Agreement is terminated by NCPA with respect to a Participant in accordance with Section 10.4.1 (iii), (i) such Participant shall pay any and all costs and obligations incurred by NCPA as a result of such termination including reasonable attorneys'fees, the fees and expenses of other experts, including auditors and accountants, other reasonable and necessary costs associated with such termination and any portion of the Project Costs that were not, or will not be, recovered from such Participant as a result of such termination; provided, however, if NCPA terminates this Agreement with respect to the last Participant, then this Agreement shall terminate. 10.5.4 Termination by Participants.If this Agreement is terminated by all Participants in accordance with Section 10.4.3, or by unanimous consent of all of the Parties hereto, then the Participants shall pay to NCPA all previously unpaid costs and obligations incurred as of the date of such termination,, and following such termination, the Participants shall cooperate and act in good faith to negotiate and agree upon the method of allocating among the Participants in proportion to their respective Participation Percentages the costs and 23 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE benefits of the PPA and any financing agreements or commitments and any matters pertaining to the administration, management, control, operation and maintenance of the PPA. NCPA shall reasonably cooperate with the Participants in connection with implementing the foregoing and the Participants shall indemnify NCPA for any costs and obligations incurred in connection therewith, including reasonable attorneys'fees, fees and expenses of other experts, including auditors and accountants and other reasonable and necessary costs. If the Parties are unable to reach agreement as to the foregoing, then the Parties agree to submit the matter to mediation with a mutually agreed upon mediator. If the Parties are still unable to reach agreement following mediation, then the matter shall be submitted to binding arbitration subject to the rules of the American Arbitration Association, the costs of such arbitration being borne proportionally among the Participants. Section 11. Miscellaneous 11.1 Confidentiality.The Participants and NCPA will keep confidential all confidential or trade secret information made available to them in connection with this Agreement, to the extent possible, consistent with applicable laws, including the California Public Records Act. It shall be the responsibility of the holder of the claim of confidentiality or trade secret to defend at its expense against any request that such information be disclosed. Confidential or trade secret information shall be marked or expressly identified as such. 11.2 Indemnification and Hold Harmless.Subject to the provisions of Section 11.4, each Participant agrees to indemnify, defend and hold harmless NCPA and its Members, including their respective governing officials, officers, agents, and employees, from and against any and all claims, suits, losses, costs, damages, expenses and liability of any kind or nature, including reasonable attorneys’ fees and the costs of litigation, including experts (“Claims”), to the extent caused by any acts, omissions, breach of contract, negligence (active or passive), gross negligence, recklessness, or willful misconduct of a Participant, its governing officials, officers, employees, subcontractors or agents, to the maximum extent permitted by law. 24 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE 11.3 Several Liabilities.No Participant shall be liable under this Agreement for the obligations of any other Participant, and each Participant shall be solely responsible and liable for performance of its obligations under this Agreement, except as otherwise provided for herein, and the obligation of each Participant under this Agreement is a several obligation and not a joint obligation with those of the other Participants. 11.4 No Consequential Damages.FOR ANY BREACH OF ANY PROVISION OF THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGE IS EXPRESSLY PROVIDED, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE HEREBY WAIVED. IN NO EVENT SHALL NCPA OR ANY PARTICIPANT OR THEIR RESPECTIVE SUCCESSORS, ASSIGNS, REPRESENTATIVES, DIRECTORS, OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE FOR ANY LOST PROFITS, CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, PUNITIVE OR INCIDENTAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE, LOSS OF GOODWILL, LOST REVENUES, LOSS OF PROFIT OR LOSS OF CONTRACTS EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NCPA AND EACH PARTICIPANT EACH HEREBY WAIVES SUCH CLAIMS AND RELEASES EACH OTHER AND EACH OF SUCH PERSONS FROM ANY SUCH LIABILITY. The Parties acknowledge that California Civil Code section 1542 provides that: “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 executing 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 section 1542, or other similar provisions of law, and intend that the waiver and release provided 25 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE by this section of this Agreement shall be fully enforceable despite its reference to future or unknown claims. 11.5 Amendments.Except where this Agreement specifically provides otherwise, this Agreement may be amended only by written instrument executed by the Parties with the same formality as this Agreement. 11.6 Severability.In the event that any of the terms, covenants or conditions of this Agreement or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court having jurisdiction, all other terms, covenants or conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless the court holds that such provisions are not severable from all other provisions of this Agreement. 11.7 Governing Law.This Agreement shall be interpreted, governed by, and construed under the laws of the State of California. 11.8 Headings.All indices, titles, subject headings, section titles and similar items are provided for the purpose of convenience and are not intended to be inclusive, definitive, or affect the meaning of the contents of this Agreement or the scope thereof. 11.9 Notices.Any notice, demand or request required or authorized by this Agreement to be given to any Party shall be in writing, and shall either be personally delivered to a Participant and the Secretary of the Commission or transmitted to the Participant and the Secretary of the Commission at the address shown on the signature pages hereof. The designation of such address may be changed at any time by written notice given to the Secretary of the Commission who shall thereupon give written notice of such change to each Participant. 11.10 Warranty of Authority.Each Participant, and NCPA, represents and warrants that it has been duly authorized by all requisite approval and action to execute and 26 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE deliver this Agreement and that this Agreement is a binding, legal, and valid agreement enforceable in accordance with its terms as to the Participant and as to NCPA. Upon execution of this Agreement, each Participant shall deliver to NCPA a resolution of the governing body of such Participant,evidencing approval of and authority to enter into this Agreement,that such authority was duly exercised in accordance with such Participant’s Constitutive Documents. 11.11 Counterparts.This Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument and as if all the signatories to all of the counterparts had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more signature pages. 11.12 Assignment.Except as provided by Section 7 no Participant may assign or otherwise transfer its interest in its Participation Percentage or any other rights and obligations under this Agreement without the express written consent of NCPA, which shall not be unreasonably withheld. 11.13 Exercise of the Right of First Refusal. Participants shall abide by the NCPA Facilities Agreement in the exercise of any options by NCPA to purchase the underlying assets of the PPA as per the voting procedures of this Agreement outlined in Section 6. Participation in any such purchase shall be in accordance with the then existing Participation Percentages, unless such Participation Percentages are otherwise agreed upon by the Participants. 11.14 List of Exhibits.The Exhibits referenced herein shall be denoted as follows: 27 THIRD PHASE AGREEMENT FOR THE WESTERN GEOPOWER, INCORPORATED RENEWABLE POWER PURCHASE AGREEMENT //GENSERV/18.23/WESTERNGEOPOWERIIIPHASE Exhibit A -RENEWABLE ENERGY POWER PURCHASE AGREEMENT between NORTHERN CALIFORNIA POWER AGENCY and WESTERN GEOPOWER INCORPORATED Exhibit B -PARTICIPATION PERCENTAGES IN WITNESS WHEREOF, each Participant has executed this Agreement with the approval of its governing body, and NCPA has authorized this Agreement in accordance with the authorization of its Commission. NORTHERN CALIFORNIA POWER AGENCY [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: __________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: ALAMEDA POWER AND TELECOM [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: __________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: BAY AREA RAPID TRANSIT [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: CITY OF LODI [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: __________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: CITY OF LOMPOC [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: CITY OF PALO ALTO [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: PORT OF OAKLAND [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: CITY OF ROSEVILLE [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: SILICON VALLEY POWER [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: TRUCKEE DONNER PUBLIC UTILITY DISTRICT [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: CITY OF TURLOCK [Address] [City, State, Zip] [Telephone] [Facsimile] _____________________________ By:__________________________ Title: ________________________ Date: Approved as to form: _____________________________ By:__________________________ Its: Attorney Date: ATTACHMENT E DRAFT Excerpt of: UTILITIES ADVISORY COMMISSION MEETING MINUTES OF FEBRUARY 2, 2011 ITEM 5: ACTION: Agreement Terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement Director Fong provided a brief summary of the report. Palo Alto signed up for the project with a $98 per megawatt-hour ((MWh), but the project does not go forward due to financing difficulties. The Northern California Power Agency (NCPA) has been able to negotiate an agreement for the project, but at the higher price of $113/MWh. Fong indicated that staff feels that it cannot recommend going forward with this project at $113/MWh at this time since it has not completed some of the planning work requested by Council: LEAP, GULP, and the Strategic Plan. In addition, the City of Santa Clara has offered to take on more of the project initially and has indicated a willingness to let Palo Alto in to the project. First, Palo Alto needs to step aside to let participants, including Santa Clara, proceed with the project. Therefore, staff’s recommendation is to terminate the original $98/MWh contract so that participants can sign up for the available project at $113/MWh. Commissioner Foster asked for clarification that there is no reason to agree to execute the $113/MWh contract now since Santa Clara will offer it to us later. Fong indicated that the first thing to not be a roadblock is to execute the termination agreement. Then, Santa Clara has offered to provide Palo Alto the opportunity to become a participant in the project if it can complete its required planning tasks and approvals by the end of the year. Commissioner Melton said that the geothermal source looked good in the past to us and still looks good to us and noted that the feed-in tariffs can only supply half of our remaining RPS needs over the next five years. He asked if staff was inclined to do the project. Senior Resource Originator Tom Kabat indicated that the size of the project would fit nicely into the portfolio and could help achieve the RPS goals. He anticipated that the City could release another request for proposals for renewable power to verify that the $113/MWh was a competitive price. Commissioner Melton said that the price seemed to be in the ballpark of what we’ve seen in the recent past. Commissioner Keller agreed that we need to get out of the way now by terminating the existing contract, but asked if there could be anything lost by waiting such as having the price move. She asked about the term of the contract and if the plant was currently operational. Kabat stated that the contract term was 25 years and that the plant is not yet operational, but there have been test wells drilled. She asked if there was certainty that there is 25 years of a steam source. Kabat indicated that he is not certain of the life of the steam source, but because the contract is a Power Purchase Agreement, the City would only pay for actual generation produced. ATTACHMENT E Commissioner Foster stated that he supports terminating the original agreement and, in general, is supportive of this renewable purchase. However, if the decision can be delayed, this is acceptable. Commissioner Eglash indicated that he did not agree with the recommendation and disagreed with the statement in the report that the price of $113/MWh was “reasonably competitive.” Instead, he noted that we know that the price is very competitive as it is essentially the same price as the landfill gas contracts Council approved last year. In addition, one of the issues with those landfill gas contracts was the fact that we already had many such contracts in the portfolio and there was a question of resource diversity. The Western GeoPower contract would add diversity to the portfolio. Environmental issues regarding the operation of the landfills was also raised as another concern and the Western GeoPower project would not have these concerns. For those reasons, this contract is overwhelmingly compelling and we still have far enough to go to achieve the RPS goals and enough uncertainty around the PV FIT that this would be a good decision. Commissioner Eglash concluded that having too much renewable energy at $113/MWh is a happy problem to have, it’s a terrific deal and he would support recommending it to the Council. Commissioner Foster indicated that he was persuaded by Commissioner Foster’s arguments. Commissioner Melton also indicated that he was supportive of the project at the $113/MWh and advised against hesitating on the project. Commissioner Eglash could recommend option 2.b in the report (execute the Termination Agreement and not enter into the new Third Phase Agreement at the $113/MWh price at this time), while staff recommended 2.a. (execute the Termination Agreement and enter into the new Third Phase Agreement at the $113/MWh price at this time). Commissioner Keller asked for staff’s reaction to Commissioner Eglash’s proposal. Fong indicated that staff does support option 2.b., but it has heard many times from the Council that it must have LEAP and the Strategic Plan completed and approved before bringing any new renewable resources for consideration. The new price does look attractive to staff and it has had discussions with Santa Clara to allow the City to get the price if it is able to act by the end of the year. Commissioner Eglash is sympathetic to staff’s position, but this is a case to treat as an exception and that the burden to make the recommendation is on the Commission and not on staff. This is one case where the staff and the Commission are under different pressures and may make different recommendations to the Council. He itemized the reasons for the Commission to make a recommendation to agree to the new contract now: 1) it is an attractive price; 2) it is well within the scope of what we do; 3) the Finance Committee will be able to review the project’s merits even if staff does not have the time to do its usual thorough review; and 4) the project is not a new project, but a derivative of an earlier one which was approved. We would not be doing anyone at the City a favor to take part of a year to more fully analyze and vet the project or to send out another request for proposals. We already know the project is a good one with a reasonable price. Fong indicated that there is no problem with staff taking a recommendation to the Finance Commission that is different from the UAC’s recommendation. Commissioner Eglash indicated that staff should explain that the reason for not agreeing with the UAC’s recommendation is based on procedural concerns and not on disagreement with the merits of the project. Regarding the choices on the participation level for the project, Commissioner Eglash indicated that it would be best to stick with the level from the original agreement (up to 15% of the project ATTACHMENT E size), which would provide about 3% of the City’s annual electric needs. Thus, this would not be a proposal for a new level. ACTION: Commissioner Berry made a motion to execute the Termination Agreement and enter into the new Third Phase Agreement at the $113/MWh price at a participation level of up to 15% of the project. Commissioner Eglash seconded the motion. The motion carried unanimously by a vote of 6 to 0, with Cook absent. Preliminary Evaluation of the new Western GeoPower Project Preliminary Evaluation of the Western GeoPower Project at a Flat $113/MWh price The following sections discuss the City’s Renewable Portfolio Standard (RPS) goals, current progress towards meeting the RPS goals, Council direction in August 2009 and May 2010, integration of energy efficiency into the electric resource portfolio, and information regarding the market prices for renewable energy. Renewable Portfolio Standard Goals The City’s current renewable portfolio standard (RPS) target as adopted by Council in March 2007 is to meet 33 percent of City loads with renewable resources by 2015. The target is to be achieved while not exceeding the retail rate impact measure of 0.5¢/kWh (CMR:158:07). As of February 2011 a proposed update of LEAP awaits final Council action. While staff, the UAC and the Finance Committee (CMR: 426:10) have recommended some changes to the LEAP Strategy related to RPS, the proposed LEAP RPS Strategy is similar to the existing LEAP RPS Guideline in that it still has a target of meeting 33 percent of the City’s electric consumption with renewable resources by 2015 within the 0.5¢/kWh rate impact limit. Current Status of Renewable Resources in Electric Portfolio Five Power Purchase Agreements (PPAs) for energy generated from new renewable resources are currently delivering energy to Palo Alto. An additional three PPAs have been executed for projects that are under construction. The resources for all eight existing PPAs are shown in Table 1 below. Table 1 –Existing Renewable Energy Contracts Supplier Technology Date Contract Executed Actual or Estimated Online Date Annual Energy (GWh) High Winds Iberdrola Wind Nov. 2004 Dec. 2004 51.8 Shiloh Iberdrola Wind Oct. 2005 June 2006 74.4 Santa Cruz Ameresco Landfill Gas Nov. 2004 Feb. 2006 11.2 Half Moon Bay Ameresco Landfill Gas Jan. 2005 Apr. 2009 40.8 Keller Canyon Ameresco Landfill Gas Aug. 2005 Aug. 2009 11.8 Subtotal –Operating 190.0 Johnson Canyon Ameresco Landfill Gas Aug. 2009 June 2012 11.2 Crazy Horse Ameresco Landfill Gas May 2010 Jan. 2013 32.0 San Joaquin Ameresco Landfill Gas May 2010 Jan. 2013 32.0 Subtotal –Under Construction 75.2 Total –All Executed Contracts 265.2 In addition, through its contract with the Western Area Power Administration, the City receives hydroelectric energy that includes a small amount of energy from “small” hydroelectric projects that qualify under the state’s standard for renewable energy. The City also receives a share of the New Spicer Meadow qualifying small hydroelectric output as part of the Calaveras Hydroelectric Project. If these supplies are included (as proposed in the LEAP update), they would add about 1% towards the RPS goals of the portfolio in normal water years. Together, when all of the committed facilities reach commercial operating status, these resources –plus the output of the small hydro facilities –will provide about 27.5% of Palo Alto’s total energy supply needs as shown in Figure 1 below: Figure 1 –Palo Alto’s Renewable Resources 0 50 100 150 200 250 300 350200320042005200620072008200920102011201220132014201520162017201820192020Calendar Year GWh per Year Small Hydro Short-term Renewables Crazy Horse LFG San Joaquin LFG Johnson Canyon LFG Keller Canyon LFG Half Moon Bay LFG Santa Cruz LFG Shiloh Wind High Winds 2015 RPS Goal: 33% (331 GWh)Actual Projected Note that the volumes in Figure 1 are actual deliveries through 2010 and estimated deliveries after 2010. Energy deliveries from the wind energy contracts were lower than expected in 2009 due to a transmission line outage for an upgrade project. “Green Premium” Calculation To conform to the rate impact limitation of 0.5 ¢/kWh on average, staff compares the total cost of the renewable resource to the wholesale market price of non-renewable energy at the time that the contract is executed. The rate impacts from each renewable resource are added together to determine if the new resource would drive the cumulative retail rate impact above the 0.5 ¢/kWh upper limit. The limit is converted into an annual premium “budget”for qualifying renewables. For example, for 2010, the annual premium is calculated by multiplying the annual energy sales (approximately 1,000,000 MWh/year) by the premium (0.5 ¢/kWh, or $5/MWh) to get a green premium budget of $5.0 million/year. For each resource the levelized1 cost impact ($/year) is calculated based on the renewable energy cost plus transmission charges, minus any system or local capacity value provided, and minus the wholesale market price quote for non-renewable energy (or “brown power”) plus transmission charges. Table 2 below shows the amount of the green premium budget that has been used up with the existing eight PPAs. As shown, the contracts that were executed in 2004 and 2005 were priced very near the brown energy market price. Prices for the last three contracts were significantly higher than the brown energy market price. As shown in Table 2, for the eight existing renewable contracts, the total green premium that is expected to be paid annually once all projects are generating (expected in 2013) is $2.31 million, which corresponds to a rate impact of about 0.231 ¢/kWh. This means that there is still room (up to $2.69 million per year) to acquire additional renewable energy to meet the 33% RPS goal within the 0.5 ¢/kWh rate impact limit. Table 2 –Green Premium for Existing Renewable Energy Contracts Date Contract Executed Annual Energy (GWh) Levelized Project Cost ($/MWh) Adjusted * Brown Market Cost ($/MWh) Green Premium ($/MWh) Green Premium ($1000/yr) High Winds Nov. 2004 51.8 57.60 55.0 2.56 132 Shiloh Wind Oct. 2005 74.4 62.95 69.5 (6.50)(484) Santa Cruz Nov. 2004 11.2 62.32 59.3 2.97 33 Half Moon Bay Jan. 2005 40.8 58.97 67.5 (8.55)(349) Keller Canyon Aug. 2005 11.8 70.88 83.9 (13.00)(154) Johnson Canyon Aug. 2009 11.2 98.66 67.3 56.35 633 Crazy Horse May 2010 32.0 107.58 70.8 36.81 1,178 San Joaquin May 2010 32.0 118.08 76.8 41.26 1,321 Total -All Committed Contracts 265.2 2,310 *Brown Market Costs are levelized across the project’s contract period, and adjusted for the comparison project’s monthly and daily delivery profile, local and system capacity value, transmission costs and losses. Note that the Brown Market Cost does not include any future cost for greenhouse gas (GHG) emissions allowances. These costs could be imposed starting in 2014. The cost for these 1 Levelizing is a process of taking nominal cash flows, discounting them to present value, summing the present values, and amortizing the present value into uniform annual payments like a mortgage. The discounting and the amortizing are both performed with the user’s discount rate or time value of money. allowances is highly uncertain at this time. As part of the Climate Protection Plan (CPP) approved by the Council in December 2007, a GHG adder of $20 per metric ton, escalating by 5% per year, is to be incorporated in utility purchasing decisions. The impact of the $20/ton GHG adder would be to add about $10/MWh onto the levelized brown energy market prices shown in the Table 2. This would effectively lower the green premium attributed to renewable energy projects. Council Action in August 2009 and May 2010 In July 2009, when staff requested that the Finance Committee recommend that the Council approve the PPA with Ameresco Johnson Canyon landfill (CMR: 305:09), the Finance Committee discussed the rising cost of renewable energy and stated that these high prices should prompt a review of the policies and guidelines related to the acquisition of renewable power and the emphasis on efficiency improvements that could reduce electricity use. In August 2009, the Council agreed with the Finance Committee’s recommendation and directed staff to work with the UAC to re-evaluate the policies and plans related to the acquisition of renewable energy and energy efficiency and report back to the Finance Committee (CMR: 342:09). In May 2010, when Council approved 20-year renewable energy PPAs with Ameresco San Joaquin and Crazy Horse landfills (CMR: 226:10), it also directed staff to: A.Return to the Finance Committee before making any further recommendations on the acquisition of any new renewable energy resources with a re-examination of the policies and goals that are being used in the alternate energy program, including the energy efficiency plans and the electric acquisition policies and plans; and B.In its review, staff should provide information on the flexibility of the 33% target date with the option of aligning it to the State mandated goal. Following extensive review with the UAC, the Finance Committee recommended Council approval of proposed updates to LEAP (CMR: 426:10) and the Gas Utility Long-term Plan (GULP) (CMR: 432:10) in December 2010. The proposed LEAP guidelines include direction related to the pursuit of renewable energy supplies and the evaluation and funding of energy efficiency. Council is scheduled to consider the updated LEAP and GULP in March 2011. 2010 Ten-Year Electric Energy Efficiency (EE) Plan In May 2010, the Council approved the 2010 Ten-Year Electric EE Plan (CMR: 218:10). The 2010 EE Plan doubled the energy savings goals that were in the 2007 EE Plan. Figure 2 below shows the actual electric load since 1990 and the load forecast until 2020 without additional EE, with the 2007 EE Plan goals and with the 2010 EE Plan goals. The load forecast includes the expected increased load due to the construction of the Stanford Hospital expansion project. Figure 2 –Electric Consumption Forecast and Planned Energy Efficiency - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1990 1995 2000 2005 2010 2015 2020 Annual Load (MWh) Historic load + Forecast with 2010 EE plan goals Forecast with 2007 EE Plan goals Forecast with no additional EE Program Historic and Projected Annual Electric Loads Impact of Energy Efficiency Programs on Load Forecast The citywide electric load in 2020 is projected to be about 1,087 GWh/year with no active energy efficiency efforts. If the goals in the 2010 ten-year EE Plan are achieved, the 2020 load is projected to be about 1,001 GWh/year, a load reduction of about 86 GWh/year. If the goals in the 2010 EE Plan are achieved, a 33% RPS goal in 2020 would require about 330 GWh/year of renewable energy. Therefore, meeting the 2010 EE Plan goals would reduce the amount of renewable energy required to meet a 33% RPS goal in 2020 by 29 GWh/year. In addition, meeting the 2010 EE Plan goals reduces the amount of other (non-renewable) power purchases by 57 GWh/year. The Market for Renewable Resources in California and the West With the arrival of RPS goals for investor owned utilities (IOUs) and the likelihood of still higher RPS goals as a result of pending state legislation, the developers of renewable power are bullish on the pricing prospects for their products. Legislation under consideration that establishes higher RPS targets, California in-state renewable quotas, carbon taxes, or carbon cap-and-trade mechanisms drive the bullishness of renewable energy project developers. In the meantime, the California Public Utilities Commission’s (CPUC) “Market Price Referent” (MPR) has impacted renewable energy prices. The MPR is published by the CPUC periodically and consists of prices above which renewable projects proposed to IOUs would face additional CPUC scrutiny. Therefore, the MPR acts as a renewable energy price floor for Palo Alto, as proposers know they can get at least the MPR if they offer the project to the IOUs. For 25-year base load power contracts with delivery starting in 2013 the current levelized MPR is $112.45/MWh. The City seeks new renewable supplies through several activities. The most successful method to date has been to issue RFPs for renewable power, the last of which was released in the fall of 2009. The City also participates in a joint effort with other members of the Northern California Power Agency (NCPA), the NCPA Green Power Project (NGPP), which aims to attract larger projects that can be shared among the members. The NGPP has negotiated and worked toward contracts with several proposers, but no PPA has yet been executed in the six years NGPP has sought renewable energy. Other projects are brought to the NCPA by project developers for the consideration of the NCPA general membership; the Western GeoPower project is one of those projects. In addition, staff plans to propose a local solar photovoltaic (PV) feed-in tariff (FIT) for Council consideration in the spring or summer of 2011. At a February 2011 UAC study session on PV FITs, an industry advocate told the UAC that the City could meet about 2.4% of its electric needs from PV FITs by 2015. Palo Alto’s Renewable Resource Portfolio with the Western GeoPower Project The City has made commitments to renewable resources projected to provide 27.4% of its energy from qualified renewable resources by 2013. If a 15% share of the Western GeoPower Project is added, Palo Alto’s renewable resources would increase to about 30.8% of total load in 2014, or about 2.2% short of the 33% RPS target. Figure 3 below illustrates the renewable resources already in the portfolio plus a 15% share of the Western GeoPower project. Figure 3 –Palo Alto’s Renewable Resources Plus the Western GeoPower Project 0 50 100 150 200 250 300 350 200 3 200 5 200 7 200 9 201 1 201 3 201 5 201 7 201 9 202 1 202 3 202 5 202 7 202 9 203 1 203 3 203 5 203 7 Calendar Year GWh/yr WesternGeoPower Small Hydro Crazy Horse LFG San Joaquin LFG JohnsonCanyon LFG Short-term Renewables Keller Canyon LFG Half Moon BayLFG Santa Cruz LFG Shiloh Wind High Winds 2015 RPS Goal: 33% (331 GWh) As shown in Figure 3, the terms for the existing resources expire at varying times over the next 25 years so that contract extensions or new resources will be needed to continue to meet the RPS goals in the future. Table 3 below shows a summary of the information for the current renewable PPAs and the Western GeoPower project including the levelized price, adjusted brown market cost, and green premium. Table 3 –Summary of Current Renewable Energy Supplies and Western GeoPower Delivery Begins Annual Generation (GWh) Levelized Price ($/MWh) Adjusted Brown Market Price ($/MWh) Green Premium ($/MWh) Total Annual Green Premium ($1000) Small Hydro Before 2000 10.0 0 High Winds Dec 2004 51.8 57.60 55.0 2.56 132 Shiloh Wind Jan 2006 74.4 62.95 69.5 (6.50)(484) Santa Cruz Feb 2006 11.2 62.32 59.3 2.97 33 Half Moon Bay Apr 2009 40.8 58.97 67.5 (8.55)(349) Keller Canyon Aug 2009 11.8 70.88 83.9 (13.00)(154) Johnson Canyon Oct 2011 11.2 98.66 67.3 56.35 633 Crazy Horse Jan 2013 32.0 107.58 70.8 36.81 1,178 San Joaquin Jan 2013 32.0 118.08 76.8 41.26 1,321 Total Committed Projects 275.2 Total Committed Green Premium 2,310 Western Geo 33.1 113.0 74.0 39.01 1,290 Total with Western GeoPower 308.3 Total Green Premium with Western Geo 3,600 If the City agreed to the new Third Phase Agreement with Western GeoPower, renewable energy would supply about 31% of the City’s electric energy usage by 2014. The retail rate impact for this renewable power would amount to about 0.36 ¢/kWh, still within the 0.5 ¢/kWh rate impact limit. Resource Impact The cost of renewable energy supplies under a new Western GeoPower agreement for a flat price of $113/MWh for up to 15% of the project output is expected to be up to $95.0 million over the 25-year term of the agreement. The annual expected cost is up to $4.0 million. Approval of the new Western GeoPower Third Phase Agreement would result in a retail rate impact from all renewable resources, including Western GeoPower, estimated at up to 0.36¢/kWh, beginning no earlier than 2013. Staff’s Conclusion on the Western GeoPower Project After Preliminary Review As shown in Table 3 above, the price for the Western GeoPower Project is similar to the price of the last two contracts approved by Council in May 2010 for the Crazy Horse and San Joaquin landfill-gas-to-energy projects. In addition, there continues to be strong market for renewable resources due to the likelihood that state legislation mandating a 33% RPS goal will be signed into law. The price is also close to the MPR; however, the MPR is due to be updated soon and could possibly fall about 5-10 percent depending on certain factors, such as the price of natural gas. Since it has been about 16 months since the City tested the renewable market independently with an RFP, staff cannot say with certainty that the price offered for the Western GeoPower project is the best available. Waiting to commit to Western GeoPower would give the City time to issue another Request for Proposals for renewable energy and get solid alternatives to compete with the Western GeoPower option. In addition, although the UAC and the Finance Committee recommend the Council approve the proposed updated LEAP, the Council has not yet considered LEAP so approving the project is not completely consistent with the Council direction from May 2010. Finally, although the deadline for signing the new Third Phase Agreement is short,Silicon Valley Power (SVP) has verbally agreed to let the City participate in the Third Phase Agreement later in 2011 to permit staff to conduct a more thorough review and provide a recommendation on whether to enter into the new Third Phase Agreement. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 ATTACHMENT F NCPA DRAFT 3/7/11 ____________________________________________________________________________ AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT between NORTHERN CALIFORNIA POWER AGENCY And WESTERN GEOPOWER, INC. March ___,2011 ________________________________________________________________________________ OHS WEST:261077640.9 i OHS West:261077640.10 23768-8 LX0/LX0 TABLE OF CONTENTS Page AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT ...................................................................................................................1 ARTICLE 1.DEFINITIONS.....................................................................................................2 ARTICLE 2.TERM, TERMINATION AND SURVIVAL OF OBLIGATIONS...............13 2.1 Effective Date and Term....................................................................................13 2.2 Effect of Termination -Survival of Obligations .............................................14 ARTICLE 3.PURCHASE AND SALE..................................................................................14 3.1 Purchase and Sale of Output.............................................................................14 3.2 Delivery Point .....................................................................................................15 3.3 Environmental Attributes; Capacity Attributes and Compliance...............15 3.4 Tax Credits...........................................................................................................18 3.5 ROFO, Purchase and Related Rights ...............................................................18 ARTICLE 4.METERING........................................................................................................22 4.1 Metering Requirements .....................................................................................22 4.2 Meter Inaccuracies and Retroactive Adjustments .........................................23 4.3 Records and Audits............................................................................................23 ARTICLE 5.BILLING AND PAYMENT.............................................................................23 5.1 Billing....................................................................................................................24 5.2 Payment ...............................................................................................................24 5.3 Netting of Payments...........................................................................................25 5.4 Allocation of Taxes.............................................................................................25 ARTICLE 6.CREDIT REQUIREMENTS .............................................................................25 6.1 Financial Information.........................................................................................25 6.2 Guaranty Requirement ......................................................................................26 ARTICLE 7.SELLER’S ADDITIONAL OBLIGATIONS...................................................26 7.1 Construction, Operation and Maintenance of the Generating Facility..................................................................................................................26 7.2 Milestones............................................................................................................27 7.3 Commercial Operation Performance Tests.....................................................28 7.4 Performance Guaranties....................................................................................29 7.5 Obligations to Schedule and Deliver ...............................................................29 7.6 Modifications to the Generating Facility.........................................................32 ARTICLE 8.FORCE MAJEURE............................................................................................32 8.1 Force Majeure Events.........................................................................................33 8.2 Conditions............................................................................................................34 8.3 Termination Due To Force Majeure Event......................................................34 ARTICLE 9.DEFAULT/REMEDIES/TERMINATION....................................................35 9.1 Events of Default Generally..............................................................................35 9.2 Additional Events of Default by Seller............................................................36 OHS WEST:261077640.9 ii OHS West:261077640.10 23768-8 LX0/LX0 9.3 Remedies..............................................................................................................36 9.4 Indemnification 9.5 Project Viability Determination........................................................................38 ARTICLE 10.REPRESENTATIONS, WARRANTIES AND COVENANTS ....................39 10.1 Seller’s Representations, Warranties and Covenants....................................39 10.2 Buyer’s Representations, Warranties, and Covenants..................................40 ARTICLE 11.MISCELLANEOUS...........................................................................................41 11.1 Notices..................................................................................................................41 11.2 Dispute Resolution.............................................................................................41 11.3 Regulatory Compliance .....................................................................................42 11.4 No Dedication of Facilities ................................................................................43 11.5 Confidentiality ....................................................................................................43 11.6 Assignment and Reorganization......................................................................44 11.7 Waiver of Rights .................................................................................................45 11.8 Section Headings ................................................................................................45 11.9 No Third Party Beneficiary ...............................................................................45 11.10 Forward Contract ...............................................................................................46 11.11 Applicable Law...................................................................................................46 11.12 Venue ...................................................................................................................46 11.13 Nature of Relationship.......................................................................................46 11.14 Good Faith and Fair Dealing; Reasonableness...............................................46 11.15 Severability..........................................................................................................46 11.16 Counterparts........................................................................................................47 11.17 Cooperation.........................................................................................................47 11.18 Limitation of Liabilities......................................................................................47 11.19 Further Assurances.............................................................................................48 11.20 Time is of the Essence ........................................................................................48 11.21 Construction........................................................................................................48 11.22 Entire Agreement; Integration..........................................................................49 11.23 Exhibits ................................................................................................................49 Exhibit 1 [Reserved] Exhibit 2 Description of Generating Facility Exhibit 2.1 Leasehold Description Exhibit 2.2 Map of Leasehold Exhibit 2.3 Map of Delivery Point Exhibit 2.4 Conceptual One-Line Diagram Exhibit 3 Commercial Operation Performance Tests Exhibit 4 Contract Price Exhibit 5 [Reserved] Exhibit 6 Expected Annual Contract Quantity Form Exhibit 7 Milestones Exhibit 8 Guaranty Agreement OHS WEST:261077640.9 iii OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 9 [Reserved] Exhibit 10 Operations Forecasts and Scheduling Protocols Exhibit 11 Form of Attestation Exhibit 12 Payment / Wire Instructions Exhibit 13a Contacts, Buyer Exhibit 13b Contacts, Seller Exhibit 14 Example of Availability Shortfall Damages Exhibit 15 Seller's Insurance Information Exhibit 16 Agreement Modification Election Provisions Exhibit 17 Notice of NCPA's Rights to PPA Output Exhibit 18 Notice of NCPA's Rights to Purchase Steam Exhibit 19 Purchase Option Transaction Terms OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 1 AMENDED AND RESTATED RENEWABLE ENERGY POWER PURCHASE AGREEMENT This Amended and Restated Renewable Energy Power Purchase Agreement, (the “Agreement”) is made and effective as of March __, 2011 (“Effective Date”) by and between the Northern California Power Agency, a joint powers agency established pursuant to the laws of the State of California (“Buyer” or “NCPA”), and Western GeoPower, Inc., a corporation organized and existing pursuant to the laws of the State of California (“Seller”). WHEREAS,Buyer and Seller entered into a Renewable Energy Power Purchase Agreement on May 16, 2008 (“2008 PPA”), and, as a result of further negotiations and changes in financing, desire to amend and restate the 2008 PPA; and WHEREAS, after the execution of the 2008 PPA, the equity interests in Seller were purchased by Ram Power, Corp. (“Ram Power”), and Seller is currently a wholly- owned subsidiary of Ram Power; and WHEREAS,this Amended and Restated Agreement is entered into by and between the parties as of the Effective Date; and WHEREAS,Seller intends to construct, own, and operate a geothermal-powered generating facility, which qualifies as of the Effective Date as an eligible renewable energy resource (“ERR”) under the State of California Renewable Portfolio Standard Program (“RPS”), as codified at California Public Utilities Code Section 399.11, et seq., and desires to sell electricity produced by such Generating Facility together with all Environmental Attributes and Capacity Attributes, each as defined below, exclusively to Buyer pursuant to the terms and conditions set forth herein; and WHEREAS,Buyer desires to be the exclusive purchaser of electricity generated by Seller’s Generating Facility, as defined below, together with all Environmental Attributes and Capacity Attributes pursuant to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises hereof, and the covenants and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Buyer and Seller, intending to be legally bound, hereby agree as follows: OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 2 AGREEMENT ARTICLE 1.DEFINITIONS Unless otherwise required by the context in which any term appears, (i) initially- capitalized terms used in this Agreement shall have the meanings specified in this Article; (ii) terms defined in the singular shall include the plural and vice versa; (iii) references to “Articles,” “Sections,” and “Exhibits” shall be to articles, sections, or exhibits hereof; (iv) all references to a particular entity shall include a reference to such entity’s successors and permitted assigns; (v) the words “herein,” “hereof,” and “hereunder” shall refer to this Agreement as a whole and not to any particular section or subsection hereof; (vi) all accounting terms not specifically defined herein shall be construed in accordance with GAAP; (vii) references to this Agreement shall include all appendices and Exhibits hereto, as the same may be amended, modified, supplemented, or replaced from time to time; (viii) terms used in the masculine shall include the feminine and neuter and vice versa; and (ix) the terms “include”, “including,” and other variations thereof, when used in this Agreement, shall mean to include without limitation. 1.1 “2008 PPA” has the meaning set forth in the recitals of this Agreement. 1.2 “Accepted Compliance Costs” has the meaning set forth in Section 3.3(g)(ii). 1.3 “Adjustment Period” means (i) the period of time when inaccurate measurements were made by a defective Meter, if that period of time can be determined to the mutual satisfaction of the Parties, or (ii) if the period of time cannot be determined to the mutual satisfaction of the Parties, one- half the period of time from the date of the last previous test of the Meter to the date such Meter failure is discovered. 1.4 “Affiliates” means, with respect to any Person (other than an individual), any other Person (other than an individual) that (a) directly or indirectly, through one or more intermediaries, controls, or is controlled by such Person or (b) is under common control with such Person. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power. 1.5 “Agreement” has the meaning set forth in the preamble of this Agreement. 1.6 “Assets” means all of Seller’s rights and interests in the following: OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 3 (a)the Generating Facility; (b)any Expansion Plant; (c)the Site and any facilities erected, installed or constructed on the Site; (d)the Leaseholds; and (e)the geothermal resources and related rights to extract steam within the terms and conditions of the Leaseholds. 1.7 “Availability Percentage” or “AP” means, for any given period, (1) the aggregate Deemed Output for such period divided by (2) the aggregate Contract Capacity for such period, expressed as follows: AP for period n = 100% x Deemed Output (in MWhs) for period n Contract Capacity (in MWhs) for period n OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 4 1.8 “Availability Shortfall Damages” has the meaning as set forth in Section 7.4. 1.9 “Balancing Authority Area” means the electric power system or successor (or combination of electric power systems) under the operational control of the CAISO or any other electric power system under the operational control of another organization vested with authority comparable to that of the CAISO. 1.10 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall begin at 8:00 a.m. and end at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent, or by whom the notice, payment or delivery is received, as the context requires. 1.11 “Buyer” has the meaning set forth in the preamble of this Agreement. 1.12 “CAISO” means the California Independent System Operator. 1.13 “CAISO Tariff” means the duly authorized tariff, rules, protocols and other requirements of the CAISO, as amended from time to time. 1.14 “Capacity Attributes” means any and all current or future defined characteristics, certificates, tags, credits, ancillary service attributes, or accounting constructs, howsoever entitled, including the rights and privileges attached to any generating resource that satisfy any entity’s resource adequacy obligations, (Resource Adequacy under the CAISO Tariff), and any tracking or accounting associated with the foregoing, attributed to or associated with the electricity generating capacity of the Generating Facility, or any unit of electricity generating capacity of the Generating Facility, during the Term. 1.15 “CEC” means the California Energy Commission. 1.16 “Commercial Operation” means that: (i) the Generating Facility has in all material respects been constructed in accordance with Prudent Utility Practice, all Permits, Requirements of Law, and the applicable requirements and specifications set forth in Article 7 and Exhibit 2 [Description of Generating Facility], provided that the foregoing shall exclude punch-list type items and other similar items that do not have any OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 5 material adverse effect on the ability of the Generating Facility to commence and continue commercial operations safely and reliably; and (ii) Seller has successfully completed the Commercial Operation Performance Tests. 1.17 “Commercial Operation Date” means the date on which Commercial Operation first occurs. 1.18 “Commercial Operation Performance Tests” means any tests required for commercial operation under Seller’s Large Generator Interconnection Agreement and as set forth in Exhibit 3 [Commercial Operation Performance Tests]. 1.19 “Compliance Actions” has the meaning set forth in Section 3.3(g)(ii). 1.20 “Compliance Expenditure Cap” has the meaning set forth in Section 3.3.(g)(i). 1.21 “Confidential Information” means information with respect to the business of either Party provided by one Party to the other in accordance with, or in furtherance of, this Agreement including the content of documents, ideas, business methods, finances, prices, business plans, financial development plans, manpower plans, customer lists or details, computer systems, software, know-how, trade secrets or other matters connected with such Party’s obligations hereunder; provided, however, that “Confidential Information” shall not include information that (i) at the time of disclosure or thereafter is generally available to, or known by, the public other than as a result of a disclosure by the receiving Party or its representatives in violation of this Agreement; (ii) was available to the receiving Party on a non-confidential basis from a source other than the disclosing Party; or (iii) was otherwise independently acquired or developed by the receiving Party without violating its obligations hereunder. 1.22 “Contract Capacity” means, for each month, Seller’s forecast of electricity generation output in MWhs of the Generating Facility for such month, net of all expected on-Site uses (e.g. parasitic loads) and any other known and knowable impacts such as planned outages and line or transformation losses to the Delivery Point. This forecast shall be delivered in writing to NCPA at least ten (10) days prior to the beginning of each month in accordance with Section 2.2 of Exhibit 10 [Operations Forecasts and Scheduling Protocols]. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 6 1.23 “Contract Price” means the price in United States Dollars to be paid by Buyer to Seller for the purchase of the Output, as specified in Exhibit 4 [Contract Price]. 1.24 “Contractual Obligations” means, as to Seller, any material agreement, instrument or undertaking to which Seller is a party or by which it or any of its property is bound. 1.25 “Contract Year” means each year beginning on January 1st and ending on December 31st of such year following the Commercial Operation Date; provided, however, that the first Contract Year shall commence on the Commercial Operation Date and end on the following December 31st, and the last Contract Year shall end on the relevant anniversary of the Commercial Operation Date as set forth in Section 2.1. 1.26 “Contract Year Period” shall mean a rolling period of three (3) Contract Years. 1.27 “Damages” has the meaning set forth in Section 9.4. 1.28 “Deemed Output” means, for any given period, the aggregate Metered Quantity plus the aggregate Lost Output for such period. 1.29 “Delay Liquidated Damages” means an amount equal to one dollar ($1.00) per day. 1.30 “Delivery Point” means the point on the CAISO controlled grid at which the Energy will be delivered by Seller and received by Buyer hereunder, as specified in Exhibits 2 [Description of Generating Facility], Exhibit 2.3 [Map of Delivery Point] and Exhibit 2.4 [Conceptual One-Line Diagram], and specified in Seller’s Interconnection Agreement as the “Point of Interconnection”. 1.31 “Deviation Band” means a defined MW range, generally 3%, in which a specific generation resource or the summation of a load/resource portfolio may deviate from expected energy without incurring a penalty, which may include but is not limited to the MSS Deviation Band or the compliance range utilized to compute Uninstructed Deviation Penalties, as defined in the CAISO Tariff. 1.32 “EA Agency” means any local, state or federal entity, or any other Person, that has responsibility for or jurisdiction over a program involving transferability of Environmental Attributes, including the Clean Air OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 7 Markets Division of the United States Environmental Protection Agency, the California Resources, Conservation and Development Commission, the California Public Utilities Commission, and any successor agency thereto. 1.33 “Effective Date” has the meaning set forth in the preamble of this Agreement. 1.34 “Energy” means the electricity generated by the Generating Facility pursuant to this Agreement, as expressed in units of kWh or MWh as measured at the Meter(s). 1.35 “Environmental Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Generating Facility or Expansion Plant(s), as the case may be, and its displacement of conventional energy generation. Environmental Attributes include: (i) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (ii) any avoided emissions of carbon dioxide (CO2), methane (CH4) and other greenhouse gases that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the earth’s climate by trapping heat in the atmosphere; and (iii) the reporting rights to these avoided emissions such as Green Tag Reporting Rights. Environmental Attributes do not include: (i) any Energy, capacity, reliability or other power attributes from the Generating Facility or Expansion Plant(s), (ii) Production Tax Credits or Investment Tax Credits associated with the construction or operation of the Generating Facility, or Expansion Plant(s), and other financial incentives in the form of grants, credits, reductions, or allowances associated with the Generating Facility or Expansion Plant(s) that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by Seller or the owners of the Site for the destruction of particular pre- existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits or any other similar credits, offsets, allowances or attributes encumbered, used or required by the Generating Facility or Expansion Plant(s) for compliance with local, state, or federal operating and/or air quality permits or other Requirements of Law, including renewable energy credits. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 8 1.36 “Environmental Attributes Reporting Rights” means all rights to report ownership of the Environmental Attributes to any Person, including under Section 1605(b) of the Energy Policy Act of 1992. 1.37 “ERR” or “Eligible Renewable Energy Resource” is a resource that qualifies under the State of California Renewable Portfolio Standard Program, as codified at the California Public Utilities Code Sect 399.11 et seq as an eligible renewable resource. 1.38 “ERR and RA Benefits” has the meaning set forth in Section 3.3(g)(iv). 1.39 “Event of Default” has the meaning set forth in Article 9. 1.40 “Excluded Transactions” has the meaning set forth in Section 3.5(a). 1.41 “Expansion Plant” means any expansion of the Generating Facility from its nameplate rating capacity achieved through the addition of new or additional generating equipment at the Site. Each such expansion of the Generating Facility shall be deemed to be an Expansion Plant. Notwithstanding the foregoing, production from the equipment and/or resources defined in Exhibit 2 [Description of Generating Facility]shall be exempt from the definition of Expansion Plant. “Expansion Plant Output” means all capacity and associated Energy, and associated Environmental Attributes and Capacity Attributes produced by Seller at any Expansion Plant. 1.42 “Expected Annual Contract Quantity” means the amount of Energy that Seller expects to deliver to Buyer hereunder in a given Contract Year other than the first and last Contract Years (which may be partial years), as set forth in Exhibit 6 [Expected Annual Contract Quantity Form], it being acknowledged that such amounts are non-binding estimates. 1.43 “Force Majeure Event” has the meaning set forth in Section 8.1. 1.44 “GAAP” means Generally Accepted Accounting Principles in the United States of America, or International Financial Reporting Standards (IFRS), as the case may be. 1.45 “Generating Facility” means Seller’s Energy generating facility as more particularly described in Exhibit 2 [Description of Generating Facility], together with all materials, equipment systems, structures, features and improvements necessary to produce electricity at such facility. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 9 1.46 “Governmental Authority” means any federal or state government, or political subdivision thereof, including, any municipality, township or county, or any entity or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, any corporation or other entity owned or controlled by any of the foregoing. 1.47 “Green Tag Reporting Rights” are the right of a Green Tag purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag purchaser’s discretion, and include those Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on MWh basis and one Green Tag represents the Environmental Attributes associated with one (1) MWh of Energy. 1.48 “Guarantor” means a Person that guarantees the obligations of Seller by executing a Guaranty, which shall be Ram Power for purposes of this Agreement, unless otherwise agreed to by the Parties. 1.49 “Guaranty” means a guaranty in the form attached hereto as Exhibit 8 [Guaranty Agreement]. 1.50 “Interconnection” means the interconnection of the Generating Facility with the Transmission System, including construction, installation, operation and maintenance of all Interconnection Facilities. 1.51 “Interconnection Agreement” means an agreement between Seller and the Transmission Provider pursuant to which Seller and the Transmission Provider set forth the terms and conditions for Interconnection of the Generating Facility to the Transmission System, as amended from time to time. 1.52 “Interconnection Facilities” means all of the facilities installed for the purpose of interconnecting the Generating Facility to the Transmission System, including transformers and associated equipment, relay and switching equipment and safety equipment. 1.53 “Interest Rate” means, for any date, the lesser of:(i) the per annum prime lending rate (or reference rate) of interest of the Bank of America NT & SA then in effect as may from time to time be published by the Bank of America NT & SA (or if not published on such day on the most recent OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 10 preceding day on which published); or (ii) the maximum rate permitted by applicable law. 1.54 “Investment Tax Credits” or “ITC” means investment tax credits under Section 48 of the Internal Revenue Code, as amended from time-to-time during the Term, or grants in lieu of tax credits. 1.55 “kWh” means 1,000 Watt-hours of electric Energy. 1.56 “Leaseholds” means the leasehold interests described in Exhibit 2.1 [Leasehold Description]. 1.57 “Lender(s)” means any Person(s) providing money or extending credit (including any lease financing) to Seller for: (i) the construction of the Generating Facility; or (ii) the term or permanent financing of the Generating Facility. 1.58 “Lost Output” means, for any given period, the total amount of energy (expressed in KWhs or MWhs) in such period that the Generating Facility would reasonably have been expected to deliver to the Delivery Point, but failed to do so, to the extent such failure was caused by Force Majeure, default or breach of this Agreement by Buyer, any curtailment or reduction in deliveries ordered or caused by the CAISO or any other Transmission Provider, or otherwise caused by Buyer in its capacity as Scheduling Coordinator or otherwise. 1.59 “Metered Quantity” means the amount of Energy generated, delivered and measured by Meters. 1.60 “Meters” means the physical metering devices, data processing equipment and apparatus associated with the meters owned by Seller or Transmission Provider or its designee, and used to determine the quantities of Energy generated by the Generating Facility and to record other related parameters required for the reporting of data to Seller in accordance with the requirements of Article 4. 1.61 “Meter Service Agreement for CAISO Metered Entities” has the meaning set forth in the CAISO Tariff. 1.62 “Milestones” means the events that are set forth in Exhibit 7 [Milestones]. 1.63 “MW” means 1,000 Kilowatts of electric Energy. 1.64 “MWh” means 1,000 kWh of electric Energy. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 11 1.65 “Outage” means a physical state in which all or a portion of the Generating Facility is unavailable to provide Energy to the Delivery Point, including any derating or reduction in the capacity of the Generating Facility, whether planned or unplanned. 1.66 “Output” means (i) the plant capacity and associated Energy, and (ii) all Environmental Attributes and Capacity Attributes. 1.67 “Participating Generator Agreement” has the meaning set forth in the CAISO Tariff. 1.68 “Party” or “Parties” refers to the Buyer and Seller, and their respective successors and permitted assignees. 1.69 “Peak Months” means, collectively, the months of June, July, August and September during each Contract Year. 1.70 “Permits” means, collectively, all federal, state or local authorizations, certificates, permits, licenses and approvals required by any Governmental Authority for the construction, ownership, operation and maintenance of the Generating Facility. 1.71 “Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity. 1.72 “Production Tax Credits” or “PTC” means production tax credits under Section 45 of the Internal Revenue Code, as amended from time-to-time. 1.73 “Prudent Utility Practice” means those practices, methods and equipment, as changed from time to time, that: (i) when engaged in, or employed, are commonly used in the State of California in prudent electrical engineering and operations to operate electricity equipment lawfully and with safety, reliability, efficiency and expedition; or (ii) in the exercise of reasonable judgment considering the facts known, when engaged in could have been expected to achieve the desired result consistent with applicable law, safety, reliability, efficiency and expedition. Prudent Utility Practices are not limited to an optimum practice, method, selection of equipment or act, but rather are a range of acceptable practices, methods, selections of equipment or acts 1.74 “Restricted Period” has the meaning set forth in Section 3.5(d). OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 12 1.75 “Requirements of Law” means, collectively, any federal or state law, treaty, franchise, rule, regulation, order, writ, judgment, injunction, decree, award or determination of any arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon Seller or Buyer or any of their property or to which Seller or Buyer or any of their respective properties are subject. 1.76 “ROFO” has the meaning set forth in Section 3.5(a). 1.77 “ROFO Negotiation Period” has the meaning set forth in Section 3.5(a). 1.78 “ROFO Notice” has the meaning set forth in Section 3.5(a). 1.79 “ROFO PSA” has the meaning set forth in Section 3.5(a). 1.80 “RPS” or “Renewable Portfolio Standard Program” has the meaning set forth in the recitals of this Agreement. 1.81 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other, pursuant to the terms and conditions of the CAISO Tariff, the quantity of Energy to be scheduled, and/or delivered on any given day or days hereunder during the Term at the Delivery Point. 1.82 “Scheduling Coordinator” or “SC” means an entity certified by the CAISO for the purposes of undertaking the responsibilities of a scheduling coordinator specified by the CAISO Tariff. 1.83 “Seller” has the meaning set forth in the preamble of this Agreement. 1.84 “Site” means the real property on which the Generating Facility is to be built and located, as more particularly described in Exhibit 2.2 [Map of Leasehold], specifically including all land and mineral rights. 1.85 “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property (including assessments, fees or other charges based on the use or ownership of real property), personal property, transactional, sales, use, transfer, registration, value added, alternative or add on minimum, estimated tax, or other tax of any kind whatsoever, or OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 13 any liability for unclaimed property or escheatment under common law principles, including any interest, penalty or addition thereto, whether disputed or not, including any item for which liability arises as a transferee or successor-in-interest. 1.86 “Term” has the meaning set forth in Section 2.1. 1.87 “Test Energy” means Energy generated by the Generating Facility prior to the Commercial Operation Date. 1.88 “Transmission Provider” means any entity or entities responsible for the Interconnection of the Generating Facility with a Balancing Authority Area or transmitting Energy on behalf of Seller from the Generating Facility to the Delivery Point, and on behalf of Buyer from the Delivery Point. 1.89 “Transmission System” means the facilities used for the transmission of electricity in interstate commerce, including any modifications or upgrades made to such facilities, owned or operated by the Transmission Provider. 1.90 “WREGIS” means the Western Renewable Energy Generation Information System, or any successor renewable energy tracking system for implementing California’s Renewables Portfolio Standard. ARTICLE 2.TERM, TERMINATION AND SURVIVAL OF OBLIGATIONS 2.1 Effective Date and Term (a)This Agreement shall become effective on the Effective Date and, shall continue until the day before the twenty-fifth (25th) year anniversary of the Commercial Operation Date, unless amended, extended or terminated pursuant to this Agreement (“Term”). (b)Notwithstanding any other provision of this Agreement to the contrary, the Parties acknowledge and agree that (i) the Parties have executed and delivered this Agreement prior to Buyer’s receipt of signed agreements between Buyer and certain of its members authorizing Buyer to enter into this Agreement, (ii) following the date hereof, Buyer shall undertake in good faith to obtain all such necessary agreements, (iii) upon Buyer's obtaining and putting in place all such agreements (or Buyer's decision (in its sole discretion) to waive the need to obtain such agreements), Buyer shall provide written notice to Seller pursuant to Section 11.1 indicating that Buyer has obtained such agreements or waived the need to do so, and (iv) if for any reason Buyer has failed to OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 14 provide such notice to Seller on or prior to April 30, 2011, then on May 1, 2011 (x) this Agreement shall automatically (and without further action of the Parties) terminate, and for all purposes shall be deemed null and void ab initio, (y) notwithstanding Section 2.2 or 3.5 or any other provision hereof, neither Party shall have any continuing rights, remedies, obligations or liabilities hereunder and (z) the 2008 PPA shall automatically (and without further action of the Parties) be reinstated, and shall be deemed effective in the same manner and to the same extent as if this Agreement had never been executed. 2.2 Effect of Termination -Survival of Obligations (a)Upon expiration or termination of this Agreement, neither Party shall have future or further rights nor obligations under this Agreement, except as provided in Section 2.2(b) and 3.5 below. (b)Survival of Obligations. The following rights, obligations or provisions shall survive termination or expiration of this Agreement: (i)obligations by one Party to the other for payment of any amounts, or for performance of any duties, that have accrued or arose prior to, or have directly resulted from, the expiration or termination of this Agreement; (ii)indemnity obligations contained in Section 9.4, which shall survive to the full extent of the statute of limitations period applicable to any third party claim; (iii)limitation of liability provisions contained in Section 11.18; (iv)for a period of one (1) year after the expiration or termination date, the right to dispute an invoice pursuant to Section 5.1(b); or (v)the confidentiality obligations under Section 11.5. ARTICLE 3.PURCHASE AND SALE 3.1 Purchase and Sale of Output (a)In accordance with the terms and conditions hereof, commencing on the Commercial Operation Date and continuing throughout the Term, Seller shall sell all Output from the Generating Facility exclusively to Buyer and deliver all Energy at the Delivery Point, and Buyer shall purchase and accept all Output from the Generating Facility from Seller, including all Energy at the Delivery Point, and pay the Contract Price as set forth in Exhibit 4 [Contract Price]. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 15 (b)Buyer shall purchase and receive Test Energy (and associated Environmental Attributes) during the plant startup phase and otherwise prior to the Commercial Operation Date. Buyer shall pay Seller One Hundred Dollars ($100) per MWh for Test Energy delivered at the Delivery Point. In the event that, prior to the Commercial Operation Date, the CAISO imposes any costs or penalties on Buyer for failure to meet Buyer’s +/-3% Deviation Band for all of Buyer’s scheduled resources, Seller agrees to compensate Buyer for the proportionate share of such costs or penalties in amounts directly and reasonably attributable to Seller’s failure to deliver the Test Energy in amounts that match Seller’s forecasts from the Generating Facility during such period. (c)Scheduled and Delivered Amounts.Following the Commercial Operation Date, Seller shall use good faith efforts to ensure that the amounts generated by the Generating Facility as measured by Meters match amounts forecasted by Seller in accordance with Exhibit 10 [Operations Forecasts and Scheduling Protocols]. 3.2 Delivery Point (a)Allocation of Costs and Risks. Subject to Section 5.4, Seller shall be responsible for any costs or charges imposed on or associated with the Output or the delivery of the Output hereunder up to and at the Delivery Point. Buyer shall be responsible for any costs or charges imposed on or associated with the Output, or its receipt, after the Delivery Point. (b)Title and Risk of Loss. Title to, and risk of loss related to, the Output shall transfer from Seller to Buyer at the Delivery Point. 3.3 Environmental Attributes; Capacity Attributes and Compliance (a)Generally. Throughout the Term, Seller shall transfer to Buyer, and Buyer shall receive from Seller, all rights, titles and interest in and to the Environmental Attributes and Capacity Attributes, if any, whether now existing or subsequently generated or acquired (other than by direct purchase from a third party) by Seller, or that hereafter come into existence, during the Term, as a component of the Output purchased by Buyer from Seller hereunder. Subject to the Compliance Expenditure Cap set forth in Section 3.3(g), Seller agrees to transfer and make such Environmental Attributes and Capacity Attributes available to Buyer immediately to the fullest extent allowed by applicable law upon Seller’s production or acquisition of the Environmental Attributes and Capacity Attributes. Seller agrees that the Contract Price is the full compensation for all Energy, Environmental Attributes, and Capacity Attributes. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 16 (b)No Assignment. Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of any portion of the Environmental Attributes and Capacity Attributes to any Person other than Buyer. (c)RPS Compliance. Subject to the Compliance Expenditure Cap set forth in Section 3.3(g), (1) before delivery of any Energy hereunder, Seller shall cause: (A) the Generating Facility to be certified as an ERR by the appropriate entity having jurisdiction for purposes of the RPS legislation; and (B) all Output delivered to Buyer from the Generating Facility to qualify as output of an ERR for purposes of the RPS legislation; (2) Seller shall ensure that the Generating Facility maintains ERR status throughout the Term of this Agreement; and (3) Seller shall cooperate reasonably with Buyer and provide such certifications or attestations to Buyer as are reasonably necessary to verify that all Environmental Attributes attributable to the Energy have been transferred to Buyer. (d)Reporting Rights. During the Term, Seller shall not report to any Person that the Environmental Attributes and Capacity Attributes granted hereunder to Buyer belong to anyone other than Buyer, and Buyer may report under any program that such attributes purchased hereunder belong to it. (e)Attestation. Subject to the Compliance Expenditure Cap set forth in Section 3.3(g): (1) Seller shall be responsible for complying, at its own expense, with requests for information associated with WREGIS and/or another entity, if any, that Buyer uses to verify its renewable energy purchases and that requires registration, inspections, certification or other evidence of the capability of the Generating Facility to produce Environmental Attributes or evidence of the quality and/or quantity of such Environmental Attributes produced; (2)Seller shall document the production of Environmental Attributes under this Agreement by delivering with each invoice to Buyer an attestation for Environmental Attributes produced by the Generating Facility and purchased by Buyer in the preceding calendar month; (3) on or before March 31st of each year following a Contract Year, Seller shall document the transfer of Environmental Attributes to Buyer under this Agreement by delivering to Buyer an attestation for Environmental Attributes transferred under this Agreement in the preceding Contract Year (the form of attestation is set forth as Exhibit 11 [Form of Attestation]); and (4) Exhibit 11 [Form of Attestation]shall be updated or changed by the Parties as necessary to ensure that Buyer receives full and complete title to, and the ability to record with any EA Agency as its own, all of the Environmental Attributes purchased hereunder. (f)Documentation. Subject to the Compliance Expenditure Cap set forth in Section 3.3(g), at Buyer’s request, the Parties, each at their own expense, shall execute all such documents and instruments in order to effect the transfer of the OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 17 Environmental Attributes specified in this Agreement to Buyer or its designees, as Buyer may reasonably request. Upon notification by an EA Agency that any transfers contemplated by this Agreement will not be recorded, the Parties shall promptly cooperate in taking all reasonable actions necessary so that such transfer can be recorded. Each Party shall promptly give the other Party copies of all documents it submits to the EA Agency to effectuate any transfers. (g)Compliance Expenditure Cap. (i)Amount. Seller's required out-of-pocket costs and expenses, in the aggregate, to take any and all actions and/or otherwise to comply with, effectuate the use of, obtain, maintain and/or remain in compliance with any and all of the items referenced in this Agreement as being subject to the Compliance Expenditure Cap, shall to the extent of any and all such costs or expenses arising out of any change in any applicable Requirements of Law following the Effective Date, be limited to a Four Million Dollar ($4,000,000) cap in the aggregate over the entire Term of this Agreement. Such expenditure cap is herein referred to as the “Compliance Expenditure Cap”. (ii)Compliance Actions. Any actions required for Seller to comply with its obligations, the cost of which are subject to the Compliance Expenditure Cap, are herein referred to collectively as the “Compliance Actions”. If Seller reasonably anticipates the need to incur out-of-pocket costs or expenses in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall promptly provide notice to Buyer of such anticipated out-of-pocket costs or expenses. Buyer will have ninety (90) days to evaluate such notice (during which time period Seller is not obligated to take any Compliance Actions described in the notice) and shall, within such time, either (i) agree to reimburse Seller for such costs or expenses that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (ii) waive Seller’s obligation to take such Compliance Actions. If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Parties and Buyer shall reimburse Seller on a current basis for Seller’s actual costs and expenses to effect the Compliance Actions, not to exceed the Accepted Compliance Costs. (iii)Timing of Notices, Etc. So long as Seller carries out its obligations under this Section 3.3(g) (including any obligation to deliver any notice hereunder) in a reasonably timely manner using all commercially reasonable efforts, Buyer hereby waives the consequences of, and Seller shall be excused from any delay in performing, and from any breach of any covenant, representation or other provision hereof, that is subject to the Compliance Expenditure Cap, during the pendency of the procedures set forth in this Section 3.3(g) and the carrying out of Compliance Actions OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 18 or, if no Compliance Actions can reasonably be taken. (iv)Certain Changes in Law. For purposes hereof, "ERR and RA Attributes and Benefits" means, collectively, all Environmental Attributes, Capacity Attributes, resource adequacy benefits, and ERR and RPS related requirements and benefits. Notwithstanding anything to the contrary herein, the Parties acknowledge that the Requirements of Law creating, establishing or recognizing ERR and RA Attributes and Benefits may be expanded, changed or eliminated after the Effective Date, and the Parties agree that, so long as Seller complies with its obligations above in this Section 3.3(g) if Compliance Actions can reasonably be taken, in the event of any such change in Requirements of Law after the Effective Date that eliminates or reduces any ERR and RA Benefits and Attributes (including, without limitation, the potential elimination of geothermal resources as qualifying for ERR status), Buyer's obligation to receive and pay for Energy delivered hereunder at the Contract Price shall not be excused or reduced. 3.4 Tax Credits Buyer agrees and acknowledges that all PTCs, ITCs and other tax credits/incentives in effect on or after the Effective Date shall be owned by Seller and/or the owners of the Generating Facility or the Site. 3.5 ROFO, Purchase and Related Rights Subject to the provisions of Exhibit 16 [Agreement Modification Election Provisions]: (a)Buyers Right of First Offer to Purchase Assets. If Seller decides to sell any portion of the Assets (including, but not limited to the Generating Facility, Expansion Plant, Leaseholds or any and all rights pertaining to the project) to any creditworthy third party, then, prior to entering into any material negotiations to carry out such a sale, Seller first shall provide notice of such proposed sale (“ROFO Notice”) to Buyer pursuant to Section 11.1 of this Agreement and provide a right of first offer (“ROFO”) to Buyer with respect to such proposed sale in accordance with the provisions of this Section 3.5(a). Upon Buyer's receipt of a ROFO Notice, Buyer shall have the right to negotiate in good faith with Seller for no more than ninety (90)days following the date of the ROFO Notice (unless otherwise agreed to by Seller, and hereinafter referred to as the “ROFO Negotiation Period”) the terms of a purchase and sale agreement (“ROFO PSA”) for the sale or transfer of the subject Assets to Buyer. Seller will provide in a timely manner information regarding the subject assets which is reasonable or customary to allow Buyer to perform due diligence and to negotiate in good faith for the purchase of such Assets during the ROFO Negotiation Period. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 19 Notwithstanding anything to the contrary contained herein, the ROFO provisions of Sections 3.5(a) and (c) shall not in any event apply to any “Excluded Transactions”, which shall include (i) the sale or transfer of any Assets in connection with any sale- leaseback or other similar financing, refinancing or monetization related transaction with respect to any Assets (including any transfer of any Site, Leaseholds or geothermal resource rights in connection with which Seller monetizes the value thereof and enters into a lease, steam supply or other similar agreement), (ii) any corporate reorganization, merger, combination or similar transaction or transfer of assets or ownership interests involving Seller or its Affiliates, provided that the Assets continue to be owned by an entity the equity interests of which (excluding any equity interests owned by providers of tax equity financing) are owned in majority part, directly or indirectly, by Ram Power, Corp., (iii) any sale of Assets in the ordinary course of Seller’s business that does not constitute a sale of all or substantially all of Seller’s Assets and which does not adversely effect Seller’s ability to perform its obligations under this Agreement, and (iv) any sale or transfer of any Assets as contemplated by Section 11.6(b). The provisions of this Section 3.5(a) shall survive any early termination of this Agreement pursuant to Section 9.3(A) (excluding only a termination arising out of a breach of this Agreement by Buyer) or 9.5 for a period ending on the earlier of (i) the date that is five (5) years following the date of such termination and (ii) the twenty fifth (25th) anniversary of the Commercial Operation Date; provided that Buyer's rights under this Section 3.5(a) shall automatically and forever expire and terminate if Seller ever provides Buyer an offer notice pursuant to Section 3.5(e) and Buyer fails to accept such offer. None of Buyer’s ROFO related rights under this Section 3.5(a) shall apply to, or be triggered by, any exercise by or on behalf of any Lender of any rights or remedies of any Lender or Lenders’ trustee under any security agreement, deed of trust or other security related documents. (b)Buyer’s Right to Purchase Expansion Output. Seller may in its sole discretion determine, from time to time, during the Term to sell, develop, finance, construct and/or operate an Expansion Plant. Each time such a determination is made, Seller shall notify Buyer of such determination and shall offer in writing to sell the Expansion Plant Output to Buyer at a contract price to be determined by the offer and the acceptance. The offer shall include the price to be paid by Buyer for the Expansion Plant Output, and the term of the proposed Power Purchase Agreement (“PPA”). The PPA shall otherwise conform to the terms and conditions of this Agreement, mutatis mutandis. If Buyer wishes to accept such offer to purchase all (or a portion) of the Expansion Plant Output, Buyer shall so notify Seller within ninety (90) days of its receipt of such offer. The Parties shall promptly thereafter enter into a definitive PPA incorporating the terms of such offer. Until such an Expansion Plant PPA is executed, Seller’s proposal accepted by Buyer (including any modifications agreed upon in writing by both Parties), shall control all dealings between the Parties relating to the Expansion Plant. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 20 (c)Seller’s Right to Sell to Third Parties. If (1) for any reason Buyer (a) fails to reach agreement with Seller on the final terms of an applicable ROFO PSA within ninety (90) days after receipt of Seller’s ROFO Notice, or (b) fails to obtain the approval of such ROFO PSA from Buyer’s governing commission or board (and provide a copy thereof to Seller) within one hundred twenty-five (125) days after receipt of Seller’s ROFO Notice or (c) fails to obtain any necessary approval(s) of such ROFO PSA from Buyer’s members (and provide a copy thereof to Seller), and actually execute and deliver to Seller such ROFO PSA, within one hundred seventy (170) days after receipt of Seller’s ROFO Notice; or (2) for any reason Buyer does not accept Seller’s offer to sell Expansion Plant Output within ninety (90) days of Buyer’s receipt of Seller’s offer therefor under Section 3.5(b), then and in any such case under preceding clauses (1) or (2), as applicable, Seller shall be free to offer to sell such Assets, or Expansion Plant Output to one or more third parties at a price and on other terms and conditions which, taken as a whole, are at least as favorable to Seller as the price and other terms and conditions set forth in Seller’s last offer to Buyer therefor. If Seller sells such Assets or Expansion Plant Output to a third party, Seller shall promptly provide to Buyer a written officer's certificate by which an officer of Seller certifies that the terms and conditions of sale of such Assets or Expansion Plant Output to such third party, taken as a whole, are at least as favorable to Seller as the price and other terms and conditions set forth in Seller’s last offer to Buyer, and Seller shall provide Buyer a summary of the relevant third party contract and any other supporting documentation necessary to support such certification. Upon the sale of such Assets or Expansion Plant Output in compliance with this Agreement, Buyer shall have no further rights to be offered or to purchase such Assets or Expansion Plant Output. Buyer’s refusal to purchase specific Assets or Expansion Plant Output from one Expansion Plant shall not affect Buyer’s right to purchase other Assets the Seller subsequently wishes to sell, or Buyer’s right to purchase the Expansion Plant Output from a later Expansion Plant under the terms of this Agreement. Prior to the termination of this Agreement, Seller shall not sell Assets nor provide Buyer’s Expansion Plant Output to any third party unless it can do so without compromising in any material way its ability to provide the Output to Buyer hereunder. The materiality of any such impact shall be determined by Buyer in its reasonable discretion. (d)New PPA Rights. If this Agreement is terminated prior to the closing of the construction financing for the Generating Facility pursuant to Section 9.3(A) (excluding only a termination arising out of a breach of this Agreement by Buyer) or 9.5, Seller may not sell, or enter into a contract to sell, any electric energy or other Output (but excluding, for the avoidance of doubt, steam, which is the subject of Section 3.5(e)), generated by, associated with or attributable to a generating facility installed at the Site to a party other than Buyer for a period of five (5) years following the date of such termination (the “Restricted Period”); provided that Buyer's rights under this Section 3.5(d) shall automatically and forever expire and terminate if Seller ever OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 21 provides Buyer an offer notice pursuant to Section 3.5(e) and Buyer fails to accept such offer. This prohibition on contracting and sale will not apply if, before entering into such contract or making a sale to a party other than Buyer, Seller provides Buyer with a written offer to sell the electric energy or other Output to Buyer at the Contract Price and on other terms and conditions materially similar to the terms and conditions contained in this Agreement and Buyer fails to accept such offer within sixty (60) days after Buyer’s receipt thereof. Seller may not sell or transfer the Site or any part thereof during the Restricted Period so long as the limitations contained in this Section 3.5(d) apply, unless the transferee agrees to be bound by the terms set forth in this Section 3.5(d), pursuant to a written agreement in a form reasonably acceptable to Buyer. Upon any termination of this Agreement in circumstances where Buyer’s rights under this Section 3.5(d) are triggered, Seller shall deliver a Notice of Buyer’s Rights in respect of the Site, in the form attached hereto as Exhibit 17 [Notice of NCPA's Rights to PPA Output], that Buyer may record giving notice of Buyer’s rights under this Section 3.5(d). (e)Purchase Option Upon Steam Sale. (1)Prior to the closing of the construction financing of the Generating Facility, Seller may not sell, or enter into a contract to sell, any steam arising out of any of the Leaseholds. Additionally, if this Agreement is terminated prior to the closing of the construction financing for the Generating Facility pursuant to Section 9.3(A) (excluding only a termination arising out of a breach of this Agreement by Buyer) or 9.5, then Seller may not sell, or enter into a contract to sell, any steam arising out of any of the Leaseholds during the Restricted Period. This prohibition on contracting and sale (i) shall not apply to Excluded Transactions and (ii) shall not apply if, before entering into any such contract or making a sale of steam to a third party, Seller provides Buyer with a written offer to sell all of Seller’s Assets to Buyer in accordance with the provisions of this Section 3.5(e), and Buyer declines such offer or fails to accept such offer within ninety (90) days after Buyer’s receipt thereof. (2)If Buyer provides written notice to Seller accepting an offer by Seller within ninety (90) days pursuant to Section 3.5(e)(1), then the purchase price and other terms and conditions of the purchase and sale of Assets from Seller to Buyer shall be as set forth on Exhibit 19 [Purchase Option Transaction Terms]. (3)Upon termination of this Agreement in circumstances where Buyer’s rights under this Section 3.5(e) are triggered, Seller shall deliver a Notice of Buyer’s Rights in respect of the Assets, in the form attached hereto as Exhibit 18 [Notice of NCPA's Rights to Steam], that Buyer may record giving notice of Buyer’s rights under this Section 3.5(e). OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 22 (f)Termination of Leaseholds. For so long as this Agreement is in effect, Seller may not terminate, assign or significantly modify any Leasehold agreements, if any such termination, assignment or modification would reasonably be expected to have a material adverse effect on Seller’s ability to perform its obligations hereunder, without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed. (g)Acknowledgement. For the avoidance of doubt, the Parties acknowledge and agree that Buyer's ROFO, option, purchase and other similar rights set forth in this Section 3.5 or elsewhere herein that in any way relate to all or any portion of Seller's Assets are intended to relate solely to Seller's Assets, and not to the assets or other rights owned or held by any Affiliate of Seller or any other third party. ARTICLE 4.METERING 4.1 Metering Requirements (a)Meters. The transfer of Energy from Seller to Buyer shall be measured by CAISO certified revenue quality Meters at the Delivery Point or corrected to the Delivery Point. Such Meters shall be selected, provided, installed, owned, maintained and operated, at Seller’s sole cost and expense, by Seller or its designee in accordance with the CAISO Tariff. Seller shall exercise reasonable care in the maintenance and operation of the Meters, and shall test and verify the accuracy of each Meter at least annually. Seller shall inform Buyer in advance of the time and date of these tests, and shall permit Buyer to be present at such tests and to receive the results of such tests. (b)SCADA. Seller shall install and maintain all equipment and data circuits necessary to determine and transmit real time supervisory control and data acquisition (“SCADA”) system data and real time data from the Meters to the CAISO. Seller shall provide to Buyer a copy of each certificate of compliance issued by CAISO, if any. (c)Access by Buyer. Buyer, at its discretion, shall be provided access to all monitored SCADA points to be used for real time monitoring, supervisory control and data acquisition. Buyer may further, at its sole cost and expense, install any updates or upgrades to the Meters, as well as install and maintain check meters and all associated measuring equipment necessary to permit an accurate determination of the quantities of Energy delivered under this Agreement, provided that such equipment does not interfere with Seller’s Meters. Seller shall permit Buyer or Buyer’s representative access to its Generating Facility for the purpose of installing and maintaining such check meters. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 23 (d)ISO Requirements. Seller shall submit to the CAISO, or allow the CAISO to retrieve, any meter data required by the CAISO related to the Generating Facility and its Output in accordance with the CAISO Tariff. 4.2 Meter Inaccuracies and Retroactive Adjustments If a Meter fails to register, or if the measurement made by a Meter is found upon testing to be inaccurate by an amount exceeding plus or minus one percent (1%), an adjustment shall be made correcting all measurements made by the inaccurate or defective Meter during the Adjustment Period. If the Parties are unable to agree on the amount of the adjustment to be applied to the Adjustment Period, the amount of the adjustment shall be determined: (i) by correcting the error if the percentage of error is ascertainable by calibration, tests or mathematical calculation, or (ii) if not so ascertainable, by estimating on the basis of the deliveries under similar conditions during periods when the Meter was registering accurately. Upon the determination of the amount of any adjustment and upon acceptance of such adjustment by the CAISO, if applicable, Buyer shall pay to Seller any additional amounts then due for deliveries of Output during the Adjustment Period at such time as other payments are due for the billing period in which the determination is made, or Buyer shall be entitled to a credit against the next subsequent payments due for the deliveries of Output, whichever case is applicable. The Parties agree to abide by protocols under the CAISO Tariff for handling Meter inaccuracies. 4.3 Records and Audits Seller and Buyer shall each keep complete and accurate records and all other data required by each Party for the purposes of proper administration of this Agreement, including such records as may be required by state or federal regulatory authorities. To facilitate payment and verification, Seller and Buyer shall keep all books and records necessary for billing and payments and grant the other Party reasonable access to those records. Seller and Buyer, at their own expense, shall have the right to audit and to examine the billing and operating records and data kept by the other Party relating to the transactions under, and the administration of, this Agreement at any time during normal business hours throughout the Term of this Agreement and for two (2) years thereafter. All such records and data shall be maintained by each Party throughout the Term of this Agreement and for a period of not less than two (2) years following the termination hereof. All such audits and examinations shall be conducted upon reasonable notice and during normal business hours. ARTICLE 5.BILLING AND PAYMENT OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 24 5.1 Billing (a)Seller shall provide to Buyer on or before the tenth (10th) day of each month: (i)An invoice based upon the Energy produced and delivered to the Delivery Point as described in Exhibit 4 [Contract Price]in the previous calendar month. (ii)The corresponding attestation pursuant to Exhibit 11 [Form of Attestation]. Such invoice shall be delivered as specified under Section 11.1. (b)Disputes over Invoice. Should either Seller or Buyer determine at a later date, but in no event later than one (1) year after the original invoice date, that the invoice amount was incorrect, that Party shall promptly notify the other Party of the error. In the event that an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within thirty (30) Business Days of such resolution along with interest accrued at the Interest Rate from, and including, the due date to, but excluding the date paid. Inadvertent overpayments by Buyer shall be returned upon request or deducted by Seller from subsequent payments, with interest accrued at the Interest Rate from, and including, the date of such overpayment to, but excluding the date repaid or deducted by, Seller. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 5.1(b) within one (1) year after the invoice is rendered or any specific adjustment to the invoice is made. If an invoice is not rendered within one (1) year after the close of the month during which performance occurred, the right to payment for such performance is waived. Failure of Buyer or its agent to withhold any payment amount from any invoice is not a waiver of Buyer’s right to challenge such invoice. 5.2 Payment (a)Subject to Section 5.1(b), all invoices under this Agreement shall be due and payable on the twentieth (20th) day of the month in which the invoice was received or the tenth (10th) day after receipt of the invoice which ever is later or, if such day is not a Business Day, then on the next Business Day. Each Party shall make payments by electronic funds transfer as set forth in Exhibit 12 [Payment/Wire Instructions], or by other mutually agreeable method(s), to the account designated by the other Party. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 25 (b)Late Payments and Interest Rate. Payments made after the due date shall be considered late and shall bear interest on the unpaid balance at an annual rate equal to two percent (2%) plus the Interest Rate. Interest shall be computed on the basis of a three hundred sixty five (365) day year. 5.3 Netting of Payments The Parties hereby agree that they shall discharge debts and payment obligations due and owing to the other on the same date through netting, in which case all amounts owed by each Party to the other for the purchase and sale of Output during the monthly billing period under this Agreement, including any related damages, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it. 5.4 Allocation of Taxes Seller shall pay or cause to be paid all Taxes on or with respect to the Output sold and delivered hereunder arising prior to the Delivery Point. Buyer shall pay or cause to be paid all Taxes on or with respect to the Output purchased and received hereunder arising at and from the Delivery Point. In the event Seller is required by law or regulation to remit or pay Taxes which are Buyer’s responsibility hereunder, Buyer shall promptly reimburse Seller for such Taxes. If Buyer is required by law or regulation to remit or pay Taxes which are Seller’s responsibility hereunder, Buyer may deduct the amount of any such Taxes from the sums due to Seller under this Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Taxes for which it is exempt under the law. ARTICLE 6.CREDIT REQUIREMENTS 6.1 Financial Information If requested by one Party, the other Party shall deliver: (i) within one hundred and eighty (180) days following the end of each fiscal year, a copy of the other Party’s annual report containing audited consolidated financial statements for such fiscal year, and (ii) within sixty (60) days after the end of each of its first three (3) fiscal quarters of each fiscal year, a copy of the other Party’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with GAAP; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as the other Party diligently pursues the preparation, certification and delivery of the statements. In the event that such Party does not prepare audited financial statements, such Party shall provide financial statements prepared in accordance with OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 26 GAAP demonstrating its financial condition in form and substance reasonably acceptable to the other Party. 6.2 Guaranty Requirement Seller shall provide Buyer with an executed Guaranty from Guarantor in the form of Exhibit 8 [Guaranty Agreement]on or before the Effective Date. Any failure to provide Buyer with a Guaranty shall be deemed an Event of Default under this Agreement. Seller may at any time in its discretion substitute a letter of credit for the Guaranty by delivering to Buyer an irrevocable, clean, standby letter of credit from a bank having a credit rating of at least A-from S&P or A3 from Moody's, and otherwise in a form and containing terms, reasonably acceptable to Buyer, in a face amount equal to Guarantor's maximum liability under the Guaranty (depending on whether before or after the Commercial Operation Date, as applicable), whereupon Buyer shall return the Guaranty to Guarantor. For purposes of the foregoing, any such letter of credit shall be deemed “clean” (as such term is used above) if, in order for Buyer to draw down thereunder, Buyer shall be required only to present the original letter of credit to the issuing bank and to execute and deliver to the issuing bank a certificate in a form to be attached to the letter of credit whereby Buyer certifies that it is entitled to draw down thereunder pursuant to the terms of this Agreement. ARTICLE 7.SELLER’S ADDITIONAL OBLIGATIONS During the Term of this Agreement, Seller hereby agrees to perform the following obligations, in addition to any of Seller’s other obligations pursuant to this Agreement: 7.1 Construction, Operation and Maintenance of the Generating Facility (a)Generally. Seller shall develop, finance, construct, own, operate, and maintain the Generating Facility in all material respects in accordance with this Agreement, all Requirements of Law, Permits and Prudent Utility Practice. (b)Compliance. Seller shall, in its own name and at its own expense, in all material respects seek, obtain, maintain, comply with and, as necessary, renew and modify from time to time, all Permits and other authorizations that are required by any Requirements of Law or Governmental Authority as are necessary for Seller to engage in the activities and obligations required by the Agreement, subject to the Compliance Expenditure Cap set forth in Section 3.3(g) with respect to Seller’s obligations set forth in Section 3.3. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 27 (c)Records. Seller shall in all material respects keep complete and accurate operating and other records and all other data for the purposes of proper administration of this Agreement as reasonably required by Buyer, including such records as may be required by any Governmental Authority or Prudent Utility Practice. (d)Disclosure. Subject to Section 11.5, Seller shall provide to Buyer such information regarding the permitting, engineering, construction or operations of the Generating Facility as Buyer may from time to time reasonably request, subject to licensing or other restrictions of Seller or a third party with respect to confidentiality, disclosure or use. (e)Insurance. Seller shall obtain and maintain the policies of insurance in amounts and with coverage as set forth in Exhibit 15 [Seller’s Insurance Information]. 7.2 Milestones (a)Generally. Seller covenants that it will diligently pursue all Milestones set forth in Exhibit 7 [Milestones], including the Commercial Operation Date. The Parties agree that time is of the essence in connection with the completion of the Generating Facility, and for achieving Commercial Operation, and that certain Milestones for the development, financing and construction of the Generating Facility must be achieved in a timely fashion or Buyer shall suffer damages. Seller shall achieve the Milestones by the corresponding dates set forth in Exhibit 7 [Milestones]. (b)Monthly Reports. Starting on the Effective Date, Seller shall provide to Buyer monthly progress reports concerning the progress towards completion of the Milestones. In addition, within five (5) Business Days of the completion of each Milestone, Seller shall provide a certification to Buyer (along with any supporting documentation) demonstrating the satisfaction of such Milestone. Seller shall provide to Buyer additional information concerning Seller’s progress towards, or confirmation of, achievement of the Milestones, as Buyer may reasonably request from time to time. (c)Notice of Failure To Achieve a Milestone. Upon becoming aware that Seller will, or is reasonably likely to, fail to achieve one or more Milestone(s) by the required date, for any reason including a Force Majeure Event, Seller shall so notify Buyer in writing as soon as is reasonably practical. Such notice shall explain the cause of the delay, provide an updated date for achievement of the Milestone(s), and describe Seller’s plan for meeting such Milestone(s). Seller’s notice will also explain any impact such delay may or will have on any other Milestone, and the measures to be taken to mitigate such impact. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 28 (d)Failure To Achieve Milestone. In the event that Seller fails to meet any Milestone by the applicable Milestone deadline as set forth in Exhibit 7 [Milestones], as such deadline may be extended as a result of a Force Majeure Event in accordance with Section 7.2(e), Seller shall be obligated to pay (as its sole and exclusive liability and obligation, but subject to the following sentence) and Buyer shall be entitled to receive (as its sole and exclusive right and remedy, but subject to the following sentence) Delay Liquidated Damages for each full day that Seller is late in satisfying the Milestone for up to eighteen (18) months. After eighteen (18) months, if Seller has not met such Milestone, such failure shall be deemed to be an Event of Default under this Agreement, and, without limiting Buyer's rights that survive termination of this Agreement under Section 3.5, Buyer shall have the right to terminate this Agreement pursuant to Section 9.3(A). (e)Force Majeure Event. In the event that a Force Majeure Event causes any delay in the achievement of a Milestone, such Milestone’s deadline shall be extended, together with any Force Majeure Event extensions for other Milestones, for a period not to exceed, in the aggregate, six (6) months. The extension of the deadline for any Milestone shall extend the deadline for all subsequent Milestones, provided that in no event shall the combined extensions for Force Majeure Events for any or all of the Milestones exceed six (6) months. The extension provided for in this Section 7.2(e) shall be the only effect of a Force Majeure Event on Seller’s obligations with respect to the Milestones. (f)Waiver of Right. Buyer may, at its discretion, grant waivers for Seller’s failure to meet any of the Milestones, but in no way shall any such waiver constitute a waiver of any future failures by Seller to meet other Milestones. 7.3 Commercial Operation Performance Tests No later than fourteen (14) days prior to conducting its Commercial Operation Performance Tests in accordance with Exhibit 3 [Commercial Operation Performance Tests]Seller shall notify Buyer of the date on which it intends to conduct such tests. Within seven (7) days of the successful completion of Seller’s Commercial Operation Performance Tests, Seller shall provide to Buyer written notification of the Commercial Operation Date, including any relevant data demonstrating that Commercial Operation has occurred. Buyer has the right to be present during any Commercial Operation Performance Test, and to receive all information, including meter and performance data associated with such tests. Seller may change the date for such tests upon written notice to Buyer, provided that Buyer has at least fourteen (14) days notice of the date of such tests. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 29 7.4 Performance Guaranties (a)Availability Percentage. Seller shall report to Buyer the Availability Percentage for each month within fifteen (15) days following the end of such month. At the end of each Contract Year (excluding the first and last Contract Years, which are not full calendar years), Buyer shall calculate the overall Availability Percentage for such Contract Year. If the Availability Percentage for any such Contract Year is at or above 90%, irrespective of the fluctuations from month to month, there will not be any Availability Shortfall Damages due from Seller to Buyer. In the event the Availability Percentage is below 90% for any such Contract Year, Seller shall pay Buyer Availability Shortfall Damages. The Availability Shortfall Damages shall be calculated by comparing the Deemed Output against the Contract Capacity for each month in such Contract Year. Only the months where the Availability Percentage was less than 90% will be subject to the Availability Shortfall Damages. The Availability Shortfall Damages for any such month shall be equal to (x) the difference between the Deemed Output and Contract Capacity for such month (expressed in MWhs) multiplied by (y) five dollars ($5) per MWh. The sum of the Availability Shortfall Damages for each applicable month in such Contract Year is the amount Seller will be obligated to pay to Buyer. Buyer shall send an invoice to Seller reflecting the amount due, and Seller shall make the payment to Buyer within 30 days of the invoice date. An example of how the Availability Shortfall Damages are to be calculated is set forth in the attached Exhibit 14 [Example of Availability Shortfall Damages]. (b)Limitations. The Parties recognize and agree that: (i) the actual damages to Buyer for a failure by Seller to meet the Availability Percentage specified above are difficult or inconvenient to determine; (ii) payment of amounts by Seller pursuant to this Section 7.4 is an appropriate remedy, and shall be Seller’s sole and exclusive liability and obligation and Buyer’s sole and exclusive right and remedy, arising out of or relating to any shortfalls in Output or any failure to meet the Availability Percentage specified above; and (iii) any such payment does not constitute a forfeiture or penalty of any kind, but rather constitutes anticipated costs to Buyer under the terms of this Agreement. 7.5 Obligations to Schedule and Deliver (a)Scheduling Coordinator Activities. (i)Annual Fee. Both Parties agree that for purposes of this Agreement, Buyer shall act as Scheduling Coordinator for Seller, and commencing upon the date of the initial synchronization of the Generating Facility, Seller shall pay to Buyer an annual fee in the amount of Seventy Thousand Dollars ($70,000.00) per year (pro-rated for partial years) for such services. Such fee shall be adjusted annually OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 30 commencing with the fee paid in the second Contract Year based on the change in the Bureau of Labor Statistics Consumer Price Index published for the preceding twelve (12) months. The amount of such fee allocable to each month (based on equal monthly installments) shall be paid against an invoice from Buyer to Seller each month. The Parties shall make reasonable efforts to comply with all applicable CAISO requirements and the provisions of Exhibit 10 [Operations Forecasts and Scheduling Protocols]. (ii)Scheduling. While it is Scheduling Coordinator, Buyer shall perform all duties of a Scheduling Coordinator under the CAISO Tariff for and on behalf of Seller and the Generating Facility. Except as specifically set forth herein, Seller shall owe no fees to Buyer for providing services as Scheduling Coordinator. At least thirty (30) days prior to the initial synchronization of the Generating Facility to the CAISO grid, Seller shall take all actions and execute and deliver to Buyer and the CAISO all documents necessary to authorize or designate Buyer as Seller’s Scheduling Coordinator effective as of initial synchronization. On and after initial synchronization Seller shall not authorize or designate any other party to act as Seller’s Scheduling Coordinator, nor shall Seller perform for its own benefit the duties of Scheduling Coordinator, and Seller shall not revoke Buyer’s authorization to act as Seller’s Scheduling Coordinator unless Buyer fails to perform its duties as Scheduling Coordinator or as otherwise agreed to by Buyer. Buyer (as Seller’s Scheduling Coordinator) shall submit Schedules to the CAISO based on the final schedules and forecasts developed in accordance with Exhibit 10 [Operations Forecasts and Scheduling Protocols] and the applicable CAISO Tariff, protocols and Scheduling practices for Energy on a day-ahead, hour-ahead, or real time basis. Buyer (as Seller’s Scheduling Coordinator) shall submit Schedules and any updates to such Schedules to the CAISO based on the most current forecast of Contract Capacity within the applicable scheduling timelines established in the CAISO Tariff. (iii)Notices. Buyer (as Seller’s Scheduling Coordinator) shall provide Seller with access to a web based system through which Seller shall submit to Buyer all notices and updates required under the CAISO Tariff regarding the Generating Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or other items. This information must be promptly provided by Seller to Buyer in order for Buyer to remain compliant with North American Electric Reliability Corporation (NERC) and Western Electricity Coordinating Council (WECC) reliability criteria. Buyer shall utilize the CAISO outage reporting systems to report outages. Seller will cooperate with Buyer to provide such notices and updates. If the web based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail,or facsimile transmission to the personnel designated to receive such information. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 31 (iv)CAISO Costs and Revenues. Except as otherwise set forth in Section 3.1(b) or this Section 7.5(a)(iv), Buyer (as Seller’s Scheduling Coordinator) shall be responsible for all CAISO costs (including penalties, negative imbalance energy costs, and other charges of any type) and shall be entitled to all CAISO revenues (including credits, positive imbalance energy revenues, and other payments) as the Scheduling Coordinator for the Generating Facility, including revenues associated with CAISO dispatches, bid cost recovery, inter-SC trade credits, or other credits in respect of the Energy Scheduled or delivered from the Generating Facility. Seller shall be responsible for CAISO charges or penalties solely to the extent set forth in Section 3.1(b) and this Section 7.5(a)(iv), in each case directly resulting from the Seller not notifying Buyer (as Seller’s Scheduling Coordinator) of outages or other unavailability of Generating Facility capacity in a timely manner (in accordance with the CAISO Tariff with respect to notifying the CAISO, if applicable, and as set forth in Exhibit 10 [Operations Forecasts and Scheduling Protocols] with respect to notifying Buyer). (v)General Scheduling Acknowledgements. The Parties acknowledge and agree that: (a)the Generating Facility is intended to be run as a baseload, as-available facility, non-dispatchable and non-curtailable, except in Emergencies within the meaning of the CAISO Tariff and as set forth in paragraph (c) below; (b)Buyer, acting as Seller’s Scheduling Coordinator, shall be obligated to Schedule all Energy that Seller forecasts to be available, except as set forth in paragraph (c) below; (c)Buyer, as Seller’s Scheduling Coordinator, may make economic bids on the Generating Facility's energy output in the CAISO administered market, and Buyer may (within the operating limits of the Generating Facility, and subject to Prudent Utility Practices) direct Seller to curtail the Generating Facility’s energy output for any period during which prices in the CAISO administered market are negative; provided that: (i)Buyer shall be obligated to (A) pay Seller at the Contract Price for any and all reductions in Output, (B) reimburse Seller on an after-tax basis for the value of any and all lost PTCs or other tax benefits and (C) reimburse Seller for any an all operating, maintenance, ramp-down, re-start and other costs or expenses of any type incurred by Seller,in each case (A), (B) and (C) arising out of any reductions in Output resulting from any such economic bidding or curtailment directions by Buyer; and OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 32 (ii)all such reductions in Output resulting from any such economic bidding or curtailment directions by Buyer shall be deemed to be Lost Output hereunder (d)except as expressly set forth herein, Buyer, as Seller’s Scheduling Coordinator, shall be entitled to all CAISO revenues and payments, and shall be responsible for all CAISO liabilities and penalties, in each case arising from or related to Energy from the Generating Facility; and (e)Buyer, as Seller’s Scheduling Coordinator, shall carry out all of its Scheduling Coordinator duties and obligations in good faith and in a reasonable and prudent manner. (b)Agreement with Transmission Provider. Seller shall, at its own cost and expense, negotiate and enter into an Interconnection Agreement and such other agreements with the Transmission Provider as needed to enable Seller to transmit Energy to the Delivery Point. (c)Agreements with CAISO. Seller shall, at its own cost and expense, negotiate and enter into any agreements with the CAISO required by the CAISO for generators delivering power into the CAISO-controlled grid, including, but not limited to, a Meter Service Agreement for CAISO Metered Entities and a Participating Generator Agreement. (d)Start-ups and Shut-downs. Seller shall coordinate all Generating Facility start-ups and shut-downs, in whole or in part, with Buyer in accordance with CAISO Tariff requirements and the reasonable protocols established by Buyer that are not inconsistent with the CAISO Tariff and CAISO procedures, as specified in Exhibit 10 [Operations Forecasts and Scheduling Protocols]. 7.6 Modifications to the Generating Facility Seller shall obtain Buyer’s written consent, which shall not be unreasonably withheld or delayed, prior to making any modifications to the Generating Facility that are likely to adversely affect Seller’s or Buyer’s ability to perform its obligations under this Agreement, including the delivery of the Expected Annual Contract Quantity and meeting the Availability Percentage requirements of Section 7.4. Any such modifications shall be conducted in accordance with Prudent Utility Practice and all applicable laws and reliability criteria, as such may be amended from time to time. ARTICLE 8.FORCE MAJEURE OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 33 8.1 Force Majeure Events (a)Definition. “Force Majeure Event” shall mean any event beyond the reasonable control of the Party affected that does not result from such Party’s negligence or breach of this Agreement, that is not excluded under Section 8.1(b) and that satisfies the requirements of Section 8.1(c), including, to the extent meeting the foregoing requirements, the following events: (i)acts of God such as storms, floods, lightning and earthquakes; (ii)sabotage or destruction by a third party of facilities and equipment relating to the performance by the affected Party of its obligations under this Agreement; (iii)Transmission System or generating equipment failure; (iv)war, riot, acts of a public enemy or other civil disturbance; (v)strike, walkout, lockout or other significant labor dispute; (vi)subject to the proviso to Section 7.5(a)(v)(c), curtailment of the Generating Facility by the CAISO or any Transmission Provider; or (vii)failures or delays by the Transmission Provider or the CAISO in entering into, or performing under, all agreements with Seller contemplated by this Agreement. (b)Exclusion. Force Majeure Event does not include the following: (i)economic hardship of either Party, including, but not limited to, failure to obtain financing; (ii)an Outage, except if caused directly by an event or circumstance that meets the requirements set forth in this Section 8.1; and (iii)failure or delay in the granting of Permits. (c)Excuse. Subject to Section 8.2 below, and except as expressly set forth herein, neither Party shall be considered in default under this Agreement for any delay or failure in its performance under this Agreement (including any obligation to deliver or accept Output) if such delay or failure is due to a Force Majeure Event, but only to the extent that: OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 34 (i)such Force Majeure Event is not attributable to fault or negligence on the part of that Party or its Affiliates; (ii)such Force Majeure Event is caused by factors beyond that Party’s (and its Affiliates’) reasonable control; and (iii)despite taking all reasonable technical and commercial precautions and measures to prevent, avoid, mitigate or overcome such event and the consequences thereof, the Party affected has been unable to prevent, avoid, mitigate or overcome such event or consequences. 8.2 Conditions In addition to the conditions set forth in Section 8.1(a) above, a Party may rely on a claim of a Force Majeure Event to excuse its performance only to the extent that such Party: (i)provides prompt notice of such Force Majeure Event to the other Party, giving an estimate of its expected duration and the probable impact on the performance of its obligations under this Agreement; (ii)exercises all reasonable efforts to continue to perform its obligations under this Agreement; (iii)expeditiously takes action to correct or cure the event or condition excusing performance so that the suspension of performance is no greater in scope and no longer in duration than is dictated by the problem; provided, however, that settlement of strikes or other labor disputes shall be completely within the sole discretion of the Party affected by such strike or labor dispute; (iv)exercises all reasonable efforts to mitigate or limit damages to the other Party; and (v)provides prompt notice to the other Party of the cessation of the event or condition giving rise to its excuse from performance. 8.3 Termination Due To Force Majeure Event In addition to and without limiting any other provisions of this Agreement, if a Party is prevented from performing its material obligations under this Agreement for a period of either (i) three hundred and sixty five (365) consecutive days or more, or (ii) seven hundred and thirty (730) non-consecutive days or more (whether full or partial days) over any Contract Year Period, the unaffected Party may terminate this OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 35 Agreement, without liability of either Party to the other, upon thirty (30) days written notice at any time during the Force Majeure Event. ARTICLE 9.DEFAULT/REMEDIES/TERMINATION 9.1 Events of Default Generally An “Event of Default” shall mean, with respect to each Party, the occurrence of any of the following: (i)the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within five (5) Business Days after written notice; (ii)any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, if such breach is not remedied within thirty (30) days after written notice; (iii)the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default, and except for the obligations set forth in Section 7.4, the exclusive remedies for which are provided in such Section) if such failure is not remedied within thirty (30) days after written notice (provided that if such failure is not capable of being remedied within such period, then for such longer period as is reasonably needed to effect the remedy, not to exceed one-hundred-eighty (180) days, so long as the failing Party diligently pursues such remedy); (iv)the initiation of an involuntary proceeding against such Party under the bankruptcy or insolvency laws, which proceeding remains undismissed for sixty (60) days, or in the event of the initiation by such Party of a voluntary proceeding under the bankruptcy or insolvency laws, including, but not limited to the making of a general assignment for the benefit of a Party’s creditors; (v)such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; or (vi)with respect to Seller’s Guarantor: OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 36 1.if any representation or warranty made by Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated , if such breach is not remedied within thirty (30) days after written notice; 2.the failure of Guarantor to make any payment required and such failure is not remedied within seven (7) Business Days after written notice or the failure of Guarantor to perform any other material covenant or obligation in the Guaranty if such failure is not remedied within thirty (30) days after written notice (provided that if such failure is not capable of being remedied within such period, then for such longer period as is reasonably needed to effect the remedy, not to exceed one-hundred-eighty (180) days, so long as the Guarantor diligently pursues such remedy); 3.the initiation of an involuntary proceeding against Guarantor under the bankruptcy or insolvency laws, which involuntary proceeding remains undismissed for sixty (60) consecutive days, or in the event of the initiation by Guarantor of a voluntary proceeding under the bankruptcy or insolvency laws; 4.the failure of Guarantor’s Guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms) prior to the satisfaction of all obligations of Seller without the written consent of Buyer; or 5.if Guarantor repudiates, disaffirms, disclaims, or rejects, in whole or in part, or challenges the validity of the Guaranty. 9.2 Additional Events of Default by Seller In addition to the Events of Default in Sections 7.2 and 9.1 above, the following shall each constitute an Event of Default by Seller: (i)Seller Schedules and/or delivers to Buyer Energy or other product from a resource other than the Generating Facility specified in this Agreement; (ii)Seller sells or transfers Buyer’s share of the Output (or any individual component thereof) to any Person other than Buyer (excluding during any period of a Buyer default hereunder). 9.3 Remedies A.Termination for Default OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 37 (a)Termination for Default. In the event the defaulting Party fails to cure the Event of Default within the period for curative action under Sections 9.1 or 9.2, as applicable, the non-defaulting Party may, for so long as such Event of Default continues uncured, terminate the Agreement by notifying the defaulting Party in writing of (i) the decision to terminate, and (ii) the effective date of the termination, which shall be no less than ten (10) days nor more than sixty (60) days from such notice. (b)Remedies. For all claims, causes of action and damages with respect to an Event of Default, in addition to the right to termination under Section 9.3(A)(a), the non-defaulting Party shall be entitled to foreclose upon, or otherwise employ, any security provided by the defaulting Party, and to recover actual damages allowed by law unless otherwise limited by this Agreement. The termination of this Agreement by a non-defaulting Party pursuant to Section 9.3(A)(a) shall not limit the right of a non-defaulting Party to rights and remedies available at law, including claims for breach of contract or failure to perform by the other Party and for direct damages incurred by the non-defaulting Party as a result of the termination of this Agreement. Nothing herein shall limit a Party’s rights to damages for any default or breach by the other Party that does not constitute an Event of Default. (c)Limitations. Except as otherwise specifically and expressly provided in this Agreement, neither Party shall be liable to the other under this Agreement for any indirect, special or consequential damages, including loss of use, loss of revenues, loss of profit, interest charges, cost of capital or claims of its customers or members to which service is made. Under no circumstances shall the non-defaulting Party be required to make a termination payment or other payment in respect of any damages to the defaulting Party (except for payments due under this Agreement for performance prior to termination). B.Buyer’s Right to Operate Plant upon Event of Default (a)Following the Commercial Operation Date, if a Seller Event of Default under Sections 9.1 or 9.2 occurs, then so long as Buyer has not terminated this Agreement, Buyer or its designee may (upon prior notice to Seller), but shall not be obligated to, step-in and assume operational control from Seller of the Generating Facility; provided that Buyer shall not be permitted to step-in and take control so long as Seller or any of Seller’s Lenders are using commercially reasonable efforts to remedy the Events of Default. In such circumstances, Buyer, its employees, contractors and designees shall have the unrestricted right to enter the Generating Facility to the extent necessary to operate the Generating Facility. Upon the exercise of this right, Buyer or its designee shall at all times operate the Generating Facility using Prudent Utility Practice and shall comply, to the extent commercially practicable, with the terms of this Agreement. Notwithstanding the foregoing, Seller shall not be excused from any OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 38 obligation or remedy available to Buyer as a result of Buyer’s operation of, or election not to operate, the Generating Facility. Buyer shall pay Seller the applicable Contract Price for Output provided hereunder, less any costs incurred by Buyer to operate the Generating Facility. Buyer shall indemnify and hold Seller harmless from any liability to third parties arising out of Buyer’s failure to operate the Generating Facility using Prudent Utility Practice. Upon Buyer’s satisfaction that Seller (or its Lenders or their designees) have the ability to operate the Generating Facility in accordance with this Agreement, Seller shall resume operational control. Buyer may exercise this right by serving five (5) days written notice to Seller. This right to operate plant is cumulative and is not exclusive of other rights and remedies in this Agreement. 9.4 Indemnification Seller and Buyer agree to defend, indemnify, and hold each other, and their respective officers, directors, employees and agents, harmless from and against all claims, demands, losses, liabilities, and expenses (including reasonable attorneys' fees) (collectively, “Damages”) for personal injury or death to persons and damage to each other's physical property or facilities or the property of any other Person to the extent arising out of, resulting from, or caused by the negligent or intentional and wrongful acts, errors, or omissions of the indemnifying Party. This indemnification obligation shall apply notwithstanding any negligent or intentional acts, errors or omissions of the indemnitees but the indemnifying Party's liability to pay Damages to the indemnified Party shall be reduced in proportion to the percentage by which the indemnitees’ negligent or intentional acts, errors or omissions caused the Damages. Neither Party shall be indemnified for its Damages resulting from its sole negligence or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy. 9.5 Project Viability Termination (a)If at any time prior to the closing of the construction financing for the Generating Facility, Seller determines for any reason that the continued development and construction of the Generating Facility is not viable, for any reason in Seller’s sole good faith judgment, then Seller may by written notice to Buyer terminate this Agreement, whereupon Seller shall pay to Buyer, as a liquidated termination fee, an amount equal to One Million Dollars ($1,000,000), which termination fee shall be Seller’s sole and exclusive liability and obligation, and Buyer’s sole and exclusive right and remedy, arising out of or relating to such termination; provided that the provisions of Sections 3.5(a), (d) and (e) shall survive such termination in accordance with the terms thereof. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 39 (b)If this Agreement is terminated pursuant to Section 9.5(a) above, in addition to any rights granted by Section 9.5(a), Seller shall not terminate any Leaseholds granted to Seller by a Seller Affiliate without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed) until the earlier of (1) the end of the Restricted Period or (2) the date that Buyer no longer has any rights, if any, in respect of such Leaseholds or the steam associated with such Leaseholds pursuant to Sections 3.5(a), (d) or (e). ARTICLE 10.REPRESENTATIONS, WARRANTIES AND COVENANTS 10.1 Seller’s Representations, Warranties and Covenants (a)Seller represents and warrants to Buyer that as of the Effective Date: (i)Seller is duly organized and validly existing as a corporation under the laws of the State of California, and has the lawful power to engage in the business it presently conducts and contemplates conducting in this Agreement and Seller is duly qualified in each jurisdiction wherein the nature of the business transacted by it makes such qualification necessary; (ii)Seller has the legal power and authority to make and carry out this Agreement and to perform its obligations hereunder; all such actions have been duly authorized by all necessary proceedings on its part. As of the Commercial Operation Date, (a) the Generating Facility will be a “qualifying small power production facility” as that term is defined in Section 3(17)(C) of the Federal Power Act, and will possess all of the exemptions from regulation provided in 18 C.F.R. Sections 292.601(c) and 292.602; or (b) Seller will have market-based rate authority, and will have made all filings required in connection with this Agreement, under the Federal Power Act; (iii)this Agreement has been duly and validly executed and delivered by Seller and, as of the Effective Date, constitutes a legal, valid and binding obligation of Seller, enforceable in accordance with its terms against Seller, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity; (iv)there are no actions, suits, proceedings or investigations pending or, to the knowledge of Seller, threatened in writing against Seller, at law or in equity before any Governmental Authority, which individually or in the aggregate are reasonably likely to have a materially adverse effect on the business, properties or assets OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 40 or the condition, financial or otherwise, of Seller, or to result in any impairment of Seller’s ability to perform its obligations under this Agreement; and (v)the execution, delivery and performance of this Agreement by Seller will not conflict with its governing documents, any applicable laws, or any covenant, agreement, understanding, decree or order to which Seller is a party or by which it is bound or affected. (b)Seller covenants to Buyer as follows: (i)Subject to the Compliance Expenditure Cap in Section 3.3(g), throughout the Term: (a) the Generating Facility will qualify and be certified by the CEC as an ERR under the rules and requirements in effect as of the Effective Date; and (b) the Output delivered to Buyer will qualify as output from an ERR under the requirements of the RPS in effect as of the Effective Date; (ii)Seller will deliver to Buyer at the Delivery Point the Output free and clear of all liens, security interests, claims and encumbrances or any interest therein, or thereto, by any Person; and (iii)Seller holds and will hold throughout the Term, the rights to all Environmental Attributes and Capacity Attributes, which it has conveyed and has committed to convey to Buyer hereunder. 10.2 Buyer’s Representations, Warranties, and Covenants Buyer represents and warrants to Seller that as of the Effective Date: (i)Buyer is a joint powers agency established pursuant to the laws of the State of California, and has all requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as is now being conducted; (ii)Buyer is duly qualified or licensed to do business as a joint powers agency and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so duly qualified or licensed and in good standing would not have a material adverse effect; (iii)Buyer has the legal power and authority to make and carry out this Agreement and to perform its obligations hereunder and all such actions have been duly authorized by all necessary proceedings on its part; OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 41 (iv)the execution, delivery and performance of this Agreement by Buyer will not conflict with its governing documents, any applicable laws or any covenant, agreement, understanding, decree or order to which Buyer is a party or by which it is bound or affected; (v)this Agreement has been duly and validly executed and delivered by Buyer and, as of the Effective Date, constitutes a legal, valid and binding obligation of Buyer, enforceable in accordance with its terms against Buyer, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity; and (vi)there are no actions, suits, proceedings or investigations pending or, to the knowledge of Buyer, threatened in writing against Buyer, at law or in equity before any Governmental Authority, which individually or in the aggregate are reasonably likely to have a materially adverse effect on the business, properties or assets or the condition, financial or otherwise, of Buyer, or to result in any impairment of Buyer’s ability to perform its obligations under this Agreement. ARTICLE 11.MISCELLANEOUS 11.1 Notices All notices, requests, statements or payments under this Agreement shall be in writing, unless otherwise specified herein, be deemed properly sent if delivered in person or sent by facsimile, reliable overnight courier, or sent by registered or certified mail, postage prepaid to the persons specified in Exhibit 13a and b [Contacts]. Notice by facsimile or hand delivery shall be effective at the close of business on the day actually received, if received during a Business Day, and otherwise shall be effective at the close of the next Business Day. Notice by overnight United States mail or courier shall be effective on the next Business Day after it was sent. A Party may change its contact information by providing notice of same in accordance herewith. 11.2 Dispute Resolution (a)Non-binding Arbitration or Mediation. Subject to Section 5.1(b), any dispute under this Agreement between Seller and Buyer shall, at the request of any Party, be referred to a senior representative of each of the Parties for resolution on an informal basis as promptly as practicable. In the event the senior representatives are unable to resolve the dispute, the matter may be submitted to non-binding arbitration or mediation on such terms and conditions as the Parties may agree. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 42 (b)Litigation. In the event the Parties are unable to satisfactorily resolve the Dispute within thirty (30) calendar days of such referral or such other period as the Parties may mutually agree, subject to any extensions of time as may be mutually agreed upon in writing, or any arbitration agreement, either Party may initiate litigation in a court of law with jurisdiction located in Sonoma County, California, or the nearest Federal court having jurisdiction over the matter, which shall be the exclusive venue to litigate disputes. (c)Remedies. Nothing in this Section 11.2 shall be construed to delay the exercise of remedies pursuant to Section 9.3 pending the resolution of any dispute. 11.3 Regulatory Compliance (a)Generally. Each Party shall at all times comply with all applicable laws, ordinances, rules and regulations applicable to it. As applicable, each Party shall give all required notices, shall procure and maintain all Permits necessary for performance of this Agreement, and shall pay its respective charges and fees in connection therewith. In the event of any change to the CAISO Tariff that materially impacts either Party’s obligations or ability to perform under this Agreement, either Party may request that the Parties engage in good faith negotiations to amend this Agreement such that an equitable balance of benefits and burdens may be restored to the Parties. In the event that the Parties are unable to agree upon any amendments to this Agreement within sixty (60) days of the request for negotiations, either Party may invoke the dispute resolution provisions of Section 11.2. Pending any resolution under Section 11.2, the Parties shall continue to comply with the provisions of this Agreement. (b)GHG Requirements. If, during any periods following the Effective Date, Seller is or becomes obligated to obtain, purchase or procure any emission allowances, credits, offsets or other rights representing the right to emit Greenhouse Gases in connection with the ownership or operation of the Generating Facility, and if in respect of any such period Buyer (in its capacity or status as an operating utility, governmental entity, owner of generating assets, or otherwise) is provided, allocated or otherwise becomes entitled to obtain any emission allowances, credits, offsets or other rights representing the right to emit Greenhouse Gases (it being acknowledged, for the avoidance of doubt, that the foregoing does not include any such allowances, credits, offsets or other rights obtained by Buyer’s members, as distinct from those obtained directly by Buyer), then Buyer shall make available to Seller without charge the amount thereof, if any, that are directly allocable to the Generating Facility, in an amount equal to the lesser of (1) the amount directly allocable to the Generating Facility or (2)the amount required by Seller to continue operating the Generating Facility at the output levels being delivered by Seller to Buyer hereunder. For purpose hereof, “Greenhouse Gas” means emissions into the atmosphere of gases that are regulated by one or more OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 43 Governmental Authorities as a result of their contribution to the greenhouse effect heating of the surface of the earth. Greenhouse gases currently include carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6), and any other gas regulated on the basis of its CO2-equivalent contribution to climate change or global warming. Greenhouse gases may be defined, or expressed, in terms of a ton of CO2-equivalent, in order to allow comparison between the different effects of gases on the environment. 11.4 No Dedication of Facilities Any undertaking by one Party to the other under any provision of this Agreement shall not constitute the dedication of the Generating Facility or any portion thereof to the public or to any portion thereof. 11.5 Confidentiality The Parties will safeguard Confidential Information against disclosure by employing the same means to protect such Confidential Information as that Party uses to protect its own non-public, confidential or proprietary information, and otherwise in accordance with the provisions of this Section 11.5. Specifically, no receiving Party shall itself, or permit its employees, consultants and/or agents to disclose to any person, corporation or other entity the Confidential Information without the prior written consent of the Party providing the Confidential Information, except a receiving Party may distribute the Confidential Information to its board members, officers, employees, agents, consultants, contractors, potential and actual investors and lenders and others who have a need for such Confidential Information. In the event that any Party receiving the Confidential Information becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process, including under the California Public Records Act, Government Code Section 6250) to disclose any of the Confidential Information other than to comply with applicable securities laws, the legally compelled Party shall give the other Party providing the Confidential Information prompt prior written notice of such requirement so that the providing Party may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Agreement, at the sole cost and expense of the providing Party. In the event that such protective order or other remedy is not obtained, the providing Party waives compliance with the terms hereof. Each Party acknowledges that the unauthorized disclosure of any Confidential Information may cause irreparable harm and significant injury that may be difficult to ascertain. Each Party therefore agrees that specific performance or injunctive relief, in addition to other legal and equitable relief, are appropriate remedies for any actual or threatened violation or breach of this Section 11.5, although neither Party shall be entitled to any special, consequential, indirect or punitive damages as a result of a OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 44 breach of this Section 11.5, whether a claim is based in contract, tort or otherwise.The Parties agree that the respondent in any action for an injunction, specific performance decree or similar relief shall not allege or assert that the initiating Party has an adequate remedy at law in respect to the relief sought in the proceeding, nor shall the respondent seek the posting of a bond by the Party initiating the action. Notwithstanding the foregoing, Buyer may, at any time, disclose any information (i) determined by its attorney to be required by law to be disclosed by a public entity such as the Buyer, and (ii) to those of its members that receive some or all of the Output, whether directly or indirectly, from Buyer, but subject to the terms of this Section 11.5. The provisions of this Section 11.5 shall survive for three (3) years after the termination of this Agreement. 11.6 Assignment and Reorganization (a)Buyer. Buyer may without the consent of Seller (and without relieving itself from liability hereunder) assign this Agreement or assign or delegate all of its rights and obligations under this Agreement, if such assignment is made to: (i) one or more of Buyer’s member municipal utilities; or (ii) where such assignment does not occur by operation of law, any successor to Buyer provided such successor succeeds to all or substantially all of Buyer’s assets and is a municipal utility or public utility holding a certificate of public convenience and necessity granted by the California Public Utilities Commission; provided that as a condition to any such assignment, Buyer shall provide notice thereof to Seller, and Seller, Buyer and the third party assignee shall enter into a written document confirming such assignment in a form subject to the reasonable approval of all three parties. (b)Seller. (i)Seller may, upon notice to Buyer but without the consent of Buyer (and without relieving itself from liability hereunder): pledge, encumber, or assign this Agreement or the accounts, revenues or proceeds hereof as collateral security in connection with any financing or other financial arrangements for the Generating Facility. In connection with any such financing, the Parties shall cooperate in good faith to enter into a consent to collateral assignment with the financing provider(s) in a customary form reasonably requested by such financing provider(s). In connection with any such pledge, encumbrance, or assignment, financing provider(s) shall agree that upon any foreclosure or exercise of similar remedies upon the Generating Facility or material assets thereof, the financing provider(s) shall (to the extent they are able under applicable law) require that any transferee of the Generating Facility or the material assets thereof assume and be bound by this Agreement. (ii)The Parties acknowledge that at any time prior to the closing of the construction financing of the Generating Facility, Seller shall have the right OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 45 without the consent of Buyer to undergo a corporate reorganization or similar transaction in connection with which Seller shall be converted or reorganized into a California or Delaware limited liability company. Seller shall provide notice of any such transaction to Buyer and, at the request of Seller, Buyer shall execute such written confirmation as Seller may reasonably request confirming Buyer’s knowledge and acceptance of such transaction. (c)Written Consent Needed. Except as stated above, neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned by either Party, without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Any assignment of this Agreement in violation of the foregoing shall be, at the option of the non-assigning Party, void. (d)Binding on Parties. This Agreement and all of the provisions hereof are binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns. 11.7 Waiver of Rights Waivers of any rights hereunder must be in writing and shall not be implied from performance or usage of trade. The failure of either Party to enforce or insist upon compliance with or strict performance of any of the terms or conditions hereof, or to take advantage of any of its rights hereunder, shall not constitute a waiver or relinquishment of any such terms, conditions or rights, but the same shall be and remain at all times in full force and effect. 11.8 Section Headings All titles, subject headings, section titles and similar items are provided for the purpose of reference and convenience and are not intended to be inclusive, definitive or to affect the meaning of the contents or scope of the Agreement. 11.9 No Third Party Beneficiary This Agreement shall not be construed to create rights in, or to grant remedies to, any third party (other than a permitted successor or assignee bound to this Agreement) as a beneficiary of this Agreement or any duty, obligation or undertaking established herein. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 46 11.10 Forward Contract The Parties acknowledge and agree that this Agreement and the transactions contemplated by this Agreement constitute a “forward contract” within the meaning of the United States Bankruptcy Code. 11.11 Applicable Law This Agreement is made in the State of California and shall be interpreted and governed by the laws of the State of California and/or the laws of the United States, as applicable. 11.12 Venue The Parties agree to the exclusive jurisdiction of the courts specified in Section 11.2(b) of this Agreement. 11.13 Nature of Relationship The Agreement shall not be interpreted or construed to create an association, joint venture, fiduciary relationship or partnership between Seller and Buyer or to impose any partnership obligation or liability or any trust or agency obligation or relationship upon either Party. A Party shall not have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or act as or be an agent or representative of or otherwise bind the other Party. 11.14 Good Faith and Fair Dealing; Reasonableness The Parties agree to act reasonably and in accordance with the principles of good faith and fair dealing in the performance of this Agreement. Unless expressly provided otherwise in this Agreement: (i) wherever the Agreement requires the consent, approval or similar action by a Party, such consent, approval or similar action shall not be unreasonably withheld or delayed; and (ii) wherever the Agreement gives a Party a right to determine, require, specify or take similar action with respect to matters, such determination, requirement, specification or similar action shall be reasonable. 11.15 Severability Should any provision of this Agreement be or become void, illegal or unenforceable, the validity or enforceability of the other provisions of this Agreement shall not be affected and shall continue in full force and effect. The Parties will, however, use their best endeavors to agree on the replacement of the void, illegal, or unenforceable provision(s) with legally acceptable clauses that correspond as closely as possible to the sense and purpose of the affected provision. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 47 11.16 Counterparts This Agreement may be executed in two or more counterparts and by different Parties on separate counterparts, all of which shall be considered one and the same Agreement, and each of which shall be deemed an original. 11.17 Cooperation The Parties agree to reasonably cooperate with each other in the implementation and performance of the Agreement. Such duty to cooperate shall not require either Party to act in a manner inconsistent with its rights under this Agreement. 11.18 Limitation of Liabilities To the extent permitted by law, no Party’s directors, members of its governing bodies, officers or employees shall be liable to any other party or parties for any loss or damage to property, loss of earnings or revenues, personal injury, or any other direct, indirect, or consequential damages or injury, or punitive damages, which may occur or result from the performance or non-performance of this Agreement, including any negligence arising hereunder. Any liability or damages faced by an officer or employee of a federal agency or by that agency that would result from the operation of this provision shall not be inconsistent with federal law. THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED, UNLESS THE PROVISION IN QUESTION PROVIDES THAT THE EXPRESS REMEDIES ARE IN ADDITION TO OTHER REMEDIES THAT MAY BE AVAILABLE. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY (WHICH SHALL INCLUDE PTCs, AS APPLICABLE), SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 48 EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 9.4, IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. PRIOR TO THE COMMERCIAL OPERATION DATE, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, EACH PARTY'S LIABILITY ARISING UNDER OR RELATING TO THIS AGREEMENT, FROM ANY AND ALL CAUSES (AND WHETHER SUCH LIABILITY IS BASED IN CONTRACT, TORT OR OTHERWISE) SHALL BE LIMITED TO FIVE HUNDRED THOUSAND DOLLARS ($500,000), EXCEPT THAT SUCH LIMITATION SHALL NOT (A) APPLY IN CASES WHERE A PARTY WILLFULLY BREACHES OR REPUDIATES THIS AGREEMENT, (B) APPLY TO INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9.4, (C) APPLY TO ANY TERMINATION BY SELLER UNDER SECTION 9.5 OR (D) LIMIT THE RIGHTS EITHER PARTY MAY OTHERWISE HAVE HEREUNDER OR UNDER APPLICABLE LAW TO SEEK AN INJUNCTION, SPECIFIC PERFORMANCE DECREE OR SIMILAR EQUITABLE RELIEF. 11.19 Further Assurances The Parties hereto agree to execute and deliver promptly, at the expense of the Party requesting such action, any and all other and further instruments, documents and information that a Party may request, and that are reasonably necessary, or appropriate, to give full force and effect to the terms and intent of this Agreement. 11.20 Time is of the Essence Time is of the essence to this Agreement and in the performance of all of the covenants, obligations and conditions hereof. 11.21 Construction The Parties acknowledge that this Agreement was jointly prepared by them, by and through their respective legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against either Party on the basis that the Party drafted the language, but otherwise shall be interpreted according to the application of the rules on interpretation of contracts. OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 49 11.22 Entire Agreement; Integration This Agreement, together with all exhibits attached hereto, constitutes the entire agreement between the Parties as of the Effective Date, and as of the Effective Date is intended to amend and restate and to supersede in the entirety, the 2008 PPA and any and all other prior oral or written understandings. No amendment, addition to or modification of any provision hereof shall be binding upon the Parties, and neither Party shall be deemed to have waived any provision or any remedy available to it, unless such amendment, addition, modification or waiver is in writing and signed by a duly authorized officer or representative of the Parties. 11.23 Exhibits This Agreement includes the following Exhibits: Exhibit 1 [Reserved] Exhibit 2 Description of Generating Facility Exhibit 2.1 Leasehold Description Exhibit 2.2 Map of Leasehold Exhibit 2.3 Map of Delivery Point Exhibit 2.4 Conceptual One-Line Diagram Exhibit 3 Commercial Operation Performance Tests Exhibit 4 Contract Price Exhibit 5 [Reserved] Exhibit 6 Expected Annual Contract Quantity Form Exhibit 7 Milestones Exhibit 8 Guaranty Agreement Exhibit 9 [Reserved] Exhibit 10 Operations Forecasts and Scheduling Protocols Exhibit 11 Form of Attestation OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 50 Exhibit 12 Payment / Wire Instructions Exhibit 13a Contacts, Buyer Exhibit 13b Contacts, Seller Exhibit 14 Example of Availability Shortfall Damages Exhibit 15 Seller’s Insurance Information Exhibit 16 Agreement Modification Election Provisions Exhibit 17 Notice of NCPA's Rights to PPA Output Exhibit 18 Notice of NCPA's Rights to Steam Exhibit 19 Purchase Option Transaction Terms OHS WEST:261077640.9 2011 Amended and Restated Power Purchase Agreement OHS West:261077640.10 23768-8 LX0/LX0 51 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives on the Effective Date first written. BUYER:SELLER: NORTHERN CALIFORNIA POWER WESTERN GEOPOWER, INC. AGENCY By:By: Name:Name: Title:Title: Attest: __________________________________________ Assistant Secretary of the Commission Approved as to Form: General Counsel OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 1 Exhibit 1 [RESERVED] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2 Exhibit 2 DESCRIPTION OF GENERATING FACILITY The Western GeoPower Unit #1 (“WGP 1”) is a geothermal, condensing steam turbine generating facility consisting of the following key systems (collectively referred herein as “Generating Facility”) to generate power to the electrical grid: ·Steam Gathering and Injection System ·Power Generation Facility ·Transmission Interconnection ·Associated leaseholds as shown in Exhibit 2.1 and 2.2 Steam Gathering and Injection System The steam gathering system (SGS) will consist of steam production wells. The actual number of production wells will depend on initial drilling results and expected sustainable production well capacity. The production wells will be connected to the power generating facility via a steam pipeline. The available condensed steam generated in the power generating facility will be re-injected to the geothermal reservoir through injection wells. Power Generating Facility The power generating facility (“PGF”) will consist of a dual flow, top exhausting condensing steam turbine. The PGF will consist of the following key systems: ·Steam Turbine-Generator o Fuji Dual Flow, Top Exhaust Condensing Steam Turbine o Design and materials proven for geothermal service o Fuji approximately 38.5MVA, TEWAC Generator ·Condensing System o 100% Steam Bypass Capability o Hybrid Non Condensable Gas Extraction (“NCG”) System, including flexible capacity gas ejectors and liquid ring vacuum pumps ·Cooling System o Counterflow, Film-fill Cooling Tower o Vertical Can Type Circulating Water Pumps ·Auxiliary Cooling Water System OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2 o 2x100% Capacity Auxiliary Cooling Water Pumps for use in plant cooling systems (oil coolers, generator coolers, NCG intercondensers, etc) ·H2S Abatement System o Abatement system for removing H2S in the Non-Condensable gas stream and the steam condensate. The abatement system will be designed to meet the requirements of the Northern Sonoma County Air Pollution Control District regulations. ·Plant Support Systems o Support systems, including fire protection, instrument air system, service water system, chemical treatment systems, plant drains and HVAC. ·Plant Electrical and Controls System o Generator Step-up Transformer, 13.8 kV : 115kV o Station Transformer, 4.16 kV : 13.8 kV o Auxiliary Transformer, 0.48 kV : 4.16 kV o Plant Switchgear and MCC’s o Metering and Relaying Equipment o Plant Control System Transmission Interconnection The Generating Facility will interconnect with the CAISO controlled Geysers #3- Cloverdale 115 kV Transmission Line as depicted in the map attached as Exhibit 2.3 and in the diagram attached as Exhibit 2.4. This transmission line crosses the project property and taps to the Cloverdale Substation to the west and the Geysers Unit 3, 4 Ring Bus to the northeast of the Site. The Generating Facility will utilize a Generator Step-up Transformer to step up the 13.8 kV generator voltage to the 115 kV transmission voltage. PG&E has completed an Interconnection System Impact Study of the interconnection of the Generating Facility to the Geysers #3-Cloverdale line. PG&E determined that the interconnection will not cause any CAISO Normal or Category B overloads. PG&E further concluded that the Generating Facility will not cause reactive power deficiencies or impact the transmission system’s transient performance. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.1 Exhibit 2.1 LEASEHOLD DESCRIPTION Seller’s Generating Facility shall include the following leaseholds and property descriptions, as well as any other properties or leases obtained by Seller in the future to generate Energy. Prior to the execution of this Agreement, Seller shall have delivered to Buyer evidence of its rights in the following Leaseholds. Mayacamas Energy Property: DESCRIPTION: All that certain real property situated in the County of Sonoma, State of California, described as follows: PARCEL ONE: Lots 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14 and 16 of Section 14, Township 11 North, 8 Range 9 West, M.D.B.&M., according to the official plat thereof. SAVING AND EXCEPTING THEREFROM, that portion of Lots 3, 4, and 16, lying northerly of the center of Big Sulpher Creek. ALSO, SAVING AND EXCEPTING THEREFROM, that portion thereof conveyed to Frank Albert Dewey, et ux, by Deed dated September 2, 1950 and recorded September 11, 1950 as Recorder's Serial No. D-22340, Sonoma County Records. ALSO, SAVING AND EXCEPTING THEREFROM, the mining rights reserved by Walter Wayne Woods, et al, in Deed to Frank Albert Dewey, et ux, dated September 2, 1950 and recorded September 11, 1950 as Recorder's Serial No. D-22340, Sonoma County Records. ALSO, SAVING AND EXCEPTING THEREFROM, that portion of Lots 9 and 14 conveyed to Daniel J. Nielsen, et ux, by Deed dated January 25, 1950 and recorded February 1, 1950 as Recorder's Serial No. D-6082, Sonoma County Records. ALSO, SAVING AND EXCEPTING THEREFROM, that portion thereof lying within the bounds of the lands described in the Deed to Regan B. Kidd, et ux, dated November 25, 1951 and recorded December 7, 1951 and Recorder's Serial No. D-55754, Sonoma County Records. ALSO SAVING AND EXCEPTING the West one-half of Lot 4, as granted to G. William Filley, by Deed dated June 20, 1962 and recorded July 9, 1962 in Book 1900 of Official Records at page 39, as Recorder's Serial No. G-99005, Sonoma County Records. ALSO, EXCEPTING THEREFROM that portion thereof conveyed to Pacific Gas and Electric Company, a California corporation recorded November 14, 1978 in Book 3482 of Official Records at page 825, Sonoma County Records, and by Instrument OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.1 recorded November 14, 1978 in Book 3482 of Official records at page 833, Sonoma County Records. PARCEL TWO: All that parcel of land located in Section 14, Township 11 North, Range 9 West, M.D.B. & M., lying west of the centerline of the creek closest to the west boundary of the Dewey property and south of the county road to Cloverdale, all as the location of these landmarks existed on July 30, 1951 and as the above described parcel was granted to Buckman Inc., a corporation by Deed dated July 30, 1951 and recorded August 7, 1951 as Recorder's Serial No. D-47201, Sonoma County Records. PARCEL THREE: The Southwest one-quarter of the Northeast one-quarter and the Southeast one- quarter of the Northeast quarter of Section 15, in Township 11 North, Range 9 West, M.D.B. & M., according to the official plat thereof. SAVING AND EXCEPTING THEREFROM, all mineral rights in the Southeast one-quarter of the Northeast one-quarter, as same were granted to C. William Filley, by Deed dated June 20, 1962, and recorded July 9, 1962 in Book 1900 of Official Records at page 39, as Recorder's Serial No. G-99005, Sonoma County Records. PARCEL FOUR: That portion of the East one-half of the Southwest one-quarter of the Southwest quarter of Section 11, Township 11 North, Range 9 West, according to the official plat thereof, lying southerly of Big Sulpher Creek. Filley Leasehold: DESCRIPTION: All that certain real property situated in the County of Sonoma, State of California, described as follows: PARCEL ONE: The Northeast one-quarter of the Northeast one-quarter of Section 15 Township 11 North, Range 9 West, M.D.B. & M. PARCEL TWO: All that portion lying South of the centerline of Big Sulphur Creek of the Southeast one-quarter of the Southeast, one-quarter of Section 10, Township 11 North, Range 9 West, M.D.B. & M. PARCEL THREE: OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.1 All that portion lying Southwesterly of the centerline of Big Sulphur Creek in the West one-half of the Southwest one-quarter of the Southwest, one-quarter of Section 11 Township 11 North, Range 9 West, M.D.B. & M. Together with all mineral rights in the Southeast one-quarter of the Northeast One-quarter of Section 15, Township 11 North, Range 9 West M.D.B. & M. Filley-Brown Leasehold: DESCRIPTION: All that real property situated in the Unincorporated Area, County of Sonoma, State of California, described as follows: The Southwest one-quarter of the Southeast one-quarter of Section 10 and the Northwest one-quarter of the Northeast one-quarter of Section 15, Township 11 North, Range 9 West, M.D.B. & M., EXCEPTING THEREFROM that portion of the Southwest one-quarter of the Southeast one-quarter of Section 10, Township 11 North, M.D.B. & M., described as follows: Beginning at an iron stake set at the southeast corner of said Southwest one- quarter of the Southeast one-quarter of Section 10, thence north 700 feet along the easterly line of the Southwest one-quarter of the Southeast one-quarter of said section 10, to an iron stake; thence west 350 feet to a point; thence south 700 feet to a point in the south line of said section 10; thence east 350 feet along said section line to the point of beginning. Abril Leasehold: DESCRIPTION: All that real property located in the County of Sonoma, State of California, described as follows: EXCLUDING THEREFROM any mineral rights owned by the Bureau of Land Management and/or the United States Federal Government. PARCEL ONE: Lot 9 of Section 15 and Lot 19 of Section 14, all in Township 11 North, Range 9 West, M. D. M. & M., containing 30 acres. APN: 141-010-004 portion APN: 141-010-014 portion OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.1 PARCEL TWO: The Southwest quarter of Section 10, Township 11 North, Range 9 West, M. D. M. & M., containing 72.73 acres. APN: 117-190-014 EXCLUDING THEREFROM the real property described in that certain Geothermal Lease and Agreement dated June 29, 1982, entered into by and between Annie Abril et al, Lessor, and Union Oil Company of California, Lessee, a Memorandum of which was recorded October 4, 1982, as instrument number 82053574, as amended between Lessor and Lessee October 6, 1987, a Memorandum of which was recorded March 4, 1988, as instrument number 88017757, Official Records of Sonoma County, CA. PARCEL THREE: Lots 1, 2 and 8, and the North 1/2 of the Northwest 1/4 of Section 15, Township 11 North, Range 9 West, M. D. M. & M., containing 190 acres. APN: 141-010-004 portion APN: 117-150-001 portion PARCEL FOUR: Lot 7 and the South 1/2 of the Northwest 1/4 of Section 15, Township 11 North, Range 9 West, M. D. M. & M., containing 120 acres. APN: 141-010-004 portion APN: 117-150-001 portion OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.2 Exhibit 2.2 MAP OF THE LEASEHOLD OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.3 Exhibit 2.3 MAP OF DELIVERY POINT OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 2.4 Exhibit 2.4 Conceptual One-Line Diagram 112 112 132 172 122 162 152 142 142 152 176 X 20 MVA 29.8 MVA 132 MVA 40 MVA 14 MW 14 MW 66 MW 66 MW 66 MW 66 MW 38 MW Calpine West Geysers #5 and #6 Aidlin Calpine West Geysers #1 and #2 WESTERN GEOPOWER UNIT 1 Calpine west Geysers #7 and #8 132 MVA EAGAL ROCK SUBSTATION UKIAH SUBSTATION CLOVERDALE SUBSTATION 115 kV Bus 115 kV Bus 115 kV Bus GEYSERS #3 SUBSTATION Ukiah-Hopland-Cloverdale 115 kV Line Mission Power 115 kV Tap Geysers # 3-Cloverdale 115 kV Line Generator Loop Lines Point of Interconnection Geysers # 3- Eagle Rock 115 kV Line Geysers # 5- Geysers # 3 115 kV Line Geysers # 7-Eagle Rock 115 kV Line 25/33/41 MVA Load HOPLAND New Switching Station Western PG&E 112 112 132 172 122 162 152 142 142 152 176 X 20 MVA 29.8 MVA 132 MVA 40 MVA 14 MW 14 MW 66 MW 66 MW 66 MW 66 MW 38 MW Calpine West Geysers #5 and #6 Aidlin Calpine West Geysers #1 and #2 WESTERN GEOPOWER UNIT 1 Calpine west Geysers #7 and #8 132 MVA EAGAL ROCK SUBSTATION UKIAH SUBSTATION CLOVERDALE SUBSTATION 115 kV Bus 115 kV Bus 115 kV Bus GEYSERS #3 SUBSTATION Ukiah-Hopland-Cloverdale 115 kV Line Mission Power 115 kV Tap Geysers # 3-Cloverdale 115 kV Line Generator Loop Lines Point of Interconnection Geysers # 3- Eagle Rock 115 kV Line Geysers # 5- Geysers # 3 115 kV Line Geysers # 7-Eagle Rock 115 kV Line 25/33/41 MVA Load HOPLAND New Switching Station Western PG&E OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 3 Exhibit 3 COMMERCIAL OPERATION PERFORMANCE TESTS Seller shall coordinate and schedule with Buyer a Generating Facility performance test after completion of all equipment startup and commissioning activities. This performance test may be performed before completing punch list items. Buyer shall be permitted to witness the performance test, including access to and copies of control room logs, control system display screens and instrumentation data for a reasonable period of time before, during and after the performance test, and may also concurrently conduct a site inspection of the Generating Facility, systems and equipment. Seller shall be responsible for and bear the costs of any performance test. During the performance test, and otherwise prior to the Commercial Operation Date, Buyer shall pay for Energy produced in accordance with Agreement Section 3.1(b). Seller shall supply a written copy of the performance test results to Buyer within five (5) business days following the conclusion of such test. (a)Protocol. Seller shall provide Buyer with a written protocol describing the performance test no later than fifteen (15) days prior to Seller’s commencement of the performance test. (b)Compliance. The performance test shall demonstrate the ability of the Generating Facility to comply in all material respects with all material safety, system reliability, environmental, and other Requirements of Law, this Agreement, and any related agreements, including any interconnection agreements. (c)Contract Capacity. The performance test shall demonstrate the ability of the Generating Facility to reliably generate no less than twenty five (25) megawatts, net capacity at corrected design conditions. The performance test shall consist of uninterrupted operation of the Generating Facility for a period of no less than four (4) hours. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 3 Exhibit 4 CONTRACT PRICE Buyer shall pay Seller one hundred and thirteen dollars ($113.00) per MWh of Metered Quantity in consideration for all Output delivered to Buyer, including all Energy, Environmental Attributes and Capacity Attributes. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 5 Exhibit 5 [RESERVED] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 6 Exhibit 6 EXPECTED ANNUAL CONTRACT QUANTITY FORM GENERATING FACILITY YEAR MW MWhs (97.5%) 2013 28.0 39,967 2014 28.0 239,148 2015 27.0 230,607 2016 26.0 222,066 2017 26.0 222,066 2018 26.0 222,066 2019 26.0 222,066 2020 26.0 222,066 2021 26.0 222,066 2022 26.0 222,066 2023 26.0 222,066 2024 26.0 222,066 2025 26.0 222,066 2026 26.0 222,066 2027 26.0 222,066 2028 26.0 222,066 2029 26.0 222,066 2030 26.0 222,066 2031 26.0 222,066 2032 26.0 222,066 2033 26.0 222,066 2034 26.0 222,066 2035 26.0 222,066 2036 26.0 222,066 2037 26.0 222,066 2038 26.0 184,954 OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 7 Exhibit 7 MILESTONES Estimated Date for Completion File CEC Certification and Verification Application Completed Submit Interconnection Application Completed File Permit Resource Management Department (Use) Permit Completed Execute Construction Contract October 31, 2011 Order Major Equipment for Facility Steam Turbine Generator—October 31, 2011 Other Major Equipment—March 31, 2012 Receive Completed System Impact Study Completed Begin Construction of Facility Plant Construction -April 30, 2012 Receive Conditional Use Permit Completed Receive Completed Interconnection Facility Study Completed Receive Amended Authority to Construct from Sonoma Air Quality Management District October 31, 2011 Commercial Operation Date October 31, 2013 OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 Exhibit 8 GUARANTY AGREEMENT This Guaranty Agreement (the “Guaranty”) is made as of the Effective Date (as defined below), by Ram Power, Corp.(“Guarantor”), a British Columbia corporation, in favor of Northern California Power Agency (“Counterparty”). WHEREAS, Counterparty is a party to the Amended and Restated Renewable Energy Power Purchase Agreement (“Agreement”) between Counterparty and Western GeoPower, Inc.(the “Company”), and the Company is a subsidiary of Guarantor; and WHEREAS, as the parent of Company, Guarantor will receive substantial and direct benefits from the transactions contemplated by the Agreement and has agreed to enter into this Guaranty to provide assurance for the obligations of Company in connection with the Agreement and to induce the Counterparty to enter into the Agreement. NOW, THEREFORE, in consideration of good and valuable consideration, the adequacy, receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows: 1.Guaranty and Maximum Liability. (a)Guaranty. The Guarantor hereby unconditionally, irrevocably and absolutely guarantees any and all payment obligations of the Company under the Agreement (which payment obligations are intended to include any and all cases where Company owes any money to Counterparty under the Agreement, including, without limitation, Company’s obligation to pay actual damages under Section 9.3 after an Event of Default by the Company, Company’s obligation to pay for a termination under Section 9.5, Company’s obligation to pay Availability Shortfall Damages, and Company’s obligation to pay Taxes and indemnities under the terms and conditions of the Agreement),as such Agreement may be amended or modified by agreement between Company and the Counterparty from time to time (the “Guaranteed Obligations”). In addition, Guarantor shall reimburse Counterparty for all sums paid to Counterparty by Company with respect to such Guaranteed Obligations which Counterparty is subsequently required to return to Company or a representative of Company’s creditors as a result of Company’s bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 (b)Maximum Liability. Notwithstanding any other provision of this Guaranty, Guarantor’s maximum liability arising under or relating to this Guaranty, from and in connection with any and all causes and claims hereunder or relating hereto (and whether any such claims are based in contract, tort or otherwise) shall be limited to (1) prior to the Commercial Operation Date under the Agreement, an amount equal to One Million Dollars ($1,000,000), and (2) on and after the Commercial Operation Date under the Agreement, an amount equal to One Million Five Hundred Thousand Dollars ($1,500,000). 2.Guaranty Absolute.The liability of Guarantor under this Guaranty shall be absolute, irrevocable and unconditional irrespective of: (a)any defect or deficiency in the Agreement or any other documents executed in connection with the Agreement; (b)any modification, extension or waiver of any of the terms of the Agreement; (c)any change in the time,manner, terms or place of payment of or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Agreement or any other agreement or instrument executed in connection therewith; (d)any sale, exchange, release or non-perfection of any property standing as security for the liabilities hereby guaranteed or any liabilities incurred directly or indirectly hereunder or any setoff against any of said liabilities, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations; (e)except as to applicable statutes of limitation, failure, omission, delay, waiver or refusal by the Counterparty to exercise, in whole or in part, any right or remedy held by the Counterparty with respect to the Agreement or any transaction under the Agreement; (f)any change in the existence, structure or ownership of the Guarantor or Company, or any bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets; or (g)subject to Guarantor’s reservations in the last sentence of this Paragraph 2, any dispute between Counterparty and the Company in connection with the Guaranteed Obligations. The obligations of the Guarantor hereunder are several and not joint with Company or any other person, and are primary obligations for which the Guarantor is the principal obligor. There are no conditions precedent to the enforcement of this Guaranty, except as expressly contained herein. It shall not be necessary for the Counterparty, in order to enforce obligations by the Guarantor under this Guaranty, OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 to exhaust its remedies against Company, any collateral pledged by Company, any other guarantor, or any other person liable for the payment or performance of the Guaranteed Obligations. This Guaranty is one of payment and not of collection and shall apply regardless of whether recovery of all such Guaranteed Obligations may be discharged, or uncollectible in any bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets. This Guaranty is a continuing guaranty and shall apply to all present and future transactions entered into under the Agreement. Notwithstanding any other provision hereof, and without limiting Guarantor’s own defenses and rights hereunder, Guarantor reserves to itself all rights, setoffs, counterclaims and other defenses to which Company is or may be entitled to arising from or out of the Agreements or otherwise, except as expressly limited herein and except for defenses arising out of any lack of authority by Company to enter into the Guaranteed Obligations or the bankruptcy, insolvency, reorganization, liquidation, receivership, or similar proceeding affecting Company or its assets. 3.Waiver.Guarantor hereby waives: (a)except for the acceptance required from Counterparty below, notice of acceptance of this Guaranty, notice of the creation or existence of any of the Guaranteed Obligations and notice of any action by the Counterparty in reliance hereon or in connection herewith; (b)notice of the entry into the Agreement between Company and the Counterparty and notice of any amendments, supplements or modifications thereto; or any waiver of consent under the Agreement, including waivers of the payment and performance of the obligations thereunder; (c)notice of any increase, reduction or rearrangement of Company’s obligations under the Agreement or notice of any extension of time for the payment of any sums due and payable to the Counterparty under the Agreement; (d)except as expressly set forth herein, presentment, demand for payment, notice of dishonor or nonpayment, protest and notice of protest or any other notice of any other kind with respect to the Guaranteed Obligations; and (e)any requirement that suit be brought against, or any other action by the Counterparty be taken against, or any notice of default or other notice be given to, or any demand be made on, Company or any other person, or that any other action be taken or not taken as a condition to the Guarantor’s liability for the Guaranteed Obligations under this Guaranty or as a condition to the enforcement of this Guaranty against the Guarantor. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 4.Subrogation.The Guarantor shall be subrogated to all rights of the Counterparty against Company in respect of any amounts paid by the Guarantor pursuant to the Guaranty, provided that the Guarantor waives any rights it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise (including, without limitation, any statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of the Counterparty against Company or any collateral which the Counterparty now has or acquires, until all of the Guaranteed Obligations shall have been irrevocably paid to the Counterparty in full. If (a) the Guarantor shall perform and shall make payment to the Counterparty of all or any part of the Guaranteed Obligations and (b) all the Guaranteed Obligations shall have been paid in full, the Counterparty shall, at the Guarantor’s request, execute and deliver to the Guarantor appropriate documents necessary to evidence the transfer by subrogation to the Guarantor of any interest in the Guaranteed Obligations resulting from such payment by the Guarantor. 5.Notices.All demands, notices and other communications provided for hereunder shall, unless otherwise specifically provided herein, (a) be in writing addressed to the party receiving the notice at the address set forth below or at such other address as may be designated by written notice, from time to time, to the other party, and (b) be effective upon delivery, when mailed by U.S. mail, registered or certified, return receipt requested, postage prepaid, or personally delivered. Notices shall be sent to the following addresses: If to Counterparty: NORTHERN CALIFORNIA POWER AGENCY 651 Commerce Dr. Roseville, CA 95678 Attention: Treasurer/Controller and Assistant General Manager, Generation Services If to Guarantor: Ram Power, Corp. c/o Ram Power, Inc. 9460 Double R Blvd., Suite 200 Reno, Nevada 89521 Attention: General Counsel OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 6.Demand and Payment.Counterparty is not entitled to make demand upon Guarantor until a default occurs in payment or performance of any Guaranteed Obligations by Company to Counterparty. Any demand by the Counterparty for payment or performance hereunder shall be in writing, reference this Guaranty, reference the Guaranteed Obligations, and signed by a duly authorized representative of the Counterparty and delivered to the Guarantor pursuant to Paragraph 5 hereof. There are no other requirements of notice, presentment or demand. The Guarantor shall pay or perform such Guaranteed Obligations within ten (10) business days of receipt of such demand. 7.No Waiver; Remedies.Except as to applicable statutes of limitation, no failure on the part of Counterparty to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 8.Term; Termination.This Guaranty shall continue in full force and effect from the Effective Date until, and this Guaranty shall terminate upon, the earliest of (i) all Guaranteed Obligations arising with respect to the Agreement have been fully satisfied, (ii) the maximum amount under Section 1(b) hereof has been paid by the Guarantor hereunder and (iii)the credit requirement obligations of the Company in Section 6.2 of the Agreement are otherwise satisfied by a letter of credit as provided therein. 9.Assignment; Successors and Assigns.The Guarantor shall not assign its rights hereunder without the prior written consent of the Counterparty, and any assignment without such prior written consent shall be null and void and of no force or effect. This Guaranty shall be binding upon and inure to the benefit of the each party hereto and their respective successors and permitted assigns. 10.Amendments, Etc.No amendment of this Guaranty shall be effective unless in writing and signed by Guarantor and Counterparty. No waiver of any provision of this Guaranty nor consent to any departure by the Guarantor therefrom shall in any event be effective unless such waiver shall be in writing and signed by Counterparty. Any such waiver shall be effective only in the specific instance and for the specific purpose for which it was given. 11.Caption.The captions in this Guaranty have been inserted for convenience only and shall be given no substantive meaning or significance whatsoever in construing the terms and provisions of this Guaranty. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 12.Representation and Warranties. The Guarantor represents and warrants as follows as of the Effective Date: (a)The Guarantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full corporate power to execute, deliver and perform this Guaranty. (b)The execution, delivery and performance of this Guaranty have been and remain duly authorized by all necessary corporate action and do not contravene the Guarantor’s constitutional documents or any contractual restriction binding on the Guarantor or its assets. (c)This Guaranty constitutes the legal, valid and binding obligation of the Guarantor enforceable against Guarantor in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditor’s rights and to general equity principles. 13.[Intentionally Omitted] 14.GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD OR REFERENCE TO THE CONFLICT OF LAWS PRINCIPLES OF ANY JURISDICTION. GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF THE FEDERAL COURTS IN THE EASTERN DISTRICT, CALIFORNIA IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS GUARANTY. However, if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guaranty. 15.Entire Agreement and Termination of Prior Guaranty. This Guaranty constitutes the entire agreement and understanding between Guarantor and Counterparty with respect to the Guaranteed Obligations and supersedes and replaces in its entirety any and all guaranties previously issued by Guarantor to Counterparty with respect to the Guaranteed Obligations, or any part of them. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 8 IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its duly authorized representative effective as of this _____ day of ___________, 2011 (“Effective Date”). [Guarantor’s Name] By:_______________________________________ Name: Title: ACCEPTED AND AGREED TO THIS ______DAY OF __________, 2011 By: _____________________________ Name: Title: OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 9 Exhibit 9 [RESERVED] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 10 Exhibit 10 OPERATIONS FORECASTS and SCHEDULING PROTOCOLS This section shall be updated as the CAISO modifies or amends reporting, scheduling, or other rules/protocols. 1.Annual Operations Forecast 1.1.No later than September 10th of each Contract Year, Seller will provide an Annual Operations Forecast detailing hourly expected generation and all proposed planned outages for the next calendar year. The Annual Operations Forecast for the first calendar year shall be provided no later than ninety (90) days prior to the Commercial Operation Date. 1.2.Buyer may request modifications to the Annual Operations Forecast at any time, and Seller shall use good faith efforts to accommodate Buyer’s requested modifications. 1.3.Seller shall not conduct planned outages at times other than as set forth in its Annual Operations Forecast, unless approved in advance by Seller, which approval shall not be withheld or delayed unreasonably. 1.4.Seller shall not conduct planned outages during the Peak Months and furthermore, shall coordinate the outages with NCPA. 2.Short Term Operations Forecasts 2.1.Quarterly Operations Forecast 2.1.1.Twenty (20) days prior to the beginning of each calendar quarter, Seller shall provide a Quarterly Operations Forecast by hour of expected generation and all proposed planned outages as approved by NCPA in advance. 2.1.2.Quarterly Operations Forecast will also include any requested additions or modifications to planned outages for the next twelve (12) months. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 10 2.1.3.Buyer will approve or require modifications to the proposed Quarterly Operations Forecast within ten (10) calendar days of receipt of the Quarterly Operations Forecast. 2.1.4.If required by Buyer, Seller will provide a modified Quarterly Operations Forecast to Buyer no later than seven (7) calendar days after receipt of required modifications from Buyer. 2.2.Monthly Update 2.2.1.No later than ten days prior to the first day of each month, Seller may provide an electronic update, in a format specified by Buyer, to the forecast for such month included in the most recent Quarterly Operations Forecast. If for any month Seller does not provide any such update, then the forecast for such month included in the most recent Quarterly Operations Forecast shall be deemed to be the forecast for such month. 2.2.2.The monthly update and forecast shall include hourly expected generation and all proposed planned Outages. 2.3.Weekly Update 2.3.1.No later than 14:00 each Wednesday prior to the following week (Sunday through Saturday), Seller may provide an electronic update, in a format specified by Buyer, to the Quarterly Operations Forecast for the next seven (7) calendar days. 2.3.2.The Weekly Update shall include hourly expected generation and all proposed planned Outages. 3.Outage Detail for Annual and Short Term Operations Forecasts 3.1.Outage information provided by Seller is to include, at a minimum, start and stop time of Outage, capacity out of service (kWh), equipment out of service, and reason for the Outage. 4.General Scheduling Protocols 4.1.Daily modifications to forecasts. Unless otherwise mutually agreed, Seller may make changes to the weekly forecasts by providing such changes to Buyer prior to 08:00 two (2) Business Days before the active scheduling day. 4.1.1.Active scheduling day as determined by the WECC Prescheduling calendar. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 10 4.1.2.Example: For power that is scheduled for generation or delivery on Thursday, March 29, changes must be submitted to Buyer no later than 08:00 on Tuesday, March 27. 4.2.Hourly modifications to active schedules. Unless otherwise mutually agreed, Seller may make changes to active schedules by providing such changes to Buyer with a minimum of four (4) hours notice before the active hour to be changed. Changes to active schedules are limited to two (2) changes per day, excluding forced outages, unless otherwise agreed to between the parties. One request for a schedule change, of one hour or multiple hours duration, constitutes one schedule change. Such schedules changes will be made in accordance with CAISO scheduling timelines, and the inability for Buyer to make such changes due to CAISO rules does not constitute a breach by Buyer of this Agreement. 4.2.1.Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must be submitted to Buyer no later than 10:00. 4.3.At Seller’s request, Buyer may modify generation and load schedules for unforeseen circumstances in accordance with the above scheduling timeline constraints. 4.4.In the absence of forecasts and schedules as required by this Agreement or this Exhibit, Buyer shall utilize the most current information provided by Seller in the development and submission of Schedules. 5.Additional Scheduling Protocols When NCPA is the Scheduling Coordinator 5.1.Seller is to notify NCPA of all planned or forced generation outages to ensure compliance with CAISO Outage Coordination and Enforcement Protocols. 5.1.1.Outage information provided by Seller is to include, at a minimum, start and stop time of Outage, capacity out of service (kW), equipment out of service, and reason for the Outage. 5.1.2.Planned Outages not included in the Annual Operations Forecast, the Quarterly Operations Forecast, or the Weekly Update, shall be provided by Seller to Buyer at least four (4) business days prior to the start of the requested outage. 5.2.Forced Outages 5.2.1.“Forced Outages” are any unplanned reductions in the capability of the Generating Facility. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 10 5.2.2.Forced Outages shall be reported by Seller to NCPA within twenty (20) minutes of such outages. 5.2.3.Notice by Seller to NCPA of a Forced Outage shall include the reason for the outage (if known), expected duration of the outage, and the capacity reduction. 5.2.4.Within forty-six (46) hours of a Forced Outage, a detailed verbal report shall be provided by Seller to NCPA specifying the reason for the outage, expected duration of such outage, capacity reduction, and actions taken to mitigate such outage. 5.3.Commencement of an Outage –Seller shall not begin any planned Outage without prior approval of NCPA and the CAISO. 5.4.Return to Service –Seller shall notify NCPA immediately whenever a generating unit is returned to service. 6.Notices 6.1.All Scheduling notices and Schedules are to be submitted to Buyer by phone, fax, email or other automated processes agreed to by the Buyer, to the following persons: 6.1.1.For Day Ahead Schedule changes, inform the Buyer’s Pre-Scheduling Contact listed in Exhibit 13a [Contacts, Buyer]. 6.1.2.For Hourly Modifications, inform the Buyer’s Schedule Coordinator Contact listed in Exhibit 13a [Contacts, Buyer]. 6.1.3.For forced Outages, inform the Buyer’s Dispatcher Contact listed in Exhibit 13a [Contacts, Buyer]. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 10 7.Example Form Of Day-Ahead Schedule: MM/DD/YY Hour Ended Expected Capability 1 25 MW 2 25 MW 3 25 MW 4 25 MW 5 25 MW 6 25 MW 7 25 MW 8 25 MW 9 25 MW 10 25 MW 11 25 MW 12 25 MW 13 25 MW 14 25 MW 15 25 MW 16 25 MW 17 25 MW 18 25 MW 19 25 MW 20 25 MW 21 25 MW 22 25 MW 23 25 MW 24 25 MW Expected Daily Temperatures (in Fahrenheit): ____ Low ____High Contact Information: Scheduling Coordinator: OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 11 Exhibit 11 FORM OF ATTESTATION Environmental Attribute Attestation and Bill of Sale Western GeoPower, Inc. (“Seller”) hereby sells, transfers and delivers to Northern California Power Agency (“Buyer”) the Environmental Attributes and Environmental Attributes Reporting Rights associated with the generation of the indicated Energy for delivery to the grid (as such terms are defined in the Amended and Restated Renewable Energy Power Purchase Agreement (“Agreement”) dated [Date], between Buyer and Seller) arising from the generation for delivery to the grid of the energy by the Generating Facility: Generating Facility name and location:Western Geo Project (Sonoma County, California) EIA ID #: _________CEC ID #:_________ISO Meter ID #:_________ Fuel Type: _________Capacity (MW):_________Operational Date: _________ Dates MWhrs generated Dates MWhrs generated ______________________________________ ______________________________________ ______________________________________ ______________________________________ ______________________________________ ______________________________________ in the amount of one Environmental Attribute for each megaWatt hour generated; and Seller further attests, warrants and represents as follows: i)to the best of its knowledge, the information provided herein is true and correct; ii)this transfer to Buyer is the one and only sale of the Environmental Attributes and associated Environmental Attributes Reporting Rights referenced herein; iii)the Generating Facility generated and delivered to the grid the energy in the amount indicated as undifferentiated energy; and (check one): ___ Seller owns the Generating Facility, or OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 11 ___ to the best of Seller’s knowledge, each of the Environmental Attributes associated with the generation of the indicated Energy for delivery to the grid have been generated and sold by the Generating Facility. This serves as a Bill of Sale, transferring from Seller to Buyer all of Seller’s right, title and interest in and to the Environmental Attributes associated with the generation of the Energy for delivery to the grid. Seller:_____________________________ By _____________________________ Title _____________________________ Date: _____________________________ OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 12 Exhibit 12 PAYMENT / WIRE INSTRUCTIONS ------------------------------------------------------------------------------------------ NORTHERN CALIFORNIA POWER AGENCY (Buyer) WIRE INSTRUCTIONS The following information is to be used when wiring funds for deposit to Buyer: U.S. Bank ABA# 121122676 For Deposit to: Northern California Power Agency Acct. No. 1-534-0216-2744 For information purposes, please fax a copy of the wire instructions to Buyer at (916) 781- 4255,Attention Treasurer-Controller. The following information is to be used for all other statements or payments to Buyer by mail: NCPA Attention: Treasurer-Controller 651 Commerce Drive Roseville, CA 95678. WESTERN GEOPOWER INC (Seller) WIRE INSTRUCTIONS The following information is to be used when wiring funds for deposit to Seller [To Be Provided] For information purposes, please fax a copy of the wire instructions to [Seller’s Name]at [Seller’s phone number], Attention [Seller’s relevant contact person]. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 13a Exhibit 13a NCPA (BUYER) CONTACTS 1.Contract Management Name Phone Email Ken Speer 916-781-4201 Ken.Speer@ncpagen.com 2.Billing/Invoice Issues Name Phone Email Bob Caracristi 916-781-4224 bob.caracristi@ncpa.com Mike Whitney 916-781-4205 mike.whitney@ncpa.com 3.NCPA Pre-Scheduling Monthly, weekly and daily generation schedules are to be provided to NCPA Pre- Scheduling contacts. Name Phone Email Kevin McMahan 916-786-0123 kevin.mcmahan@ncpa.com 916-781-4227 Norm Worthington 916-786-0124 norm.worthington@ncpa.com Don Imamura 916-781-4240 don.imamura@ncpa.com Ken Goeke 916-781-4290 ken.goeke@ncpa.com Pre-Scheduling (FAX)916-781-4239 4.NCPA Schedule Coordination All Hour Ahead or Real-Time Schedule changes are to be provided to NCPA Scheduling Coordinator Contacts. Name Phone Email NCPA Scheduling Coordinator 916-781-4237 SC2@ncpa.com (FAX) 916-781-4226 5.NCPA Dispatch/Outage Coordination All Planned and/or Forced Outages of Generating Facilities are to be provided to NCPA Dispatch/Outage Coordination. Name Phone Email OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 13a Tracy Bibb 916-781-4225 tracy.bibb@ncpa.com (Supervisor of Dispatch Operations) NCPA Dispatch 916-786-3518 Dispatch@ncpa.com NCPA Scheduling Coordinator 916-781-4237 SC2@ncpa.com NCPA Dispatch (FAX)916-781-4226 OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 13b Exhibit 13b WESTERN GEOPOWER, INC.(SELLER) CONTACTS 1.Contract Management Name Phone Email 2.Billing/Invoice Issues Name Phone Email 3.Pre-Scheduling and Dispatch/Outage Coordination Annual, Quarterly, Weekly and Daily generation schedules: Name Phone Email Pre-Scheduling (FAX)(to come) 4.Operator and Real Time Issues All Planned and/or Forced Outages of generation facilities are to be provided to NCPA Dispatch/Outage Coordination. Name Phone Email Tracy Bibb 916-781-4225 tracy.bibb@ncpa.com (FAX)916-781-4226 OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 14 Exhibit 14 Example of Availability Shortfall Damages Period "Contract Capacity" CC "Metered Quantity" MQ "Lost Output" LO "Deemed Output" DO “Availability Percentage” AP "Availability Shortfall Damages" ASD Assessed ASD MQ+LO 100*(DO/CC)$5*(CC-DO) January 18600 18600 0 18600 100 0 February 18600 7000 0 7000 37.6 58000 58000 Mar 18600 8260 2100 10360 55.7 41200 41200 Apr 9000 0 4500 4500 50.0 22500 22500 May 18600 9600 9000 18600 100 0 0 Jun 18600 18000 0 18000 96.8 3000 0 (AP•90%) Jul 18600 10000 2000 12000 64.5 33000 33000 Aug 18600 11000 0 11000 59.1 38000 38000 Sep 9000 9000 0 9000 100.0 0 0 Oct 18600 9000 0 9000 48.4 48000 48000 Nov 18600 9000 0 9000 48.4 48000 48000 Dec 18600 9000 9600 18600 100.0 0 0 Total 204000 118460 27200 145660 71.7 Less than 90% ASD due $288,700 OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Exhibit 14 EXHIBIT 15 SELLER’S INSURANCE INFORMATION Certificate of Insurance (Example)No.Dated: This document supersedes any certificate previously issued under this number This is to certify that the Policy(ies) of insurance listed below ("Policy" or "Policies") have been issued to the Named Insured identified below for the policy period(s) indicated. This certificate issued as a matter of information only and confers no rights upon the Certificate Holder named below other than those provided by the Policy(ies). Notwithstanding any requirement, term or condition of any contract or any other document with respect to which this certificate may be issued or may pertain, the insurance afforded by the Policy(ies) is subject to all the terms, conditions and exclusions of such Policy(ies). This certificate does not amend, extend or alter the coverage afforded by the Policy(ies). Limits shown are intended to address contractual obligations of the Named Insured. Limits may have been reduced since Policy effective date(s) as a result of a clam or claims. Certificate Holder: To Whom It may Concern Named Insured and Address: This certificate is issued regarding: Western GeoPower, Inc. Type(s) of Insurance Insurer(s)Policy Number(s) Effective/ Expiry Dates Sums Insured or Limits of Liability Each Occurrence (including Tenants Legal Liability) USD 1,000,000 Employers Liability USD 1,000,000 General Aggregate Limit USD 5,000,000 Medical Expense USD 25,000 Non-Owned Auto USD 1,000,000 Personal or Advertising Injury Limit USD 1,000,000 COMMERCIAL GENERAL LIABILITY ·Each Occurrence (including Tenants Legal Liability) ·Personal or Advertising Injury Limit ·Products & Completed Operations ·General Aggregate Limits Products & Completed Operations Aggregate USD 1,000,000 AI/PI Aggregate Limit USD 9,000,000 Each Occurrence Limit USD 9,000,000 Excess Coverage other Aggregate Limit USD 9,000,000 Products Completed Operations Aggregate Limit USD 9,000,000 UMBRELLA ·AI/PI Aggregate Limit ·Each Occurrence Limit ·Excess Coverage other Aggregate Limit ·Products Completed Operations Aggregate Limit ·Umbrella Coverages Aggregate Limit Umbrella Coverages Aggregate Limit USD 9,000,000 WORKERS COMPENSATION As Required by Law OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT 16 Agreement Modification Election Provisions 1.Notwithstanding Section 3.5(e) or any other provision of the Agreement, commencing on the Effective Date and for so long as Buyer’s purchase option described in Section 3.5(e) remains in effect in accordance with the provisions of Section 3.5(e) (including during the Restricted Period, if any), if Seller makes a Modification determination as described below, then Seller shall have an obligation to send Buyer a Modification Determination Notice, as described below, and with the consequences set forth below in this Exhibit 16. 2.The Parties acknowledge and agree that (a) the Site is located in a region of significant geothermal resources and that there are a number of geothermal electrical generating facilities owned by other third parties (“Third Party(ies)”) in the vicinity of the Site, (b) Seller has concluded substantial permitting and related work, has drilled four proven production wells and made significant investment with respect to the development of the Generating Facility and (c) although Seller is entering into this Agreement with the full expectation of completing the development and construction of the Generating Facility, prior to closing of the construction financing of the Generating Facility it is possible that Seller may be approached by a Third Party with a proposal that, taken as a whole (including environmental, financial and other considerations), leads Seller to a determination that it is desirable to modify this Agreement (a “Modification”) to enable Seller to provide steam from the Leaseholds at the Site to another geothermal generating facility owned by a Third Party in the vicinity of the Site (an “Other Facility”) for electrical energy and other Output from the Other Facility to be provided to Buyer, all as an alternative to concluding the development and construction of the Generating Facility. 3.If a Modification determination is made as described above, Seller shall provide written notice thereof to Buyer (a “Modification Determination Notice”), indicating (a) the identity and location of the Other Facility, (b) the Third Party owner of the Other Facility (“Other Owner”), (c) a brief description of the manner in which Seller proposes to modify the Agreement to carry out the Modification (including the details set forth in the next sentence) and (d) such other details as may be relevant. The Modification Determination Notice shall specify whether Seller recommends that the Modification be carried out in a manner under which, either (1) the Agreement would be assigned to the Other Owner and amended to carry out the Modification, in connection with which Seller would enter into a long-term steam sales agreement with the Other Owner, or alternatively (2) Seller would itself enter into a steam/energy tolling arrangement with the Other Owner (under which Seller would provide steam to the Other Owner in return for delivery to Seller of Output), and the Agreement would OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 be amended between Seller and Buyer to allow for the resale by Seller to Buyer of such Output. Notwithstanding the foregoing, and unless both Parties mutually agree in writing, no Modification shall modify or change (i) the nature of the Output that is delivered to Buyer, (ii) the Contract Price for Output delivered to Buyer, (iii) the Term during which Output is delivered to Buyer, (iv) the expected Contract Capacity to be delivered to Buyer or (v) the fundamental allocation of economic benefits and burdens as set forth in the Agreement, including as to the Performance Guaranties in Section 7.4, the Compliance Expenditure Cap set forth in Section 3.3(g) and Guaranty and credit related requirements set forth in Section 6.2. 4.If Seller delivers a Modification Determination Notice, the Parties promptly shall commence good faith negotiations and shall execute and deliver mutually acceptable documentation to carry out the Modification within one hundred twenty (120) days following the date of the Modification Determination Notice, provided that neither Party shall be obligated to enter into any arrangements, modifications or other agreements that such Party has not approved in its sole discretion, acting reasonably and in good faith. 5.The provisions of this Exhibit 16 shall survive any termination of the Agreement for the duration of the Restricted Period, it being the Parties’ intent that Seller shall have the option and right to provide a Modification Determination Notice at any time within the period described in Section 1 of this Exhibit 16 and, for the avoidance of doubt, the delivery of a Modification Determination Notice shall not trigger Buyer’s ROFO rights under Section 3.5(a) or purchase option rights under Section 3.5(e). At any time following Seller’s delivery of a Modification Determination Notice, but prior to the Parties’ execution of final binding documents carrying out the Modification, Seller may by written notice to Buyer rescind such Modification Determination Notice. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT 17 Notice of NCPA's Rights to PPA Output RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Northern California Power Agency _______________________ _______________________ Attention: _____________________ APN: ______________________ (Space Above for Recorder’s Use Only) NOTICE OF NCPA’s RIGHTS NOTICE IS HEREBY GIVEN THAT Northern California Power Agency, a joint powers agency established pursuant to the laws of the State of California (“NCPA”), and Western GeoPower, Inc., a California corporation (“Seller”), have entered into that certain Amended and Restated Renewable Energy Power Purchase Agreement dated as of __________ (as amended, supplemented and revised from time to time, the “Agreement”). Pursuant to the Agreement, NCPA has a right of first offer to purchase all electric energy, capacity and related environmental attributes from any geothermal electrical generating facility constructed on that certain real property (the “Property”) more particularly described on Exhibit A attached hereto and incorporated herein by the reference. NCPA’s rights shall terminate as set forth in the Agreement, but not later than ____. This Notice shall terminate automatically on ____, unless earlier terminated by NCPA by recording a notice of termination. Reference is made to the Agreement for the terms and conditions of NCPA’s rights. In the event of a conflict between the terms of this Notice and the terms of the Agreement, the terms of the Agreement shall control. [Signatures are on the following page] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Western GeoPower, Inc.Northern California Power Agency By: Its: Date: By: Its: Date: OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT A [Legal Description of Property] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) COUNTY OF ______________) On _______________________ 20____, before me, ____________________________________________________, Notary Public, personally appeared __________________________________________________,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _____________________________________ [SEAL] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) COUNTY OF ______________) On _______________________ 20____, before me, ____________________________________________________, Notary Public, personally appeared __________________________________________________,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _____________________________________ [SEAL] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT 18 Notice of NCPA's Rights to Purchase Steam RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Northern California Power Agency _______________________ _______________________ Attention: _____________________ APN: ______________________ (Space Above for Recorder’s Use Only) NOTICE OF NCPA’s RIGHTS NOTICE IS HEREBY GIVEN THAT Northern California Power Agency, a joint powers agency established pursuant to the laws of the State of California (“NCPA”), and Western GeoPower, Inc., a California corporation (“Seller”), have entered into that certain Amended and Restated Renewable Energy Power Purchase Agreement dated as of __________ (as amended, supplemented and revised from time to time, the “Agreement”). Pursuant to the Agreement, NCPA has a right of first offer to purchase all steam derived from geothermal resources on that certain real property (the “Property”) more particularly described on Exhibit A attached hereto and incorporated herein by the reference. NCPA’s rights shall terminate as set forth in the Agreement, but not later than ____. This Notice shall terminate automatically on ____, unless earlier terminated by NCPA by recording a notice of termination. Reference is made to the Agreement for the terms and conditions of NCPA’s rights. In the event of a conflict between the terms of this Notice and the terms of the Agreement, the terms of the Agreement shall control. [Signatures are on the following page] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Western GeoPower, Inc.Northern California Power Agency By: Its: Date: By: Its: Date: OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT A [Legal Description of Property] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) COUNTY OF ______________) On _______________________ 20____, before me, ____________________________________________________, Notary Public, personally appeared __________________________________________________,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _____________________________________ [SEAL] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) COUNTY OF ______________) On _______________________ 20____, before me, ____________________________________________________, Notary Public, personally appeared __________________________________________________,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _____________________________________ [SEAL] OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 EXHIBIT 19 Purchase Option Transaction Terms 1.Purpose. If Buyer accepts Seller’s offer to sell its Assets to Buyer under Section 3.5(e) by sending an election notice pursuant to Section 3.5(e) (an “Election Notice”), then this Exhibit 19 shall govern the terms and conditions of the purchase and sale of such Assets from Seller to Buyer (the “Transaction”). 2.Definitions. In addition to other terms defined in the Agreement, for purposes of this Exhibit 19 the following terms have the following meanings: “Appraiser(s)” has the meaning set forth in Section 4(b)(i) of this Exhibit. “Closing” has the meaning set forth in Section 3(b) of this Exhibit. “Election Notice” has the meaning set forth in Section 1 of this Exhibit. “Fair Market Value” means the amount at which the Assets would change hands between a willing buyer and a willing seller, taking into account all relevant factors and criteria, including the actual and reasonably expected geothermal steam energy available as part of the Assets, and assuming that (a) neither buyer nor seller is under compulsion to buy or sell and both have reasonable knowledge of the relevant facts, (b) buyer takes the Assets unencumbered by the Agreement, and (c) buyer has the ability and option of using the Assets to provide geothermal steam to a renewable electrical generating facility owned by buyer or a third party to produce renewable electrical energy and other characteristics of Output for sale at market pricing no less than the pricing set forth in the Agreement. In determining Fair Market Value, the Appraisers shall take into account and give proper weighting to the income capitalization approach in addition to other valuation approaches. “High Value” has the meaning set forth in Section 4(b)(v) of this Exhibit. “Low Value” has the meaning set forth in Section 4(b)(v) of this Exhibit. “Median Value” has the meaning set forth in Section 4(b)(v) of this Exhibit. “Transaction” has the meaning set forth in Section 1 of this Exhibit. 3.General Terms of Transaction. (a)As-Is, Where-Is. The Transaction purchase and sale shall be on an “as-is,” “where-is” basis, with all faults, and all implied warranties (including for fitness, merchantability or otherwise) shall be waived, excepting only that Seller shall provide OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 customary and reasonable representations and warranties as to the title to any personal and real property included in the transaction. (b)Closing. Seller and Buyer shall use commercially reasonable efforts to close and consummate the Transaction (“Closing”) within one hundred and twenty (120) days after Buyer’s delivery of an Election Notice. At the Closing, the Parties shall execute and deliver such documents and instruments of transfer as may be reasonably necessary to effect the Closing. (c)Purchase Price, Transaction Costs and Transfer Taxes. The purchase price for the Assets shall be payable 100% in cash by wire transfer on the Closing date and shall be equal to the Fair Market Value of the Assets. Seller and Buyer shall each bear their own costs and expenses incurred in connection with the Transaction, including costs of legal counsel. The Parties shall pro-rate as of the Closing date all applicable utilities, real estate and similar taxes, if any. Buyer shall be responsible for payment of any applicable sales, transfer or similar taxes payable in connection with the sale and transfer of the Assets. (d)Consents. Seller shall use commercially reasonable efforts to obtain and deliver to Buyer copies of all consents and approvals required for Seller’s sale and transfer to Buyer of the Assets, if any. 4.Determination of Fair Market Value. (a)Determination by Mutual Agreement. Upon delivery of an Election Notice, the Parties shall promptly meet and confer in good faith to determine if they are able to reach mutual agreement on the then current Fair Market Value. (b)Determination by Appraisal. (i)If for any reason the Parties fail to reach mutual agreement on the Fair Market Value in accordance with Section 4(a) above on or before the date that is thirty (30) days following the date of the Election Notice, then, within fifteen (15) days thereafter each Party shall, by notice to the other Party, appoint an investment bank, appraisal company or other appraiser, in any such case having experience in appraising assets similar to the Assets (an “Appraiser”). (ii)Within fifteen (15) days following the appointment of the two Appraisers pursuant to clause (i) above, such Appraisers shall select a third Appraiser, and shall promptly give notice of such selection to each Party. Such third Appraiser (a) shall be independent of and not affiliated with either Party, including that such Appraiser and its Affiliates shall not have any officers, directors or other principals who also are officers, directors or principals of either Party or its Affiliates and (b) shall not have performed any material advisory or other work for either Party during the two-year period prior to the appointment date. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 (iii)Each Party shall reasonably cooperate to provide information to the Appraisers so as to allow the Appraisers to deliver their written notices as provided in clause (iv) below. Any written information provided by or on behalf of a Party to the third Appraiser shall be copied to both Parties at the same time as provided to the third Appraiser. The third Appraiser shall not disclose its final valuation of the Fair Market Value to the other Appraisers or the Parties prior to the written submission of such amount as described in clause (iv) below. (iv)On the date, and at the specific place and time, agreed by the Parties and designated in a written notice delivered by the Parties to the Appraisers, each Appraiser shall deliver a sealed envelope to each Party and to each other Appraiser including a statement as to its valuation of the Fair Market Value. The date specified in such notice shall be a date between one (1)and three (3)Business Days after the thirtieth (30th)day following the date on which notice of the selection of the third Appraiser is delivered pursuant to clause (ii) above. (v)The final Fair Market Value shall be equal to the weighted average of the values determined by each of the three Appraisers, with (a) the value which is between the highest and lowest values (the “Median Value”) given a weighting of 100, (b) the highest such value (the “High Value”) given a weighting of 100 if such number is the same as the Median Value, declining linearly to zero if such High Value is equal to 140% of the Median Value, and zero if such High Value is greater than 140% of the Median Value, and (c) the lowest such value (the “Low Value”) given a weighting of 100 if such value is the same as the Median Value, declining linearly to zero if such value is equal to 60% of the Median Value, and zero if such Low Value is less than 60% of the Median Value. If two of the values are the same, but different than the third value, the Parties acknowledge that the outcome of the computation above will be the same regardless of which of the two equal values is deemed the Median Value, and the computation shall be done accordingly. If all three values are the same, the Parties acknowledge that the Fair Market Value shall be equal to that value. If any Appraiser fails to deliver written notice of its value, then the final valuation of the Fair Market Value shall be equal to the average (mean) of the values determined by each of the other Appraisers which has so delivered its written notice. An example of such weighted average calculation is attached as Schedule 1 to this Exhibit 19. (vi)Each Party shall be responsible for the fees and expenses of the Appraiser selected by it, and the fees and expenses of the third Appraiser shall be borne by the Parties equally. If either Party fails to appoint an Appraiser under clause (i), or if the two Appraisers selected under clause (i) fail to select a third Appraiser in accordance with clause (ii), then either Party may, by written notice to the American Arbitration Association (with a copy to the other Party), request that the American Arbitration Association appoint such Appraiser. The fees and expenses of the American Arbitration Association shall be borne equally by the Parties. OHS WEST:261077640.9 OHS West:261077640.10 23768-8 LX0/LX0 Schedule 1 to Exhibit 19 Example of Weighted Average Calculation The following is an example of the weighted average calculation contemplated by Section 4(b)(v) of Exhibit 19. Assume the three Appraisers provide the following three Fair Market Value appraisals: Appraiser 1:$48,000,000 Appraiser 2:$60,000,000 Appraiser 3:$89,000,000 Appraiser 1 is the Low Value, Appraiser 2 is the Median Value, and Appraiser 3 is the High Value. Based on Section 4(b)(v), in calculating the weighted average of the three appraisals, the Median Value is weighted at 100; the Low Value is weighted at 50, since the Low Value is 80% of the Median Value, and therefore exactly half-way between the Median Value and 60% of the Median Value; and the High Value is weighted at zero since the High Value exceeds 140% of the Median Value. The weighted average calculation is as follows: 50 x $48,000,000 =$2,400,000,000 100 x $60,000,000 =$6,000,000,000 0 x $89,000,000 =$0 ______________________ Totals:150 $8,400,000,000 $8,400,000,000 / 150 = $56,000,000 The weighted average of the three Appraisers’ values is $56,000,000, and this amount is therefore the Fair Market Value of the Assets. 1606206.1 ATTACHMENT G EXCERPTED DRAFT MINUTES FINANCE COMMITTEE Regular Meeting March 1, 2011 4. Agreement with Western GeoPower Renewable Energy. Senior Resource Originator, Tom Kabat spoke on the history of the Western GeoPower Renewable Resource Contract decision. In 2008, the City and the Northern California Power Agency (NCPA) signed a $98/mega watt hour (MWh) third phase agreement. In 2009, Western GeoPower failed to finance the $98/MWh project. In 2009, Palo Alto agreed on a $117/MWh contract with Western GeoPower. In 2010, Western GeoPower was taken over and Palo Alto moved on to look for other power sources. In 2011, NCPA renegotiated at $113/MWh, but needed participants to terminate all non-starter 2008 third phase agreements. Silicon Valley Power (SVP) said they would hold the City’s place through 2011. He spoke on the recommendation, from Staff, taken to the Utilities Advisory Commission (UAC). Staff and the UAC recommend that Council approve the agreement terminating the third phase agreement with Western GeoPower. Additionally, the UAC recommended that Council approve the new third phase agreement with Western GeoPower. He spoke on the reasons the UAC recommended that the City commit to the new agreement. Staff continued the significant efforts, requested by Council, to reevaluate the goals and plans for efficiency and renewables. Staff recommended taking advantage of SVP’s verbal offer to amend the contract by December 2011. The decision requested, this evening, was to terminate the non-starter 2008 third phase agreement, and wait and decide later by taking advantage of SVP’s verbal offer, or decide now by executing the new third phase agreement. Utilities Advisory Commission Vice Chair, Jon Foster spoke on the UAC’s recommendation to execute the new third phase agreement. 1 Council Member Schmid said the Market Price Referent was due to be updated, and could possibly fall 5 to 10 percent. Ms. Fong said the Market Price Referent was updated annually. Council Member Schmid felt Western GeoPower added diversity to the City’s portfolio. He inquired on the Market Price Referent. Ms. Fong said the ceiling price, regulated by the California Public Utilities Commission, was the reasonable price to pay for renewable power. The price that jurisdictions bid on became the floor price. Council Member Schmid inquired on the risk of not locking into the agreement. Ms. Fong said the current price was locked between NCPA and the developer. She said a market change would be irrelevant. Council Member Schmid said another vendor may bring forward an alternative contract. It was his belief this was why Staff recommended not locking into the new agreement. Ms. Fong said the price was fairly attractive. Staff recommended not signing now because Staff had an obligation to return to Council with the Long Term Electric Acquisition Plan (LEAP), Gas Utility Long Term Plan (GULP), strategic plan, and other City policies. Council Member Schmid inquired on Staff’s confidence level that the price would remain the same. Ms. Fong said Staff was very confident. Council Member Yeh inquired whether SVP had a use for all of the energy allocated to them. Ms. Fong said SVP had oversubscribed on their original commitment, and was willing sell a piece of their share to Palo Alto. Council Member Yeh inquired whether the City had a right of first refusal under the current $98/MWh agreement. Ms. Fong said the project would never be developed at that price. Council Member Yeh said some LEAP goals dealt with increased efficiency, and 2 Staff had doubled its efficiency goals. He inquired whether there would still be an energy gap if the City met its seven percent reduction goal. Mr. Kabat said yes. Council Member Yeh said Council had been aggressive in efficiency goals. The new agreement would diversify the City’s portfolio. His primary concern was on buyer’s remorse. Mr. Kabat said some analysis had been done on the natural gas component. The natural gas component had shown a reduction, but Staff did not know where the other components were heading. He spoke on a State Legislature action that may target RPS standards at 33 percent. Council Member Yeh inquired on the timing of the State’s Legislature. Mr. Kabat said timing depended on the PUC’s cycle on investor-owned utilities. Ms. Fong said the first step of action was to terminate the non-starter 2008 agreement. This was scheduled on the April 11, 2011 Council meeting. Chair Scharff said Staff’s concern on signing the new agreement was based on previous Council directions. He inquired whether Staff felt comfortable if the Council moved forward with the UAC recommendation. Ms. Fong said yes. Chair Scharff inquired whether SVP could change their mind if the signing of the new agreement was postponed. Ms. Fong said SVP changing their mind was unlikely. Chair Scharff inquired whether it would create more work for Staff if Council did not move forward with the new agreement. Ms. Fong said yes. MOTION: Chair Scharff moved, seconded by Council Member Yeh, that the Finance Committee recommend the City Council adopt two Resolutions, 1) approving an agreement terminating the Third Phase Agreement for Western GeoPower Incorporated Renewable Energy Power Purchase Agreement, and 2) approving a new Third Phase Agreement for Western GeoPower Incorporated 3 4 Renewable Energy Power Purchase Agreement for the acquisition of up to 15 percent of project energy over 25 years at a cost not to exceed $95 Million. Chair Scharff said he fully supported the UAC recommendation. Council Member Shepherd said the State kept raising the bar on how much the City needed to allocate toward renewables. Moving forward with the Motion would secure this position. Council Member Schmid inquired on the impact on rate payers. Mr. Kabat overviewed the Summary of Current Energy Supplies and Western GeoPower. MOTION PASSED 4-0 City of Palo Alto (ID # 1482) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 3 (ID # 1482) Summary Title: Approval of Maintenance Contract w/ PSSI Title: Approval of an Additional Authority of $98,877 of the Consolidated Maintenance Contract between the City of Palo Alto and Public Safety Systems, Inc. For Computer Aided Dispatch, Police Records Management, Fire Records Management, Mobile Data, and Geovalidation From:City Manager Lead Department: Police Recommendation Staff recommends that Council authorize an additional authority of $98,877 for the 2011 maintenance contract with Public Safety Systems, Inc. (PSSI) for the not-to-exceed amount of $296,025 for the current contract that ends on December 31, 2011. Background In 1999, the City signed a contract with PSSI for the purchase and installation of Computer Aided Dispatch (CAD). In subsequent years, the City has contracted for other critical public safety systems with PSSI, and PSSI provides maintenance and support for these systems. The systems include: Police Records Management (ICIS); Computer Aided Dispatch (CAD); a component of Fire Records Management (EMBRS); a GIS-based location validation application (GeoServer); and mobile data software for the police mobile data computers (Mobile). In 2009, the City consolidated the five separate maintenance contracts into one contract and invoice. In 2009, staff anticipated implementing a replacement regional enterprise-wide system in 2010. As the planned system is not fully integrated, the additional maintenance cost of $98,877 is required to maintain the existing public safety systems. Discussion April 11, 2011 Page 2 of 3 (ID # 1482) The City is currently in the final contract negotiation process for a new CAD vendor in partnership with the cities of Mountain View and Los Altos. Vendor selection and contract negotiations have taken longer than originally anticipated and implementation that was expected to occur this year will not be completed until 2012. Once a vendor is selected, project development and implementation will take approximately one calendar year. The maintenance contract with PSSI will need to be renewed,at a minimum, for the first six months of 2012 for CAD and potentially longer on a month-to-month basis depending on the implementation schedule for the replacement CAD system. The other legacy systems covered under this contract may require maintenance for an additional period as well, depending on which systems are replaced in conjunction with CAD. Resource Impact The annual cost for system maintenance is covered in Information Technology’s existing application maintenance fund. Agreements for subsequent years’ maintenance are subject to a future decision on the new joint agency CAD System. It is anticipated that Palo Alto will continue to require maintenance for these systems into 2012 Policy Implications The recommendations in this report do not represent a change in City policies. Environmental Review The recommendations in this report do not constitute a project requiring review under the California Environmental Quality Act (CEQA). Attachment A: Software support agreement between the City of Palo Alto and PSSI Attachments: ·PSSI 2011 Maint Contract (PDF) April 11, 2011 Page 3 of 3 (ID # 1482) Prepared By:Charles Cullen, TSD Coordinator Department Head:Dennis Burns, Police Chief City Manager Approval: James Keene, City Manager Public Safety Systems Incorporated SOFTWARE SUPPORT AGREEMENT This Software Support Agreement is made by and between Public Safety Systems Incorporated, a Corporation, hereinafter referred to as PSSI, and the City of Palo Alto, California, hereinafter referred to as CUSTOMER. This agreement, together with all appendices or other attachments referenced herein, constitutes the entire agreement between PSSI and CUSTOMER and supersedes all proposals, oral or written, between the parties on this subject. 1. SERVICES TO BE PROVIDED. a. Telephone assistance for reproducible software problems will be provided between the hours of 9:00 AM and 6:00 PM, Eastern time, Monday through Friday, exclusive of PSSI's holidays, at those numbers as provided by PSSI. A reasonable degree of preliminary evaluation by appropriate CUSTOMER personnel is expected prior to calling for telephone assistance. Emergency after hour telephone support for RESPONSE (Computer Aided Dispatch) will be provided on a 24 hour a day basis for the term of this Agreement. After hour emergency support should only be used for critical problems. b. Periodic updates of the software that may incorporate (A) corrections of substantial defects, (B) fIxes of minor bugs, and (C) at the sole discretion of PSSI, enhancements to the software, will be developed and coordinated between PSSI and all users that have a current support Agreement. These periodic updates will be distributed via new releases. 2. MAINTENANCE FEE. a. Software to be covered by the Agreement and compensation for it. ICIS EMBRS CAD Mobile GeoServer $10,710.00 $3,225.00 $54,830.00 $24,060.00 $10,710.00 1 b. CUSTOMER understands that if CUSTOMER discontinues and then resumes purchase of Software Support, CUSTOMER will be required to pay PSSI the entire Maintenance Fees for the period of discontinuance, plus the Maintenance Fee for the term set forth in the invoice for the services. 3. TERM OF AGREEMENT. The term of this Agreement is for a period of one year and shall commence on the 1st day of January 2011, and terminate on the 31 st day of December 2011. This Agreement may be renewed by mutual consent of PSSI and CUSTOMER. The new term will be stated on the renewal notice and shall become a part of this Agreement. 4. PAYMENT. The compensation, as outlined in this Agreement, is due on the commencement date as defined in Paragraph 3 above and will be paid within thirty (30) days thereafter. 5. CUSTOMER OBLIGATIONS. a. CUSTOMER shall notify PSSI of CUSTOMER's designated contact. To the maximum extent practicable, CUSTOMER's communication with PSSI will be through this contact. b. CUSTOMER agrees to install all corrections of substantial defects, minor bug fixes, and any enhancements, for the software in accordance with the instructions and in order of receipt from PSSI. c. CUSTOMER agrees to grant PSSI access to CUSTOMER's facilities and personnel concerned with the operation of the software to enable PSSI to provide services. d. CUSTOMER agrees not to modify, enhance, or otherwise alter the software, unless and only to the extent specifically authorized in writing by PSSI. e. Upon detection on any error in the software, CUSTOMER, as requested by PSSI, agrees to provide PSSI a listing of output and any other data, including databases and backup systems, that PSSI reasonably may request in order to reproduce operating conditions similar to those present when the error occurred. 6. PROPRIETARY SERVICE. The software and services provided under this Agreement are proprietary to PSSI, and CUSTOMER acknowledges that it is for their exclusive use only. CUSTOMER agrees to not give the service or software to any person or entity unless it is specifically 2 allowed by PSSI in writing. CUSTOMER further agrees to reasonably safeguard the above to prevent any unauthorized taking of it. 7. WARRANTIES. Other than specified herein, PSSI provides this software and service without any warranties and conditions either expressed or implied, including without limitation, any implied warranties of fitness for a particular purpose. PSSI disclaims any and all liability for incidental or consequential damages arising out of the use or operation of the software, except for damages caused by the negligence or other fault of PSSI. 8. JURISDICTION. This Agreement shall be subject to the laws of the state of Maryland. 9. NOTICES. All notices under this Agreement are to be sent by registered mail to the address below or to any other address as the party may designate: PSSI Attn: Lou Henneke 10001 Derekwood Ln, Ste#204 Lanham, MD 20706 City of Palo Alto, California Attn: ________________ __ IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their duly authorized representatives. PSSI CUSTOMER Signature: Signature: Name: Name: Title: Title: Date: Date: ATTEST: 3 TO: CITY COUNCIL CITY OF PALO ALTO Memorandum . January 18,2011 SUBJECT: Approval of an Exchange Agreement and Quit Claim Deed for the Exchange of a 1,525 Square Foot Portion of Public Street Right-of-Way Land Along San Antonio Road for a 28,098 Square Foot Privately Owned Parcel of Land Located Under the San Antonio Road Overpass to Secure and Maintain a Public Access Road to the Former Mayfield Mall Site at 200 San Antonio Road This replaces Iteln #1268, previously submitted for. your review and consent, for the January 18, 2011 meeting. The attachments were misaligned in the previous version. Directo {fr~~j City of Palo Alto \gj}}fr5it\~ City Council Staff Report "'"cr.."n J (ID # 1268) Report Type: Consent Calendar Meeting Date: 1/18/2011 Title: Approval of an Agreement and Quit Claim Deed Subject: Approval of an Exchange Agreement and Quit Claim Deed for the Exchange of a 1,525 Square Foot Portion of Public Street Right-of-Way Land Along San Antonio Road for a 28,098 Square Foot Privately Owned Parcel of Land located Under the San Antonio Road Overpass to Secure .and Maintain a Public Access Road to the Former Mayfield Mall Site at 200 San Antonio Road From: City Manager Lead Department: Administrative Services RECOMMEf;lDATION Staff recommends that Council authorize the Mayor to sign an Exchange Agreement and Quitclaim Deed (Attachment A) for the exchange of a 1,565 square foot portion of public street right-of-way land along San Antonio Road for a 28,098 square foot privately owned parcel of land located under the San Antonio Road overpass to secure and maintain a public access road to the former Mayfield Mall site at 200 San Antonio Road BACKGROUND In June 2006, the City of Mountain View approved a project for redevelopment of the Mayfield Mall/Hewlett Packard site at 200 San Antonio Road with 450 units of multiple family housing. The entire project site, owned by Hewlett Packard (Owner), located at the corner of Central Expressway and San Antonio Road contains 24 acres, 19.8 acres are located with the City of Mountain View and 4.2 are located within the City of Palo Alto. On April 17, 2008, the Palo Alto Architectural Review Board (ARB) approved plans, with conditions, for the 45 units to be built upon the 4.2 acre Palo Alto portion ofthe project (Project). On July 27, 2009, Council adopted Ordinance No. 5046 (CMR:209:09) approving a Development Agreement extending the ARB . approval and Vesting Tentative Map approval for the Project to February 26, 2014, to be consistent with the expiration of approvals for the larger portion of the housing project located in the City of Mountain View. One of the ARB conditions of approval for the Project ensured public access to the development through an existing underpass roadway serving San Antonio Road. This condition required that the Owner acquire a privately-owned parcel (Kelly Parcel) on the West side of San Antonio Avenue on which the access road to the underpass lies and then deed this parcel to the City of Palo Alto (Attachment B). The 28,089 square-foot Kelly parcel was acquired by Hewlett Parckard after months of negotiation at a cost of $25,000. Another ARB condition noted that January 18, 2011 (10 # 1268) Page 1 of 4 the approved Tentative Map plans require the Owner to acquire a 1,565 square-foot City- owned right-of-way parcel (City Parcel) adjacent to both San Antonio Avenue and th e Project property (Attachment C). The ARB condition notes that "if the applicant is unable to secure the small City owned parcel, the alternate site plan shall be considered". DISCUSSION During the ARB approval process there was discussion thaUhe Owner would acquire from the City the small 1,565 portion of City right-of-way, to provide for the design as approved in the Tentative Map. The approved site plan is not significantly different from the alternative, but it does have some benefits in terms of design configuration. It will provide for a less cramped site layout which eliminates some of the necessary setback encroachments. It removes a unit from one building (Building 4) and places it at another building (Building 8) providing a greater setback at the entry to the project (see Attachments D and E). The 1,565 square foot City Parcel is triangular in shape with 99.20 feet of frontage along San Antonio Road, immediately north of Central Expressway/Alma Street. The parcel overlays a portion of the San Antonio Road right-of-way; however, it is not necessary for the movement of traffic on San Antonio Road. It lies partially within an area that was used at one time as an access roadway/driveway to the Owners parcel at 200 San Antonio Road. It contains 3 pine trees, ground cover and some asphalt paving and concrete curbing (see Attachment E). The parcel is zoned Public Facility (PF) which permits only public use. The Owner intends to apply for a zone change once the parcel is conveyed to them to become incorporated into the Project. Appraisal To aid in making an informed decision concerning the proposed exchange, staff contracted for an independent appraisal of the City Parcel prepared by a Member of the Appraisal Institute (M.A.I.), The purpose ofthe appraisal was to provide an opinion of the market value of the City Parcel based on its highest and best use. By itself, the size and location of the City parcel is severely limiting and could not be developed independently. The appraisal concludes the highest and best use is to assemble the City Parcel with the adjoining property of the Owner. Given this limited use, the market value of the parcel is determined by comparing the value of the Project with and without the inclusion ofthe City Parcel. The addition ofthe City Parcel will not affect the density or development rights accruing to the project, but, as described above, it will affect the deSign configuration in terms of location and placement of units in bUildings. The appraisal concludes that only one unit is affected in terms of increased market appeal and value. The additional landscaped area afforded by the City parcel is essentially an amenity to one of the town home units, which will provide an approximate 2 percent Increase in value over a competing unit. Using comparable direct sales of similar units to determine the value of this town home the appraisal concludes a market value for the City Parcel of $22,500. January 18, 2011 (ID 111268) Page 2 of4 Exchange Both the Kelley and City Parcels are irregularly-shaped and are overlain by or adjacent to public rights-of-way and roadway improvements. The Kelley Parcells larger, however, its market value of $25,000 is comparable to the $22,500 value of the City Parcel. In accordance with the ARB approval condition, the Developer has acquired the Kelley Parcel and deeded it to the City. In addition, as required by the ARB approval, the developer of the project must upgrade the access road upon the former Kelley Parcel to City standards. This benefits the City by assuring public access to the Project through the San Antonio Road underpass. The conveyance of the City Parcel to the Owner provides for a more desirable site layout as provided in the approved Tentative Map. In summary, the parcels are equivalent in value, and maintain or provide pUblic benefit by continuing access through the former private access road and by providing the layout as approved in the Tentative Map, therefore, the exchange as requested by the . Developer is recommended. RESOURCE IMPACT The Owner has paid the $1,260 deed preparation processing fee required by the Palo Alto Municipal Code and has reimbursed the City for the cost of the appraisal. The parcels proposed for exchange have offsetting equal economic value and the proposed exchange involves no cost to the City. The Developer will pay for any escrow costs and recording charges. POLICY IMPLICATIONS The recommendation does not represent any change to City policies. The Planning Department has determined that the quit claim of the City Parcel does not impact the sites conformity with the Palo Alto Comprehensive Plan. ENVIRONMENTAL REVIEW An Environmental Impact Report for the development project was adopted in June of 2006. The proposed quitclaim for the City Parcel as assemblage to the adjacent owner are 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: Exchange Agreement and Quit Claim Deed (PDF) • Attachment B: Kelly Parcel (PDF) • Attachment C: City Parcel(PDF) • Attachment D: Site Plan With Assembled City Parcel (PDF) • Attachment E: Site Plan Without Assembled City Parcel (PDF) Prepared By: January 18, 2011 (ID n 1268) Martha Miller, Manager, Real Property Page 3 of 4 Department Head: City Manager Approval: January 18, 2011 (ID # 1268) , . lalo Perez, Director of Administrative Services ~;/7(r-"- James Keenel.vlvlanager (j Page4of4 ATfACHMENT A (Page 1 of 17) AGREEMENT FOR EXCHANGE OF REAL PROPERTY THIS AGREBM~NT FOR EXCHANGE OF REAL PROPERTY ("Agreement") is dated January ~ 2010'r("Effective Date"), and is made by and between HEWLETT·PACKARD COMPANY, a Delaware corporation ("Developer"). and the CITY OF PALO ALTO, 1\ California municipal corporation eClty"). City and Developer are herein collectively referred to as the "Owners.» RECITALS A. City is the owner of certain real property (referred to herein as the "Triangle"), located within the City of Palo. Alto, California, consisting of an approximately 0.12-acre remainder portion of land Wlderlying the public right of way for San Antonio Road and which is more fully described and depicted on Exhibit "A" to this· Agreement. Gity intends to convey the Triangle to Developer so that It may he incorporated into Developer's approved site plan for the "Mayfield" residential development Pl:oject ("Project'?,loeated at 200 San Antonio Road. B. In connection with the Project, by that certain Grant Deed recortjed in the·Official Records of Santa Clara County, California on April 9, 20 I 0 as J;locument No. 20672467, a copy ofwbich is attached hereto as Elxhibit "B", Developer caused to be conveyed to City certain real property (referred to herein as the "Kelley Parcel'1 located within the City of Palo Alto. Clilifornia, consisting of an approximately 0.59 acre remainder portion of land underlying the public right of way for an underpass serving San Antonio Road. The Triangle and the Kelley Parcel are correctively referred to herein as the "Properties." C. Incident to City's issuance of land use approvals ("Approvals") for the Project, specifically a Vesting Tentatiye Subdivision Map and Architectural Review Board design approval, City desired Developer to cause the Kelley Parcel 10 he conveyed to City. In anticipation of Developer acquiring rights to the City owned Triangle, City has approved the Project in a site design configuration which included the Triangle· as part of the Project. The Kelley Parcel and the Triangle. are both small, irregularly-shaped fragments of real property overlain by or adjacent io public rights of way and roadway improvements, and such Properties therefore have no feasible economic use and no objective value to any third party. D. As contemplated In the Approvals, City and Developer now desire to complete the previously anticipated exchange of the Triangle and the Kelley Parcel. NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, City and Developer agree lIS follows: TERMS AND CONDITIONS L EllChange of Properties: In exchange for the acknowledged conveyance of the Kelley Parcel to the City, City agrees to transfcr and convey the Triangle to Developer upon the terms and conditions of this Agreement. The Owners agree that the reciprocal conveyances described herein are an exchange of real properties with offsetting equal economic values and no additional monetary remWleration shall bc paid to either part.y. 1Il1404.06 2. Title and Conveyance of the Triangle: At the Property Closing (defined below), "City shall convey "the Triangle to Developer by quit claim deed in the form attaehed hereto as exhjbit ''C'' (the "Triangle Deed"), with title free from any public rights of way and other rights of the public. If shall be a condition to the Property Closing that First American Title Insurance" Company ("Title "Company"), be irrevocably committed to issue, subject only to payment of its premium therefore, a standard owner's ALTA policy of title insurance (the "Triangle Title < Policy'" in fomi aniI substance acceptable to Developer, insuring roe simple title to the ;rriangle vested in Developer, subject only to exceptions approved by Developer during the DUe Diligence Period (as defmed below). City will complcte any necessary abandonment of any public rights of way and other rights of the public in or over the Triangle prior to the Property Closing. 3. Inspection: <3.1 "Documents: To the extent such items ere in City's possession or reasonably within City's control, City shall make available for inspection by "Developer, the information and documents available in City's files conceming the Triangle, within ten (10) days after the"date of this Agrc<ement. " 3.2 Due Dilhlenee: Developer and Its agents shall have until 5:00 p.m., PaCific Time on the thirtieth (30th) day following the full execution arid delivery of this Agreement by the "OWners (the "Due Diligence Period") in which . to exlimine, inspect, and investigate the Triangle and, "in Developer's sole discretion, to determine whether the same is satisfactory to Developer. peveloper may elect for any reason, in its sole discretion, to terminate this Agreement pursulirtt to tWs Section 3.2 by giving notice of termination (the "Due Diligimce Tennmation Notice'~ to City on or before the end of the Due Diligence Period. Developer shall be deemed to have approved such examination, inspection and investigation, and this Agreement shall oontinue in full foree and' ~fect, if'Developer does ndt deliver a Due Diligerlce Termination Notice tQ. thy as 'specified herein. In the everit Developer elects tp ternlllU\te tWs Agreement pursuant to IWs Section 3.2, then neither Developer nor the City shallthereJifter have any further nghts or" obligatiohs under tWs Agreentent uriless expreSsly provided otherwise herein. Developer shall have reasonablellC(:ess ro the Triangle djlring the term of this Agreement for the PUrpose< of conducting snrveys, arehitectnrsl, engineering;" geotech!1lcal and environmental " inspections"and tests, and other inspections, studies, and tests desiied by Developer (collectively, "Inspections"); pi-ovided, however, that Developer shall not coilduct any physical testing, boring, sampling or removal (cpllectlvely, "Physical Testing") of any portion of the Triangle without f11'St obtaining the written consent of City. DevelQper, on behalf of itself and its agents, bereby waives all claims against City for any injury to persons or damage to property arising out of any Inspj:Ctions ()r Physical Testing, including, without Iimitalion, any damage to the tools and equipment of Developer or its agents. and agrees to indemnify, protect, defend and hold the City harmless from and against any and all claims, liabilities, damages, costs and expenses of any kind or character arising from, related to or caused by Developer's entry upon the Triangle or the perfonnance 'ofthe Inspections and any Physical Testing by Developer or its agents. Illl40QJi6 "2 " L~~ 4. Conditionsto Properly Closing: 4. L Conditions. The obligations of the parties under this Agreement to complete the Property Closing are subject to the satisfaction on or before the date of the Property ~ Closing of the folloWing conditions precedent: 4.1. I The obligation of City to ~complete the Property Closing shall be conditioned on the satisfaction of tho following conditions: (a) the City shall have acquired the Kelley Parcel (which condition the City hereby acknowledges has been satisfied). and (b) . Developer shall not be in default of any covenant. representation or warranty under this )\greement. 4.1.2 The obligation of Developer to complete the Property Closing shall , be conditioned on the satisfaction of the following conditions: (a) the Title Company shall have issued or shall have committed to issue, upon the sole condition of the payment of its regularly scheduled premium, tlie Tri.angle Title Policy, and (b) the City shall not be in default of any covenant, repres~tation or· warranty under this Agreement. , 4.2 Failure of Conditionll. If any of the conditions set forth in Scction 4.1 are not timely satisfied or waived by the applicable party and neither party is in default hereunder, !ben the party benefited by such eondition may by written notice to the other party terminate this Agreement and the rights and obligations of City or Developer shall terminate and be of· no further force or effect except as to ·those matters as specifically stated in this Agreement to survive termination. In the event of the failure of any such condJiion due to a default by one of the Owners, such default may be waived by the non-defaulting party in which event the Property Closing shall proceed, and in the absence of any such waiver Section 8 below shall apply. 4.3 Satisfaction of Conditions. The occurrence of the Property Closing shall constitute satisfaction of conditions set forth in Section 4.1 that were not otherwise specifically satisfied or waived by the Owners. 5. Escrow: S.l Opening of Escrow: Once this Agreement has been fully executed, the Owners shall open an escrow ("Escrow'~ with the Title Company. The Owners shall also execute such further escrow instructions as the Title Company may reasonably require in connection with the Property Closing so long as such instructions are consistent with the provisions of this Agreement. In the event of any contlict between the terms and conditions of this Agreement and the provisions of any escrow instructions, the terms and conditions of this Agreement shall control. 5.2 Property Closing: Subject to the satisfaction or waiver ofthe conditions to the Property Closing set forth in Section 4.1 hereof, the closing ("Property Closing") shall occur at the offices of the Title Company, and be completed on or before the earlier of: (8) the date which is ten (10) business days following the date upon which Developer gives notice to City that Developer desires to close the transaction, or (b) March 31, 2011. It is understood and agreed by the Owners that the Property Closing may occur concurrently with Developer's conveyance of the Project to a third party and such third party may be the Developer's nominee 111140&.06 -3 - to take title to the Triangle pursuant to Seetion 13 below. Each of the Owners agree to work with the other party, such third party which is acquiring the Project and any escrow or title officers involved in the cOnveyance of the Project, so that the Property Closing and the closing of Developer's conveyance of the Project shall occur concurrently. 5.3 Triangle Deed: Further Assurances: City shalt deliver the duly executed and acknowledged Trilll18le Deed into Escrow within ten (10) business days following the eXpiration of the Due DiligenceJ'eriod. The Owners shall each deposit such other instruments 118 ate reasonably required by the Title Company or otherwise required to consummate the exchange of the Properties in accordance with the t= hereof 5.4 Taxes; Closing Costs: Developer shall accept the Triangle subject to any non-delinquent real property taxes and assessments. Developer shall pay for the cost of the rriangle-rille Policy lIS well lIS all other escrow costs and recording charges, or any other charges required to close escrow on this Agreement 6. No Brokers and Finders: Neither party has had any contact or dealings regarding -thp Trllll18le or the Kelley Parcel through any real estate broker, finder or other person who can claim a-right to a comn\isslon or finder's fee in connection with the transaction contemplated herein. -Each party agrees to prolect, defend, indemnify and hold haImless the other party from IIild against any and aU commissions, fees and other compensation claimed by any broker, finder or third party arising by virtue of this transaction whose commissions, fees or other compensation, or any claim therefor, arises from acts of the indemnifying party. The obligations of iMeronity contained in this Section 6 shall survive the Property Closing or the earlier expiration or tennination of this Agreement. 7. As-Is: Mutua) Release: Each of the Owners represents, warrants and covenants to the other party that: (I) -Owners are familiar with and have investigated the Triangle and the Kelley Parcel and. all matters pertaining thereto, and there are no representations or warranties of any kind whatsoever, express or implied, made by the Owners to eaCh other -in connection with this Agreement, the exchange of the Triangle for the Kelley Parcel, the physical condition of the Properties, or whether the Properties comply with applicable laws or are appropriate for the Owners' respective intended uses, as applicable (except any representations given by City to Developer in connectiQll witl.t the development ()!' entiilement process of the Project); (il) except as expressly set forth in this Agreement, l\either party is relying on any statement or representation made by the other party, or the Other party's agents or representatives; (iii) the Owners are aware (or have voiun)arily chosen not to be aware) of all zoning regulations, other governmental requirements, site and physical conditions, title Bnd other matters affecting the ownership, use IlI1d condition of the Properties, as applicable; and (iv) City accepts the Kelley Parcel, and Developer accepts thc Triangle, in their respective "AS IS" condition WITH ALL FAULTS lIS of the date of the PrQperty Closing, and both Owners waive and release any and all claims, demands, causes of action, losses, costs, dllll1ages, penalties, fines, taxes, remedial actions, I1lmovai and disposal costs, iDvestigation and remedial costs and expenses (including, without limitation, attorneys', expert and consultant fees), whether direct or indirect, known or unknowil, either party may have against the other party as a result of the foregoing matters. The provisions of this Section 7 shall survive the Property Closing. The Owners each hereby waive tlie provisions of Califomia Civil Code Seetion 1542, which provides that: 11210108.06 -4- "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH TIlE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT TIm . TIME OF IlXECUTING THE RELEASE, WHICH!F KNOWN BY HIM OR HER MUST HAVE MA TERIALL Y AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." By initialing below. the Owners hereby waive the provisions of Sootion 1542 solely in connootion with the matters which are the subject of the foregoing waiver and release: . Initials by City: .~~ __ ~ __ Initials by Developer: U'if!!:- 8. LImitation on Deyeloper Remedies: If City shall default in iis obligation under this Agreement to· convey the Triangle to Developer. Develojler's sole and exclusive remedies shall be either to (i) sue for spooific perfonnance. or (ii) terminate this Agreem~t. which tennination shall release the defaulting party from any and all liability hereunder. Developer shall be deemed to have elected to tenninate this Agreement if it falls to file suit for specific performance agalnst City on or before ninety (90) days following the date upon which the Property Closing was to have occurred. Developer hereby waives any other rern~les available at law or in equity in the event of a default by City in its obligation 10 convey the Triangle to Developer. including without limitation its rights to seek damages for such default. 9. Attorneys' Fjles: Should any action or proceeding be conunenced between the parties hereto concerning the Propertles. this Agreement or the rights and duties of either party pursuant thereto. the prev.ailing party shall be entitled, including in any specific perfonnance action and in addition to all other relief as may be granted by the court, to reasonable sums for attorneys' fees and cosis in the discretion of the court. "Prevailing party" as used In Ibis Section 9 includes a party who dismisses· an action for recovery hereunder in· exchange for· sums allegedly due, perfonrnmce of covenants allegedly breached or considerations sUbstanli.ally equal to the relief sought in the action. 10. Notices: Any notice or report required or desired to be given regarding this Agreement shall be in writing and may be given by personal delivery. by certified mail return receipt requested. or by courier service. Any notice or report addressed 10 the Owners at· their respective addresses sct forlli below, as appropriate, shall be deemed to have been given (i) when personally delivered, (ii) if properly addressed and deposited in the mail (certified, return receipt requested), on the date shown on the return receipt·for acceptance or rejection or (iii) if properly addressed and deposited with a reputable overnight carrier. on the liusiness day next follOwing the date of deposit. For this purpose, a "business day" shall be a day on which such reputable overnight carrier has regularlY scheduled delivery (excluding Saturdays). lI21408-06 Each notice to City shail be delivered to; Office of the City Attorney City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 9430 I ·5· . i Bach notice to Developer shall be delivered to: Office ,of Corporate GcneralCounsel Hewlett-Packard Company 3000 Hanover Street Palo Alto, CA 94304 , 13.. Assignment: Developer may assign its right, title and interest in and to this Agreement to any other PartY without the approval of City. Additionally, Developer shall have the right to designate a nominee to acquire title to the Triangle under the Triangle Deed. . .' ." . . 14.' ' Miscellaneous: This Agreement constitutes the c6mplete and fmal expression, of the agreemellt of the OWners relating to the matters set forth hereIn and supersedes all previous contracts, agreeinenls; aridundetiltaiJdings of the Owners, eithef oral or written, relating thereto. This Agreemellt cannot be modified,or any of the terms hereof waived, except by an inslrUlnent in writing (referring spedficallyto this Agreement) executed by the party against whom enforcement of the ln6dlfication or wruver is sought: Time is of the essence for the performance of each and every covenant and for the satisfaction of each and every cOndition contained in this Agreement. This Agreement Shall be .governed by and construed in accordance with the Jaws of the State of CalifornIa. The language in all 'parts of this Agreement shall in all cases be construed as a whole acCording 'to iis reasonable meaning. This Agreement may be exeeuted in counterparts by the parties hereto; and shall become biilding when all parties have eaeh executed and delivered to' the other party a Counte!pllrt hereof. and together' such executed counterparts shall constitute this Agreement. Each plirtyhereto shuJlexecute. acknowledge and deliver or to cause to have executed, acknowledged and delivered, such other and further instnunents and documents as may reasonably be requested by,the other to carry out ttils Agreement. ' [Siguatore page follows] L IN Wl1NESS WHEREOF, the parties hereto have executed this Agreement on "the respective dates set forth below. " DEVELOPER: HEWLETT·PACKARD COMPANY, a Delaware corporation BY:d.-~ Name: 8'W~ 'PnfRr Tide: ve,. ikn 6"" ,f Itrlf. '!:!f' Dale: December 1,2010" ClTY; Cily of Palo Alto, a California Municipal Corporalion By:" ______ ~ ________ ~ Name: ______ "_~ ___ _ Title:: _______ ~ APPROVED AS TO FORM: By:_"" City Attorney Date: January_"~. 2011 " 1111<40s.o6 ACKNOWLEDGED: By:_-:-;-_"=-:-____ _ City Clerk -7 - ; " , I I t TRIANGLE LEGAL DESCRIPTION AND DEPICTION TImt certain real property located in the Cit)' of Palo Alto, County of Santa Clara; State"" of California, and more particularly described as follows: Real Property in the Cit)' of Palo Alto, County of Santa Clnra, Slate of California, being a portion of Parcel No.2 as described in the Filial Order of Condemnation recorded April 18, 1962,.in Book 5543 of Official Records, page 586, Santa Clam County Records, and a portion of Parcel No. I as described in the Final Order and Decree of Condemnation recorded April "18, 1962, in Book 5543 of Official Records, page 591, Santa Cllllil County Records, described as: follows: " Beginning at the most easterly corner of said Parcel No.2; Thence along the southeasterly lines of said Parcel No.2, the following two courses: 1. Thence South 38°23'10" West, 68.00 feet; 2. Thence North 51 °36'50" West, 2.57 feet: ~: Thence North 08°39'58" East, 99.20 feet. to a point of cusp, being on the ea~terly"line of said Parcel No. I: Thence along said easterly line, southerly, along a tangent curve to the Jdt, having a radius of " 36.00 feet, whose"center hears South 81°20'02" .Easl, through a central angle of 60°16'49" for an arc length of37.87 feet, to the northeasterly line of Parcel No.2; " Thence along sold northeasterly line, South 51 °36'50" East, 20.49 feet. to the Point of Beginning. " 1111408.00 -8- LEG£N~ (II) fWlIAi. , 1!tAAI~ hJ" i p.o.e. _r OF BECM<!HO 1 IN •• 80 FT. SAN ANTONIO ROAD j I ____ ' __ cl!Y ~L£ ~L~.J,_' _,_ CITY or MOUNTAIN VIEW ----,--- W ::J ,~ I « , ; 1::::< i • I , / I : I :z I /[ / / I / I 1/ ( it. , .. '\ I I ---1j: -----1 j I /_.- 1 01' 1 ~~-~f~~I~'~~~~'_-~~_A_~_to_cc_~_PC_nY_d~ __ Pt_lOO~~ -9- 11214118.6& EXHIBIT"B" KELLEXPARCELDEED [Attached] ( ·10. I' , ' L j. 11lI463.!16 , :lIttit.I.-'<M TIIIa ~ 'F""",! Ii ... U'S'lfW'fR-SC llECORUI~G RUQI.lT'lTO,O nv MIT> WHEN tlEl.'O\WII>RE1'I1I!N TO: Cf1f<lft'llb""o . Htqlttll fftOidbJi witI~ '", 1i:ttMd rer klldlt ot elf)' of Pllio ,,\It(l pl"U~ .,~ Secnon ~l(l) 01 (ltlmnmm' M¢, m"A~'f u.:nu Ft.",," " "'II"'.,' . tho f··~ ,1 .... lIt, ' {:lfP'lfI. , _---"' ,"I P'J.Jj H,I( 'YALUASUi COr\SlOtRA.TlO)l, N¢O'lt (if ",hjt1\ I" hmby tCMowledllod, RYIA~n Ktl.l.';V Mill lIA VKA ~IWU' KllLUiY ""'by (I .... r .. "" <:fry (W!'AL\) All'(}. ItOt rl$l ",,'VoW in lht ehy of r.to Aho. County \)f $wJt1f t!l\l'l'o, 5tllt cil ()llrOlttiJ, dutribtdt1in J!Xbibh 'w' JI~h~d '!fret!'! 1M tl'lC\lJPOf1i1Cd Uetlll'fnLy I-:lm'n':(, -11 • ·" : .. • 12- l tl214tlUM ",' . IJX'IIUI"'''A"' THAT CEATAltt I'.M\.. .... Of£ltTY illUATEO IN tHr lfrA1-e OF !:.UJftOO>IA, OOOOY of MN1'A tlAM. Cltv OF ,...,,1.0 .iL TO, ;')If) I'1tJCiiJARI'l/l" FQtJ.¢WS' 'G!IIIO f, "On'(Jo.~O!" 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",·w W"(l.·/\ hl~rA.WCf M"11~1Co nE7: nmK:n~, 2" '" "'~t.,A tll}"f""M;t!QI' w~:1't ~Ii'r; 11tF.HC£t4. -U"W 00" W. ADflTI\Ii(lJOI' &1~) rBfll TOA IImNTON THIi-Mt/)lIDUTH'A~'llIU, Y LlHLI twit.NJI,,"r<INlO ,w£.~~ 'ff~ .'\t.QHO $.AID lOUtMIlU" LINt: S, )""9'1IL~ 'II, A fflln-Am 0' !n,l·1 ri!.ttf T¢ TljN lRUJl m::lT ~ Ot:Gr;..'trI~O Mtf" 'A,.IH.!I,)1 ~---- -13 - .. ' 1111.408.06 t!}!R'N'JI'fCNH!I 01' A.CeEHA-WE. 'lbl0 is co CQt'f'.;'f)" tilut; t:'0 1ntereat in :red prol'IU:Ly r:CilvflYtill IJ~ thO wLtlau dtted 01' qrant fO ttJQ C:!.ty tif t'j),ln ,,.:t">f • C8,l!tQlnh l~h"'II:~r C!CY-. !& b't:'oOby olCC@I.e6 1.1)' t.11. \:mre!9tild officer 01' lluaftt 00 hfih1'l1r af:.t.~ (:;ounon O~ the. C!ty.of palo ;.t·~(li \\Ul'HUIIf+t, to .vthQf'h:V corafi!rm rrl :~.solUr:t.(ltt I'J! ills lllli-t3 C,,1,Illf,li ... ,"*ptetl en &m IS, 1'9'"1 aM tmfl: C!il'.l' or t'li.lo Aito, cons!Gta ';';0'" . nco.r4atio)\ taerao! ~y It,,. dldy ,,\1trurrl'lJd ()U1cQI:, 1\ppYoved pi '1::00 Porm . Abot. C:Uy A,';;.LIQn')WY ',,' COllN'l~ or BAWl." ¢L.AAA ; .' on&\ltv ... b· . aOI;), Iltl~u". ;;'j>skb lA, D4,... • A nnl'Jlry ~1C •. jn .lJd, for the State at C4U!orda, p{l.t'Slrn1bllr . • ~rW t-~jL , "Ifmt ~ov..-d to' n.u on 'Che b'tl)~s of SAt:i.Sr!'(; '(uty t¥.lrthult."(I to 'tI" t'he panonM wholiht· r.A1'l* 1~ • &ub3o-.:i bed to tb1t WiU:1n .t"ItXI~:W:lt W .w~:)w1411du.ul t~l 1DIt t;b.-t ~,,~;'~'. execu.ted LhQ ff&ilt$ an fl!~r .uc:~i:.d e4P4C1.t.Y~f o.td ~h. .. t by )-.!II/~r ttt9J\ature~! (11). ,!..bel l.n~p'\)fl\,fnt: the peiocn~. or thi!: ~t1ty 'Jt)Otl ~l! oC wh~v.h tlle llersonJ(l a<-"tad, "('QCu~\ toll. inl'f~rtnent. = l;41ntt:y ~'Dder l'Uft.'A!."V ur IEMUey UtUihr tM In.~ ¢ ,;:hO DrAlt& ot Oa.lifornla t;tmt tho fox.Ml:~g £)jt"aurt\J).ll 1a tnu. and cozrect. to1:TKISS ny h~d 01t4 orllcia}. .... 1 --:.'7 ~.' 5!.Olwfur: .. 'i4"_ .... "W=:::..-I~=-"=L-.;... -14- ( EXHIBIT "C" FORM OF TRIANGLE DEED [Attached] -J 5 - -_.--" .~ .... "-... ""---_ .. ........ ". '"" RECORDING REQUESTED BY' WHEN RECORDED MAIL TO AND MAlL TAX STATEMENTS TO; (Space Above for Recorder's Use) QUITCLAIM DEED The undersigned Grantor declares that this conveyance is exempt from the payment of Documentary Transfer Tax pursuant to Section 11922 of the California Revenue and Taxation Code, as amended. FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby aclmowledged, the CITY OF PALO ALTO, a Californiamunicipai corporation ("Grantor"), does hereby quitclaim, remise, convey and release to -:-:---:::-__ ;;-::-_ {"Grantee"),lhat certain real property (the "Property") in the City of Palo Alto, County of Santa Clara, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference. Additionally, Gr!llltor releases and conveys any rights uf the public in, to or over the Property. IN WITNESS WHEREOF, this Grant Deed has been executed this ____ day of _____ " 2011. CITY OF PALO ALTO, a ClIIifurnia municipal corporation By: Nam-e-:~---------------- TItle: ______ --'-__ _ ATTEST: City Clerk APPROVED AS TO FORM: City Attorney ·16 - · ......... _--_." .. ,".--_ ... -..... , .. EXHIBIT "A" Legal Description of Property That certain real property located in the City of Palo Alto, County of Santa Clara, State of California, aad more particularly described as follows: _ -_ Real Property in the CitY of Palo Alio; County of Santa Clara, State of C!llifornia, bei,llga portion of Parcel No.2 as descri\1ed in the Fhial Order of Condemtllltion recorded April 18, 1962, in Book 5543 of Official Records, page 586, Santa Clara-County R~cords, and a -portion of Parcel No. I as described in the Final Order and Decree of Condemnation .recorded April 18; 1962, in Book 5543 of Offieial Records, page 591, Santa Clara County Records,deseribe_d as follows! -. -. --' '-- Beginnlrig -atthemost easterly eomer of said Parcel No. '2; Thence along the southeasterly lines of said Parcel No.2, the following two courses: 1. Thence South 38°23'10" West"68,00 feet; 2. Thence North 5 1°36'50" West, 2.57 feet; Thence North 08°39'58" East. 99.20 reel, to a point of cusp, being on the easterly line of sald Parcel No. I: Thence along said easterly Hne, southerly, along a tangent curVe to the left, having a radius of 36.00 feet, whose center bears South 81°20'02" East, through a central angle of 60°16'49" for an arc length of 37.87 feet, to tlle northeasterly line of Parcel No.2; Thenee along said northeasterly line. South 51·36'50" East, 20.49 feet, to the Point of Beginning. . 112141)3J)& • 17· __ Pl_IliDl ,.,.,...... W8tet Featue ~ (SO) i!Jll c.teh Ib:$in l,$0} "'.. Jnlet{SO) " -ISO) <10", 0t.4fd (SO) ,-, W;<~ (SO) ,-F!l)e.UBh(WT) ..--Pipe. SeNce (WT) ____ PPl, Main H}'dr.rIlt (WTj ""..-C1'I'Juin; ~1'I9'(Wi) n CoI.Iping, ~ (WT) .. ~~(WT) i1 F'MjI'JO,~twn Q ~1(Wt} ~ fHlter, htail'I ('Wi) ~ ~.$~O'(WT) " -lWll X !Itr! strudimII fIbdO, M'M (\¥'I) o Valle, Uair1 ('oVT) 'f' vfiIio.&, Air ReIi~(WT) o VR,6aNce(Wl) o VN. HyOr1nt (WT) " Vb. B1OwIJftwt} .1Ii!Ie Text (\NT) .--P~. ~(GS) :;: c.atra' Ff.ting (OS) -. COp (GOl $ Pipe. SeNe.e ~ I,'GS) ;! ~~er(GS) V ~ ReMer(GS) ~,...~ .. ' Cn:r;w.g C3:!;11lg [GS} ,.",-FI\!I'I,:;e(GS) Meter, Si!Jt\ice (GS) 3 Weter, Senk:eCtrb(GS) .,..-p~. Man (GS) 9~" TIIb1 (GS) o v ..... Ma,!t, (GS) o v8he,$~(m-} ;:" V~. tlrIp (GiS} ",.--Pi~ Late:af (WW) Fi!t~~(iNWr. .,..-Pipe. 1.fI:Ml PabAtto ()M1od(WYll) .-"'" ~. Main I'Iot City o.ned (W'W) ".~'-. CtonI('9 Casing ~ 0" ~. Meil'l (WW) ~'. ~. L.atai'al (WIN) y \tIQ'I S~ NtdQ,. MlSntNNJ F1~ Tee(WW) :011 FItting. Ph:g (:N'N; \to MIri'oIe. M.Sn (WYII} ~/ I.am~~ 'Main (rII'M \i A",1ing tiet, MIn rN'M i\ ~ r:.ap (WW) ~~ 'JlQ:rt~ ~ ~tahtI, III" (W'N) • PeinI 'Tap (YM) ~~Mo.!".iI\o$II'N"'#<~1"f"~fJ:.;,p~J'W:tQ>T!l'!.t;!~I'IoW*.;~".:ml:i!'!:IrNI'II!Qt!':I$-=~ l' i, Kelly Parcel. To Be Deeded To City o 1t\. to;" ,.r Palo ABo ~ Q 3! .. ~ o-iI = '1'WII:",,"WI fI--=<>fe<l ~Qf~II.#I>GIft ~ . ;. LEGEND (R) P.O.B. RADIAL BEARIHG POINT OF BEGIHNING 4p 80 I I 80 FT. SAN ANTONIO ROAD -----~-------------- CITY OF PALO ALTO --_···-CiTV-OF MouNiAlt~" V:::IE:,-W-L...--------j-~~--i 111100al<l,,,,d Rood 95131 "PALO CITY PARCEL """'.T 1 " , .-~.-.-.... -"~ ... ~~.'". ATTACHMENTD· r I, , . ----I " , ATTACHMENTE 1-1 'r-;l '~ ~ ~ ~ b u \ ~ fj ~ CI':l CI':l -< ~ ~ j I ~ ~ I '" , IJ) i ,. _i City of Palo Alto (ID # 1433) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 3 (ID # 1433) Council Priority: {ResProject:ClearLine} Summary Title: Landfill Phase II Closure ECS Modifications Title: Approval of a Contract with LFG Control Corporation in the Amount of $474,071 for Landfill Closure Phase II Environmental Control System Modifications, Capital Improvement Program Project RF-11001 From:City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve and authorize the City Manager or designee to execute the attached contract with LFG Control Corporation in the amount of $474,473 (Attachment A) to underground the existing landfill gas and leachate control systems in the closed Phases IIA & IIB and to install new wells and piping in the active Phase IIC pursuant to CIP RF-11001, Palo Alto Landfill Phase II Closure. 2.Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with LFG Control Corporation for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $47,447. Background The Palo Alto landfill is divided into four Phases –I, IIA, IIB, and IIC. Phase I (Byxbee Park), was closed, capped and opened to the public as a pastoral park in 1991. Phase IIA was subsequently closed and capped in 1992 followed by Phase IIB in 2000. Currently, Phases IIA and IIB are closed to the public, but in July 2011 will be opened as additional Byxbee Park pastoral park acreage in accordance with Council direction (CMR:356:10 dated 9/22/2010 and CMR:421:10 dated 11/22/2010). Phase IIC is the last remaining active phase which still receives refuse. Following Council’s direction to “fast fill” the landfill, Phase IIC is expected to be filled to capacity in mid 2011 and capped sometime in mid-to late 2012. Once capped and approved by the State, Phase IIC will be opened to the public as additional Byxbee Park acreage in early 2013. April 11, 2011 Page 2 of 3 (ID # 1433) When landfills are de-commissioned, CalRecycle, the State regulatory agency overseeing the landfill permit, requires the installation of environmental controls designed to capture methane and other gases that are created as the deposited waste decomposes over time. The landfill’s environmental control systems currently consists of 92 methane gas and 21 leachate (liquids) extraction wells and conveyance piping. These components are below ground in Byxbee Park (Phase I) and above ground in the rest of the landfill. Another 17 gas wells and 3 leachate wells (and associated piping) are planned to be installed to complete the final environmental control systems necessary for final closure. At final closure, all of the environmental control systems will be installed underground in order to ensure the safety of the public from exposure to landfill gas and leachate as well as from any tripping hazards. Discussion Project Description Work to be performed under this contract includes the installation of all of the planned gas and leachate wells included in the final closure plan and the undergrounding of all of the existing above ground landfill gas and leachate wells, piping and other components in Phases IIA & IIB of the City of Palo Alto Landfill. Most of the undergrounding work is expected to be completed by July 1, 2011, which is the date that Phases IIA and IIB are scheduled to be opened to the public. Generally, work under this contract includes: ·Drill and install landfill gas and leachate wells, piezometer and condensate sumps; ·Install vaults for the undergrounding of all wells in Phases IIA and IIB; ·Trench and underground gas and leachate piping; ·Install new gas and leachate valves and cleanouts; and ·Secure exposed (above ground) environmental control system flow control components. Staff has reviewed all bids submitted and recommends that the bid of $474,473 submitted by LFG Control Corporation be accepted and that LFG Control Corporation be declared the lowest responsible bidder. The contingency amount of $47,447 which equals 10 percent of the total contract is requested for any additional or unforeseen work associated with the closure work. Staff confirmed with the Contractor's State License Board that the contractor has an active license on file. Staff checked references supplied by the contractor for previous work performed and found no significant complaints. April 11, 2011 Page 3 of 3 (ID # 1433) Summary of Bid Process Bid Name/Number Palo Alto Landfill Phase II Closure, IFB Number 140480 Proposed Length of Project 240 calendar days (two stages of work) Number of Bids Mailed to Contractors 32 Number of Bids Mailed to Builder’s Exchanges 13 Total Days to Respond to Bid 27 Pre-Bid Meeting?Yes Number of Company Attendees at Pre-Bid Meeting 18 Number of Bids Received:10 Bid Price Range From a low of $474,473 to a high of $817,806 *Bid summary provided in Attachment B. Resource Impact Funds for this project have been appropriated under the FY 2011-2012 Refuse Fund Enterprise Fund Capital Improvement Program project RF-11001. Policy Implications Recommendations of this staff report are consistent with existing City policies. Environmental Review The proposed upgrade and replacement modifications are Categorically Exempt from California Environmental Quality Act (CEQA) under Section 15301, Class 1 covering the replacement, repair and minor alteration of existing facilities. ATTACHMENTS: ·Attachment A -LFG Control Corporation Contract (PDF) ·Attachment B -Bid Summary (PDF) Prepared By:Matt Raschke, Senior Engineer Department Head:J. Michael Sartor, Interim Director City Manager Approval: James Keene, City Manager Rev. August 3, 2010 CONSTRUCTION CONTRACT Contract No. C11140480 City of Palo Alto and LFG Control Corporation PROJECT: Palo Alto Landfill Phase II Closure Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC i CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1. INCORPORATION OF RECITALS AND DEFINITIONS....................................1 1.1 Recitals................................................................................................................................1 1.2 Definitions ...........................................................................................................................1 SECTION 2. THE PROJECT ...................................................................................................1 SECTION 3. THE CONTRACT DOCUMENTS........................................................................1 LIST OF DOCUMENTS.....................................................................................................................1 3.2 ORDER OF PRECEDENCE ...............................................................................2 SECTION 4. THE WORK.........................................................................................................2 SECTION 5. PROJECT TEAM ................................................................................................2 SECTION 6. TIME OF COMPLETION.....................................................................................2 6.1 Time Is of Essence .............................................................................................................3 6.2 Commencement of Work ...................................................................................................3 6.3 Contract Time......................................................................................................................3 6.4 Liquidated Damages...........................................................................................................3 6.4.1 Entitlement...................................................................................................................3 6.4.2 Daily Amount................................................................................................................3 6.4.3 Exclusive Remedy........................................................................................................3 6.4.4 Other Remedies...........................................................................................................3 6.5 Adjustments to Contract Time ..........................................................................................3 SECTION 7. COMPENSATION TO CONTRACTOR ..............................................................3 7.1 Contract Sum ......................................................................................................................1 7.2 Full Compensation..............................................................................................................1 7.3 Compensation for Extra or Deleted Work ........................................................................1 7.3.1 Self Performed Work....................................................................................................1 7.3.2 Subcontractors.............................................................................................................1 Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC ii SECTION 8. STANDARD OF CARE.......................................................................................1 SECTION 9. INDEMNIFICATION ............................................................................................5 9.1 Hold Harmless.....................................................................................................................5 9.2 Survival................................................................................................................................5 SECTION 10 NONDISCRIMINATION ......................................................................................5 SECTION 11. INSURANCE AND BONDS................................................................................5 SECTION 12. PROHIBITION AGAINST TRANSFERS.............................................................5 SECTION 13. NOTICES ............................................................................................................6 13.1 Method of Notice.................................................................................................................6 13.2 Notice Recipients................................................................................................................6 13.3 Change of Address.............................................................................................................7 14.1 Resolution of Contract Disputes.......................................................................................7 14.2 Resolution of Other Disputes............................................................................................7 14.2.1 Non-Contract Disputes.................................................................................................7 14.2.2 Litigation, City Election.................................................................................................7 14.3 Submission of Contract Dispute.......................................................................................8 14.3.1 By Contractor...............................................................................................................8 14.3.2 By City..........................................................................................................................8 14.4 Contract Dispute Resolution Process ..............................................................................8 14.4.1 Direct Negotiations.......................................................................................................8 14.4.2 Deferral of Contract Disputes.......................................................................................9 14.4.3 Mediation......................................................................................................................9 14.4.4 Binding Arbitration........................................................................................................9 14.5 Non-Waiver........................................................................................................................10 SECTION 15. DEFAULT..........................................................................................................11 15.1 Notice of Default ...............................................................................................................11 15.2 Opportunity to Cure Default.............................................................................................11 SECTION 16. CITY'S RIGHTS AND REMEDIES....................................................................11 16.1 Remedies Upon Default ...................................................................................................11 16.1.1 Delete Certain Services .............................................................................................11 16.1.2 Perform and Withhold ................................................................................................11 Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC iii 16.1.3 Suspend The Construction Contract..........................................................................11 16.1.4 Terminate the Construction Contract for Default........................................................11 16.1.5 Invoke the Performance Bond....................................................................................11 16.1.6 Additional Provisions..................................................................................................12 16.2 Delays by Sureties............................................................................................................12 16.3 Damages to City................................................................................................................12 16.3.1 For Contractor's Default.............................................................................................12 16.3.2 Compensation for Losses ..........................................................................................12 16.5 Suspension by City for Convenience .............................................................................12 16.6 Termination Without Cause.............................................................................................13 16.6.1 Compensation............................................................................................................13 16.6.2 Subcontractors...........................................................................................................13 16.7 Contractor’s Duties Upon Termination...........................................................................13 SECTION 17. CONTRACTOR'S RIGHTS AND REMEDIES ..................................................14 17.1 Contractor’s Remedies ....................................................................................................14 17.1.1 For Work Stoppage....................................................................................................14 17.1.2. For City's Non-Payment.............................................................................................14 17.2 Damages to Contractor....................................................................................................14 SECTION 18. ACCOUNTING RECORDS...............................................................................14 18.1 Financial Management and City Access.........................................................................14 18.2 Compliance with City Requests ......................................................................................14 SECTION 19. INDEPENDENT PARTIES................................................................................14 SECTION 20. NUISANCE........................................................................................................15 SECTION 21. PERMITS AND LICENSES...............................................................................15 SECTION 22. WAIVER............................................................................................................15 SECTION 23 GOVERNING LAW ...........................................................................................15 SECTION 24 COMPLETE AGREEMENT ..............................................................................15 SECTION 25 SURVIVAL OF CONTRACT.............................................................................15 SECTION 26 PREVAILING WAGES......................................................................................15 Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC iv SECTION 27 NON APPROPRIATION ...................................................................................16 SECTION 28 GOVERNMENTAL POWERS...........................................................................16 SECTION 29 ATTORNEY FEES ............................................................................................16 SECTION 30 SEVERABILITY ................................................................................................16 1 Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on April _____, 2011 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and LFG Control Corporation ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a corporation duly organized and in good standing in the State of California, Contractor’s License Number 724490. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On February 24, 2011, City issued an Invitation for Bids (IFB) to contractors for the Palo Alto Landfill Phase II Closure (“Project”). In response to the IFB, Contractor submitted a bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Bid Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the construction of the Palo Alto Landfill Phase II Closure ("Project"). SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Change Orders 3) Contract 4) Project Plans and Drawings 5) Technical Specifications Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 2 6) Special Provisions 7) Notice Inviting Bids 8) Instructions to Bidders 9) General Conditions 10) Bidding Addenda 11) Invitation for Bids 12) Contractor's Bid/Non-Collusion Affidavit 13) Reports listed in the Bidding Documents 14) Public Works Department’s Standard Drawings and Specifications dated 2007 and updated from time to time 15) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards dated 2005 and updated from time to time 16) City of Palo Alto Traffic Control Requirements 17) City of Palo Alto Truck Route Map and Regulations 18) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 19) Performance and Payment Bonds 20) Insurance Forms 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. SECTION 4 THE WORK. The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other things necessary for Contractor to perform its obligations and complete the Project, including, without limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable Code Requirements. SECTION 5 PROJECT TEAM. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Project requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 3 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed not later than . Contractor shall complete the First and Second Stages of the Construction Work by July 1, 2011. All remaining work shall be completed within 240 days after the commencement date specified in the City’s Notice to Proceed. 6.4 Liquidated Damages. 6.4.1 Entitlement. City and Contractor acknowledge and agree that if Contractor fails to fully and satisfactorily complete the Work within the Contract Time, City will suffer, as a result of Contractor’s failure, substantial damages which are both extremely difficult and impracticable to ascertain. Such damages may include, but are not limited to: (i) Loss of public confidence in City and its contractors and consultants. (ii) Loss of public use of public facilities. (iii) Extended disruption to public. 6.4.2 Daily Amount. City and Contractor have reasonably endeavored, but failed, to ascertain the actual damage that City will incur if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time. Therefore, the parties agree that in addition to all other damages to which City may be entitled other than delay damages, in the event Contractor shall fail to achieve Substantial Completion of the entire Work within the Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per day for each Day occurring after the expiration of the Contract Time until Contractor achieves Substantial Completion of the entire Work. The liquidated damages amount is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. 6.4.3 Exclusive Remedy. City and Contractor acknowledge and agree that this liquidated damages provision shall be City’s only remedy for delay damages caused by Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.4.4 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and agreed to by Change Order executed by City and Contractor in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 1 Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Four Hundred Seventy-four Thousand Four Hundred Seventy-three Dollars ($474,473.00). [This amount includes the Base Bid and Add Alternates #1.] 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work. The Contract Sum may only be adjusted for Change Orders issued, executed and satisfactorily performed in accordance with the requirements of the Contract Documents. 7.3 Compensation for Extra or Deleted Work. The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving Extra Work or Deleted Work based on one or more of the following methods to be selected by City: 1. Unit prices stated in the Contract Documents or agreed upon by City and Contractor, which unit prices shall be deemed to include Contractor Markup and Subcontractor/Sub-subcontractor Markups permitted by this Section. 2. A lump sum agreed upon by City and Contractor, based on the estimated Allowable Costs and Contractor Markup and Subcontractor Markup computed in accordance with this Section. 3. Contractor’s Allowable Costs, plus Contractor Markup and Subcontractor Markups applicable to such Extra Work computed in accordance with this Section. Contractor Markup and Subcontractor/Sub-subcontractor Markups set forth herein are the full amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors and Sub-subcontractors, of every Tier. When using this payment methodology, Contractor Markup and Subcontractor/Sub-subcontractor Markups, which shall not be compounded, shall be computed as follows: 7.3.1 Markup Self-Performed Work. 10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by Contractor with its own forces. 7.3.2 Markup for Work Performed by Subcontractors. 15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by a first Tier Subcontractor. SECTION 8 STANDARD OF CARE. Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 5 SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and all Losses arising directly or indirectly from, or in any manner relating to any of, the following: (i) Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub-subcontractors, of any tier; (ii) Performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of any of the obligations under the Contract Documents; (iii) The construction activities of Contractor or its Subcontractors or Sub-subcontractors, of any tier, either on the Site or on other properties; (iv) The payment or nonpayment by Contractor to any of its employees, Subcontractors or Sub-subcontractors of any tier, for Work performed on or off the Site for the Project; and (v) Any personal injury, property damage or economic loss to third persons associated with the performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of the Work. However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses resulting from the sole or active negligence or willful misconduct of the Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Failure to do so shall be deemed a material breach of this Construction Contract. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract based upon the stated experience and qualifications of the Contractor and its subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 6 control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (iv) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Operations 3201 East Bayshore Road Palo Alto, CA 94303 Attn: Ron Arp Or City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 7 All notices, demands, requests or approvals from City to Contractor shall be addressed to: LFG Control Corporation 289 W. Hilton Drive Boulder Creek, CA 95006 Attn: Marcus Penn 13.3 Change of Address. In the event of any change of address, the moving party shall notify the other party of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. SECTION 14 DISPUTE RESOLUTION. 14.1 Resolution of Contract Disputes. Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section 14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such Contract Disputes. 14.2 Resolution of Other Disputes. 14.2.1 Non-Contract Disputes. Contract Disputes shall not include any of the following: (i) Penalties or forfeitures prescribed by statute or regulation imposed by a governmental agency; (ii) Third party tort claims for personal injury, property damage or death relating to any Work performed by Contractor or its Subcontractors or Sub- subcontractors of any tier; (iii) False claims liability under California Government Code Section 12650, et. seq.; (iv) Defects in the Work first discovered by City after Final Payment by City to Contractor; (v) Stop notices; or (vi) The right of City to specific performance or injunctive relief to compel performance of any provision of the Contract Documents. 14.2.2 Litigation, City Election. Matters that do not constitute Contract Disputes shall be resolved by way of an action filed in the Superior Court of the State of California, County of Santa Clara, and shall not be subject to the Contract Dispute Resolution Process. However, the City reserves the right, in its sole and absolute discretion, to treat such disputes as Contract Disputes. Upon written notice by City of its election as provided in the preceding sentence, such dispute shall be submitted by the parties and finally decided pursuant to the Contract Dispute Resolution Process in the manner as required for Contract Disputes, including, without limitation, City’s right under Paragraph 14.4.2 to defer resolution and final determination until after Final Completion of the Work. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 8 14.3 Submission of Contract Dispute. 14.3.1 By Contractor. Contractors may commence the Contract Dispute Resolution Process upon City's written response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.10 of the General Conditions. Contractor shall submit a written Statement of Contract Dispute (as set forth below) to City within seven (7) Days after City rejects all or a portion of Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a timely manner shall result in City’s decision by City on the Claim becoming final and binding. Contractor’s Statement of Contract Dispute shall be signed under penalty of perjury and shall state with specificity the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the asserted effect on the Contract Sum and the Contract Time. The Statement of Contract Dispute shall include adequate supporting data to substantiate the disputed Claim. Adequate supporting data for a Contract Dispute relating to an adjustment of the Contract Time shall include both of the following: (i) All of the scheduling data required to be submitted by Contractor under the Contract Documents to obtain extensions of time and adjustments to the Contract Time and (ii) A detailed, event-by-event description of the impact of each event on completion of Work. Adequate data to support a Statement of Contract Dispute involving an adjustment of the Contract Sum must include both of the following: (a) A detailed cost breakdown and (b) Supporting cost data in such form and including such information and other supporting data as required under the Contract Documents for submission of Change Order Requests and Claims. 14.3.2 By City. City's right to commence the Contract Dispute Resolution Process shall arise at any time following City's actual discovery of the circumstances giving rise to the Contract Dispute. City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor. A Statement of Contract Dispute submitted by City shall state the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the damages or other relief claimed by City as a result of such events. 14.4 Contract Dispute Resolution Process. The parties shall utilize each of the following steps in the Contract Dispute Resolution Process in the sequence they appear below. Each party shall participate fully and in good faith in each step in the Contract Dispute Resolution Process, and good faith effort shall be a condition precedent to the right of each party to proceed to the next step in the process. 14.4.1 Direct Negotiations. Designated representatives of City and Contractor shall meet as soon as possible (but not later than ten (10) Days after receipt of the Statement of Contract Dispute) in a good faith effort to negotiate a resolution to the Contract Dispute. Each party shall be represented in such negotiations by an authorized representative with full knowledge of the details of the Claims or defenses being asserted by such party in the negotiations, and with full authority to resolve such Contract Dispute then and there, subject only to City’s obligation to obtain administrative and/or City Council approval of any agreed settlement or resolution. If the Contract Dispute involves the assertion of a right or claim by a Subcontractor or Sub-subcontractor, of any tier, against Contractor that is in turn being asserted by Contractor against City (“Pass-Through Claim”), then the Subcontractor or Sub-Subcontractor shall also have a Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 9 representative attend the negotiations, with the same authority and knowledge as described above. Upon completion of the meeting, if the Contract Dispute is not resolved, the parties may either continue the negotiations or any party may declare negotiations ended. All discussions that occur during such negotiations and all documents prepared solely for the purpose of such negotiations shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.2 Deferral of Contract Disputes. Following the completion of the negotiations required by Paragraph 14.4.1, all unresolved Contract Disputes shall be deferred pending Final Completion of the Project, subject to City’s right, in its sole and absolute discretion, to require that the Contract Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that have been deferred until Final Completion shall be consolidated within a reasonable time after Final Completion and thereafter pursued to resolution pursuant to this Contract Dispute Resolution Process. The parties can continue informal negotiations of Contract Disputes; provided, however, that such informal negotiations shall not be alter the provisions of the Agreement deferring final determination and resolution of unresolved Contract Disputes until after Final Completion. 14.4.3 Mediation. If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph 14.4.1, the parties shall submit the Contract Dispute to non-binding mediation before a mutually acceptable third party mediator. .1 Qualifications of Mediator. The parties shall endeavor to select a mediator who is a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in mediating public works construction disputes. In addition, the mediator shall have at least twenty (20) hours of formal training in mediation skills. .2 Submission to Mediation and Selection of Mediator. The party initiating mediation of a Contract Dispute shall provide written notice to the other party of its decision to mediate. In the event the parties are unable to agree upon a mediator within fifteen (15) Days after the receipt of such written notice, then the parties shall submit the matter to the American Arbitration Association (AAA) at its San Francisco Regional Office for selection of a mediator in accordance with the AAA Construction Industry Mediation Rules. .3 Mediation Process. The location of the mediation shall be at the offices of City. The costs of mediation shall be shared equally by both parties. The mediator shall provide an independent assessment on the merits of the Contract Dispute and recommendations for resolution. All discussions that occur during the mediation and all documents prepared solely for the purpose of the mediation shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.4 Binding Arbitration. If the Contract Dispute is not resolved by mediation, then any party may submit the Contract Dispute for final and binding arbitration pursuant to the provisions of California Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be final and may be entered as a judgment by any court of competent jurisdiction. Such arbitration shall be conducted in accordance with the following: .1 Arbitration Initiation. The arbitration shall be initiated by filing a complaint in arbitration in accordance with the regulations promulgated pursuant to California Public Contract Code Section 10240.5. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 10 .2 Qualifications of the Arbitrator. The arbitrator shall be approved by all parties. The arbitrator shall be a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in arbitrating public works construction disputes. In addition, the arbitrator shall have at least twenty (20) hours of formal training in arbitration skills. In the event the parties cannot agree upon an arbitrator, the provisions of California Public Contract Code Section 10240.3 shall be followed in selecting an arbitrator possessing the qualifications required herein. .3 Hearing Days and Location. Arbitration hearings shall be held at the offices of City and shall, except for good cause shown to and determined by the arbitrator, be conducted on consecutive business days, without interruption or continuance. .4 Hearing Delays. Arbitration hearings shall not be delayed except upon good cause shown. .5 Recording Hearings. All hearings to receive evidence shall be recorded by a certified stenographic reporter, with the costs thereof borne equally by City and Contractor and allocated by the arbitrator in the final award. .6 Limitation of Depositions. The parties may conduct discovery in accordance with the provisions of section 10240.11 of the Public Contract Code; provided, however, that depositions shall be limited to both of the following: (i) Ten (10) percipient witnesses for each party and 5 expert witnesses per party. Upon a showing of good cause, the arbitrator may increase the number of permitted depositions. An individual who is both percipient and expert shall, for purposes of applying the foregoing numerical limitation only, be deemed an expert. Expert reports shall be exchanged prior to receipt of evidence, in accordance with the direction of the arbitrator, and expert reports (including initial and rebuttal reports) not so submitted shall not be admissible as evidence. .7 Authority of the Arbitrator. The arbitrator shall have the authority to hear dispositive motions and issue interim orders and interim or executory awards. .8 Waiver of Jury Trial. Contractor and City each voluntarily waives its right to a jury trial with respect to any Contract Dispute that is subject to binding arbitration in accordance with the provisions of this Paragraph 14.4.4. Contractor shall include this provision in its contracts with its Subcontractors who provide any portion of the Work. 14.5 Non-Waiver. Participation in the Contract Dispute Resolution Process shall not waive, release or compromise any defense of City, including, without limitation, any defense based on the assertion that the rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by Contractor due to Contractor’s failure to comply with the Contract Documents, including, without limitation, Contractor’s failure to comply with any time periods for providing notice of requests for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting documentation of Claims. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 11 SECTION 15 DEFAULT. 15.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract. 15.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. SECTION 16 CITY'S RIGHTS AND REMEDIES. 16.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 15, then City may pursue any remedies available under law or equity, including, without limitation, the following: 16.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 16.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 16.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 16.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 15. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 16.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 12 16.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 16.2 Delays by Sureties. Without limiting to any of City’s other rights or remedies, City has the right to suspend the performance of the Work by Contractor’s sureties in the event of any of the following: (i) The sureties’ failure to begin Work within a reasonable time in such manner as to insure full compliance with the Construction Contract within the Contract Time; (ii) The sureties’ abandonment of the Work; (iii) If at any time City is of the opinion the sureties’ Work is unnecessarily or unreasonably delaying the Work; (iv) The sureties’ violation of any terms of the Construction Contract; (v) The sureties’ failure to perform according to the Contract Documents; or (vi) The sureties’ failure to follow City’s instructions for completion of the Work within the Contract Time. 16.3 Damages to City. 16.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 16.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the Project. If City incurs Losses due to Contractor’s default, then the amount of Losses shall be deducted from the amounts withheld. Should the amount withheld exceed the amount deducted, the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the difference and shall promptly remit same to City. 16.4 Suspension by City for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 13 16.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole by giving thirty (30) Days written notice to Contractor. The compensation allowed under this Paragraph 16.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. 16.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 16.5, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors and Sub-subcontractors for: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. 16.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 16.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description, in writing no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 14 SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES. 17.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 17.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 17.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 17.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 16.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 18 ACCOUNTING RECORDS. 18.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) final payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. 18.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 18 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 18.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 19 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint venturers of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 15 SECTION 20 NUISANCE. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 21 PERMITS AND LICENSES. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 22 WAIVER. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. SECTION 23 GOVERNING LAW. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California. SECTION 24 COMPLETE AGREEMENT. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 25 SURVIVAL OF CONTRACT. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 26 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. Or The Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations. Copies of these rates may be obtained at cost at the Purchasing office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 16 1810, and 1813 of the Labor Code. SECTION 27 NON APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 28 AUTHORITY. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 29 ATTORNEY FEES. Each Party shall bear its own costs, including attorney’s fees through the completion of mediation. If the claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2, the prevailing party in any action brought to enforce the provision of this Agreement may recover its reasonable costs and attorney’s fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorney’s’ fees paid to third parties. SECTION 30 SEVERABILITY. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. Rev. August 3, 2010 Contract C11140480 LFG Control Corp.DOC 17 IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO: ____________________________ Purchasing Manager City Manager APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney APPROVED: ___________________________ Public Works Director CONTRACTOR: LFG CONTROL CORPORATION By:___________________________ Name:_________________________ Title:________________________ CMR 1433 Attachment B - Bid Summary IFB Number 140480 - Palo Alto Landfill Phase II Closure CIP: RF-11001 Bidders Bid Bid Item Engr's Item Description Estimate LFG Ford ICS Shaw Wood SCS Sukut Platinum AEG Casey 1 Mob/Demob $37,500 30,000.00$ 35,000.00$ 24,671.00$ 23,000.00$ 45,260.00$ 26,000.00$ 67,000.00$ 5,000.00$ 52,500.00$ 19,280.00$ 2 Survey/Layout $8,200 7,000.00$ 31,000.00$ 26,054.00$ 11,500.00$ 67,900.00$ 14,000.00$ 29,500.00$ 18,500.00$ 13,000.00$ 48,550.00$ 3a Above-Ground 8" Pipe $57,038 30,000.00$ 30,000.00$ 29,310.00$ 42,000.00$ 42,210.00$ 48,000.00$ 42,000.00$ 42,000.00$ 42,000.00$ 45,000.00$ 3b Below Ground 8" Pipe $53,826 50,750.00$ 47,850.00$ 55,622.00$ 60,900.00$ 59,450.00$ 57,200.00$ 55,970.00$ 55,100.00$ 75,400.00$ 87,000.00$ 3c Above-Ground 4" Pipe $26,191 9,200.00$ 16,100.00$ 17,135.00$ 16,100.00$ 14,950.00$ 20,700.00$ 17,020.00$ 23,000.00$ 16,100.00$ 29,900.00$ 3d Reposition & Bury 4" Pipe $26,947 25,440.00$ 13,780.00$ 22,387.20$ 16,960.00$ 20,776.00$ 36,040.00$ 27,136.00$ 23,320.00$ 31,800.00$ 50,880.00$ 3e 8" Pipe Tie-Ins $9,900 4,800.00$ 12,000.00$ 3,357.04$ 12,800.00$ 4,744.00$ 9,600.00$ 19,200.00$ 9,864.00$ 20,000.00$ 16,800.00$ 3f 8" Dia. Isolation Valves $30,900 27,600.00$ 27,600.00$ 15,343.92$ 15,600.00$ 28,488.00$ 20,400.00$ 34,800.00$ 21,000.00$ 18,000.00$ 20,400.00$ 3g Reposition & Bury 8" Pipe $21,629 21,150.00$ 2,820.00$ 11,590.20$ 11,985.00$ 11,139.00$ 28,200.00$ 19,740.00$ 16,920.00$ 25,380.00$ 33,840.00$ 4a Above ground 4" Pipe $11,961 4,500.00$ 7,000.00$ 8,210.00$ 13,000.00$ 12,450.00$ 11,000.00$ 8,000.00$ 22,000.00$ 7,000.00$ 14,000.00$ 4b Below Ground 4" Pipe $1,328 3,850.00$ 11,825.00$ 4,327.00$ 4,400.00$ 7,975.00$ 5,225.00$ 6,325.00$ 5,775.00$ 4,950.00$ 7,150.00$ 4c Above ground 2" Pipe $2,499 2,500.00$ 3,200.00$ 3,889.00$ 2,500.00$ 7,100.00$ 7,000.00$ 4,800.00$ 9,000.00$ 2,000.00$ 4,000.00$ 4d Below Ground 2" Pipe $285 825.00$ 4,675.00$ 3,586.00$ 1,925.00$ 6,600.00$ 4,675.00$ 3,575.00$ 5,225.00$ 3,300.00$ 1,100.00$ 4e Reposition & Bury Pipe $7,583 2,528.00$ 1,264.00$ 4,803.20$ 5,056.00$ 12,640.00$ 7,584.00$ 6,572.80$ 10,112.00$ 5,056.00$ 30,336.00$ 4f 2" and 4" Tie-Ins $1,800 3,600.00$ 3,900.00$ 1,995.00$ 2,700.00$ 3,300.00$ 6,000.00$ 10,800.00$ 4,656.00$ 9,600.00$ 7,200.00$ 5a LFG Wells $62,460 45,500.00$ 64,400.00$ 70,203.00$ 57,400.00$ 56,525.00$ 58,800.00$ 55,300.00$ 72,800.00$ 79,100.00$ 84,000.00$ 5b Leachate Wells $13,050 9,900.00$ 14,250.00$ 18,178.50$ 13,350.00$ 15,150.00$ 14,100.00$ 15,000.00$ 19,200.00$ 16,950.00$ 18,000.00$ 5c Leachate Piezometers $15,372 16,750.00$ 12,500.00$ 26,517.50$ 26,250.00$ 28,750.00$ 16,000.00$ 19,750.00$ 27,500.00$ 18,250.00$ 28,750.00$ 6a Above Gr. LFG Wellheads $10,200 7,990.00$ 15,300.00$ 14,703.98$ 13,600.00$ 17,731.00$ 15,300.00$ 9,350.00$ 18,972.00$ 16,150.00$ 19,550.00$ 6b Below Gr. LFG Wellheads $37,000 30,000.00$ 47,500.00$ 41,621.00$ 42,500.00$ 49,550.00$ 45,500.00$ 36,500.00$ 61,300.00$ 50,000.00$ 83,500.00$ 6c Temp. Security Measures $405 540.00$ 2,520.00$ 819.00$ 1,125.00$ 1,944.00$ 1,620.00$ 2,790.00$ 3,132.00$ 6,075.00$ 990.00$ 6d Above Gr. Leachate Wellheads $18,000 18,300.00$ 21,000.00$ 20,000.00$ 28,200.00$ 4,155.00$ 9,900.00$ 30,000.00$ 24,765.00$ 21,900.00$ 21,240.00$ 6e Below Gr. Leachate Wellheads $7,500 9,000.00$ 6,450.00$ 3,174.00$ 7,500.00$ 3,480.00$ 19,500.00$ 6,450.00$ 91,125.00$ 93,000.00$ 18,000.00$ 6f Piezometer Wellheads $1,320 3,900.00$ 1,560.00$ 1,233.96$ 180.00$ 1,956.00$ 1,800.00$ 840.00$ 11,184.00$ 2,100.00$ 3,000.00$ 7a 8" Road Crossings $8,000 2,500.00$ 1,800.00$ 4,257.00$ 2,700.00$ 5,900.00$ 4,800.00$ 5,100.00$ 2,500.00$ 3,400.00$ 5,500.00$ 7b 14" Road Crossings $12,000 3,000.00$ 2,550.00$ 4,413.00$ 3,600.00$ 6,600.00$ 5,200.00$ 5,400.00$ 3,300.00$ 4,000.00$ 5,500.00$ 8 Condensate Sumps $46,000 30,000.00$ 31,800.00$ 25,437.00$ 42,000.00$ 27,550.00$ 31,000.00$ 31,000.00$ 35,216.00$ 16,000.00$ 38,000.00$ 9a Vault Boxes (LFG) $24,400 40,000.00$ 42,500.00$ 36,088.00$ 48,000.00$ 46,650.00$ 49,500.00$ 55,000.00$ 60,150.00$ 65,000.00$ 40,000.00$ 9b Vault Boxes (Leachate) $15,283 13,950.00$ 14,725.00$ 14,300.00$ 21,700.00$ 22,289.00$ 25,110.00$ 18,600.00$ 33,852.00$ 34,100.00$ 18,600.00$ 9c Vault Boxes (Valves) $15,500 6,200.00$ 13,020.00$ 9,880.00$ 3,100.00$ 8,308.00$ 31,620.00$ 24,800.00$ 19,220.00$ 17,670.00$ 4,340.00$ 9d Vault Boxes (Cleanouts) $4,110 3,000.00$ 4,200.00$ 48,109.00$ 6,000.00$ 3,280.00$ 11,700.00$ 4,500.00$ 7,740.00$ 9,500.00$ 4,000.00$ 9e Vault Boxes (Piezometers) $3,504 2,400.00$ 2,640.00$ 2,834.00$ 3,600.00$ 2,796.00$ 6,480.00$ 4,800.00$ 4,440.00$ 9,000.00$ 2,400.00$ 10 Record Drawings $5,000 1,800.00$ 4,200.00$ 2,644.00$ 18,500.00$ 7,150.00$ 7,500.00$ 9,100.00$ 10,000.00$ 5,500.00$ 3,000.00$ 11 Decom. Existing Header $11,000 6,000.00$ 6,000.00$ 2,871.00$ 7,100.00$ 5,410.00$ 4,600.00$ 6,900.00$ 5,000.00$ 12,500.00$ 4,000.00$ Totals $607,691 474,473.00$ 556,929.00$ 579,564.50$ 586,831.00$ 660,156.00$ 661,654.00$ 693,618.80$ 782,868.00$ 806,281.00$ 817,806.00$ Percent Variance From Engineer's Estimate -21.9% -8.4% -4.6% -3.4% 8.6% 8.9% 14.1% 28.8% 32.7% 34.6% 3/28/2011 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK April 11, 2011 The Honorable City Council Palo Alto, California Appointment of Council Member Larry Klein as Director to the Boards of the Bay Area Water Supply & Conservation Agency and the Bay Area Regional Water System Financing Authority The four-year term of Council Member Larry Klein on the Board of Directors of the Bay Area Water Supply & Conservation Agency (BAWSCA) will end on June 30, 2011, as will his term on the Bay Area Regional Water System Financing Authority (RFA). Appointments to both agencies must be made by Action of the full City Council at a public meeting. The term is for four years and will expire on June 30, 2015. Council Member Klein is eligible to serve in unlimited terms, and has agreed to continue serving. Prepared by:Ronna Jojola Gonsalves, Deputy City Clerk ATTACHMENTS: ·a:Letter from BAWSCA (PDF) Department Head:Donna Grider, City Clerk Updated: 4/6/2011 11:22 AM by Donna Grider Page 2 City of Palo Alto (ID # 1580) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 2 (ID # 1580) Council Priority: {ResProject:ClearLine} Summary Title: HHW Grant Application Resolution Title: Approval of a Resolution to Authorize the City Manager to Submit Application(s) and Sign Related Agreement(s) for the Department of Resources Recycling and Recovery (CalRecycle) Household Hazardous Waste Grant Program for Fiscal Year 2010/11 (Cycle 19) From:City Manager Lead Department: Public Works RECOMMENDATION Staff recommends Council approve a resolution (Attachment A) to authorize the City Manager or his designee to submit a grant application to CalRecycle and to sign related grant program agreements and amendments. BACKGROUND The California Department of Resources Recycling and Recovery (CalRecycle) offers discretionary grant and funding opportunities authorized by legislation to assist local governments to establish or expand Household Hazardous Waste (HHW) facilities or innovative HHW material collection facilities. In conjunction and coordination with the relocation of the City’s Recycling Center to the Palo Alto Regional Water Quality Control Plant (RWQCP) property, the City anticipates upgrading its HHW collection facility already located at the RWQCP in order to provide more convenient HHW drop-off for Palo Alto residents in the future. DISCUSSION Staff proposes submitting a HHW grant application to acquire additional funds needed to upgrade and implement improvements at the facility. The upgrades and improvements will include the addition of one HHW storage locker/shed, one additional storage container for supplies and equipment, two household product reuse cabinets, additional pavement for the staging of two paint collection bins and a canopy structure to cover the HHW collection unloading and sorting area. These improvements are estimated at $200,000. CalRecycle offers a grant of up to a maximum $150,000 that if awarded to the City could cover a large portion of these HHW facility improvements. These improvements may also be eligible for additional funds with the next cycle (FY2011/12, 20th cycle) of the HHW Grant Program April 11, 2011 Page 2 of 2 (ID # 1580) depending on the project’s permitting and construction schedule. The grant application for this year must be submitted by April 15, 2011. The attached resolution is necessary component of the application. RESOURCE IMPACT The budget for these HHW facility improvements have been approved as part of the Capital Improvement Program Project (CIP) RF-07001. CIP RF-07001 also includes the relocation of the existing Recycling Center. This project is scheduled to be constructed in FY 2012. If the grant is secured, grant monies will reimburse CIP funding used in the HHW facility expansion part of this project and reduce Refuse Fund expenses. Any funds required in excess of the HHW Grant are expected to be within the approved budget amount. Staff will submit the application, administer agreements and amendments, and submit for reimbursements periodically during the project as required by the grant conditions. POLICY IMPLICATIONS This grant program is consistent with two of the City Council’s 2011 top 5 priorities, environmental sustainability through the removal and proper management of hazardous wastes from the waste stream, sanitary sewer and storm drains and City finances by seeking outside funding sources for City infrastructure projects. ENVIRONMENTAL REVIEW Approval of the Administering Agency-State Master Agreements does not constitute a project for purposes of the National Environmental Protection Act (NEPA) or the California Environmental Quality Act (CEQA); therefore, no environmental analysis is required to apply for this grant. Environmental review is currently underway as part of the CEQA process for the permitting and construction phase of this project. ATTACHMENTS: ·Attachment A Household Hazardous Waste Facility Expansion Grant Resolution (DOC) Prepared By:Ron Arp, Manager, Environmental Control Programs Department Head:J. Michael Sartor, Interim Director City Manager Approval: James Keene, City Manager Not Yet Approved 110330 jb 0130700 Resolution No. ______ Resolution of the Council of the City of Palo Alto Authorizing the City Manager to Submit Application(s) and Sign Related Agreement(s) for the California Department of Resources Recycling and Recovery (CalRecycle) Household Hazardous Waste Facility Expansion Grant Resolution WHEREAS, Public Resources Code sections 40000 et seq. authorize the Department of Resources Recycling and Recovery (CalRecycle) to administer various Grant Programs in furtherance of the State of California’s (State) efforts to reduce, recycle and reuse solid waste generated in the State thereby preserving landfill capacity and protecting public health and safety and the environment; and WHEREAS, in furtherance of this authority CalRecycle is required to establish procedures governing the application, awarding, and management of the grants; and WHEREAS, Grant Application procedures require an Applicant’s governing body to authorize by resolution its approval for submittal of the Grant Application(s) identified below, and the designation by job title of the individual authorized to execute all Grant documents on behalf of the City of Palo Alto; and WHEREAS, if awarded, the City of Palo Alto will enter into a Grant Agreement with CalRecycle for implementation of said Grant(s). NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVES as follows: SECTION 1. The Council authorizes the submittal of application(s) to CalRecycle for Targeted Household Hazardous Waste Incentive which the City of Palo Alto is eligible. SECTION 2. The City Manager, or his/her designee is hereby authorized and empowered to execute in the name of the City of Palo Alto all grant documents, including but not limited to, applications, agreements, amendments and requests for payment, necessary to secure grant funds and implement the approved grant project; and / / / / / / / / / / / / Not Yet Approved 110330 jb 0130700 SECTION 3. These authorizations are effective for five (5) years from date of adoption of this resolution. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: _____________________________ ___________________________ City Clerk Mayor ___________________________ APPROVED AS TO FORM:City Manager ________________________________________________________ Sr. Assistant City Attorney Director of Public Works City of Palo Alto (ID # 1562) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/11/2011 April 11, 2011 Page 1 of 2 (ID # 1562) 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 $42,900 for a Total Not to Exceed Amount of $136,400 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 $42,900 for legislative advocacy services which includes a monthly retainer of $5,000; monthly expenses not to exceed $500; $5,000 contingency and $4,900 in expenses for Washington, DC legislative trip taken in March 2011 (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 April 4th 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 not to exceed $5,000 per month, including expenses, which CAI has been billing the City since that amendment was executed. It was recently called to the City’s attention that CAI has been billing for expenses during this period, which were not eligible for reimbursement. This issue has been rectified and, with payment of April 11, 2011 Page 2 of 2 (ID # 1562) the February invoice, the City will have paid CAI the total $30,000 authorized for the period covered by contract amendment number two. Contract amendment number three has three components. First, it proposes to pay the CAI a monthly retainer of $5,000 per month for legislative advocacy services, as well as up to $500 per month in expense reimbursement. CAI has requested to add reimbursement for expenses because it splits the costs of expenses related to high speed rail advocacy between the three cities (i.e., Atherton, Menlo Park and Palo Alto). CAI has communicated to the City it would not be fair and equitable to not charge Palo Alto for its share of expenses while charging the other two cities. Second, it would provide for payment for legislative advocacy services that the contractor performed in March 2011 on a trip to Washington, DC. The Palo Alto share of the cost is $4,900 dollars. This includes both CAI’s time and expenses (time $3,900 + $1,000 expenses). Finally, given that there may be a need for services above and beyond normal legislative advocacy services, an additional $5,000 has been included in the contract amount as a contingency. These funds would not be authorized without written approval of the City Manager or designee. Thus, the total contact amount requested is $42,900 as follows: ·Monthly retainer at $5,000/month x 6 months = $30,000 ·Monthly expenses up to $500/month x 6 months = $3,000 ·March 2011 Washington, DC trip expenses = $4,900 ·Contract contingency amount = $5,000 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 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 (DOC) Prepared By:Rob Braulik, Project Manager 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 : ~': .' . . '" . . 2 'H:lDepartmenl.\City M.nager\Cllplwl Advocates\PDF Capilal Advocal69 Pinal 022S10A,doc -'Profcasionil!Siliviceii , Rev. December I. 2009 " .. 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 .... I:· ~ '. ;. 2 H:lDcpBrlmontslClIy Manager\CKpital AdvoClltes\PDF Copilol Advocates Finftl 022510A.Qoc '-l'rofessioiiilIServicea . Rev. December t, 2009 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. 3 H:IDeparlmenls\Cily MQ~a!:cr\C.pit.1 Advoc.le~\PDF Cupita1 Advucates Final 022SIOA.doc Professional Services R.v. December I, 2009 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 H:\Deptulment8\City Manager\Capital AdvocRtesIPDP Copilal Advocates Fin.1 022510A.doc _. Professional Servjce~ Rov. Owembe, 1,2009 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 H:\DepHr1ment5\Cily Manftger\Capital Advoc~leslPDF Cnpit~l Advoeates Final 022S10A,doc 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 ., ', ... ' .. : : .. ',.,:" H:\Dellat1m~nls\CiIY ManKger\Capilal AdvocatesWDF Copilll Advopates Final 022S10A.doc " ..... Professinnal ·Services .Rev. December I, 2009 :.. 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'.· .H:\Depadmenis\CiIY Manager\Capilal Advocales\PDF Capital Advocates Final 022510A.doo· Prof&ssional Services Rov. Dctembcr 1,2009 '. SCHEDULE OF PERFORMANCE CONSULTANT shall perfonn the Services as indicated in the Scope of Services (Exhibit A). J H:l:popartmtnts\Cily MQnngei\C~p!tal Advoc3tes\PDF Capital Advoc~te8 Filllli 0225tOA.doc Professional Services Roy. December 1, 2009 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. . .. ,. .... . ... . ; .. '.:. .' .... ~ ~ H:lDepartmenls\Cily Monager\C~pilal Advucate~\PDF Copi •• 1 Advucates Finol 022S 1 OA.doo Professional Services Rev. December 1,2009 :EXHIBIT "e-1" HOURLY RATE SCHEDULE Hourly Rate is $325 dollars per hour. Monthly Retainer is $5000 plus expenses H:\Dcp~t1menli\CiIY Monager\CapilRI AdvoeatC1l\PDY Capital Advocates Final 0225 lOA. doc Professional Sel'Vices Rev. December I, 200~ '. - 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 ($42,900) for a total not to exceed amount of One-Hundred Thirty-Six Thousand Four Hundred Dollars ($136,400). 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 Thirty-Six Thousand Four Hundred Dollars ($136,400).” 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 amended 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 3 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 for all services described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed a total of One Hundred Thirty-Six Thousand Four Hundred Dollars ($136,400). For the period of March 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 plus reimbursable expenses up to five hundred ($500.) dollars per month.The City has also authorized reimbursement and compensation for services performed on March 9th and 10th, 2011 for legislative trip to Washington DC as follows (a) $3,900 in compensation and b) $946.46 for expenses. Compensation also includes 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. 4 This Page Intentionally Left Blank City of Palo Alto (ID # 1550) City Council Staff Report Report Type: Action ItemsMeeting Date: 4/11/2011 April 11, 2011 Page 1 of 4 (ID # 1550) Council Priority: {ResProject:ClearLine} Summary Title: Council direction on Energy/Compost Study Title: Request for Council Direction on Draft Energy/Compost Feasibility Study due to Council in June 2011 From:City Manager Lead Department: Public Works Recommendation Staff recommends that Council direct staff to: 1)Submit a Draft Energy/Compost Feasibility Study on an Energy/Compost Facility in early June 2011, based upon the Preliminary Analysis submitted to Council on March 21, 2011, and Council and Public Comments. 2)Present a manageable number of scenarios in the Draft Feasibility Study containing a range of input values which reflect the range of comments received. Executive Summary Staff is recommending that Council direct staff to submit a Draft Feasibility Study on an Energy/Compost Facility in early June 2011, as envisioned in the established schedule for the City’s consultant, Alternative Resources, Inc. (ARI). This will provide Council with a draft study reflecting Council and public comments. This will provide Council the opportunity to terminate the work at that point should Council determine that an Energy/Compost Facility in Palo Alto does not need further study at that time. Background 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: April 11, 2011 Page 2 of 4 (ID # 1550) 1)Hire a consultant to evaluate Dry Anaerobic Digestion; 2)Prepare an applicable level Environmental Impact Report (EIR) focused on 9- acres of Byxbee Park; 3)Study energy conversion-technologies including Anaerobic Digestion at Palo Alto’s Wastewater Treatment Plant as part of its Long Range Master Plan-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 appropriately scoped EIR (No. 2 above) will be produced at the appropriate time should Palo Alto continue to pursue a Palo Alto Facility. 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. City Council conducted a Study Session on March 21 and staff indicated it would return to Council for further direction on April 11, 2011. Discussion Public comments and Council comments on the Preliminary Analysis of Dry Anaerobic Digestion on the Landfill/Byxbee Park 9-acre site were received at the Council Study Session on March 21, 2011. Earlier comments had also been received. Staff has analyzed those comments and has planned to prepare a Draft Feasibility Study in June based upon the Preliminary Analysis and the comments received. Should Council direct staff to continue the Draft Feasibility Study, staff would make the following changes and additions to the Preliminary Analysis: 1)Include additional “export” (non-Palo Alto site) alternatives in which Wet Anaerobic Digestion is used in place of incineration at the Regional Water Quality Control Plant (RWQCP). 2)Lift the Net Present Value (NPV) analysis from the detailed analysis to the summary tables. 3)Include the replacement costs of the wastewater solids (biosolids) incinerator in those alternatives involving the incinerator. 4)Conduct more runs of the economic and greenhouse gas models, providing new data points with respect to the following input parameters: a.Land Rent Value b.Greenhouse Gas Value (“CO2 Adder”) c.Interest Rate for Loans d.Contingency Amount e.Amount of any Grants 5)Summarize the data such that Council can determine whether to complete the Feasibility Study or forego further work at that time. April 11, 2011 Page 3 of 4 (ID # 1550) In summarizing the data (in No. 5 above) for the Draft Feasibility Study in June, staff will assist Council in efforts to determine alternatives with the greatest environmental benefits at the lowest costs. A manageable number of scenarios will be presented to reflect a range of perspectives. All alternatives will assume that the current RWQCP Multiple Hearth Incinerator must be replaced at some point. Other Comments Staff’s above proposal modifying the Preliminary Analysis does not address all comments received. Some comments would require substantially more time and funding. Examples include: 1)A new alternative to combine biosolids and food scraps in wet anaerobic digesters and then combine the digestate with yard trimmings, using some combination of the RWQCP site and the Landfill/Byxbee park site; 2)Full integration of the Energy/Compost Feasibility study and the Long Range Facilities Planning for the RWQCP; and 3)Consideration of gasification and other high temperature conversion technologies in Palo Alto. Initiative It is likely that a Citizen Initiative to undedicate Parkland for an Energy/Compost Facility will appear on the November 2011 Ballot in Palo Alto. Several points related to the Feasibility Study can be made: 1)The Initiative does not require construction of a facility, but only allows it. City Council would ultimately decide whether a facility is constructed. 2)The Initiative contains a provision allowing Council to re-dedicate the site as parkland after 10 years, if some or all of the area is not used for an Energy/Compost Facility. 3)The Initiative does not exclusively focus on Dry Anaerobic Digestion and would allow other “equally environmentally protective” technology alternatives. The Preliminary Analysis focuses on Dry Anaerobic Digestion. Neither the Preliminary Analysis nor the Draft Feasibility Study was scoped to provide a quantitative analysis of all technologies which may be “equally environmentally protective”. Resource Impact The additional work described to prepare the June Draft Feasibility Study will require additional funds. Those funds are being taken from other future tasks in the ARI contract so that the schedule can be adhered to and the Draft produced in June. Specifically, the work to prepare the California Envrionmental Quality Act (CEQA) Initial Study will be delayed to allow the more critical work to be completed. Should it be decided to ultimately complete the CEQA Initial Study, a contract amendment will be prepared and submitted to Council for approval. This contract ammendment would April 11, 2011 Page 4 of 4 (ID # 1550) require additional funding, but is not the subject of this CMR. Environmental Review The Feasibility Study itself is not a “project” as defined by CEQA and no environmental review is required at this point in the process. ATTACHMENTS: ·Attachment A CMR165-10 (PDF) Prepared By:Philip L. Bobel, Manager, Environmental Compliance Department Head:J. Michael Sartor, Interim Director City Manager Approval: James Keene, City Manager • ..-: .. ,.:; 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